1.8 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive)
as a result of a past event, and it is probable that an outflow of resources embedded and that
the Company will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
1.9 Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity. Financial assets and financial liabilities
are recognised when the company becomes a party to the contractual provisions of the relevant
instrument and are initially measured at fair value. However trade receivables are initially measured
at the transaction price. Transaction costs that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through Statement of Profit and Loss) are added to or deducted from the fair value of
the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial liabilities at fair value through
Statement of Profit and Loss (FVTPL) are recognised immediately in Statement Profit and Loss.
1.10 Financial Assets
All regular way purchases or sales of financial assets are recognised and derecognised on a
trade date basis. Regular way purchases or sales are purchases or sales of financial assets that
require delivery of assets within the time frame established by regulation or convention in the
market place.
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.
a. Classification of Financial Assets
Debt instruments that meet the following conditions are subsequently measured at
amortised cost. The debt instruments carried at amortised cost include Deposits, Loans
and Advances recoverable in cash.
0 the asset is held within a business model whose objective is to hold assets in order
to collect contractual cash flows; and
0 the contractual terms of the instrument give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
(i) Investments in Equity Instruments Investments in Equity Instruments in
Subsidiary and Associates :
The Company has elected to carry investment in Equity Instruments in Subsidiary
and Associates at cost in accordance with Paragraphs 10 of ‘Ind AS 27 - Separate
Financial Statements’.
(ii) Investments in Other Equity Instruments:
The Company has irrevocably designated to carry investment in Other Equity
Instruments at Fair Value through Other Comprehensive Income. On initial recognition,
the Company can make an irrevocable election (on an instrument-by-instrument
basis) to present the subsequent changes in Fair Value in Other Comprehensive
Income pertaining to Investments in Equity Instruments. This election is not permitted
if the equity investment is held for trading. These elected investments are initially
measured at fair value plus transaction costs. Subsequently, they are measured at
fair value with gains and losses arising from changes in fair value recognised in Other
Comprehensive Income and accumulated in the ‘Reserve for Equity Instruments
through Other Comprehensive Income’. On derecognition of such Financial Assets,
cumulative gain or loss previously reported in OCI is not reclassified from Equity to
Statement of Profit and Loss. However, the Company may transfer such cumulative
gain or loss into retained earnings within Equity.
The Company has Equity Investments which are not held for trading. The Company
has elected the FVTOCI irrevocable option for these investments (see Note 3). Fair
value is determined in the manner described in Note 1.2.
b. Impairment of Financial Assets
In accordance with Ind AS 109, the Company uses “Expected Credit Loss” (ECL) model, for
evaluating impairment of financial assets other than those measured at Fair Value through
Profit and Loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
0 The 12 months expected credit losses (expected credit losses that result from those
default events on the financial instrument that are possible within 12 months after the
reporting date); or
0 Full lifetime expected credit losses (expected credit losses that result from all possible
defaults events over the life of the financial instrument).
For trade receivables or any contractual rights to receive cash or other financial assets
that results from transactions that are within the scope of Ind AS 115, the Company always
measures the loss allowance at an amount equal to life time expected credit losses.
The general terms of payment for the credit sales made by the Company is 30 to 60 days
from the date of Invoice. Hence the trade receivable do not carry any financing component.
For other assets, the Company uses 12 months ECL to provide for impairment loss where
there is no significant increase in credit risk. If there is significant increase in credit risk, full
lifetime ECL is used.
1.11 Financial Liabilities and Equity Instruments
a. 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.
b. Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of
an entity after deducting all of its liabilities. Equity instruments issued by a company are
recognised at the proceeds received, net of direct issue costs.
c. Financial Liabilities
All financial liabilities are initially recognised at the value of respective contractual
obligations. Financial liabilities that are not held-for-trading and are not designated as
at FVTPL are measured at amortised cost at the end of subsequent accounting periods.
The carrying amounts of financial liabilities that are subsequently measured at amortised
cost are determined based on the effective interest method. Interest expense that is not
capitalised as part of costs of an asset is included in the ‘Finance Costs’ line item.
1.12 Derivative Financial Instruments and Hedge Accounting
The Company enters into derivative financial instruments to manage its exposure to foreign
exchange rate risks, by means of foreign exchange forward contracts.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered
into and are subsequently remeasured to their fair value at the end of each reporting period. The
resulting gain or loss is recognised in the Statement of Profit and Loss immediately unless the
derivative is designated and effective as a hedging instrument, in which event the timing of the
recognition in Statement of Profit and Loss depends on the nature of the hedging relationship
and the nature of the hedged item.
The Company designates hedging instruments in respect of foreign currency risk as either fair
value hedges or cash flow hedges.
At the inception of the hedge relationship, the Company documents the relationship between
the hedging instrument and the hedged item, along with its risk management objectives and
its strategy for undertaking various hedge transactions. Furthermore, at the inception of the
hedge and on an ongoing basis, the Company documents whether hedging instrument is highly
effective in offsetting changes in fair values or cash flows of the hedged item attributable to the
hedged risk.
Cash Flow Hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges are recorded in Other Comprehensive Income and are accumulated as ‘cash
flow hedge reserve’. The gain or loss relating to the ineffective portion is recognised immediately
in the Statement of Profit and Loss.
The cumulative gain or loss previously recognised in Other Comprehensive Income remains
there until the forecast transaction occurs. When the hedged item is a non-financial asset, the
amount recognised in Other Comprehensive Income is transferred to the carrying amount of
the asset when it is recognised. In other cases the amount recognised in Other Comprehensive
Income is transferred to the Statement of Profit and Loss in the same period when the hedged
item affects Profit and Loss.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated
or exercised, or no longer qualifies for hedge accounting. Any gain or loss recognised in Other
Comprehensive Income and accumulated in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in the Statement of Profit and Loss. If a
hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in
the Other Comprehensive Income is transferred to the Statement of Profit and Loss.
Fair Value Hedges
The Company designates derivative contracts as hedging instruments to mitigate the risk of
change in fair value of hedged item in foreign exchange rates.
Changes in the fair value of hedging instruments and hedged items that are designated and
qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging
relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying
amount of a hedged item for which the effective interest method is used is amortised to Statement
of Profit and Loss over the period of maturity.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or
exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the
carrying amount of the hedged item arising from the hedged risk is amortised to Statement of
Profit and Loss from that date.
1.13 Treatment of shares held by SPB Equity Shares Trust
Pursuant to the Scheme of Amalgamation of SPB Papers Limited with the Company, 5,68,181
Equity Shares with face value of ' 10 each (28,40,905 Equity Shares of face value of ' 2 each,
after stock-split) were allotted to SPB Equity Shares Trust and approved by the High Court of
Madras to the benefit of the Company, in the financial year 2012-13.
The original cost of the investment is adjusted in other equity as under:
a) To the extent of Face/Nominal value is deducted from Equity Share capital
b) Balance is reduced from other equity under a separate reserve
The dividend received by the Company from SPB Equity Shares Trust, is taken to retained
Earnings.
1.14 Acquisition of the Assets of M/s Servalakshmi Papers Limited, Corporate Debtor in
Liquidation, as a going concern
The Company participated and emerged as the sole successful bidder in the e-auction held on
19.09.2022, for the sale of assets of M/s.Servalakshmi Paper Limited (In Liquidation) (Corporate
Debtor), on a Going Concern basis and the company had remitted the entire bid value of ' 105.0
crores in the month of October 2022.
The e-auction was for sale of assets of M/s.Servalakshmi Paper Limited (In Liquidation)
(Corporate debtor) on a Going Concern basis, without liabilities, on “As is where is basis”, “As is
what is basis”, “Whatever there is basis” and “Without any recourse basis”, under the provisions of
Insolvency and Bankruptcy Code, 2016 read with Regulation 32(e) of Insolvency and Bankruptcy
Board of India (Liquidation Process) Regulations, 2016 and pursuant to the directions contained
in Order of Hon’ble National Company Law Tribunal, Chennai Bench (“NCLT”).
The Hon’ble NCLT, Chennai Bench vide its Order dated May 12, 2023 had approved the
application filed by the Liquidator for confirmation of sale of assets of M/s.Servalakshmi Paper
Limited (Corporate Debtor) (In Liquidation) as a Going Concern, in favour of M/s. Seshasayee
Paper and Boards Limited (SPB) and dismissed / disposed of other appeals against the auction.
Consequent to the order of the Hon’ble NCLT dated 12.05.2023, the official liquidator of the
Corporate Debtor has Issued Sale Certificate dated 24.05.2023 and has completed the physical
handing over of the possession of land and factory premises located at Kodaganallur Village,
Vaduganpatti Post, I.C.Pettai, Tirunelveli - 627 010 of Servalakshmi Paper Limited (In Liquidation)
on 24.05.2023 to SPB, as per direction in the Order dated 12/05/2023 of Hon'ble NCLT, Chennai
Bench and the company remitting additional ' 2.0 crores as per the directions in the said NCLT
order.
Appeals challenging the aforesaid Hon’ble NCLT’s Order have been filed in Hon’ble NCLAT by
three parties, of which two appeals are “ Dismissed as withdrawn” and one appeal (filed by
Ex-promoter of the Corporate Debtor) is pending. Company, in the meantime, is taking steps for
revival, refurbishment and recommencement of operations.
The Board of Directors of the company in their meeting held on 21.03.2024 have approved
carrying the assets of Servalakshmi Unit, comprising of land, building and Plant & Machinery,
in the books of SPB and the Company has classified the amount of ' 107.0 crores as
“Other Non Current Assets” since 31.03.2024.
1.15 Investment in Shares of Renewable Power Generating (Solar & Wind Power) entity -
M/s Navia One Power Private Limited (SPV), under Group Captive Model.
The company had entered in to Share Purchase Agreement, Share Subscription & Shareholders'
Agreement and Energy Supply Agreement and Performance incentive agreement with M/s.Navia
One Power Private Limited (SPV) and its promoter shareholders, during April & May 2025, for the
purposes of developing a 52.8 MWp (DC) / 35.2 MW AC Solar Power Capacity and 9 MW Wind
Power Capacity and intending to supply power to our company exclusively.
During the financial year ended 31st March, 2026 the company has invested ' 26.0 crores in
the SPV to subscribe to 26.1% of its Equity Share Capital, in accordance with the terms of the
agreement. The said SPV is not considered for consolidation, as it is neither an associate nor a
subsidiary of our company, as per Ind AS 110- Consolidated Financial Statements. Considering the
contractual terms of the agreement and the rights and obligations of the company as a consumer
shareholder, the company has designated to carry the investments at fair value through OCI.
1.16 Events after reporting period
Where events occurring after the Balance Sheet date provide evidence of conditions that existed
at the end of the reporting period, the impact of such events is adjusted within the financial
statements. Otherwise, nature and consequent impact of the events of material size, occurring
after the Balance Sheet date, are only disclosed.
1.17 Financial and Management Information System
The Company’s Accounting System is designed to unify the Financial and Cost Records and also
to comply with the relevant provisions of the Companies Act, 2013, to provide financial and cost
information appropriate to the businesses and facilitate Internal Control.
Audit trail feature, as mandated by the Companies (Accounts) Rules, 2014 (as amended) with
effect from April 01,2023, has been enabled in the accounting software used by the Company.
The Company also a set up practices for daily backup of the entire database and applications in
remote locations.
B. Key Accounting Estimates and Judgments
1.1 Use of Estimates
The preparation of financial statements in conformity with Ind AS requires Management to make
judgments, estimates and assumptions that affect the application of the accounting policies and
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenses during
the year. Actual results could differ from those estimates.
1.2 Key sources of estimation uncertainty
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
Key assumption concerning the future, and other key sources of estimation uncertainty at the
end of the reporting period that may have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year is as given below.
a. Fair value measurement and valuation processes
Some of the Company’s assets and liabilities are measured at fair value for financial
reporting purposes. In estimating the fair value of an asset or a liability, the Company uses
market-observable data to the extent it is available. Where Level 1 inputs are not available,
the Company engages third party qualified valuers to perform the valuation.
b. Useful life of Property, Plant and Equipment
The Company reviews the estimated useful lives of Property, Plant and Equipment at the
end of each reporting period. During the current year, there has been no change in useful
life considered for the assets.
c. Cash Discounts
In accordance with Ind AS-115, the Company deducts cash discounts from the revenue for
sale of products. Cash discounts, on the sale of products in the last month of the year, is
estimated based on the past experience.
d. Actuarial valuation
The determination of Company’s liability towards defined benefit obligation to employees
is made through independent actuarial valuation including determination of amounts to
be recognised in the Statement of Profit and Loss and in Other Comprehensive Income.
Such valuation depend upon assumptions determined after taking into account inflation,
seniority, promotion and other relevant factors such as supply and demand factors in the
employment market. Information about such valuation is provided in notes to the financial
statements.
e. Claims, Provisions and Contingent Liabilities
The Company has ongoing discussions / litigations with various regulatory authorities,
trade unions and third parties. Where an outflow of funds is believed to be probable and
a reliable estimate of the outcome of the dispute or settlements can be made based on
Management’s assessment of specific circumstances of each dispute and relevant external
advice, Management provides for its best estimate of the liability. Such accruals are by nature
complex and can take number of years to resolve and can involve estimation uncertainty.
Information about such litigations is provided in notes to the financial statements.
f. Tax Expense
Significant judgments and estimates are involved in estimating the budgeted profits for the
purposes of advance tax, determining the provision for income tax.
g. Inventories
An inventory provision is recognised for cases where the realisable value is estimated to
be lower than the inventory carrying value. The inventory provision is estimated taking
into account various factors, including prevailing sale prices of inventory item, changes
in the related laws / emission norms and losses associated with obsolete / slow-moving
/ redundant inventory items. The Company has, based on these assessments, made
adequate provision in the books.
14 OTHER EQUITY
Please refer (B) OTHER EQUITY in STANDALONE STATEMENT OF CHANGES IN EQUITY
Description of nature and purpose of each reserve :
General Reserve
General Reserve is created from time to time by way of transfer of profits from retained earnings
for appropriation purposes. General Reserve is created by a transfer from one component of Equity
to another and is not an item of Other Comprehensive Income. It is a free reserve created by the
Company and is available for distribution to the shareholders of the Company.
Capital Reserve
Capital Reserve primarily represents gain on Business Combination of a capital nature and is not
available for dividend declaration.
Securities Premium Account
Securities Premium account records the premium component on issue of shares and can be utilised in
accordance with the provisions of Companies Act, 2013.
Cash Flow Hedge Reserve
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges are recorded in Other Comprehensive Income and are accumulated as ‘cash flow
hedge reserve'. This reserve will be transferred to Statement of Profit and Loss, on expiry / settlement
/ closure / ineffectiveness of the hedge.
19 (i) The classification of the suppliers under Micro, Small and Medium Enterprises Development
Act, 2006 is made on the basis of information made available to the Company.
(ii) Disclosure requirement as required under Micro, Small and Medium Enterprises Development
Act, 2006 is as follows.
a. Borrowings secured against current assets
The Quarterly returns or statements of current assets filed by the Company with Banks or financial
statements are in agreement with the books of account.
b. Utilisation of borrowed funds and share Premium thro’ intermediaries or for benefit of third
party beneficiaries.
i) No funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the company to or in any other persons
or entities, including foreign entities (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the intermediary shall, whether, 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 provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
ii) No funds have been received by the company from any persons or entities, including foreign
entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise,
that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
* Investments in these equity shares are not held for trading. Upon the application of Ind AS 109-Financial
instruments, the Company has chosen to measure these investments in equity instruments at FVTOCI
irrevocably as the management believes that presenting fair value gains and losses relating to these
Investments in the Profit or Loss may not be indicative of the performance of the Company.
1. The fair value of quoted investment in quoted equity shares measured at quoted price.
2. In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings
and other financial assets and liabilities it is assessed that the fair values approximate their carrying
amounts largely due to the short-term maturities of these instruments.
3. The fair values of the financial assets and financial liabilities included above have been determined
in accordance with generally accepted pricing models based on a discounted cash flow analysis,
with the most significant inputs being the discount rate that reflects the credit risk of counterparties.
36 (B) FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES
The Company’s operational activities expose to various financial risks i.e. market risk, credit
risk and risk of liquidity. The Company realises that risks are inherent and integral aspect of any
business. The primary focus is to foresee the unpredictability of financial markets and seek to
minimize potential adverse effects on its financial performance.
The Company’s financial assets comprise mainly of cash and cash equivalents, other balances
with banks, trade receivables, other receivables and investments.
The Company has financial risk exposure in the form of market risk, credit risk and liquidity risk.
The risk management policies of the Company are monitored by the Risk Management Committee
of the Board of Directors. The present disclosure made by the Company summarizes the exposure
to the financial risks.
1. Market 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. Financial instruments affected by market risk include loans
and borrowings, deposits, investments, and derivative financial instruments. 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. 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. Regular
interaction with bankers, intermediaries and the market participants help us to mitigate such risk.
a) Interest Rate Risk exposure
The risk is that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company’s financial liabilities comprise
mainly of trade payables and other payables. The Company has NIL Term Loan and working
capital borrowings from Banks / any Financial Institutions as on March 31, 2026 (Term
Loan Outstanding as on 31.03.2025 : NIL; Working Capital PCFC Loans Outstanding as on
31.03.2025 : ' 81.86 crores). Hence the Company doesn’t have any financial liability and
allied risk on this account. The Company has not entered into any of the interest rate swaps.
The Company’s investment in fixed deposit with banks is only on Fixed Interest Rate Terms
and hence, there is no exposure to future interest rate movement.
b) Foreign currency risk exposure
The Company imports coal, 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, in general, follows a conservative and sound policy by
entering into simple Forward Exchange Contracts to hedge the foreign currency risk whose
maturity is coterminous with the maturity period of the foreign currency liabilities (underlying).
The Company had Foreign Exchange liability for US $ 9.33 Mn as on 31st March 2026 (Previous
Year -US $ 19.20 Mn) of which US $ 4.20 Mn (Previous Year -US $ 9.64 Mn) is hedged with
forward contracts, leaving US $ 5.13 Mn (Previous Year -US $ 9.56 Mn) as unhedged but fully
matched with unhedged anticipated export collections.
The Company is also exposed to foreign currency risk on its Exports. As on March 31, 2026,
the Company had Export Receivables in Foreign Currency amounting to US $ 1.59 Mn.
(Previous Year -US $ 2.49 Mn), of which US $ 0.5 Mn (Previous Year: US $ Nil Mn) is hedged
with forward contracts on cash flow basis. The company has a Forex policy dealing specifically
with measurement and reporting of both “Net unhedged exposures” and “Stop loss” limits. The
compliance to this policy on a daily basis is audited by the Internal Auditor and reported to the
Audit Committee.
c) Commodity price risk
The Company is exposed to the movement in price of key input 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. The Company manages fluctuations
in raw material price through hedging in the form of advance procurement when the prices are
perceived to be low, in order to keep raw material prices under check, to the extent possible.
d) 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. The Company’s equity investment in its subsidiary and
associate is for strategic purposes and not held for trading. They are carried at cost and are
hence not subjected to price related risk. Other investments in equity instruments are held
with a view to hold them for a long-term basis and not held for trading. The investments are
in fundamentally strong companies and temporary fluctuations in price do not attribute any
investment risk. (Refer Note No.3 for details on Investments)
e) Competition and Price risk
The Company faces competition from local and foreign competitors. Nevertheless, it believes
that it has competitive advantage in terms of the wide spread of product offerings, good quality
products and continuous upgrading its expertise to meet the needs of its customers.
2. Credit Risk
The credit risk refers to risk that a counterparty will default on its contractual obligations resulting
in financial loss to the Company. Credit risk arises primarily from financial assets such as trade
receivables, other balances with banks and other receivables.
_>
The credit risk arising from the exposure of investing in other balances with banks and bank
balances is limited and there is no collateral held against these because the counterparties are
public sector banks / AAA rated private sector banks.
The Company sells its products through appointed indentors. The Company has established a
credit policy under which every indentor is analysed individually for creditworthiness. Each indentor
places security deposit in the Company, based on the quota allocated to him. Though the invoices
are raised on the individual customer, the indentor is responsible for the collection and in case of
default by the customer, the dues from the customer are withheld / adjusted against the payables
to indentor. Over 20% of the receivables as on 31.03.2026 (Previous Year 26%) is covered by
the credits available with the Company against indentors account. The balance receivables are
insured with Trade Credit Insurance programs offered by a premier Indian Insurance Company.
Thus, the credit risk is mitigated in full.
Exports are, in general, made against advances received or terms with payment against documents.
The Company has also covered the residual risk with a credit insurance from a premier Indian
Insurance Company. Hence, the credit risk in respect of its exports is fully covered.
For trade receivables, as a practical expedient, the Company computes the credit loss allowance
if there is life-time expected credit losses.
3) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk
may result from an inability to sell a financial asset quickly to meet obligations when due. The
Company’s exposure to liquidity risk arises primarily from mismatches of maturities of financial
assets and liabilities.
The Company manages the liquidity risk by (i) maintaining adequate and sufficient cash and cash
equivalents including investments in fixed deposits with banks (ii) making available the funds from
realizing timely maturities of financial assets to meet the obligations when due. The management
monitors rolling forecast of the Company’s liquidity position and cash and cash equivalents on the
basis of expected cash flows. Also, 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 and monitoring balance sheet liquidity
ratios. Further, the liquidity risk management involves matching the maturity profiles of financial
assets and financial liabilities.
i. Financial arrangements
The Company has access to the following undrawn borrowing facilities at the end of the
reporting period:
Working Capital borrowing facilities (' 25 crores, ' 150 crores and ' 40 crores of Fund
Based Limits sanctioned by HDFC, State Bank of India and Kotak Mahindra Bank
Limited respectively; ' 25 crores and ' 50 crores of Non-Fund Based Limits sanctioned
by HDFC and State Bank of India respectively ) secured by :
- Hypothecation of stocks of Raw Materials, Stores, Spares, Chemicals and others,
including Goods-in-Transit, Stock-in-Trade, Stock-in-Process, Finished Goods and Book
Debts of the Company.
- Second charge, by way of hypothecation of movable fixed assets of the Company,
consisting of plant and machinery, fixtures and fittings.
Period and amount of default in respect of above said borrowing facilities: NIL
The Company is not a Large Corporate as per the applicability criteria given under the Chapter
XII of SEBI Operational Circular SEBI/HO/DDHS/P/CIR/2021/ 613 dated August 10, 2021 (as
updated on 13th April 2022).
36 (C) CAPITAL MANAGEMENT
The Company adheres to a cautious capital management that seeks to trigger growth creation
and maximization of shareholders’ value. For the purpose of the Company’s capital management,
capital includes issued capital and all other equity reserves attributable to the shareholders of the
Company. The Company has been funding its growth and acquisition plans and working capital
requirements through a balanced approach of internal accruals and external debt from banks. The
Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile
of the overall debt component of the Company.
40 EMPLOYEE BENEFITS
(i) Defined Contribution Plans:
The Company makes Provident Fund and Superannuation Fund contributions which are defined
contribution plans, for qualifying employees. Under the Schemes, the Company is required to
contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised
' 6.09 crores (Year ended March 31, 2025 ' 5.85 crores) for Provident Fund contributions and
Nil (Year ended March 31, 2025 ' 0.27 crores) for Superannuation Fund contributions in the
Statement of Profit and Loss. The contributions payable to these plans by the Company are at
rates specified in the rules of the schemes.
(ii) Defined Benefit Plans:
Gratuity (Funded) and Retirement Benefit Scheme (Unfunded)
In respect of Gratuity, the most recent actuarial valuation of the plan assets and in respect of
Gratuity and Retirement benefit Scheme the present value of the defined benefit obligation
were carried out by actuarial valuation. The present value of the defined benefit obligation
and the related current service cost and past service cost, were measured using the
projected unit cost method. The following table sets forth the status of the Gratuity Plan and
the Retirement benefit Scheme of the Company and the amount recognised in the Balance
Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through
annual contributions to the funds managed by the Life Insurance Corporation of India.
The Company is exposed to various risks in providing the above gratuity benefit and Leave
encashment which are as follows:
Interest Rate Risk:
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result
in an increase in the ultimate cost of providing above benefit and will thus result in an increase in
the value of the liability (as shown in financial statements).
Investment Risk:
The probability or likelihood of occurrence of losses relative to the expected return on any particular
investment.
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, based on past experience. 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.
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 adverse compared to the
assumptions.
The Company pays contributions to the insurer as determined by them. The insurance company has
invested the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds and Money
Market Instruments. The expected rate of return on plan assets based on expectation of the average
long term rate of return expected on investments of the fund during the estimated term of the obligation.
Significant actuarial assumptions for the determination of the defined benefit obligation are as
discussed above.
The sensitivity analysis below have been determined based on reasonably possible changes of the
assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The results of sensitivity analysis is given below:
Sensitivity analysis presented above may not be representative of the actual change in the defined
benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one
another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit
obligation has been calculated using the projected unit credit method at the end of the reporting period,
which is the same as that applied in calculating the defined benefit obligation liability recognised in the
balance sheet.
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation
plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year.
The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening
during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity
risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the
duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the
significant fall in interest rates, which should result in a increase in liability without corresponding
increase in the asset).
The Company’s best estimate of the contribution expected to be paid to the plan during the next year
is ' 3.00 crores (Previous year Actual ' 0.23 crores).
41 SEGMENT REPORTING
The Chairman, who is also the Whole time Director and KMP of the Company, has been identified
as the Chief Operating Decision Maker. The CODM has considered only Paper as the operating
segment as defined under Ind AS 108. The Company’s operations primarily relate to Sale of Paper
and Paper Boards.
The Assets and Liabilities of the Company can not be identified to a specific segment since they
are common in nature to all the reported segments.
42 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved for issue by the Board of Directors at their meeting held
on 12th May 2026.
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