1.17 Provisions, contingent liabilities and contingent assets
(i) Provisions -
Provision are recognised when the Company has a present obligation (legal or constructive) as a result of past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted
to their present value and are determined based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best
estimates.
(ii) Contingent liabilities -
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that
may probably not require an outflow of resources. When there is a possible or a present obligation where the
likelihood of outflow of resources is remote, no provision or disclosure is made.
Show cause notices issued by various Government authorities are not considered as contingent liabilities.
However, when the demands are raised against such show cause notices after considering the Company’s
views, these demands are either paid or treated as liabilities, if accepted by the company, and are treated as
contingent liability, if disputed by the Company.
The Company does not recognise a contingent liability but discloses in the financial statements.
(iii) Contingent assets -
Contingent assets are neither recognised nor disclosed in the financial statements.
1.18 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the
Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS are calculated by dividing the profit attributable to equity holders of the Company by the weighted
average number of Equity shares outstanding during the year plus the weighted average number of Equity
shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.
1.19 Cash dividend to equity shareholders of the Company
The Company recognises a liability to make cash distributions to equity holders of the Company when the
distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on
shares are 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.
1.20 Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all
attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement
of profit and loss on a systematic basis over the periods to which they relate. Grants relating to assets, including
non-monetary grants are presented in the balance sheet by deducting the grant in arriving at the carrying
amount of the asset.
1.21 Non-Current Assets held for sale
Assets that are available for immediate sale and where the sale is highly probable of being completed within
one year from the date of classification are considered and classified as assets held for sale. Non-current assets
and disposal groups held for sale are measured at the lower of carrying amount and fair value less costs to sell.
1.22 Recent Accounting Pronouncements
(i) Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year
ended March 31, 2025, MCA has notified Ind AS 117 - Insurance Contracts and amendments to Ind AS
116 - Leases, relating to sale and lease back transactions, applicable from April 1, 2024:
The Company has assessed that there is no significant impact on its financial statements.
(ii) On May 9, 2025, MCA notified the amendments to Ind AS 21 - Effects of Changes in Foreign Exchange
Rates. These amendments aim to provide clearer guidance on assessing currency exchangeability and
estimating exchange rates when currencies are not readily exchangeable. The amendments are effective
for annual periods beginning on or after April 1, 2025. The Company is assessing the probable impact
of these amendments on its financial statements.
NOTE 2 : KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Company’s financial statements in conformity with Ind AS requires the management
to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts
of revenues and expenses for the year. Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimates are revised and future periods are affected.
Key source of estimation of uncertainty as at the date of financial statements, which may cause a material
adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of the
following:
(i) Defined benefit plans (gratuity benefits) -
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate, future salary increases
and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting
date.
(ii) Useful life of property, _ plant and equipment and intangible assets:
The Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the
end of each reporting period.
(iii) Estimation of current tax expense and payable:
The Company’s tax jurisdiction is India. Significant judgments are involved in determining the provision for
income taxes and tax credits including the amount expected to be paid or refunded.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The Company has not early adopted any standards or amendments that have been issued but are not yet effective/
notified. Amendments and interpretations applying for the first time during the year do not have an impact on
the financial statements of the Company.
Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been
no guarantees provided or received for any related party receivables or payables. For the year ended 31st March,
2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st
March, 2024 : Nil). This assessment is undertaken each financial year through examining the financial position of
the related party and the market in which the related party operates.
NOTE 36 : EMPLOYEE BENEFITS
A. Defined Contribution Plans
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plan (“the
Scheme”) for Qualifying employees. Under the Scheme, the Company is required to contribute a specified
percentage of the payroll costs to fund the benefits. The contributions payable to the plan by the Company is
at rates specified in the rules of the Scheme. Amount contributed to the Scheme is shown in Note 27.
B. Defined Benefit Plans
i) “Employee leaves are encashed as per the Company’s leave encashment policy. A provision has been
recognised for leave encashment liability based on the actuarial valuation of leave balance of employees
as at year end”.
ii) The Company offers Gratuity benefit to its employees. The Company has set up a Trust for gratuity and
the plan assets are invested with Life Insurance Corporation of India and in approved Bank Deposits.
The amounts recognised in the balance sheet and the movements in the net Defined Benefit Obligations
(“DBO” ’) over the period are as follows:
* The carrying value of these accounts are considered to be the same as their fair value. Accordingly, these are
classified as level 3 of fair value hierarchy.
** These accounts are considered to be highly liquid/ liquid and the carrying amount of these are considered to be the
same as their fair value.
NOTE 38 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s financial liabilities comprises mainly of loan borrowings, trade payables and other payables.
The Company’s financial assets comprises mainly of cash and cash equivalents, other balances with banks, trade
receivables and other receivables.
Risk management policies and systems of the Company are reviewed regularly by the Board of Directors to reflect
changes in market conditions and the company’s activities. The Company has financial risk exposure in the form of
A. Market Risk,
B. credit Risk, and
C. Liquidity Risk.
The present disclosure made by the Company summarises the exposure to these financial risks.
A. Market Risk:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
fluctuation in market prices. These comprise three types i.e., Foreign Currency Exchange Rate Risk, Interest Rate
Risk and Other Price Related Risks.
(i) Foreign Currency Exchange Rate Risk:
The Company imports 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 evaluates the
impact of foreign exchange rate fluctuations by closely monitoring exchange rate movements and where necessary
occasionally enters into simple forward exchange contracts to hedge the foreign currency risk whose maturity is
coterminous with the maturity period of the foreign currency liabilities. Thus, the Company is generally not exposed
to any significant foreign currency risk. .
(ii) Interest Rate Risk:
The Company’s exposure to the risk of changes in market interest rates relates to bank borrowings comprising of term
loans and working capital loans.
The exposure of the Borrowings from Banks changes at the end of the reporting period are as follows:
(iii) 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.
Commodity price risk:
The Company is exposed to the movement in price of key raw 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.
Others:
Company does not have any equity or other investments which are subjected to price related risks.
B. Credit Risk:
Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual
obligations.
(i) Trade Receivables
Company periodically assesses the financial reliability of customers, taking into account the financial condition,
current economic trends, and analysis of historical bad debts and ageing of accounts receivable and thus set the
individual risk limits are. The company does not hold any collateral on the unsecured trade receivables balance
outstanding. The company has stop supply mechanism in place in case outstanding goes beyond agreed limits.
The Company also sells its products through appointed agents. The Company has established a credit policy under
which every agent is analysed individually for creditworthiness. Each agent places security deposit based on the
quotas allocated to him. Though the invoices are raised on the individual customer, the agent is responsible for the
collection and in case of default by such customer, the dues from the customer are withheld / adjusted against the
payables to the agent. Thus, the credit risk is mitigated. .
(ii) Financial instruments and cash deposits
The Company’s investment in fixed deposit with banks is fixed and hence, there is no risk on account of price
movement arising to the Company. The Company considers factors such as track record, size of the institution, market
reputation and service standards to select the banks with which balances and deposits are maintained. The Company
does not maintain significant cash and deposit balances other than those required for its day to day operations.
C. Liquidity Risk:
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations
without incurring unacceptable losses. 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. The liquidity risk management involves matching the maturity profiles of financial assets and
financial liabilities.
NOTE 39 : CAPITAL MANAGEMENT
The Company’s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to
sustain future development. Capital includes issued capital and all other equity reserves attributable to equity holders.
The primary objective of the Company’s capital management is to maximise the shareholder value.
The Company monitors capital using Gearing Ratio, which is as under :
NOTE 40 : EXCHANGE DIFFERENCES
The Company has recognized an aggregate loss on exchange differences of '7.17 lakhs (P.Y. Gain of '27.40 Lakhs)
in the Statement of Profit & Loss.
The Company has amounts due to Micro and Small Enterprises under The Micro, Small and Medium Enterprises
Development Act, 2006 (MSMED Act) as at 31st March, 2025 and 31st March, 2024. The information as required to
be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 regarding Micro and Small
enterprises is determined to the extent such parties have been identified on the basis of the information available with
the company. The Company has not received any claim for interest from any supplier as at the Balance Sheet date.
The details in respect of such dues are as follows:
Note 44: Additional Regulatory Information
a. The company has not carried out revaluation of items of Property, Plant & Equipment during the year.
b. The Company does not have any Immovable Property whose title deeds are not held in the name of the
Company.
c. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.
d. The Company has not advanced any loans or advances in the nature of loans to specified persons viz.
promoters, directors, KMPs, related parties which are repayable on demand or where the agreement
does not specify any terms or period of repayment.
e. The Company has utilised funds raised from borrowings from banks and financial institutions for the
specific purposes for which they were taken.
f. The Company has not been declared as a wilful defaulter by any lender who has powers to declare a
company as a wilful defaulter at any time during the financial year or after the end of reporting period
but before the date when financial statements are approved.
g. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
h. The Company has not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company
shall:
(i) 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
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
i. The Company does not have any material transactions with struck-off companies.
j. The Company does not have any transaction which is not recorded in the books of accounts but 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).
k. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial
year.
l. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the
Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
m. The Company does not have any charges or satisfaction which is yet to be registered with the Registrar
of Companies (ROC) beyond the statutory period.
n. In respect of the borrowings on the basis of security of current assets, details of current assets mentioned
in the Quarterly Monitoring Reports filed with the bank are in agreement with the books of accounts.
An incidence of fire occurred at PM5 Stock Warehouse during the previous year, resulting in loss of finished and
unfinished paper, machinery spares and damages to building & plant and machinery. There were no human injuries/
casualties. Company has received insurance claims during the year on account of damage to inventory and PPE.
In respect of inventory, the Company has recognised loss (net of insurance claims received) in the previous year.
Insurance claims received in respect of PPE, to the extent in excess of amounts recognised earlier, have been classified
as an Exceptional Item in the Statement of Profit and Loss. An amount of '10.59 lakhs, receivable towards insurance
claims, is pending settlement and has been recognised under Note 11.
Note 46: Renewable Consumption Obligations
The Ministry of Power (“MoP”) vide Gazette Notification dated 20th October 2023 has specified the Renewable
Consumption Obligations (“RCO”) applicable with effect from 1st April 2024. Subsequently, MoP, vide its letter
dated 16th April 2025, issued clarifications on RCOs for Captive Power Plants, which was communicated to the
Company by the Bureau of Energy Efficiency through its Notice dated 14th May 2025.
The Company is currently in the process of evaluating the financial impact of the RCO on its operations. Pending
completion of such evaluation, no effect has been given in the financial statements for the year ended 31st March
2025. The impact of RCO compliance will be recognised in the period in which the evaluation is completed and the
conditions for recognition are demonstrably met.
Note 47 : Previous Year Figures
Previous year figures are regrouped, wherever necessary to conform to that of current year.
As per our report of even date
MANISH M. PATEL MEENAKSHI SUNDARAM SHIVAKUMAR For B S RAVIKUMAR & ASSOCIATES
Managing Director Director Chartered Accountants
DIN 00128179 DIN : 06445505 Firm’s Regn. No. 006101S
B. RAVI HOLLA VIDYA BHAT B S RAVIKUMAR
Chief Financial Officer Company Secretary Partner
Membership No. 010218
Place : NANJANGUD ICAI UDIN: 25010218BMISZU2611
Date : 29th May 2025
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