22. Provisions and contingent liabilities
Provisions:
A Provision is recorded when the Company has a present obligation (legal or constructive) as a result
of past events, it is probable that an outflow of resources will be required to settle the obligation and
the amount can be reasonably estimated.
Contingent liabilities:
Whenever there is possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the entity or a present obligation that arises from past events but is not
recognised because (a) it is not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; or (b) the amount of the obligation cannot be measured with
sufficient reliability are considered as contingent liability. Show cause notices are not considered as
Contingent Liabilities unless converted into demand.
Contingent Assets:
Contingent assets are not recognised in the standalone financial statements since this may result in
recognition of income that may never be realized. However, when the realization of income is
virtually certain, then the related assets is not a contingent asset and is recognised.
23. Investment in Subsidiaries
The investments in subsidiaries are carried in these standalone financial statements at historical cost
except when the investment, or a portion thereof, is classified as held for sale, in which case it is
accounted for as non-current assets held for sale and discontinued operations.
When the Company is committed to a sale plan involving disposal of an investment, or a portion of
an investment, in a subsidiary, the investment or the portion of the investment that will be disposed
of is classified as held for sale when the criteria described above are met.
Any retained portion of an investment in a Subsidiary that has not been classified as held for sale
continues to be accounted for at historical cost.
24. Financial Instruments
Initial Recognition and Measurement:
Financial assets (other than trade receivables) and financial liabilities are recognized when the
Company becomes a party to the contractual provisions of the financial instrument and are measured
initially at fair value adjusted for transaction costs, except for those carried at fair value through
Statement of Profit and Loss which are measured initially at fair value.
Trade receivables are recognised at their transaction value as the same do not contain significant
financing component.
Trade payable is in respect of the amount due on account of goods purchased in the normal course of
business. They are recognised at their transaction and services availed value as the same do not
contain significant financing component.
Classification and Subsequent Measurement:
Financial Assets:
The Company classifies financial assets as subsequently measured at amortised cost, fair value
through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL) on the
basis of both
(a) Business model for managing the financial assets, and
(b) The contractual cash flow characteristics of the financial asset
A Financial Asset is measured at amortised cost if both of the following conditions are met:
(i) the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows, and
(ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A financial asset is measured at fair value through Other Comprehensive Income (FVTOCI) if both of
the following conditions are met:
(i) the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets, and
(ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A Financial Asset shall be classified and measured at fair value through profit or loss (FVTPL) unless
it is measured at amortised cost or at fair value through OCI (FVTOCI). All recognised financial
assets are subsequently measured in their entirety at either amortised cost or fair value, depending on
the classification of the financial assets.
Equity Investments:
Equity investments in Subsidiaries and Associates are out of scope of Ind AS 109 and hence, the
Company has accounted for its investment in Subsidiaries at cost. All other equity investments are
measured at fair value.
Equity instruments, which are held for trading are classified as at FVTPL. For equity instruments
other than held for trading, the company has exercised irrevocable option to recognise in other
comprehensive income subsequent changes in the fair value.
Derecognition of financial assets:
The Company derecognize a financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Company neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control the transferred asset, the Company
recognises its retained interest in the asset and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial
asset, the Company continues to recognise the financial asset and also recognises an associated
liability.
On derecognition of a financial asset, the difference between the asset's carrying amount and the sum
of the consideration received and receivable and the cumulative gain or loss that had been recognised
in other comprehensive income and accumulated in equity is recognised in the Statement of profit
and loss.
Financial Liabilities and Equity Instruments
Classification as Debt or Equity:
Debt and equity instruments issued by the Company are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
Equity instruments:
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the
proceeds received, net of direct issue costs.
Financial liabilities:
Financial liabilities are classified, at initial recognition:
• at fair value through Profit or Loss,
• Loans and borrowings, Payables, or
• as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and in the case of loans and borrowings
and payables, they are recognised net of directly attributable transaction costs. The Company's
financial liabilities include trade and other payables, loans and borrowings, including bank
overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent Measurement:
Financial Liabilities at FVTPL:
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading,
if they are incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the company that are not designated as hedging
instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are
also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial
date of recognition, and only if the criteria in IND AS 109 are satisfied.
Loans and Borrowings:
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in the
Statement of Profit and Loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the
Statement of Profit and Loss.
Derecognition of Financial Liabilities:
The Company de-recognises financial liabilities when and only when, the Company's obligations are
discharged, cancelled or have expired. The difference between the carrying amount of the financial
liability de-recognised and the consideration paid and payable is recognised in the statement of profit
and loss.
25. Earnings per share
Basic earnings per share are 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 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 considered for the effects of all dilutive potential equity shares.
Note - 29
Provision for employee benefits
(i) Gratuity
The Company contributes to defined benefit schemes for Gratuity which is administrated through duly constituted and approved independent trust. The liability for
Gratuity and Leave encashment is determined on the basis of actuarial valuation made at the year end.
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit (PUC) Method as prescribed by the Ind AS-19 - 'Employee
Benefits', which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up final
obligation.
(ii) Compensated Absences/Leave Encashment:
The Company also extends defined plans in the form of Compensated absences/leave encashment to employees. Provisions for compensated absences is made on
actuarial valuation basis.
The company is exposed to various risks as regards its obligation towards gratuity benefit and leave salary which are as follows:
(i) Interest Rate Risk, (ii) Liquidity Risk, (iii) Salary Escalation Risk, (iv) Regulatory Risk, (v) Market Risk and (vi) Investment Risk
Financial Instruments : Fair values Measurement
(A) Accounting Classification and Fair Value Hierarchy
Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are presented below. It
does not include the fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable
approximation of fair value.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1: Inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2: Inputs other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3: If one or more significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted
equity instruments and certain debt instruments which are valued using assumptions from market participants.
Set out below, is a comparison by category of the carrying amounts and fair value of the Company's financial instruments.
Key Inputs:
i Listed Equity Investments (other than Subsidiaries, Joint Ventures and Associates): Quoted Bid Price on Stock Exchange (Level 1)
ii Mutual Funds: Based on Net Asset Value of the Scheme (Level 2)
iii The management assessed that fair value of cash and bank balances, trade receivables, loans, trade payables, borrowings , other financial assets and
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
iv. During the reporting period ending 31st March, 2025 and 31st March, 2024, there was no transfer between Level 1 and Level 2 fair value measurement.
Note - 31
Financial Instruments : Financial Risk Management
The Company's activities exposes it to various risk such as market risk, liquidity risk and credit risks. This section explains the risks which
the Company is exposed to and how it manages the risks.
The Board of Directors ('Board') oversee the management of these risks through its Risk Management Committee. The Company's Risk
Management Policy has been formulated by the Risk Management Committee and approved by the Board. The Policy articulates on the
Company's approach to address uncertainties in its endeavor to achieve its stated and implicit objectives. It also prescribes the roles and
responsibilities of the Company's management, the structure for managing risks and the framework for risk management. The framework
seeks to identify, assess and mitigate risks in order to minimize potential adverse effects on the Company's financial performance.
1 Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company's receivable from customers and loans and advances.
The carrying amount of following financial assets represents the maximum credit exposure:
(i) Trade receivables
Exposure to credit risk is influenced mainly by the individual characteristics of each customer in which it operates. Credit risk is managed
through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company
grants credit terms in the normal course of business.
However Company is providing credit period of 15 days only to some specific customers and in other case, Company has collecting
advance against sales. Therefore on reporting date all debtors were realized. Accordingly, requirement of provision is not arised.
(ii) Financial assets other than trade receivables
Credit risk from balances with banks and financial institutions is managed by the CFO in accordance with it's policy. Surplus funds are
parked only within approved investment categories . Investment category is periodically reviewed by the Company's Board of Directors.
The Company held cash and cash equivalents of ^ 396.41 Thousand as on 31st March, 2025 (Previous year ' ^ 1604.42 Thousand). The cash
and cash equivalent's are held with bank counterparties with good credit ratings.
2 Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible,
that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damages to the Company's reputation.
Maturity profile of financial liabilities
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
3 Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the
Company's income or the value of its holdings of financial instruments.
Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long
term debt.
Management exposed to market risk primarily related to the market value of investments and interest rate risk. Thus, our exposure to
market risk is function of investing and borrowing activities only.
4 Interest rate risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in
fair values of fixed interest bearing investments because of fluctuations in interest rates. Cash flow interest rate risk is the risk that the
future cash flows of floating interest bearing investments will fluctuate because of fluctuations in interest rates.
Exposure to interest rate risk
Company's interest rate risk arises from borrowings. The interest rate profile the Company's interest bearing financial instruments as
reported to the management of the Company.
Note - 34
Additional Information Details :
1 The declaration filed under the Urban Land (Ceiling and Regulation) Act, 1976 in respect of the Company's holding in
excess of the ceiling prescribed under the said Act and the application for exemption filed under section 20 of the said act,
to retain these lands are under consideration of the concerned authorities.
2 The Company has only one reportable segment of activity namely manufacture of "High/Medium / Low Carbon Ferro
Manganese and Silico Manganese Slag".
3 Deferred tax assets for unused tax loss carry forward or unused tax credit if, and only if, it is considered probable that there
will be sufficient future taxable profit against which the loss or credit carry forwards can be utilized.
However In the opinion of the management, there is no probability of taxable profit in near foreseeable future. Therefore
deferred tax asset has not been recognised.
Detail of deferred tax assets (DTA) is as follows:
4 The Company was engaged in the manufacturing of Ferro manganese (high carbon and medium carbon) and silico
manganese through electro metallurgical process since inception. The Company discontinued this business in 2011 on
account of a number of business challenges including high volatility, higher input costs, raw material shortages etc. The
Company had also set up a solid waste recovery division to process the slag which was generated during the production of
Ferro alloys. After the Ferro alloys business was discontinued, the company has continued to produce low Ferro
manganese (slag) through its profitable slag recovery process. The Company has been actively exploring other business
opportunities since it discontinued the Ferro alloys business.
The Company has exploring various possibilities for developing the land including the development of a large
warehousing facility and other commercial real estate. The Company's efforts to date have not yielded a commercially
viable proposition, although it is continuing to put in efforts in this regard. The Company has invested its surplus funds in
bank deposits and financial securities, and the income from these investments exceeds the income that the company
generates from its curtailed business operations.
During the previous financial years and as well as in current financial year company's financial assets and financial income
constitute more than 50% of the total assets and income.
Thus, management sought clarification from RBI on meeting criteria applicability of section 45-IA of RBI Act, 1934 through
letter dated 23rd February, 2022, which stated that company's principal business is not to undertake financial activities and
expects its financial assets and financial income to be in excess of its business assets and income from operations.
In response to above RBI clarified in letter dated 15th March, 2022 that company is meeting the principal business criteria
for NBFCs as specified in Bank's press release 99/1269 dated April 8, 1999 as on 31st March, 2021.
Considering above, Company is required to obtain NBFC registration under section 45-IA of RBI Act, 1934 and the
company has initiated process of applying for registration of NBFC under section 45-IA of RBI Act, 1934. Further no
communication has been recevied from RBI and therefore company is maintaining Status quo.
5 The Company do not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
6 The Company do not have any transactions with companies struck off.
7 The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
8 The Company have not any such transaction which is not recorded in the books of accounts that 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.
9 The figures of previous year have been regrouped and rearranged wherever necessary.
As per our report of even date attached
For Parekh Sharma & Associates For and on behalf of the Board
Chartered Accountants
Firm Regn. No. 129301W
Sd/- Sd/- Sd/-
Sujesh Sharma Gautam P. Khandelwal Virat Mehta
Partner Executive Chairman Director
M. No. :118944 (DIN: 00270717) (DIN: 07910116)
Sd/- Sd/-
Praveen Bhati Santosh Khandelwal
Company Secretary Chief Financial Officer
(ACS: 71212)
Place: Mumbai Place: Mumbai
Date: 13th June, 2025 Date: 13th June, 2025
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