O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event,
where 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.
Where a provision is measured using the cash flows estimates to settle the present obligation, its carrying amount is the
present value of those cash flows. Where the effect is material, the provision is discounted to net present value using an
appropriate current market-based pre-tax discount rate and the unwinding of the discount is included in finance costs.
Contingent liabilities are recognised only when there is a possible obligation arising from past events, due to occurrence
or non-occurrence of one or more uncertain future events, not wholly within the control of the Company, or where any
present obligation cannot be measured in terms of future outflow of resources, or where a reliable estimate of the
obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable
outflow of resources are provided for.
Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable.
P. LEASES
The Company, as a lessee, recognises a right-of-use asset and a lease liability for its leasing arrangements, if the contract
conveys the right to control the use of an identified asset.
To assess whether a contract conveys the right to control the use of an identified asset, the Company assess whether it
involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset
and has right to direct the use of the identified asset. The cost of the right-of-use asset shall comprise of the amount of the
initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus
any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any and adjusted for any re-measurement of the lease liability. The
right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease
term or useful life of right-of-use asset.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease
term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease term.
Q. IMPAIRMENT OF ASSETS
Impairment of non-financial assets
The Company assesses at each reporting date as to whether there is any indication that any property, plant and
equipment and intangible assets or group of assets, called Cash Generating Units (CGU) may be impaired. If any such
indication exists, the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any.
When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable
amount of the CGU to which the asset belongs. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in prior years. A reversal of an impairment loss is recognised immediately in the statement of profit and loss.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and
recognition of impairment loss for financial assets. ECL is the difference between all contractual cash flows that are due to
the Company in accordance with the contract and all the cash flows that the Company expects to receive.
The Company applies approach permitted by Ind AS 109, financial instruments, which requires expected lifetime losses
to be recognised from initial recognition of receivables.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, assets carrying amount exceeds its
recoverable amount. The recoverable amount is higher of an asset fair value less cost of disposal and value in use. Value
in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that
reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of
recoverable amount.
R. FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument. Financial assets and liabilities are initially measured at fair value. 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 profit or loss) are added to or deducted from the fair value measured on initial recognition
of financial asset or financial liability. Purchase and sale of financial assets are recognized using trade date accounting.
Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and on hand and demand deposits with an original maturity of three
months or less and short-term highly liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value. Cash and cash equivalents include balances with banks
which are unrestricted for withdrawal and usage.
(i) Financial Assets
Initial Recognition and Measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
Other Comprehensive Income (OCI), and fair value through profit or loss. The classification of financial assets at
initial recognition depends on the financial asset's contractual cash flow characteristics and the Company's business
model for managing them. With the exception of trade receivables that do not contain a significant financing
component or for which the Company has applied the practical expedient, the Company initially measures a
financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction
costs. Trade receivables that do not contain a significant financing component or for which the Company has
applied the practical expedient are measured at the transaction price determined under Ind AS 115.
Subsequent Measurement
Financial Assets at Amortised Cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business
model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial Assets At Fair Value Through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if such financial assets are held
within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell
such financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
Financial Assets At Fair Value Through Profit or Loss (FVTPL)
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value
through other comprehensive income on initial recognition. The transaction costs directly attributable to the
acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in profit or
loss.
All equity investments are measured at fair value in the balance sheet, with value changes recognized in the
statement of profit and loss, except for those equity investments for which the Company has elected an irrevocable
option to present value changes in OCI.
(ii) Financial Liabilities
Initial recognition and measurement financial liabilities are classified, at initial recognition, as financial liabilities at
fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of
loans and borrowings and payables, net of directly attributable transaction costs. The Company's financial liabilities
include trade and other payables, loans and borrowings including bank overdrafts.
Subsequent measurement
For purposes of subsequent measurement, financial l iabilities are classified in two categories:
• Financial liabilities at fair value through profit or loss
• Financial liabilities at amortised cost (loans and borrowings)
(iii) Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency
risks. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered
into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the
resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the
nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken
directly to profit or loss.
De-recognition of Financial Instruments:
A financial asset is primarily de-recognised when the rights to receive cash flows from the asset have expired or the
Company has transferred its rights to receive cash flows from the asset and has substantially transferred all the risks
and rewards of ownership of the financial assets.
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.
Offsetting of Financial Instruments :
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or
to realise the assets and settle the liabilities simultaneously.
S. NON-CURRENT ASSETS HELD FOR SALE
Non-current assets or disposal comprising of assets and liabilities are classified as 'held for sale' when all of the following
criteria's are met (i) decision has been made to sell (ii) the assets are available for immediate sale in its present condition
(iii) the assets are being actively marketed and (iv) sale has been agreed or is expected to be conducted within twelve
months of the Balance Sheet date. Subsequently, such non-current assets and disposal groups classified as held for sale
are measured at lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are not
depreciated or amortised.
Non-current assets classified as held for sale are presented separately in the balance sheet.
T. GOVERNMENT GRANTS
Government grants are recognised when there is a reasonable assurance that the Company will comply with the relevant
conditions and the grant will be received. Government grants are recognised in the statement of profit and loss, either on
a systematic basis when the Company recognises, as expenses, the related costs that the grants are intended to
compensate or, immediately if the costs have already been incurred. Government grants related to assets are deferred
and amortised over the useful life of the asset. Government grants related to income are presented as an offset against the
related expenditure and government grants that are awarded as incentives with no ongoing performance obligations to
the Company are recognised as income in the period in which the grant is received.
U. OPERATING SEGMENTS
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker ('CODM') of the Company. The CODM is responsible for allocating resources and assessing
performance of the operating segments of the Company.
V. EXCEPTIONAL ITEMS
When items of income and expense within statement of profit and loss from ordinary activities are of such size, nature or
incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and
amount of such material items are disclosed separately as exceptional items.
(b) Rights, preferences and restrictions attached to equity shares:
The Company has one class of equity shares referred to as equity shares having at face value of '10/- each. Each share¬
holder is entitled to one vote per share. Holders of equity shares are entitled to dividend, in proportion to the paid up amount,
proposed by Board of Directors subject to approval of the shareholders in the ensuing annual general meeting except in case
of interim dividend. In the event of liquidation, the equity-holders are eligible to receive the remaining assets of the Company
after distribution of all preferential amounts, in proportion to their shareholding.
Remaining performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially
unsatisfied) as of the end of the reporting period are having performance obligations, which are a part of the contracts that
has an original expected duration of one year or less. Hence, the Company has applied practical expedient as per para 121
of the Ind AS 115 in regards to remaining performance obligations.
47) Disclosure of the amounts due to the Micro and Small Enterprises as required under the "Micro, Small and Medium
Enterprises Development Act, 2006" is based on the information available with the Company regarding the status of
registration of such vendors under the said Act, as per the intimation received from parties on the request made by the
Company as given under:
48) Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Managing Director of the Company. The Company
operates only in one Business Segment i.e. manufacturing and sale of paper and the activities incidental thereto, hence
does not have any reportable Segments as per Ind AS 108 "Operating Segments".
49) CAPITAL MANAGEMENT
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to
optimise returns to our shareholders.
For the purposes of the Company's capital management, capital includes issued capital and all other equity reserves.
The primary objective of the Company's capital management is to maximise shareholder value. The Company
manages it's capital structure and makes adjustments in the light of changes in economic environment and the
requirements of the financial covenants. The Company's Capital Management objectives are to maintain equity
including all reserves to protect economic viability and to finance any growth opportunities that may be available in
future so as to maximize shareholders' value. The Company is monitoring capital using debt equity ratio as its base,
which is debt to equity.
The following methods and assumptions were used to estimate the fair values:
The fair values of the long term borrowings, loans and other deferred payments are determined by using discounted cash
flow method using the appropriate discount rate. The discount rate is determined using other similar instruments
incorporating the risk associated.
The fair value of long term quoted investment in equity instruments are measured at quoted market price.
The fair values of the unquoted instruments and other financial assets and liabilities have been estimated using a
discounted cash flow method using the appropriate discount rate. The discount rate is determined using other similar
instruments incorporating the risk associated.
The Company executed derivative financial instruments such as cross currency interest rate swap being valued using
valuation techniques, which employs use of market observable inputs. The Company uses mark to market valuation
provided by bank for its valuation.
There were no transfers between level 1 and level 2 for recurring fair value measurements during the year.
Carrying amount of Financial Assets and Liabilities carried at Amortized Cost is considered a reasonable approximation of
Fair Value.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole;
Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable.
Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
52) FINANCIAL RISK MANAGEMENT
The Company's principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables. The
Company's principal financial assets include, trade and other receivables and cash and cash equivalents that derive
directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's management monitors these risks
and provides assurance that the financial risk activities are governed by appropriate policies and procedures. The
financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. All
derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience
and supervision. The Board of Directors reviews and agrees policies for managing each of these risks, which are
summarised below:
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, loans and investments.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the
creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.
Trade receivables
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in
several jurisdictions and industries and operate in largely independent markets. The credit worthiness are monitored at
periodical intervals. The maximum exposure to credit risk at the reporting date is the carrying value of each class of
financial assets.
The Company has used expected credit loss (ECL) model for assessing the impairment loss. For the purpose, the Company
uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and
internal risk factors and historical data of credit losses from various customers.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The
Company manages liquidity risk by continuously monitoring forecast and actual cash flows on daily, monthly and yearly
basis. The Company ensures that there is a free credit limit available at the start of the year which is sufficient for repayments
getting due in the ensuing year. Loan arrangements, credit limits with various banks including working capital and monitoring
of operational and working capital issues are always kept in mind for better liquidity management.
The Company has unutilised working capital limits from banks of '376.20 lakhs as on March 31,2025; '545.70 lakhs as on
March 31,2024.
Market Risk- Foreign Currency Risk
This is the risk that the Company may suffer losses as a result of adverse exchange rate movement during the relevant period. As a
policy, the Company is covering foreign exchange risk on account of import to avoid any loss situation due to adverse
fluctuations in currency rates. There is periodical review of foreign exchange transactions and hedging by the Company's
executives.
Derivative instruments and unhedged foreign currency exposure:
(a) Derivative outstanding as at the reporting date:
Market Risk- Price Risk Exposure
Equity Price Risk is related to the change in market reference price of the investments in equity securities. The Company is
exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading
purposes. The Company does not actively trade these investments. Profit /(Loss) for the year would increase/ (decrease) as a
result of gains/ losses on equity securities as at fair value through profit or loss.
Sensitivity
The table below summarizes the impact of increases/decreases of the BSE index on the Company's equity and Gain/Loss for
the period. The analysis is based on the assumption that the index has increased by 5% or decreased by 5% with all other
variables held constant, and that all the Company's equity instruments moved in line with the index:
Interest Rate Risk
The Company has loan facilities on floating interest rate, which exposes the Company to the risk of changes in interest
rates. The management monitors the interest rate movement and manages the interest rate risk by evaluating interest rate
swaps etc. based on the market / risk perception.
For the years ended March 31, 2025 and March 31, 2024, every 50 basis point decrease in the floating interest rate
component applicable to its loans and borrowings would increase the Company's profit before tax by approximately
'8.07 Lakhs and '6.22 Lakhs respectively. A 50 basis point increase in floating interest rate would have led to an equal but
opposite effect.
Commodity Rate Risk
Exposure to market risk with respect to commodity prices primarily arises from the Company's purchases of waste paper
including the raw material components and sale of various types of papers. These are commodity products, whose prices
may fluctuate significantly over short periods of time. The prices of the Company's some of the raw materials generally
fluctuate in line with commodity cycles, although the prices of raw materials used in the Company's business are
generally more volatile. Commodity price risk exposure is evaluated and managed through operating procedures and
sourcing policies. As of March 31,2025, the Company had not entered into any material derivative contracts to hedge
exposure to fluctuations in commodity prices.
d) Terms and conditions of transactions with related parties:
The sales to and purchases from 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 will be settled in cash. There have been no
guarantees received or provided for any related party receivables or payables.
e) The Company does not have any subsidiary/associates.
54) RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES PURSUANT TO IND AS 7 - CASH
FLOWS
The changes in the Company's liabilities arising from financing activities can be classified as follows:
including differential value of amortisation in accordance with Ind AS '56.67 lakhs in March 31,2025 and '53.63
lakhs in March 31, 2024.
55) During the year ended March 31,2025 no material foreseeable loss (March 31,2024: Nil) was incurred for any long-term
contract including derivative contracts.
56) There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on
the balance sheet date.
57) The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee), are held in the name of the Company.
58) The Company has borrowings from banks on the basis of security of current assets and the quarterly returns filed by the
Company with the banks are in accordance with the books of account of the Company for the respective quarters.
59) The Company does not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or
Section 560 of Companies Act, 1956 during the year ended March 31,2025 and March 31,2024.
60) No proceedings have been initiated or are pending against the Company for holding any benami property under the
Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder, as at March 31, 2025 and
March 31,2024.
61) The Company is not declared wilful defaulter by any bank or financial Institution or other lender during the year ended
March 31,2025 and March 31,2024.
62) (a)The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other
sources or kind of funds) to any other person or entity, 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/ 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.
(b) 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 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.
63) There have been no transactions which have not been recorded in the books of account, that have been surrendered or
disclosed as income during the year ended March 31,2025 and March 31,2024, in the tax assessments under the Income
Tax Act, 1961. There have been no previously unrecorded income and related assets which were to be properly recorded
in the books of account during the year ended March 31,2025 and March 31,2024.
64) The Company has not traded or invested in Crypto Currency or Virtual Currency during the year ended March 31,2025
and March 31,2024.
65) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of
Companies beyond the statutory period.
66) During the year, the Company has utilised the borrowings for the specific purposes for which they were taken.
67) The Company has not revalued its Property, Plant and Equipment, Intangible and Right of Use asset during the year.
68) The Company has used accounting software for maintaining its books of account which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.
Further, except where audit trail was not enabled in the prior year, the audit trail has been preserved by the Company as
per the statutory requirements for record retention.
69) Comparative corresponding figures for the previous year have been re-grouped and/or re-arranged wherever considered
necessary.
70) The financial statements were approved for issue in accordance with a resolution of the Board of Directors of the
Company on May 30, 2025.
The accompanying notes are an integral part of the financial statements
As per our attached report of even date For and on behalf of the Board of Directors °f
Shree Krishna Paper Mills & Industries Ltd.
For Ashwani Garg & Associates r
Firm Registration No. 019179N
Chartered Accountants
Sanjiv Kumar Agarwal Narendra Kumar Pasari
Chief Financial Officer Managing Director
CA Ashwani Garg DIN : 00101426
Proprietor
Membership No. 502010
Ritika Priyam Dev Kishan Chanda
Company Secretary Director
Membership No. A53502 DIN : 00407123
Place: New Delhi Place: New Delhi
Date: May 30, 2025 Date: May 30, 2025
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