(w) Provisions & Contingent Liabilities:
Provisions:
Provisions are recognized when the Company has a present legal or constructive obligation as
a result of past events, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and the amount can be reliably estimated.
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. When
the Company expects some or all of a provision to be reimbursed, for example, under an
insurance contract, the reimbursement is recognized as a separate asset, but only when the
reimbursement is virtually certain. The expense relating to a provision is presented in the
Statement of Profit and Loss net of any reimbursement.
Contingent Liabilities:
A disclosure for contingent liabilities is made when there is a possible obligation arising from
past events, the existence of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not wholly within the control of the
Company or a present obligation that arises from past events where it is either not probable
that an outflow of resources embodying economic benefits will be required to settle or a
reliable estimate of the amount cannot be made.
(x) Financial Assets at Fair Value through Profit or Loss Account:
Financial assets are measured at fair value through profit or loss unless it is measured at
amortized cost or at fair value through other comprehensive income on initial recognition. The
transaction costs directly attributable to the acquisition of assets and liabilities at fair value
through profit and loss are immediately recognized in the statement of profit and loss.
(y) Financial Liabilities:
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings or payables, as appropriate. All financial liabilities
are recognized initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs. The Company's financial liabilities include trade and
other payables, loans and borrowings including bank overdrafts and financial guarantee
contracts.
Financial liabilities are measured at amortized cost using the effective interest method.
(z) Reclassification of Financial Assets & Liabilities:
The Company determines classification of the financial assets and liabilities on initial
recognitions. After initial recognition, no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial assets which are debt instruments, a
reclassification is made only if there is a change in the business model for managing those
assets. Changes to the business model are expected to be infrequent. The Company's senior
management determines change in the business model as a result of external or internal
changes which are significant to the company's operations. Such changes are evident to
external parties. A change in the business model occurs when a company either begins or
ceases to perform an activity that is significant to its operations. If the Company reclassifies
financial assets, it applies the reclassification prospectively from the reclassification date which
is the first day of the immediately next reporting period following the change in business
model. The Company does not restate any previously recognized gains, losses (including
impairment gains and losses) or interest.
(aa)Offsetting of Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet if
there is currently enforceable legal right to offset the recognized amounts and there is no
intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
i) Capital Management: -
The Company's capital management objectives are to maintain a strong capital base so as to
maintain investors, creditors and market confidence and to future development of the business.
The Board of Directors monitor return on capital employed.
The Company manages capital risk by maintaining sound/optimal capital structure through
monitoring of financial ratios, such as debt-to-equity ratio and net borrowings-to-equity ratio on a
monthly basis and implements capital structure improvement plan when necessary.
The Company uses debt ratio as a capital management index and calculates the ratio as Net debt
divided by total equity. Net debt and total equity are based on the amounts stated in the financial
statements.
ii) Credit Risk:-
Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt
according to contractual terms or obligations. Credit risk encompasses both, the direct risk of
default and the risk of deterioration of credit worthiness as well as concentration of risks. Credit
risk is controlled by analyzing credit limit and creditworthiness of customers on a continuous basis
to whom the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to credit risk principally consists of trade receivable,
investments, derivative financial instruments and other financial assets. None of the financial
instruments of the Company results in material concentration of credit risk.
Exposure to credit risk:-
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk is as under, being the total of the carrying amount of balances with trade
receivables and loans and advances: -
Ind AS requires expected credit losses to be measured through a loss allowance. The Company
assesses at each date of financial statement whether a financial asset or group of financial assets
is impaired. The Company recognizes lifetime expected losses for all contract assets and / or all
trade receivables that do not constitute a financing transaction. For all other financial assets,
expected credit losses are measured at an amount equal to 12 months expected credit losses or at
an amount equal to the life time expected credit losses, if the credit risk on the financial asset has
increased significantly since initial recognition
Before accenting any new customer, the Company uses an external/internal credit scoring system
to assess potential customer's credit quality and defines credit limits by customer. Limits and
scoring attributed to customer are reviewed periodic basis
iii) Liquidity Risk
a. Liquidity Risk Management:-
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The
objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are
available for use as per 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.
b. Maturities of financial liabilities
The following table details the remaining contractual maturities for its financial liabilities with
agreed repayment period. The amount disclosed in the table has been drawn up based on the
undiscounted cash flow of financial liabilities based on the earliest date on which the Company is
required to pay. The table includes principal cash outflows.
c. Maturities of financial assets:-
The following table details the Company's expected maturity for financial assets. The table has
been drawn up based on the undiscounted contractual maturities of the financial assets including
interest that will be earned on such assets.
d. Market Risk:-
Market risk is risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in the market prices. Such changes in the value of financial instruments may
result from changes in the foreign currency exchange rate, interest rate, credit, liquidity and other
market changes.
Note No.: 35
Secured Loans
a. Working Capital and Term Loan:-
Loans Repayable on demand or on due date and GECL availed from the State Bank of India is
primarily secured by Hypothecation of present and future stock of raw materials, Stock in
process, finished goods, Stores & spare parts and Book debts.
Term loans availed from the State Bank of India for Co-generation power plant, Sulphuric
Expansion projects and New Online Coating Plant are primarily secured by the respective
plants.
All the above facilities are additionally secured by the registered mortgage on existing
leasehold land admeasuring 23,409 sq mtr with building and structure thereon, including all
machineries at industrial Plot No 293, 296 in industrial area bearing survey no. 55/P, 57/P,
67P, 68P and 139P, within the limits of Chirri and Chanod, Vapi, Taluka Pardi, Dist Valsad -
396195 and existing leasehold land and building bearing Survey No 621/P, 58/P, 56/P, 136/P,
137/P situated at Industrial Plot No 294, 295 and 296/P, within the limits of Chirri and Chanod,
Vapi, Taluka Pardi, Dist Valsad - 396195 admeasuring 39,020 sq mtrs,
Loans are also guaranteed by personal guarantee of Shri Akash Kagliwal, Smt Jeevanalata
Kagliwal and Shri Nandkishor Kagliwal and corporate guarantee of M/s Akash Farms LLP.
b. Working capital term loan availed from Aditya Birla Finance Limited is secured by registered
mortgage on land at
i. Gut No 50/2, 50/3 and 50/6 at Wahegaon and Gut No 54/1, 54/2, 54/3 and 54/5 50/5,
50/6 and 54/1 at Issarwadi, both lands at Tal. Paitha, Dist Aurangabad owned by the
company admeasuring 30.59 acres
ii. Gut No 321, 322, 323, 324 and 37/8 at Wahegaon Tal Paithan, Dist. Aurangabad
admeasuring 31.89 acres and
iii. Utsah Bunglow, Ground Floor at Plot No 3, CTS no. 20186 bearing Municipal no 5-14-67,
Adalat Road, Aurangabad owned by Mrs Jeevanlata Kagliwal admeasuring 1598 sq ft.
and
iv. Utsah Bunglow, First Floor at Plot No 3, CTS no. 20186 bearing Municipal no 5-14-67,
Adalat Road, Aurangabad owned by Mr Akash Kagliwal admeasuring 1598 sq ft. and
portion admeasuring 305 sq ft on second floor.
Note No.:41
Segment Reporting :
i) Primary Segment:-
The company is engaged in manufacturing of Paper & chemicals. Management has identified
reportable primary Segment & Geographic secondary Segment in accordance with Accounting
Standard 108 issued by the Institute of Chartered Accountants of India. Revenue & Expenses
directly attributable to segments are reported under each reportable segment. Expenses which
ii) Secondary Segment-
Geographical Revenue is allocated based on the location of the customer.
The company produces and sales, its products in India & also Export the same directly or indirectly
to overseas countries. The overseas sales operations are managed by its office located in India. For
the purpose of AS 108 regarding segment reporting secondary segment information on
geographical segment is considered on the basis of revenue generated from Domestic & Export
market.
NOTE No.:42
Deferred Sales Tax Liability
Nath Industries Limited -Unit Nath Paper was the beneficiary of Package Scheme of Incentive (PSI-
1988) of Government of Maharashtra upto 2008-09. As per the scheme and Government
Resolution no IDL/1093/(8889)/IND-8 dated 07th May 1993, unit Nath Paper being located in
Marathwada was eligible to pay the deferred sales tax after 18 years in seven equal annual
installments. Accordingly, the liability of deferred sales tax will be paid from 18th years in seven
equal installments. The repayment of same will begin from the F.Y. 2029-30.
The Department of Industries, Government of Maharashtra has further sanctioned vide their letter
dated 07.12.2015 the Eligibility for the unutilized CQB of Rs. 1951.75 lakhs under PSI-1988, for a
period of 5 years i.e. from 1st November, 2015 to 31st October, 2020
Deferred Sales tax Liability of MVAT/ SGST has been valued at Book value, which would have been
Rs 1,090.51 lakhs if valued at Fair Value as required under the IND AS -113 Fair Value
Measurement. Company has recognized the same at its Book value considering the fact that the
company is liable to pay the entire dues to the Government of Maharashtra as per the schedule of
repayment.
Note No.:44
Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Act, 2006:
Information related to Micro and Small Enterprises, as per the Micro, Small and Medium
Enterprise Development Act 2006 (MSME Development Act), are given below. The information
given below have been determined to the extent such enterprises have been identified on the
basis of information available with the Company.
*The results of expansion and cost reductions project undertaken in last 3 years have reflected in
the performance of the company. The company has recorded net profit after tax of Rs 973.72 lakhs
as against the profit after tax Rs 49.42 lakhs recorded in previous financial year.
Note No.:47
Previous year Figures
Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the
current year's classification / disclosure.
In term of our report attached
For N. R. Agrawal & Co For and on behalf of the Board
Chartered Accountants
Firm Reg. No. 100143W
N. R. Agrawal Akash Kagliwal
Partner Managing Director
M.No.: 030117
UDIN:- 25030117BMULBW5932
Place : Mumbai Abhaykumar Jain
Date: 30th May 2025 Director
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