k. Provisions (other than for employee benefits) and contingent liabilities
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows
(representing the best estimate of the expenditure required to settle the present obligation at the balance
sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount is recognized as finance cost. Expected future
operating losses are not provided for.
Decommissioning costs
Decommissioning costs are measured as the best estimate of the expenditure to settle the obligation or
to transfer the obligation to a third party. Provisions for decommissioning obligations are required to
be recognized at the inception of the arrangement. The estimated costs to be incurred at the end of the
arrangement are discounted to its present value using the market rate of return.
Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company
or a present obligation that is not recognized because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a
liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a
contingent liability but discloses its existence in the financial statements.
Contingent Assets
A contingent asset is a possible asset 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. The inflow of economic benefits cannot be measured due to uncertainties that surround the
related events and circumstances.
Contingent assets are not recognized, but they are disclosed when it is more likely than not that an inflow of
benefits will occur.
i. Revenue recognition
Revenue is measured based on the transaction price, which is the fair value of the consideration received
or receivable after netting trade discounts, volume discounts, sales returns and Goods and Services
Tax. Revenue from sale of goods is recognized upon transfer of control of promised goods or services to
customers.
Revenue from contract with customers is recognized when the Company satisfies performance obligation
by transferring promised goods and services to the customer. Performance obligations are satisfied at a
point of time. Performance obligations are said to be satisfied at a point of time when the customer obtains
controls of the goods / services rendered i.e, transfer of control happens when the goods are delivered to the
carrier.
Rental income from investment property is recognized as part of other income in profit or loss on a straight¬
line basis over the term of the lease except where the rentals are structured to increase in line with expected
general inflation.
Renewable Energy Certificate (REC) / Energy Saving Certificates (ESCerts) issued by Bureau of Energy
Efficiency (BEE) benefits are recognized in the statement of Profit and Loss on sale of REC's / ESCerts.
Liquidated damages and penalties recovered from suppliers/contractors, in relation to property, plant and
equipment are credited to statement of profit and loss unless the delay has resulted in extra cost of assets, in
which case the same are adjusted towards the carrying cost of the respective asset. In case of Interest from
Customers (Overdue bills), the Interest income is recognized only when the uncertainty of realization does
not exist.
Barter transactions
The Company has engaged into barter transactions comprising of exchanging steam/fuel for bagasse. This
exchange though is of dissimilar goods, would not qualify as sale since it is not a product sold by the Company
and the transaction does not have commercial substance.
Export Benefits
The benefit accrued under Duty Drawback Scheme as per the Export and Import Policy in respect of exports
made is accounted on an accrual basis and is included under the head "Revenue from Operations" as 'Other
Operating Revenue - Export Incentives'.
The benefit accrued under Remission of Duties or Taxes on Export Products Scheme (RoDTEP) in respect
of exports on an accrual basis and is included under the head "revenue from operations" as 'Other Operating
Revenue - Export Incentives'.
Export benefits available under eligible schemes are recognized in the year when the right to receive credit
as per the terms of the scheme is established in respect of exports made and are accounted to the extent
there is no significant uncertainty about the measurability and ultimate utilization/ realization of such duty
credit.
m. Government grants
Government grants and project incentives are recognized initially as deferred income at fair value when
there is reasonable assurance that they will be received and the Company will comply with the conditions
associated with the grant and the same is recognized in statement of profit and loss as other income on a
systematic basis.
Grants that compensate the Company for expenses incurred are recognized in Statement of profit or loss as
other income on a systematic basis in the periods in which such expenses are recognized.
n. Leases
i. The Company as a Lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the
terms of the lease transfer substantially all the risk and rewards of ownership to the lessee, the contract
is classified as finance lease. All other leases are classified as operating lease.
ii. The Company as a Lessee:
The Company's lease asset consists of lease for buildings and Plant & Machinery. The Company assesses
whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset,
the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company
has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and
a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with
a term of twelve months or less (short-term leases) and low value leases. For these short-term and low
value leases, the Company recognizes the lease payments as an operating expense on a straight-line
basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the
lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they
will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any
initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the
shorter of the lease term and useful life of the underlying asset. Right-of-use assets are tested for
impairment whenever there is any indication that their carrying amounts may not be recoverable.
Impairment loss, if any, is recognised in the statement of profit and loss.
The lease liability is initially measured at amortized cost at the present value of the future lease
payments. The lease payments are discounted using the interest rate implicit in the lease or, if not
readily determinable, using the incremental borrowing rates. Lease liabilities are remeasured with a
corresponding adjustment to the related right of use asset if the Company changes its assessment if
whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
o. Recognition of dividend income, interest income or expense
Dividend income is recognized in statement of profit and loss on the date on which the company's right
to receive payment is established. Interest income or expense is recognized using the effective interest
method.
p. Income tax
Income tax comprises current and deferred tax. It is recognized in statement of profit and loss except to the
extent that it relates to an item recognized directly in equity or in other comprehensive income.
i. Current tax
Current tax comprises the estimated tax payable or receivable on the taxable income or loss for
the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of
current tax reflects the best estimate of the tax amount expected to be paid or received after considering
the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set
off the recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or
simultaneously.
ii. Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
Deferred tax is also recognized in respect of carried forward tax losses and tax credits.
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be
available against which they can be used. The existence of unused tax losses is strong evidence that
future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company
recognizes a deferred tax asset only to the extent that it has sufficient taxable temporary differences
or there is convincing other evidence that sufficient taxable profit will be available against which such
deferred tax asset can be realized. Deferred tax assets - unrecognized or recognized, are reviewed at
each reporting date and are recognized/ reduced to the extent that it is probable/ no longer probable
respectively that the related tax benefit will be realized.
Credit for Minimum Alternative Tax (MAT) if any is recognized as a part of deferred tax assets. Deferred
tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the
liability is settled, based on the laws that have been enacted or substantively enacted by the reporting
date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realized simultaneously.
q. Borrowing cost
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency
borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection
with the borrowings. Borrowing costs directly attributable to acquisition or construction of an asset which
necessarily take a substantial period of time to get ready for their intended use are capitalized as part of
the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are
incurred.
r. Cash flow statements
Cash flow statements are prepared under Indirect Method whereby profit or loss is adjusted for the effects
of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments, and items of income or expense associated with investing or financing cash flows. Cash and cash
equivalents comprise of cash in hand, current accounts held with banks and bank overdraft (Cash Credit).
s. Events occurring after the balance sheet date
Assets and liabilities are adjusted for events occurring after the reporting period that provides additional
evidence to assist the estimation of amounts relating to conditions existing at the end of the reporting
period.
Dividends declared by the Company after the reporting period are not recognized as liability at the end of the
reporting period. Dividends declared after the reporting period but before the issue of financial statements
are not recognized as liability since no obligation exists at that time. Such dividends are disclosed in the
notes to the financial statements.
t. Operating segments
An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of
the Company's other components, and for which discrete financial information is available. All operating
segments' operating results are reviewed regularly by the Company's Board of Directors (BoD) to make
decisions about resources to be allocated to the segments and assess their performance.
A component that is dependent substantially on any other operating component and which does not trigger
threshold for reporting under Ind AS - 108 is aggregated with the main segment.
Revenue and expenses have been identified to respective segments on the basis of operating activities of the
enterprise. Revenue and expenses which relate to the enterprise as a whole are not allocable to a segment on
a reasonable basis have been disclosed as un-allocable assets and liabilities.
Inter segment revenue / expenses are recognized at cost.
Geographical segments considered for reporting are India and Rest of the World.
Information about reportable segments
Performance is measured based on segment profit (before tax), as included in the internal management reports
that are reviewed by the Company's CEO. Segment profit is used to measure performance as management
believes that such information is the most relevant in evaluating the results of certain segments relative to
other entities that operate within these industries. Inter-segment pricing is determined on cost basis.
u. Earnings per share (EPS)
Basic earnings per share is computed by dividing profit or loss attributable to equity shareholders of the
Company by the weighted average number of equity shares outstanding during the year. The Company did
not have any potentially dilutive securities in any of the years presented.
v. Dividends
Final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim
dividends are recorded as a liability on the date of declaration by the Company's Board of Directors.
The Company declares and pays dividends in Indian rupees. The remittance of dividends outside India is
governed by Indian law on foreign exchange and is subject to applicable withholding taxes.
Dividends, if any are to be declared at the Annual General Meeting of Shareholders based on the
recommendation of the Board of Directors. Interim Dividends declared by the Company's Board of Directors
are ratified at the Annual General Meeting. Generally, the factors that may be considered by the Board of
Directors before making any recommendation of dividend include, without limitation, the company's future
expansion plans and capital requirements, profits earned during the fiscal year, cost of raising funds from
alternative sources, liquidity position, applicable taxes including tax on dividend as well as exemptions under
tax laws available to various categories of investors from time to time and general market conditions.
Note:
a) The Land includes ' 149.69 Lakhs towards the value of 10 grounds and 425 sq.ft for the construction of Corporate Office
building. The transfer of title of the said Land by the Government of Tamilnadu in favour of the company is yet to be done
pending completion of necessary formalities.
b) The company has acquired 832.57 acres of Private Patta land and 41.89 acres of Government Poramboke Land for setting up
the Multilayer Coated Board Plant and paid interim compensation of ' 2501.70 lakh for Private Patta Land . As per notification
by the Government of Tamil Nadu vide its order GO.(Ms.) No.13 dated 21.02.2018, Industries (SIPCOT-LA) Department, Govt.
Of Tamil Nadu, Final amount of compensation has been determined by applying the multiplier factors in the Tamil Nadu
Acquisition of Land for Industrial purpose Act, 1997 by virtue of the Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013. Accordingly, the total additional compensation along with interest
was determined amounting to ' 3699.47 lakhs have been capitalized towards private patta land in the books of accounts during
the year ended 31st March 2020. Out of 832.57 acres, the company has transferred 10.52 acres to M/s.Tamilnadu Electricity
Board as per G.O. (Ms) No.18 dated 02.02.2015 at free of cost for setting up 230 KV sub-station exclusively for operation of
Board Plant and also land acquisition to the extent of 1.5 acres has been withdrawn vide G.O. (Ms) No.245 dated 20.09.2021.
In respect of Government Poramboke land of 41.89 acres, the Govt., vide G.O.No.447, Revenue (LD5(2)) Department, dated
11.11.2013, has adopted the guideline value (GLV) of adjacent patta lands and arrived land value of ' 84.68 lakh. Pending
determination of cost for transfer, the company has adopted the guideline value of ' 84.68 lakhs and capitalized during the
year ended 31st March, 2020. Out of which, ownership for 2.39 acres have been transferred to the company in Feb., 2021.
c) The additions to land during the financial year 2023-2024 amounting to ' 15.80 lakh relates to transfer of Investment Property
to Owner occupied Land at Corporate Office. Further additions to Building amounting to ' 57.04 lakh relates to transfer on
Investment Property to owner occupied property.
d) The Company availed of lease finance for 4 Nos of 750KW capacity each Wind Electric Generators in 2001 with lease rentals
payable upto 31.03.2007. The Company has not opted for a secondary lease and hence no provision is made for secondary
lease rent in the books. The formal transfer of assets by the lessor to TNPL is yet to be done pending completion of certain
formalities.
e) The Company has erected 2 Nos of 85 TPH high pressure boiler & its auxiliaries at the cost of ' 3438 Lakhs at M/s.Sakthi
Sugars Ltd (SSL) for procurement of bagasse on fuel substitution basis and M/s.SSL has fully repaid capital cost of one Boiler.
Each boiler has been valued by chartered engineers for ' 1965 lakhs. In terms of agreement dated 25th July, 2020 , both TNPL
and SSL have agreed that the ownership rights of one Boiler shall be transferred to SSL only on settlement of outstanding
loan in full by SSL. During the year, M/s.Sakthi Sugars Ltd (SSL) has settled the loan in full and consequently the company has
transferred one of the Boilers to M/s.SSL.
f) As at 31 March 2025, PPE are subject to charge towards secured bank loans (Refer Note 19A and 19B)
g) The "recoverable amount" is higher than the "carrying amount" of the cash generating units and hence there is no impairment
losses under Ind AS -36
Nature of reserves
(a) Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with Section
52 of Companies Act, 2013.
(b) General reserve
The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the
General reserve is created by a transfer from one component of equity to another and is not item of other comprehensive
income, items included in the General reserve will not be reclassified subsequently to statement of profit and loss.
(c) Fair value gain/(loss) of Equity Instruments through other comprehensive income
This reserve represents the cumulative gains and losses arising on the revaluation of equity / debt instruments measured
at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have
been disposed off.
(d) Effective portion of cash flow hedges
The cash flow hedges represents the cumulative effective portion of gains or losses arising on changes in fair value of
designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes
in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of
effective portion of cash flow hedges. Such gains or losses will be reclassified to statement of profit and loss in the period in
which the hedged transaction occurs.
(e) Re-measurement of defined benefit plans
Re-measurements of defined benefit liability comprises actuarial gains and losses.
(f) Capital Management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to
equity shareholders.
The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of
borrowing and the advantages and security afforded by a sound capital position. The weighted-average interest expense on
interest-bearing borrowings was 8.54% (2023-24: 8.01%)
* For security details - Refer A. Term and Repayment schedule
** Primary Security - Hypothecation charge over the company's entire current assets viz Stock of Raw materials, stock-in¬
process, finished goods, consumables, stores, spares, receivables and other current assets both present and future, on pari-
passu basis with consortium banks.
Collateral Security:
a) Equitable Mortgage over the following immovable properties of the company under second charge on pari-passu basis with
consortium banks:
i) Factory land and building located at Unit I, Kagithapuram, Karur-639136, admeasuring 566.26 acres together with all
structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to
the earth.
ii) Factory land and building located at Unit II, Mondipatti Village & Chettichataram Village, Manaparai Taluk, Tiruchirapalli-
621306, admeasuring 851.22 acres together with all structures thereon and all plant and machinery attached to the earth
or permanently fastened to anything attached to the earth.
b) Hypothecation Charge on Second Pari-passu basis over the other fixed assets of the company excluding windmills, vehicles
and computer software and assets created out of Automatic Storage and Retrieval System (ASRS), Lime Sludge and Fly
ash Management (LSFM), Power Plant Revamping (PPR), De-inked Pulp Plant (DIP) and Multi Layered Double Coated Board
(MLDCB) Projects.
(iv) First pari passu charge on assets created out of Mill Expansion Plan (MEP) (Phase I) with other lenders funding for expansion
phase I. First pari passu charge on existing assets of Unit II (both movable and immovable fixed assets) along with existing
lenders and lenders for MEP of Unit II
(v) First pari passu charge on existing movable and immovable fixed assets at TNPL Unit II and First pari passu charge on assets
created out of term loan.
(vi) Secured by a first pari passu charge on movable fixed assets of the company (except assets under specific charge to other
lenders)
(vii) Subservient charge on current asset and entire moveable fixed assets of the company.
(viii) Exclusive Charge on land situated at Mayanur and immovable - Land & Town Ship ( Housing Colony ) at Karur . ( Thirukkatuthurai).
(ix) Exclusive Charge on land situated at Mayanur and immovable - Land & Town Ship ( Housing Colony ) at Karur . ( Thirukkatuthurai).
(x) Residual charges on existing and future moveable fixed assets of the company .
(xi) Equitable mortgage : Extension of 1st Charge on Factory Land and Building admeasuring 820.55 acres (excluding Wasteland &
TNEB Lands) situated at Mondipatti Village, Manaparai Taluk, Tiruchirapalli District, Tamil Nadu -621306 on pari passu basis
with other term lenders and Exclusive charge on assets to be created out of proposed project for setting up of tissue plant
including hypothecation of Plant and Machinery at Unit -II situated at Mondipatti Village, Manaparai Taluk, Tiruchirapalli
District, Tamil Nadu -621306 .
The Company pays fixed contribution to provident fund at pre-determined rates to a separate irrevocable trust approved by
the Commissioner of Income Tax, which invests the fund in permitted securities. The contribution to the fund for the period is
recognized as expenses and is charged to Statement of Profit and Loss. While the obligation to the Company is limited to such
fixed contribution, as per the rules of Employee's Provident Fund (EPF) any deficiency in the rate of interest on the contribution
based on its return on investment as compared to the rate declared for Employees Provident Fund by the Government under Para
60 of the Employees Provident Fund Act is to be met by the Company. Also as per the rules, any deficiency in the fair value of Plan
Assets backing the Provident Fund accumulations compared to the amount of such accumulations is to be met by the company.
In accordance with actuarial valuation of provident fund liabilities and based on the assumptions as mentioned below, there is no
deficiency in the interest cost as present value of expected future earnings of the fund is greater than the expected amount to be
credited the individual members based on the expected guaranteed rate of interest of Government administered provident fund.
Note:
(i) The Company is entitled to Net Output VAT and CST refund in terms of G.O. (Ms) No.212 Dated 05.09.2015 for a period of
twelve years from the Date of Commercial Production with GST compensation clause in the said G.O. The Government of Tamil
Nadu (GoTN) vide G.O(Ms) No.164 dated 29th July, 2020 announced modified incentive scheme under GST regime and given
an option to avail either SGST paid based incentive or capital subsidy incentive of 1% per annum on the eligible investment
for the residual period to be sanctioned annually upon fulfillment of eligibility criteria .The company opted to avail capital
subsidy incentive of 1% p.a and the GoTN issued company specific order for company's option vide G.O.(Ms} No.275 dated
28th December, 2020. Accordingly, the Company accounted the GST Incentive of ' 1600 lakh (Previous Year ' 1600 lakh) during
the current year.
(ii) The Company is entitled for a capital subsidy which is revenue in nature i.e, subsidy for reimbursement of SGST every year
in term of G.O. (Ms).No.21 dated 30.01.2023. The eligible subsidy of ' 11000 lakh (ie., 10% of investment of ' 110000 lakh) will
be equally reimbursed over the period of 15 years subject to fulfillment of conditions since from the financial year 2023-24.
Accordingly, the Company has recognized a sum of ' 733.33 lakh (Previous Year ' 733.27 lakh) being the eligible reimbursement
during the current year.
(iii) Other Government grants includes a) Effluent Treatment Plant (ETP) subsidy of ' 1.20 lakh (Previous Year ' 1.20 lakh) being
related to specific fixed asset has been recognised as other income over the useful life of the asset and b) one-time training
subsidy of ' 27.36 lakh (Previous Year ' Nil) as per Structured Package of Assistance for setting up of Hardwood pulp plant as
per G.O. (Ms).No.27 dated 18.01.2019
iv) Miscellaneous Income of current year includes write back of trade payables ' 1033.29 lakh, LD recovered ' 483.05 lakh and
Insurance Claim received ' 326.11 lakh,
d) The Taxation Laws (Amendment) Act, 2019” has inserted Section 115BAA of the Income Tax Act, 1961, whereby a domestic
company has an irrevocable option of exercising for a lower corporate tax rate along with consequent forego of certain tax
deductions and incentives, including accumulated MAT credit eligible for set-off in subsequent years.
The company has still not exercised this option considering the accumulated MAT Credit and additional depreciation available
for set-off and continues to evaluate the benefit of exercising the option for a lower corporate tax rate. Pending exercising
of the option, the company continues to recognize the taxes on income for the year ended March 31, 2025 as per the earlier
provisions.
37. Leases
A) Leases as lessor
i) Investment Property
The Company leases out its investment property and buildings on operating lease basis and future minimum lease receivable
out of Investment property under non-cancellable lease as at 31st March is as follows:
The company has exposure to the following risks arising from financial instruments:
- Credit Risk (see (CXii));
- Liquidity Risk (see (CXiii)); and
- Market Risk (see (C)(iv)).
i. Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the company's risk
management framework. The Company's risk management policies are established to identify and analyze the risks faced
by the company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the company's activities.
The Company's audit committee oversees how management monitors compliance with the company's risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the
company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad
hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
ii. 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 receivables from customers and loans. The carrying
amounts of financial assets represent the maximum credit risk exposure.
Trade receivables and loans
The company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base.
The company has established a credit policy under which each new customer is analyzed individually for creditworthiness
before the company's standard payment and delivery terms and conditions are offered. Sale limits are established for
each customer and reviewed quarterly. Any sales exceeding those limits require approval from the management of the
company.
The company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of 90 days
for customers. In respect of Government Entities no credit risk is perceived as the transactions are akin to Government
transactions and are settled by cheques or adjustments. More than 85% of the company's customers have been transacting
with the company for over four years, and none of these customers' balances are credit-impaired at the reporting date.
Cash and cash equivalents
The company holds cash and cash equivalents of ' 2389.26 lakh at 31 March 2025 (31 March 2024: ' 4664.04 lakh). The cash and
cash equivalents are held with bank and cash on hand.
Derivatives
The derivatives are entered into with bank as counterparties.
iii. 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 damage to the company's reputation. The company
uses process costing to cost its products, which assists it in monitoring cash flow requirements and optimizing its cash
return on investments.
iv. Market Risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the company's income or
the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimizing the return.
Currency Risk
The company is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies
in which sales, purchases, receivables and borrowings are denominated and functional currency. The functional currency of
the Company is INR The currencies in which these transactions are primarily denominated are US dollars.
The Company Forex risk management policy is to hedge currency exchange fluctuation and mitigate currency volatility
and risks and to avoid uncertainties in cash flows. All foreign currency exposures - financial assets and liabilities and firm
commitments (imports) & probable forecast transactions (exports) which are off-balance sheet exposures are covered under
FRMP policy. Hedging of trade exposures viz., imports and exports are hedged separately and not on net exposures basis. The
company mostly uses forward exchange contracts to hedge its currency risks mostly with the maturity of less than one year
from the reporting date. Forward contracts booked to hedge currency risk relating to foreign currency transactions of firm
commitments and probable forecast transactions are generally designated as cash flow hedge. All other forward contracts
are designated as fair value hedge for the purpose of accounting.
42. (a) The penal interest on delayed receipts in terms of the agreement by one of the customer upto March, 2025 amounting to
' 1900.81 Lakh (upto March, 2024 - ' 2184.41 Lakh) has not been recognised as income in the books of account pending
confirmation by the customer and due to uncertainty of receipt of amount.
(b) The Parliament of India has approved the Code of Social Security, 2020 which would impact the contribution by the
Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for
the Code on Social Security, 2020 on November 13, 2020 and invited suggestions from stakeholders which are under
consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified.
The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective
and the related rules to determine the financial impact are published.
(c) Other Regulatory Information
(i) Title deeds of immovable properties not held in the name of the company is disclosed vide Note 4(a) & 4(k)
(ii) The fair value of Investment Property is disclosed vide Note 4 (j)
(iii) The company has not done any revaluation of Property, Plant and /equipment during the year
(iv) The company has not done any revaluation of Intangible assets during the year
(v) The company has not granted any loans or advances in the name of loan to promoters, directors, KMPs, and other related
parties except as disclosed in note no. 39 (d)
(vi) Aging schedule of Capital work-in-progress is disclosed vide Note 4 (i)
(vii) There is no Intangible asset under development during the year
(viii) The company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(ix) The company has borrowings against current assets and the statement of current assets are filed with Banks.
Reconciliation between current assets filed with Banks and as per books of account are given in Note 13 on a quarterly
basis.
(x) The Company has not been declared as willful defaulter by any bank or financial institution or other lender.
(xi) As per the information available on the reporting date, the company does not have any relationship / transactions with
struck off companies.
(xv) The compliance with approved schemes of arrangement is not applicable.
(xvi) (A) The company has not advanced or loaned or invested funds to any persons or entities, including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(xvi) (B) The company has not received any funds from any persons or entities, including foreign entities (Funding party) with
the understanding (whether recorded in writing or otherwise) 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.
(xvii) The Company does not have any 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).
(xviii) The company has not traded or invested in Crypto currency or virtual currency during the financial year.
43. Operating segments
A) Basis for segmentation
An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company's
other components, and for which discrete financial information is available. All operating segments' operating results are
reviewed regularly by the Company's Board of Directors (BoD) to make decisions about resources to be allocated to the
segments and assess their performance.
The Company has two reportable segments, as described below, which are the Company's strategic business units. For
each of the business units the Company's Board of Directors reviews internal management reports on at least a quarterly
basis.
B) Information about reportable segments and reconciliations
Information regarding the results of each reportable segment is included below. Performance is measured based on
segment profit (before tax), as included in the internal management reports that are reviewed by the Company's Board
of Directors. Segment profit is used to measure performance as management believes that such information is the most
relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
44. General
a) Figures for the previous year have been regrouped/restated/reclassified wherever necessary to conform to current
year's classification.
b) Amounts have been rounded off to the nearest two decimal points of lakh of rupees.
vide our report of even date
DR SANDEEP SAXENA IAS P B SANTHANAKRISHNAN MAHARAJ N R SURESH and CO LLP
CHAIRMAN & MANAGING DIRECTOR DIRECTOR CHARTERED ACCOUNTANTS
(DIN - 00770925) (DIN - 03213653) Firm Reg. No:001931S/S000020
SATHYA ANANTH ANURADHA PONRAJ N R SURESH
Place : Chennai CHIEF GENERAL MANAGER (FINANCE) COMPANY SECRETARY Partner
Date : 13th May, 2025 & CHIEF FINANCIAL OFFICER Membership No: A26150 Membership No: 021661
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