1.17 Provisions, contingent liabilities and contingent assets (i) Provisions -
Provision are recognised when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
(ii) Contingent liabilities -
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.
Show cause notices issued by various Government authorities are not considered as contingent liabilities. However, when the demands are raised against such show cause notices after considering the Company’s views, these demands are either paid or treated as liabilities, if accepted by the company, and are treated as contingent liability, if disputed by the Company.
The Company does not recognise a contingent liability but discloses in the financial statements.
(iii) Contineent assets -
Contingent assets are neither recognised nor disclosed in the financial statements.
1.18 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS are calculated by dividing the profit attributable to equity holders of the C ompany by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.
1.19 Cash dividend to equity shareholders of the Company
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors.
1.20 Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis over the periods to which they relate. Grants relating to assets, including non-monetary grants are presented in the balance sheet by deducting the grant in arriving at the carrying amount of the asset.
1.21 Non-Current Assets held for sale
Assets that are available for immediate sale and where the sale is highly probable of being completed within one year from the date of classification are considered and classified as assets held for sale. Non-current assets and disposal groups held for sale are measured at the lower of carrying amount and fair value less costs to sell.
1.22 Recent Accounting Pronouncements
(i) Ministry of Corporate Affairs had notified amendments to the existing Ind AS under Companies (Indian Accounting Standards) Rules, 2023 to be effective from 1st April, 2023 on 31st March, 2023. Key amendments to the Ind AS are:
Ind AS 1- Presentation of Financial Statements
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates.
Ind AS 12 - Income Taxes
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.
The Company has adopted, with effect from 1st April 2023, the above revised standards and interpretations. The adoption has not had any impact on the amounts reported in the financial statements of the Company.
(i) Ministry of Corporate Affairs has not notified any new standards or amendments to the existing Ind AS under Companies (Indian Accounting Standards) Rules.
NOTE 2 : KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Company’s financial statements in conformity with Ind AS requires the management to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses for the year. Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and future periods are affected.
Key source of estimation of uncertainty as at the date of financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of the following:
(i) Defined benefit vlans (gratuity benefits) -
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(ii) Useful life of property, plant and equipment and intangible assets:
The Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period.
(iii) Estimation of current tax expense and payable:
The Company’s tax jurisdiction is India. Significant judgments are involved in determining the provision for income taxes and tax credits including the amount expected to be paid or refunded.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The Company has not early adopted any standards or amendments that have been issued but are not yet effective/ notified. Amendments and interpretations applying for the first time during the year do not have an impact on the financial statements of the Company.
NOTE 35 : EMPLOYEE BENEFITS
A. Defined Contribution Plans
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plan (“the Scheme”) for Qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to the plan by the Company is at rates specified in the rules of the Scheme. Amount contributed to the Scheme is shown in Note 26.
B. Defined Benefit Plans
i) “Employee leaves are encashed as per the Company’s leave encashment policy. A provision has been recognised for leave encashment liability based on the actuarial valuation of leave balance of employees as at year end.
ii) The Company offers Gratuity benefit to its employees. The Company has set up a Trust for gratuity and the plan assets are invested with Life Insurance Corporation of India and in approved Bank Deposits.
The amounts recognised in the balance sheet and the movements in the net Defined Benefit Obligations (“DBO”) over the period are as follows :
NOTE 37 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s financial liabilities comprises mainly of loan borrowings, trade payables and other payables. The Company’s financial assets comprises mainly of cash and cash equivalents, other balances with banks, trade receivables and other receivables.
Risk management policies and systems of the Company are reviewed regularly by the Board of Directors to reflect changes in market conditions and the company’s activities. The Company has financial risk exposure in the form of
A. Market Risk,
B. Credit Risk, and
C. Liquidity Risk.
The present disclosure made by the Company summarises the exposure to these financial risks.
A. Market Risk:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of fluctuation in market prices. These comprise three types i.e., Foreign Currency Exchange Rate Risk, Interest Rate Risk and Other Price Related Risks.
(i) Foreign Currency Exchange Rate R isk:
The Company imports 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 evaluates the impact of foreign exchange rate fluctuations by closely monitoring exchange rate movements and where necessary occasionally enters into simple forward exchange contracts to hedge the foreign currency risk whose maturity is coterminous with the maturity period of the foreign currency liabilities. Thus, the Company is generally not exposed to any significant foreign currency risk.
(ii) Interest Rate Risk:
The Company’s exposure to the risk of changes in market interest rates relates to bank borrowings comprising of term loans and working capital loans.
The exposure of the Company’s borrowing from banks to interest rate changes at the end of the reporting period are as follows:
(iii) 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.
Commodity price risk:
The Company is exposed to the movement in price of key raw 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.
Others:
Company does not have any equity or other investments which are subjected to price related risks.
B. Credit Risk:
Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations.
(i) Trade Receivables
Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable and thus set the individual risk limits are. The company does not hold any collateral on the unsecured trade receivables balance outstanding. The company has stop supply mechanism in place in case outstanding goes beyond agreed limits.
The Company also sells its products through appointed agents. The Company has established a credit policy under which every agent is analysed individually for creditworthiness. Each agent places security deposit based on the quotas allocated to him. Though the invoices are raised on the individual customer, the agent is responsible for the collection and in case of default by such customer, the dues from the customer are withheld / adjusted against the payables to the agent. Thus, the credit risk is mitigated.
(ii) Financial instruments and cash deposits
The Company’s investment in fixed deposit with banks is fixed and hence, there is no risk on account of price movement arising to the Company. The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. The Company does not maintain significant cash and deposit balances other than those required for its day to day operations.
C. Liquidity Risk:
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. 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. The liquidity risk management involves matching the maturity profiles of financial assets and financial liabilities.
NOTE 38 : CAPITAL MANAGEMENT
The Company’s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital and all other equity reserves attributable to equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value.
The Company monitors capital using Gearing Ratio, which is as under :
The Company has amounts due to Micro and Small Enterprises under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31st March, 2023 and 31st March, 2024. The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 regarding Micro and Small enterprises is determined to the extent such parties have been identified on the basis of the information available with the company. The Company has not received any claim for interest from any supplier as at the Balance Sheet date. The details in resneot of snob dues are as follows Ý = . ^ .
Note 43: Additional Regulatory Information
a. The Company has not carried out revaluation of items of Property, Plant & Equipment during die year.
b. The Company does not have any Immovable Property whose title deeds are not held in the name of the Company.
c. The Company does not have any Hen ami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
d. The Company has not advanced any loans or advances in Hie nature of loans to specified persons viz. Promoters, Directors, KMPs, related parties which are repayable on demand or where the agreement does not specify any terms or period of repayment.
e. The Company has utilised funds raised from borrowings from banks and financial institutions for the specific purposes for which they were taken.
f. The Company has not been declared as a wilful defaulter by any lender who has powers to declare a Company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when financial statements are approved.
g. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(i) 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
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
h. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any maimer whatsoever
by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
i. The Company does not have any material transactions with struck-off companies.
j. The Company does not have any transaction which is not recorded in the books of accounts but has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
k. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
l. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
m. The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period
n. In respect of the borrowings on the basis of security of current assets, details of current assets mentioned in the Quarterly Monitoring Reports filed with the bank are in agreement with the books of accounts.
On 11th Nov 2023, an incidence of fire occurred at PM5 Stock Warehouse, resulting in loss of finished and unfinished paper, machinery spares and damages to building & plant and machinery.There were no human injuries / casualties. Normal operations was not disrupted.
The Company has recognised loss of Rs. 30.01 Lakhs on account of damage to inventory, net of insurance claims received in the month of May 2024. In respect of damage to PPE, Company expects that the insurance claim would compensate the loss and accordingly has recognised insurance claim receivable, only to the extent of the loss. This loss is recognised under Exceptional Items.
Note 45 : Previous Year Figures
Previous year figures are regrouped, wherever necessary to conform to that of current year.
As per our report of even date
MANISH M. PATEL M.G. MOHAN KUMAR For B S RAVIKL M AR & ASSOCIATES
Managing Director Director Chartered Accountants
DIN 00128179 DIN 0020029 Finn’s Regn. No. 006101S
B. RAVI HOLLA VIDYA BHAT B S RAVIKl M AR
Chief Financial Officer Company Secretary Partner
Membership No. 010218
Place : NANJANGUD Date : 30th May 2024
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