e. Claims, Provisions and Contingent Liabilities
The Company has ongoing discussions / litigations with various regulatory authorities,
trade unions and third parties. Where an outflow of funds is believed to be probable and
a reliable estimate of the outcome of the dispute or settlements can be made based on
Management’s assessment of specific circumstances of each dispute and relevant external
advice, Management provides for its best estimate of the liability. Such accruals are by nature
complex and can take number of years to resolve and can involve estimation uncertainty.
Information about such litigations is provided in notes to the financial statements.
f. Tax Expense
Significant judgments and estimates are involved in estimating the budgeted profits for the
purposes of advance tax, determining the provision for income tax.
g. Inventories
An inventory provision is recognised for cases where the realisable value is estimated to
be lower than the inventory carrying value. The inventory provision is estimated taking
into account various factors, including prevailing sale prices of inventory item, changes
in the related laws / emission norms and losses associated with obsolete / slow-moving
/ redundant inventory items. The Company has, based on these assessments, made
adequate provision in the books.
14 OTHER EQUITY
Please refer (B) OTHER EQUITY in STANDALONE STATEMENT OF CHANGES IN EQUITY
Description of nature and purpose of each reserve :
General Reserve
General Reserve is created from time to time by way of transfer of profits from retained earnings for
appropriation purposes. General Reserve is created by a transfer from one component of Equity
to another and is not an item of Other Comprehensive Income. It is a free reserve created by the
Company and is available for distribution to the shareholders of the Company.
Capital Reserve
Capital Reserve primarily represents gain on Business Combination of a capital nature and is not
available for dividend declaration.
Securities Premium Account
Securities Premium account records the premium component on issue of shares and can be utilised in
accordance with the provisions of Companies Act, 2013.
Cash Flow Hedge Reserve
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges are recorded in Other Comprehensive Income and are accumulated as ‘cash flow
hedge reserve'. This reserve will be transferred to Statement of Profit and Loss, on expiry / settlement
/ closure / ineffectiveness of the hedge.
34. (E) ADDITIONAL REGULATORY INFORMATION:
a. Borrowings secured against current assets
The Quarterly returns or statements of current assets filed by the Company with Banks or
financial statements are in agreement with the books of account.
b. Utilisation of borrowed funds and share Premium thro’ intermediaries or for benefit of
third party beneficiaries.
i) No funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the company to or in any other persons
or entities, including foreign entities (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities Identified in any manner whatsoever by or on
behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.
ii) No funds have been received by the company from any persons or entities, including
foreign entities (“funding Parties”), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding
Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries.
* Investments in these equity shares are not held for trading. Upon the application of Ind AS 109-Financial
instruments, the Company has chosen to measure these investments in equity instruments at FVTOCI
irrevocably as the management believes that presenting fair value gains and losses relating to these
Investments in the Profit or Loss may not be indicative of the performance of the Company.
1. The fair value of quoted investment in quoted equity shares measured at quoted price.
2. In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings
and other financial assets and liabilities it is assessed that the fair values approximate their
carrying amounts largely due to the short-term maturities of these instruments.
3. The fair values of the financial assets and financial liabilities included above have been determined
in accordance with generally accepted pricing models based on a discounted cash flow analysis,
with the most significant inputs being the discount rate that reflects the credit risk of counterparties..
36 (B) FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES
The Company’s operational activities expose to various financial risks i.e. market risk, credit
risk and risk of liquidity. The Company realises that risks are inherent and integral aspect of any
business. The primary focus is to foresee the unpredictability of financial markets and seek to
minimize potential adverse effects on its financial performance.
The Company’s financial assets comprise mainly of cash and cash equivalents, other balances
with banks, trade receivables, other receivables and investments.
The Company has financial risk exposure in the form of market risk, credit risk and liquidity risk.
The risk management policies of the Company are monitored by the Risk Management Committee
of the Board of Directors. The present disclosure made by the Company summarizes the exposure
to the financial risks.
1. Market Risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. Financial instruments affected by market risk include loans
and borrowings, deposits, investments, and derivative financial instruments. Foreign currency risk
is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes in market interest rates. Regular
interaction with bankers, intermediaries and the market participants help us to mitigate such risk.
a. Interest Rate Risk exposure
The risk is that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company’s financial liabilities comprise mainly of
trade payables and other payables. The Company has NIL Long Term Loan Borrowings from
Banks / any Financial Institutions as on March 31,2025 and has working capital borrowings
only to the extent of ' 81.86 crores availed in the form of Packing Credit Loan in Foreign
Currency (PCFC), which is significantly less than the total Cash and Bank balances of
' 679.70 crores as on March 31,2025. The Company has not entered into any of the interest
rate swaps.
b) Foreign currency risk exposure
The Company imports coal, pulp, waste paper and other stores & spares for which payables
are denominated in foreign currency. The Company is exposed to foreign currency risk on
these transactions. The Company, in general, follows a conservative and sound policy by
entering into simple Forward Exchange Contracts to hedge the foreign currency risk whose
maturity is coterminous with the maturity period of the foreign currency liabilities (underlying).
The Company had Foreign Exchange liability for US $ 19.20 Mn as on 31st March 2025
(Previous Year -US $ 9.67 Mn) of which US $ 9.64 Mn (Previous Year -US $ 0.70 Mn) is
hedged with forward contracts, leaving US $ 9.56 Mn (Previous Year -US $ 8.97 Mn) as
unhedged but fully matched with unhedged anticipated export collections.
The Company is also exposed to foreign currency risk on its Exports. As on March 31, 2025,
the Company had Export Receivables in Foreign Currency amounting to US $ 2.49 Mn
(Equivalent to ' 21.32 crores). (Previous Year -US $ 2.74 Mn; Equivalent to ' 22.79 crores),
of which the amount hedged with forward contracts on cash flow basis is Nil (Previous Year
: US $ 0.5 Mn). The company has a Forex policy dealing specifically with measurement and
reporting of both “Net unhedged exposures” and “Stop loss” limits. The compliance to this
policy on a daily basis is audited by the Internal Auditor and reported to the Audit Committee.
c) Commodity price risk
The Company is exposed to the movement in price of key input materials in domestic and
international markets. The Company has in place policies to manage exposure to fluctuations
in the prices of the key raw materials used in operations. The Company manages fluctuations
in raw material price through hedging in the form of advance procurement when the prices are
perceived to be low, in order to keep raw material prices under check, to the extent possible.
d) Other price risk
Other price risk is the risk that the fair value of a financial instruments will fluctuate due to
changes in market traded prices. The Company’s equity investment in its subsidiary and
associate is for strategic purposes and not held for trading. They are carried at cost and are
hence not subjected to price related risk. Other investments in equity instruments are held
with a view to hold them for a long-term basis and not held for trading. The investments are
in fundamentally strong companies and temporary fluctuations in price do not attribute any
investment risk. (Refer Note No.3 for details on Investments)
e) Competition and Price risk
The Company faces competition from local and foreign competitors. Nevertheless, it believes
that it has competitive advantage in terms of the wide spread of product offerings, good quality
products and continuous upgrading its expertise to meet the needs of its customers.
2. Credit Risk
The credit risk refers to risk that a counterparty will default on its contractual obligations resulting
in financial loss to the Company. Credit risk arises primarily from financial assets such as trade
receivables, other balances with banks and other receivables.
The credit risk arising from the exposure of investing in other balances with banks and bank
balances is limited and there is no collateral held against these because the counterparties are
public sector banks / AAA rated private sector banks.
The Company sells its products through appointed indentors. The Company has established a
credit policy under which every indentor is analysed individually for creditworthiness. Each indentor
places security deposit in the Company, based on the quota allocated to him. Though the invoices
are raised on the individual customer, the indentor is responsible for the collection and in case of
default by the customer, the dues from the customer are withheld / adjusted against the payables
to indentor. Over 26% of the receivables as on 31.03.2025 (Previous Year 13%) is covered by
the credits available with the Company against indentors account. The balance receivables are
insured with Trade Credit Insurance programs offered by a premier Indian Insurance Company.
Thus, the credit risk is mitigated in full.
Exports are, in general, made against advances received or terms with payment against documents.
The Company has also covered the residual risk with a credit insurance from a premier Indian
Insurance Company. Hence, the credit risk in respect of its exports is fully covered.
For trade receivables, as a practical expedient, the Company computes the credit loss allowance
if there is life-time expected credit losses.
3) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk
may result from an inability to sell a financial asset quickly to meet obligations when due. The
Company’s exposure to liquidity risk arises primarily from mismatches of maturities of financial
assets and liabilities.
The Company manages the liquidity risk by (i) maintaining adequate and sufficient cash and cash
equivalents including investments in fixed deposits with banks (ii) making available the funds from
realizing timely maturities of financial assets to meet the obligations when due. The management
monitors rolling forecast of the Company’s liquidity position and cash and cash equivalents on the
basis of expected cash flows. Also, the Company manages the liquidity risk by projecting cash
flows considering the level of liquid assets necessary to meet the obligations by matching the
maturity profiles of financial assets and financial liabilities and monitoring balance sheet liquidity
ratios. Further, the liquidity risk management involves matching the maturity profiles of financial
assets and financial liabilities.
36 (C) CAPITAL MANAGEMENT
The Company adheres to a cautious capital management that seeks to trigger growth creation
and maximization of shareholders’ value. For the purpose of the Company’s capital management,
capital includes issued capital and all other equity reserves attributable to the shareholders of the
Company. The Company has been funding its growth and acquisition plans and working capital
requirements through a balanced approach of internal accruals and external debt from banks. The
Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile
of the overall debt component of the Company.
40 EMPLOYEE BENEFITS
(i) Defined Contribution Plans:
The Company makes Provident Fund and Superannuation Fund contributions which are defined
contribution plans, for qualifying employees. Under the Schemes, the Company is required to
contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised
' 5.85 crores (Year ended March 31, 2024 ' 5.90 crores) for Provident Fund contributions and
' 0.27 crores (Year ended March 31,2024'0.28 crores) for Superannuation Fund contributions
in the Statement of Profit and Loss. The contributions payable to these plans by the Company are
at rates specified in the rules of the schemes.
(ii) Defined Benefit Plans:
Gratuity (Funded) and Retirement Benefit Scheme (Unfunded)
In respect of Gratuity, the most recent actuarial valuation of the plan assets and in respect of
Gratuity and Retirement benefit Scheme the present value of the defined benefit obligation were
carried out by actuarial valuation. The present value of the defined benefit obligation and the
related current service cost and past service cost, were measured using the projected unit cost
method. The following table sets forth the status of the Gratuity Plan and the Retirement benefit
Scheme of the Company and the amount recognised in the Balance Sheet and Statement of Profit
and Loss. The Company provides the gratuity benefit through annual contributions to the funds
managed by the Life Insurance Corporation of India.
The Company is exposed to various risks in providing the above gratuity benefit and Leave
encashment which are as follows:
Interest Rate Risk:
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result
in an increase in the ultimate cost of providing above benefit and will thus result in an increase in
the value of the liability (as shown in financial statements).
Investment Risk:
The probability or likelihood of occurrence of losses relative to the expected return on any particular
investment.
Salary Escalation Risk:
The present value of the defined benefit plan is calculated with the assumption of salary increase
rate of plan participants in future, based on past experience. Deviation in the rate of increase
of salary in future for plan participants from the rate of increase in salary used to determine the
present value of obligation will have a bearing on the plan’s liability.
Demographic Risk:
The Company has used certain mortality and attrition assumptions in valuation of the liability.
The Company is exposed to the risk of actual experience turning out adverse compared to the
assumptions.
Sensitivity analysis presented above may not be representative of the actual change in the defined
benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one
another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit
obligation has been calculated using the projected unit credit method at the end of the reporting period,
which is the same as that applied in calculating the defined benefit obligation liability recognised in the
balance sheet.
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation
plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year.
The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening
during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity
risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the
duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the
significant fall in interest rates, which should result in a increase in liability without corresponding
increase in the asset).
The Company’s best estimate of the contribution expected to be paid to the plan during the next year
is ' 2.00 crores ( Previous year Actual ' 0.91 crores).
41 SEGMENT REPORTING
The Chairman, who is also the Whole time Director and KMP of the Company, has been identified
as the Chief Operating Decision Maker (CODM). The CODM has considered only Paper as the
operating segment as defined under Ind AS 108. The Company’s operations primarily relate to
Sale of Paper and Paper Boards.
The Assets and Liabilities of the Company can not be identified to a specific segment since they
are common in nature to all the reported segments.
42 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved for issue by the Board of Directors at their meeting held
on 10th May 2025.
For SURI & CO N GOPALARATNAM SRI MOHAN VERGHESE CHUNKATH
Chartered Accountants (DIN : 00001945) (DIN : 01142014)
Regn. No.004283S Chairman
SRI S DURGASHANKAR
(DIN : 00044713)
SANJEEV ADITYA M GANESH BALAKRISHNA BHADTI SMT SHEELA BALAKRISHNAN,
Membership No.229694 (DIN : 9634741) (DIN : 05180044)
Partner Director (Operations)
UDIN: 25229694BMIIIV4240 SRI T.C.A RANGANATHAN
(DIN : 03091352)
S SRINIVAS DR C CHANDRAMOULI
Chennai (DIN : 09713128) (DIN : 00345124)
May 10, 2025 Director (Finance) & Secretary Directors
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