(l) Provisions and contingencies
A Provision is recognised when the company has a present obligation(legal or
constructive) as a result of past event i.e., 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. If the
effect of the time value of money is material, provisions are discounted using a
current pre-tax rate reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Contingent liability is disclosed for:
• Possible obligations which will be confirmed only by future events not
wholly within the control of the company or
• Present obligations arising from past events where it is not probable that
an outflow of resources will be required to settle the obligation or a reliable
estimate of the amount of the obligation cannot be made.
• Contingent liabilities and assets are not recognised in financial statements.
A disclosure of the contingent liability is made when there is a possible or
a present obligation that may, but probably will not, require an outflow of
resources.
h. j
(m) Government grants
Government grants are not recognised until there is reasonable assurance
that the Company will comply with the conditions attached to them and that
the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over
the periods in which the Company recognises as expenses the related costs
for which the grants are intended to compensate. Specifically, government
grants whose primary condition is that the Company should purchase, construct
or otherwise acquire non-current assets are recognised as deferred revenue
in the standalone statement of financial position and transferred to profit or
loss on a systematic and rational basis over the useful lives of the related
assets.
Government grants that are receivable as compensation for expenses or
losses already incurred or for the purpose of giving immediate financial support
to the Company with no future related costs are recognised in profit or loss in
the period in which they become receivable.
The benefit of a government loan at a below-market rate of interest is treated
as a government grant, measured as the difference between proceeds
received and the fair value of the loan based on prevailing market interest
rates.
(n) Earning per equity share
Basic earnings per equity share is calculated by dividing the net profit or loss
for the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per equity share, the net profit
or loss for the period attributable to equity shareholders and the weighted
average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares. In computing the dilutive earnings
per share, only potential equity shares that are dilutive and that either reduces
the earnings per share or increases loss per share are included.
(o) Statement of Cash flow
Cash flows are reported using the indirect method, whereby profit before tax
is adjusted for the effects of transactions of a non-cash nature, any deferrals
or accruals of past or future operating cash receipts or payment and items of
income or expenses associated with investing or financing cash flows. The
cash flows from operating, investing and financing activities of the Company
are segregated.
(p) Investment property
Investment properties are properties held to earn rentals and/or for capital
appreciation (including property under construction for such purposes).
Investment properties are recognised initially at cost, including transaction
costs. Subsequent to initial recognition, investment properties are measured
at cost less accumulated depreciation and accumulated impairment losses if
any.
Depreciation on buildings is calculated using straight line method to allocate
their cost, net of residual values, over their estimated useful lives, depreciation
is provided on useful life of assets as prescribed in schedule III to the Companies
Act, 2013.
An investment property is derecognised upon disposal or when the investment
property is permanently withdrawn from use and no future economic benefits
are expected from the disposal. Any gain or loss arising on derecognition of
the property (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the period
in which the property is derecognised.
(q) Segment Reporting
The management has assessed the identification of reportable segments in
accordance with the requirements of Ind AS 108 ‘Operating Segments' and
the company has disclosed three reportable segments namely (i) Chemical
Manufacturing, (ii) Power Generation and (iii) Trading in coal. Further, the
Board of directors have designated the Managing Director as Chief Operating
Decision Marker (‘CODM').
(r) Estimates and assumptions
The preparation of the Company's financial statements requires management
to make judgments, estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or liabilities
affected in future periods.
The Company applies judgment to determine whether each product or
services promised to a customer are capable of being distinct, and are distinct
in the context of the contract, if not, the promised product or services are
combined and accounted as a single performance obligation. The Company
allocates the arrangement consideration to separately identifiable performance
obligation deliverables based on their relative stand-alone selling price. Because
the financial reporting of these contracts depends on estimates that are
assessed continually during the term of these contracts, recognized revenue
and profit are subject to revisions as the contract progresses to completion.
Allowance for expected credit losses:
It describes the use of practical expedient by computing the expected credit
loss allowance for trade receivables based on provision matrix. The expected
credit allowance is based on the aging of the days receivables which are past
due and the rates derived based on past history of defaults in the provision
matrix.
Fair value of investments:
The Company has invested in the equity instruments of various companies.
However, the percentage of shareholding of the Company in such investee
companies is very low and hence, it has not been provided with future
projections including projected profit and loss account by those investee
companies. Hence, the valuation exercise carried out by the Company with
the help of available historical annual reports and other information in the
public domain.
Taxes
Deferred tax assets are recognized for unused tax losses to the extent that it is
probable that taxable profit will be available against which the losses can be
utilized. Significant management judgment is required to determine the amount
of deferred tax assets that can be recognized, based upon the likely timing
and the level of future taxable profits together with future tax planning strategies.
Contingent liability judgement:
Contingent liabilities are claims against the Company not acknowledged as
debt. Contingencies may arise from the ordinary course of business in relation
to claims against the Company, including legal, contractor and other claims.
By their nature, contingencies will be resolved only when one or more uncertain
future events occur or fail to occur. The assessment of the existence, and
potential quantum of contingencies inherently involve the exercise of significant
judgment and the use of estimates regarding the outcome of future events.
(s) Recent pronouncements:
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments
to the existing standards under Companies (Indian Accounting Standards)
Rules as issued from time to time, MCA has notified following amendments:
1) During the year ended March 31,2025, MCA has notified Ind AS 117 -
Insurance Contracts and amendments to Ind AS 116 - Leases, relating to
sale and lease back transactions, applicable from April 01, 2024. The
Company has assessed that there is no significant impact on its financial
statements.
2) Ind AS 21 The Effects of Changes in Foreign Exchange Rates to specify
how an entity should assess whether a currency is exchangeable and
how it should determine a spot exchange rate when exchangeability is
lacking. The amendments also require disclosure of information to enable
understand the impact on entity's financial performance, financial position
and cash flows. The amendments are effective for annual reporting periods
beginning on or after April 01,2025. When applying the amendments, an
entity cannot restate comparative information. The Company has reviewed
the new pronouncements and based on its evaluation has determined
that it does not have any significant impact on its financial statements.
Fair value of Investment properties Rs.1892.66 lakhs
Estimation of fair value
1) The Company obtains independent valuations for its investment properties
annually. The best evidence of fair value is current prices in an active market
for similar properties. Where such information is not available, the Company
considers information from a variety of sources including:
(i) Rates as per Sub Registrar Office
(ii) current prices in an active market for properties of different nature.
(iii) recent prices of similar properties in less active markets, adjusted to
reflect those differences
The main input used is the price per square metre as per the State
Government's Registration and Stamps Department rate for the property. All
resulting fair value estimates for investment properties are included in level 2.
2) Income and operating expenses of Investment Property:
(i) Rental income - Rs.143.52 lakhs
The Average credit period on sales is 60 days
No interest is charged on Trade Receivables for delay in payment beyond credit
period from the due date of the Invoice.
The Company has used a practical expediency by computing the expected credit
loss allowance for Trade Receivables based on a provision matrix. The provision
matrix takes into account historical credit loss experience and adjusted for forward
looking information. The expected credit loss allowance is based on the ageing of
the days the receivables are due and the rates are given in the provision matrix.
The provision matrix at the end of the Reporting Period is as follows :
* Refer Note 46 for related party transactions.
** Based on the above data, As there is a sufficient provision, it is carried forward
from previous year. No additional provision is made during the current year. The
provision for expected credit loss being higher is continued on a prudent basis for
unexpected credit losses.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted
prices. This includes listed equity instruments, traded bonds and mutual funds that
have quoted price. The fair value of all equity instruments (including bonds) which
are traded in the stock exchanges is valued using the closing price as at the
reporting period.
Level 2: The fair value of financial instruments that are not traded in an active
market (for example, traded bonds, over-the-counter derivatives) is determined
using valuation techniques for which the lowest level input that is significant to the
fair value measurement is directly or indirectly observable. If all significant inputs
required to fair value an instrument are observable, the instrument is included in
level 2.
Level 3: If one or more of the significant inputs is not based on observable market
data, the instrument is included in level 3. This is the case for unlisted equity
securities included in level 3.
There are no transfers between levels 1 and 2 during the year.
Note 41: Capital Management & Risk Management
Capital management
The Company being in a capital intensive industry, its objective is to maintain a
strong credit rating healthy capital ratios and establish a capital structure that
would maximise the return to stakeholders through optimum mix of debt and
equity.The Company's capital requirement is mainly to fund its capacity expansion,
repayment of principal and interest on its borrowings. The principal source of
funding of the Company has been, and is expected to continue to be, cash
generated from its operations supplemented by funding from bank borrowings.
The Company is not subject to any externally imposed capital requirements. The
Company regularly considers other financing and refinancing opportunities to
diversify its debt profile, reduce interest cost and align maturity profile of its debt
commensurate with life of the assets, and closely monitors its judicious allocation
amongst competing capital expansion projects to capture market opportunities at
minimum risk.
Financial risk management and objectives and policies
This note explains the sources of risk which the entity is exposed to and how the
entity manages the risk and the impact in the financial statements.
A Special Team with Senior Executives having exposure in various fields has been
formed to assist Cheif Financial Officer (CFO) in(a) Overseeing and approving the
Company's enterprise wide risk management framework, and (b) Overseeing
that all the risks that the organisation faces such as market risk(including currency
risk, interest rate risk and other price risk), Credit risk and liquidity risk have been
identified and assessed and there is an adequate risk management infrastructure
in place capable of addressing those risks.The CFO, monitors and reports on the
principal risks and uncertainties that can impact the company and its ability to
achieve strategic objectives. The Company's management systems, organisational
structures, processes, standards, code of conduct and behaviors together form
the Management and business of the Company.
A. Market risk
The Company is exposed to market risk through changes in foreign currency
exchange rates and changes in interest rates. Financial assets/liabilities affected
by this risk are borrowings, letter of credits and trade receivables.
The Company's investments in equity securities are susceptible to price risk arising
from uncertainities about future value of the investment secutities. The Company's
non-current investment in equity shares are strategic investments and hence are
considered as Fair Value through Other Comprehensive Income. The company's
Board of Directors reviews and approves all equity investment decisions.
Foreign Currency risk management
The Company operates internationally and is exposed to foreign currency risk
arising from foreign currency transactions, primarily with respect to the US$. Foreign
exchange risk arises from import as well as exports of goods. The risk is measured
through a forecast of highly probable foreign currency cash flows.
The special team as mentioned above analysis the options for hedging. Based on
the analysis the management takes decision regarding hedging of foreign currency
exposures. Currently, the Company has not hedged any of the foreign currency
transactions in the veiw of the natural hedging. The natural hedging is sufficient to
manage the current foreign currency risk management.
The carrying amounts of the Company's foreign currency denominated monetary
assets and monetary liabilities are restated at the end of each reporting period.
The same at the end of the reporting period are as follows :
Foreign Currency Sensitivity Analysis
The Company is mainly exposed to US Dollor.
The following tables demonstrate the sensitivity to a reasonably possible change in
USD exchange rates, with all other variables held constant. The Company's
exposure to foreign currency changes for all other currencies is not material.
Interest Rate Risk Management
Interest rate risk is the risk that the fair value or future cash flows of a financial
intruments will fluctuate because of changes in market interest rates. The Company's
exposure to the risk of changes in market interest rates relates primarily to the
Company's borrowings with floating base interest rates. Based on the interest rate
sensitivity the Company decides on the management of interest rate risk. The
Company manages by having a balanced portfolio of variable and fixed interest
rate borrowings.
B. Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual
obligations resulting in financial loss to the Company. The Company is operating
through network of dealers based at different locations. Regular monitoring of the
receivables is undertaken by the Marketing Department and in case the limits are
exceeded, steps will be taken by the Marketing departments and after discussing
with the management the Company will decide whether to stop or not further
supplies to the concerned dealer till the amount outstanding is recovered. For the
export made by the Company, the sales are backed by letters of credit or advance
receipts. The internal risk management committee of the Company meets regularly
to discuss the dealers and credit risks, measures taken to address them and the
status and level of risk after the measures taken.Export sales are fully secured
through letters of credit or against advance receipts. (refer Note No.9 for Trade
Receivbles outstanding).
C. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities and the availability of funding through an adequate amount of committed
credit facilities to meet obligations when due and to close out market positions. Due
to the dynamic nature of the underlying businesses, Company maintains flexibility
in funding by maintaining availability under committed credit lines.
Ultimate responsibility for liquidity risk management rests with the board of directors,
which has established an appropriate liquidity risk management framework for the
management of the Company's short-term, medium-term and long-term funding
and liquidity management requirements. The Company manages liquidity risk by
maintaining adequate reserves, banking facilities and reserve borrowing facilities,
by continuously monitoring forecast and actual cash flows, and by matching the
maturity profiles of financial assets and liabilities.
Note : (1) Income tax dues includes amount of TDS credit eligible by the company
but not considered by the Department in faceless assessment,
Rectification application filed pending rectification orders.
(2) GST dues includes incorrect availament of CENVAT credits and
transitional credit as per order in original passed by the department,
appeal filed with CESTAT pending disposal and also includes excess
availment as per order passed by Assisstant Commissioner GST
appeal filed with GST Appeals pending disposal.
43. Employee benefits:
A) Defined contribution plans
Employees contribution to provident fund and employees state insurance
(ESI) are recognized as expenditure in statement of profit and loss account,
as they are incurred. there are no other obligation other than the contribution
payable to aforesaid respective Trust/Government Authorities
B) Defined benefit Plans
The Company's obligation towards the Gratuity (Lic) is a defined benefit plan
and is funded with Life Insurance Corporation of India. The following table
sets out the funded status of the defined benefits scheme and the amount
recognised in financialstatements as per Acturial Valuation:
Nature of Benefits:
The Company operates a defined benefit final salary gratuity plan which is open to
new entrants. The gratuity benefits payable to the employees are based on the
employee's service and last drawn salary at the time of leaving. The employees do
not contribute towards this plan and the full cost of providing these benefits are met
by the Company.
i. Regulatory Framework:
There are no minimum funding requirements for a gratuity plan in India. The
trustees of the gratuity fund have a fiduciary responsibility to act according to
the provisions of the trust deed and rules. Since the fund is income tax
approved, the Company and the trustees have to ensure that they are at all
times fully compliant with the relevant provisions of the income tax and rules.
Besides this if the Company is covered by the Payment of Gratuity Act, 1972
then the Company is bound to pay the statutory minimum gratuity as
prescribed under this Act.
ii. Governance of the Plan:
The Company has setup an income tax approved irrevocable trust fund to
finance the plan liability. The trustees of the trust fund are responsible for the
overall governance of the plan.
iii. Risk exposures:
Valuations are performed on certain basic set of pre-determined assumptions
and other regulatory framework which may vary over time. Thus, the Company
is exposed to various risks in providing the above benefit which are as follows:
(a) Interest Rate risk: The plan exposes the Company to the rise of fall in
interest rates. A fall in interest rates will result in an increase in the ultimate
cost of providing the above benefit and will thus result in an increase in the
value of the liability (as shown in financial statements).
b) Liquidity Risk: This is the risk that the Company is not able to meet the
short-term Benefit payouts. This may arise due to non availability of enough
cash / cash equivalent to meet the liabilities or holding of illiquid assets not
being sold in time.
(c) 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. 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.
(d) 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 to be worse compared to the
assumption.
(e) Regulatory Risk: Benefit is paid in accordance with the Provisions of Gratuity
Act 1972 (as may be amended from time to time). There is a risk of
change in provisions of Gratuity Act requiring higher Plan Benefit pay outs
(e.g. change in benefit formula).
(f) Asset Liability Mismatching or Market Risk: The duration of the liability is
longer compared to duration of assets, exposing the Company to market
risk for volatilities/fall in interest rate.
(g) Investment Risk: The probability or likelihood of occurrence of losses
relative to the expected return on any particular investment.
iv. Amendments, Curtailments and Settlements - Not applicable in this case
These sensitivities have been calculated to show the movement in defined benefit
obligation in isolation and assuming there are no other changes in market conditions
at the accounting date. There have been no changes from the previous periods in
the methods and assumptions used in preparing the sensitivity analyses.
Special Events:
There are no special events such as benefit improvements or curtailments or
settlements during the inter-valuation period.
viii. Asset Liability Matching Reserves: The Company has Life Insurance
Corporation (Group Gratuity Manager) for administering the Plan liability. The
funds of the Plan liability are invested by the Life Insurance Corporation, (LIC),
pay the benefits to members of the enterprise as per Rules of the LIC. So the
LIC is exposed to the liquidity risk of not being able to arrange for the benefit
outgo due to cash liquidity problems and so the LIC faces a liquidity risk.
ix. Funding Arrangements & Policy:
The money contributed by the Company to the fund to finance the liabilities of
the plan has to be invested.
The trustees of the plan have outsourced the investment management of the
fund to an insurance company. The insurance company in turn manages
these funds as per the mandate provided to them by the trustees and the
asset allocation which is within the permissible limits prescribed in the insurance
regulations. Due to the restrictions in the type of investments that can be held
by the fund, it is not possible to explicitly follow an asset-liability matching
strategy to manage risk actively.
There is no compulsion on the part of the Company to fully pre fund the liability
of the Plan. The Company's philosophy is to fund the benefits based on its
own liquidity and tax position as well as level of under funding of the plan.
The expected contribution payable to the plan next year is INR 2,000,000.
x. Projected plan cash flow and maturity profile:
The table below shows the expected cash flow profile of the benefits to be
paid to the current membership of the plan based on past service of the
employees as at the valuation date:
G. Remaining performance obligations
The remaining performance obligation disclosure provides the aggregate amount of transaction
price yet to be recognized as at the end of the reporting period and an explanation as to when
the Company expects to recognize these amounts in revenue.
Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the
remaining performance obligation related disclosures for contracts where the revenue recognized
corresponds directly with the value to the customer of entity’s performance completed to date.
The aggregate amount of transaction price allocated to remaining performance obligations as
per the requirements of Ind AS 115 is Rs. 877.20 Lakhs out of which, approximately 100% is
expected to be recognized as revenues within one year and the balance beyond one year.
Note:
1. Total debt = Long term Borrowings (including current maturities of Long term
borrowings), Sales tax deferrment loans(Current and non-current), short term
borrowings and Interest accrued on Debts
2. Earning for Debt Service = Net Profit after taxes Non-cash operating
expenses like depreciation and other amortizations interest other
adjustments like loss on sale of Fixed assets etc
3. Debt service = Interest & lease payments principal repayments
4. Avg. Shareholder's equity = Average of opening total equity and closing total
equity
5. Avg. Inventory = Average of opening inventory and closing inventory
6. Avg. Trade Receivable = Average of opening trade receivables and closing
trade receivables
7. Avg. Trade Payables = Average of opening trade payables and closing trade
payables
8. Working capital shall be calculated as current assets minus current liabilities
9. Capital Employed = Tangible net worth (excluding revaluation reserve)
Total debt Deferred tax liability
10. Average Total Assets = Average of opening total assets and closing total
assets
11. Average Total equity = Average of opening equity share capital other
equity and closing equity share capital other equity.
56. Investment in Subsidiary:
The Company has a single partly owned Subsidiary Company and has no
Associates or Joint ventures, the Company has significant investment in the
Subsidiary Company as per details below:
a. This Financial Statements are Standalone Financial Statements.
b. The details of significant investment in Subsidiary Company as below:
i) Name of Subsidiary Company - TGV Metals and Chemicals Private
Limited.
ii) The principal place of business and country of incorporation - 40-304,
K.J.Complex, Bhagya nagar, Kurnool, A.P India.
iii) Proportionate ownership is 50 % with voting rights.
c. Method of accounting investment - Investment of Rs.1725 Lakhs at Cost.
57. Additional regulatory information:
(1) The Company has not granted any loans or Advances in the nature of Loans
to Promoters, Directors, KMPs and other related parties.
(2) The company has investment property as at the Balance Sheet date and its
fair value is disclosed as per valuation obtained from Sub Registrar Office,
Kurnool and fair valuation parameters obtained are not based on valuation by
a Register Valuer.
(3) The company has not made any revaluations of its Property Plant and
Equipment (including Right of use Assets) hence disclosing revaluations based
on values of registered valuer is not applicable to the company.
(4) The Company is not holding any Benami property and no proceeding has
been initiated or pending against the company.
(5) The Company has no transaction which is not recorded in the books of accounts
that has been surrendered or disclosed as income during the year in tax
assessments under the Income Tax Act, 1961 (such as search or survey or
any relevant provisions of Income Tax Act, 1961)
(6) (A) The Company has not advanced or loaned or invested any funds in any
other person(s) or entity(ies), including foreign entities (intermediaries)
with understanding that the intermediary shall be directly or indirectly
lend or invest in other person or entitites on behalf of the company or
provide any gurantee or security or the like to or on behalf of the company.
(B) The Company has not received any funds from any person(s) or entity(ies),
including foreign entities (funding party) with the understanding that the
company shall lend or invest in other person or entity indentified in any
manner by or on behalf of the funding party/Ultimate beneficiary or provide
any guarantee or security or the like on behalf of the funding party/
Ultimate beneficiary.
(7) The Company is not declared as willful defaulter by any Bank or Financial
institutions or RBI or other lenders.
(8) The Company has no borrowings from banks or financial institutions on the
basis of security of current assets. Accordingly submission of quarterly returns
of current assets and its reconciliation with books of accounts is not applicable
to the Company.
(9) There are no charges or satisfaction of charges yet to be registered with
Registrar of Companies beyond the statutory period.
(10) Transactions with struck off companies : During the year under review, the
Company has no transactions with any struck off companies.
(11) The company has not made any investments through any layers of invesmtment
companies.
(12) There are no Schemes of Arrangements approved by the Competent Authority
in terms of sections 230 to 237 of the Companies Act, 2013.
(13) The Company has not invested or traded in crypto currency or virtual currency
during the financial year 2023-24.
(14) The Company do not have any intangible assets.
(15) The Company does not have any capital work in progress.
(16) The title deeds of Immovable property are in the name of the Company and
the property not held in the name of the Company is detailed in Note No.53
(17) The financial ratios are calculated and provided in Note No.55
(18) Regulatory defferal accounting balances are not applicable to the Company.
58. Confirmation of balances
Confirmation of balances from certain parties for amounts due to them or due
from them are yet to be received confirmation letters were received from
some of the parties. And as per the letter of confirmation the balances are
deemed to be accepted if not responded with in 15 days.
59. Figures have been rounded off to the nearest decimal of lakhs as required
under Schedule III.
60. Approval of financial statements
The standalone financial statements approved by the Board of Directors in
their meeting held on May 30, 2025.
As per our report of even date attached. For and on behalf of the Board
For S.T.Mohite & Co., Sd/- Sd/-
Chartered Accountants (Regn.No.011410S) TG.Shilpa Bharath R.Triveni
Sd/- Chairperson & Managing Director Director
C.A. Sreenivasa Rao T.Mohite DIN : 01895414 DIN : 09045405
Partner Sd/- Sd/-
Membership No 015635 V.Surekha S. Ifthekhar Ahmed
UDIN NO : 25°15635BMOFNN41°4 Company Secretary Chief Financial Officer
Place: Kurnool Place: Kurnool
Date : May 30, 2025 Date : May 30, 2025
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