1.21 Provisions and Contingencies
A Provision is recognized for a present obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the accounts.
1.22 Segment Reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Company's Chief Operating Decision Maker ("CODM") to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the CODM evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.
1.23 Dividends
Dividends paid (including dividend distribution tax thereon) is recognized in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders. The amount is recognised directly in equity.
1.24 Recent pronouncements
A. Adoption of New Accounting Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31st March, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
i) Ind AS 1 - Presentation of Financial Statements
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023. The Company does not expect this amendment to have any significant impact in its financial statements.
ii) 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. The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023. The Company does not expect this amendment to have any significant impact in its financial statements.
iii) 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 effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023. The Company does not expect this amendment to have any significant impact in its financial statements.
B. Standards issued but not yet effective
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. During the year ended 31 March, 2024, MCA has not notified any new standards or amendments to existing standard to the Company.
(v) Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Interest risk:
A decrease in the interest rate on plan assets will increase the plan liability.
Life expectancy:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.
Salary growth risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.
(vi) Contribution to Defined benefit plan
Expected contributions to post-employment benefits plans for the year ending 31st March, 2025 is Rs. 18.31 Lakhs ( 31st March,2023, Rs.17.91).
(vii) Maturity profile of Defined Benefit Obligations
The weighted average duration of the defined benefit obligation is 5.46 years (31st March, 2023 : 5.98 years). The expected maturity analysis of undiscounted gratuity is as follows:
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. 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.
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments is determined using discounted cash flow analysis.
(iii) Fair value of financial assets and liabilities measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are reasonable approximations of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
(iv) Significant estimates
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.
Note: 38 - Lease Liabilities
(a) The Company has lease contracts for land. The Company's obligations under leases are secured by the lessor's title to the leased assets.
(b) The Company has elected to apply Ind AS 116 to its leases with modified retrospective approach. Under this approach, the company has recognised lease liabilities and corresponding right of use assets. In the Statement of Profit and Loss for the year ended, depreciation expenses on right of use assets and finance cost for interest accrued on such lease liability has been recognized.
Note: 39 - Capital Management
The Company's objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
The amount mentioned under total equity in balance sheet is considered as Capital.
No changes were made to the objective, policies or process for managing capital during the year ended 31st March, 2024 and 31st March, 2023.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
(i) Trade receivables
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying 30 days credit terms. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically. The ageing of trade receivables as of balance sheet date is given below. The age analysis have been considered from the due date:
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
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. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The management also considers the cash flows projection and level of liquid assets necessary to meet these on a regular basis.
(C) Market risk - Interest rate risk
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. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.
The Company's main interest rate risk arises from borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31st March 2024, the Company's borrowings at variable rate were denominated in Indian Rupees.
(D) Market risk - Foreign currency risk
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.
Further foreign exchange risk also arises from future cash flow against foreign currency loan. The risk is measured through a forecast of highly probable foreign currency cash flows.
(E) Market risk - Price 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 (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.
Note : Based on legal opinion / decisions in similar cases, the Management believes that the Company has a fair chance of favorable decisions in cases mentioned here-in-above and hence no provision is considered necessary.
a) In respect of demand notice dated 19th February, 2020 received by the Company from Director of Mineral Resources, Meghalaya, for payment of royalty, MEPRF, VAT/GST for H1,739 Lacs (approx) in pursuance to the National Green Tribunal (NGT) Order dated 17th January, 2020 passed in O.A. No. 110(TCH)/2012 for alleged illegal coal procurement. By passing the said order NGT has accepted the Recommendation of the 5th Interim Report of the Independent Committee set up by NGT, which has suggested imposition of penalty on Cement Companies and Thermal Power Plants in Meghalaya.
The Company has not purchased any illegal coal and has complied with all disclosure requirements of the various Government Departments. The Report of NGT Committee has been founded on the basis of assumptions and views of the Committee and not on hard facts. Further to note that the Company has neither been issued a show-cause nor any opportunity of being heard was given to the Company before submitting the Interim reports by the Independent Committee to NGT. Even NGT has not served any notice on the Company before passing the impugned order dated 17th January, 2020 which is clear violation of principles of natural justice. In addition, the Committee also recommended that an amount of Rs. 400/MT of coal to be utilized by the Company (and other plants) on or after the date of the order shall be directed to be deposited in the MEPRF, which comes to Rs. 446 Lakhs (approx).
Accordingly, the Company had preferred an appeal, being C.A. No.4144 of 2020, before the Apex Court. The Apex court vide it's order dated 02.05.2023 restored the proceeding in relation to the Company back to the file of the NGT, at the stage, at which they stood prior to the passing of the judgement dated 17.01.2020.
On 2nd Nov, 2023, the Company filed an application for impleadment which was allowed by the NGT, Eastern Zone Bench, Kolkata. Further, the Company has also filed a counter affidavit before the NGT, Eastern Zone Bench which was taken on record on 9th Feb, 2024 and the said case is now listed for hearing before the NGT, Kolkata on 02.08.2024. And hence , no provision has been made in the books of account.
Note: 43 - Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education,art and culture,healthcare,destitute care and rehabilitation, environment sustainability, disaster relief and rural developments projects.
43.1 A CSR Committee has been formed by Company as per the Companies Act, 2013. The funds were primarily utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013. a) Gross Amount required to be spent by the Company during the year is H76.83 Lakhs (as at 31st March, 2023, H51.74 Lakhs)
44 The Company has not been declared a wilful defaulter by any bank/financial institution/government/any government authority.
45 The Company has not traded or invested in crypto currency or virtual currency during the current year or previous year.
46 The borrowings obtained by the company from banks have been applied for the purposes for which such loans were taken.
47 The Company has not entered into any scheme of arrangements which has an accounting impact on current or previous financial years.
48 No proceedings have been initiated on or are pending against the company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) [formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)] and Rules made thereunder.
49 The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 during the current financial year and previous financial year.
50 (i) The Company has not advanced or loaned or invested funds (either borrowed funds or security premium or any
other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall 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) The Company have not received any fund from any person(s) or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) 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 (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
51 There are no charges or satisfaction of charges which are yet to be registered with the Registrar of Companies beyond the statutory period.
Note: 53 The Company is primarily engaged in the manufacture and sale of ferro silicon. There are no separate reportable segments as per Ind AS 108, 'Operating Segments'.
Note: 54 Previous year's figures have been rearranged and/or regrouped,whenever necessary
Note: 55 The financial statements have been approved by the Audit Committee at its meeting held on 22nd May, 2024 and by the Board of Directors on the same date.
For D. K. Chhajer & Co. For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration No. 304138E
Neha Maheshwari Uday Bahadur Chetri Aditya Vimalkumar Agrawal
Partner Chief Financial Officer Managing Director
Membership No :308616 DIN : 03330313
Ritu Agarwal Rajesh Kumar Agarwal
Place: Kolkata Company Secretary Director
Date: 22nd May, 2024 DIN : 00223718
| 