2.20 Provisions and contingencies
A provision is recognised when the Company has a present obligation as a result of past events and it is probable
that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate of
the amount can be made. Provisions are determined based on best estimate required to settle the obligation
at the balance sheet date. When a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of the
money is material).
The increase in the provisions due to passage of time is recognised as interest expense.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is
no longer probable that the outflow of resources would be required to settle the obligation, the provision
is reversed.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company or a present obligation that arises from past events where it is
either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount
cannot be made.
Contingent assets are not disclosed in the Financial Statements unless an inflow of economic benefits is probable.
2.21 Dividend
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.
2.22. Earnings per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the
Company by the weighted average number of equity shares outstanding during the financial year.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the
Company by the weighted average number of equity shares considered for deriving basic earnings per equity
share and also the weighted average number of equity shares that could have been issued upon conversion of
all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable
had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity
shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued
at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods
presented for any share splits and bonus shares issues including for changes effected prior to the approval of
the financial statements by the Board of Directors.
3. Application of new and amended standards
(A) Amendments to existing Standards (w.e.f. 1st April, 2025)
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. The Company has reviewed the
new pronouncements and based on its evaluation has determined that it does not have any significant impact
in its financial statements. On 07 May 2025, the Ministry of Corporate Affairs (MCA) notified amendments to
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, applicable w.e.f. April 1, 2025. The Company has
reviewed the amendment and based on its evaluation has determined that it does not have any significant
impact in its financial statements On 13 August 2025, the Ministry of Corporate Affairs (MCA) notified Companies
(Indian Accounting Standards) Amendment Rules, 2025 which amends certain accounting standards, and are
effective 1 April 2025. The key amendments are as follow:
1. Ind AS 1, Presentation of Financial Statements, applicable w.e.f. 01 April 2025 - The amendment relates
to classification of liabilities as current or non-current and non-current liabilities with covenants. In
the context of classifying a liability as current, it removes the requirement of existence of a right to
defer settlement for at least 12 months after the reporting date and instead requires that the said
right should exist on the reporting date and have substance. The amendment also introduces guidance
on classification of liabilities with covenants. The Company has no impact of these amendments in its
classification criteria of current and non-current liabilities.
2. Ind AS 7- Statement of Cash Flows and Ind AS 107- Financial Instruments: Disclosures, applicable w.e.f. 01
April 2025 - The amendment in Ind AS 7 requires to inform users of financial statements of the existence
of supplier finance arrangements and explain the nature of the arrangements, the carrying amount of
liabilities and the range of payment due dates. Ind AS 107 has been amended to add supplier finance
arrangements as a factor that may cause concentration of liquidity risk. The Company has reviewed the
amendment and based on its evaluation has determined that it does not have any significant impact in
its financial statements.
3. Ind AS 12, International Tax Reform - Pillar Two Model Rules applicable immediately - The amendments
provide a temporary mandatory relief from deferred tax accounting for top-up tax and disclose that they
have applied the relief. This relief is immediate and applies retrospectively.
(B) Standards notified but not yet effective
Ind AS 1 - Presentation of Financial Statements: If a covenant breach occurs on or before the reporting date
and the liability becomes payable on demand, it must be classified as current, even if the lender subsequently
agrees not to demand repayment. It is classified as current because, at the reporting date, the entity does not
have the right to defer settlement for at least 12 months. However, if the lender has already provided - by the
reporting date - a grace period extending at least 12 months beyond that date, during which the breach can be
rectified and repayment cannot be demanded, the liability is classified as non-current. This amendment is to be
applied retrospectively for annual reporting periods beginning on or after 01 April 2026, in accordance with Ind
AS 8, Accounting Policies, Changes in Accounting Estimates and Errors.
Note 16 : Equity Share Capital (Contd)
c) Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of H10/- per share. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed
by the board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.In
the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets
of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number
of equity shares held by the shareholders.
Note:- Working capital loan from Banks are secured by a) first pari passu charge by way of hypothecation of all the
stocks, book debts and all other movable current assets of the Company. b) Second pari passu charge over the Fixed
Assets of the Company situated at Unit I,III, IV at Vapi both present and future.c) Second Pari passu charge over
the Fixed Assets of the Company situated at Unit V & Unit V PM2 at Sarigam both present and future except non
-agricultural land admeasuring to 26.26 Acres and d) personal Guarantee of Shri R N Agarwal , Smt Reena Agarwal and
Shri Raunak Agarwal.
The company has filed quaterly returns or statements with the banks for the sanctioned working capital facilities,
which are in agreement with unaudited books of accounts of the company of the respective quarters with
insignificant discrepancies.
Note 25 : Current Financial Liabilities - Trade Payables (Contd)
The total dues of Micro and Small Enterprises which were outstanding for more than stipulated period are H Nil
(F.Y. 24-25: H Nil)
This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006
has been determined to the extent such parties have been identified on the basis of information available with the
Company. This has been relied upon by the auditors.
Note 35: Finance Cost (Contd)
**Includes Mark to Market on forward contracts amounting to H915.13 lakhs (F.Y. 2024-25: H280.34 lakhs).
interest subsidy receivable from Government under Aatmanirbhar Gujarat Scheme for Assistance to Large Industries
and Thrust Sector amounting to H669.73 lakhs (F.Y. 2024-25: H701.11 lakhs).
AAInterest on Borrowed funds Capitalised FY 2025-26 H315.02 lakhs (F.Y. 2024-25: H Nil).
Notes:
(i) We are in receipt of Order u/s 143(3) r.w.s 154 for A.Y 2020-21 dated 17.11.2023 wherein the Income tax department
has raised a demand of H2,167.71 lakhs. Out of this figure, a demand of H212.69 lakhs is rectifiable for which
application u/s 154 is already submitted vide letter dated 05.02.2023. The order u/s 154 is awaited. For Balance
demand, we have preferred an appeal with Hon'ble Commissioner of Income Tax (Appeals). A stay petition u/s
220(6) is already filed with the department.
(ii) We are in receipt of Order u/s 143(3) for A.Y 2021-22 dated 23.02.2024 wherein the Income tax department has
raised a demand of H645.63 lakhs. We have preferred an appeal with Hon'ble Commissioner of Income Tax (Appeals)
contesting the demand. A stay petition u/s 220(6) is already filed with the department.
(iii) We are in receipt of Intimation u/s 143(1) for A.Y 2022-23 wherein the Income tax department has raised a demand
of H128.88 lakhs. We have directly preferred an appeal with Hon'ble Commissioner of Income Tax (Appeals)
contesting the demand. We are in process of filing stay petition u/s 220(6).
Note 40: Related Party Disclosures (Contd)(e) 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 bearing and settlement occurs in cash. There
have been no financials guarantees provided to a Related Party. For the year ended March 31, 2026 and March 31,
2025, the company has not recorded any impairment of receivables relating to amount owed by related parties.
This assessment is undertaken each financial year through examining the financial position of the related party
and market in which the related party operates.
Note 41: Employee benefits plan
As per Ind AS 19 "Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting Standard are
given below :
a) Other long-term benefits - Compensated absences
The Company permits encashment of compensated absence accumulated by their employees on
retirement,separation and during the course of service. The liability in respect of the Company, for outstanding
balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the
balance sheet date performed by an independent actuary.
The Company doesn't maintain any plan assets to fund its obligation towards compensated absences.
b) Defined benefits plans - Gratuity
The Company has a defined benefit gratuity plan. The plan is funded with an insurance company in the form of a
qualifying insurance policy.
The following tables summarise the components of net employee benefit expense recognised in the Statement
of Profit and Loss and the funded status and amounts recognised in the balance sheet for the respective plans.
c) Defined contribution plan
Company's employees are covered by Provident Fund to which the Company makes a defined contribution
measured as a fixed percentage of salary. The contributions are made to registered provident fund administered
by Government. During the year, amount of H345.67 lakhs (F.Y. 2024-25: H325.24 lakhs) has been charged to the
Statement of Profit and Loss towards employer's contribution to the funds.
Note 42: Segment information
The operations of the Company are limited to one segment viz. Paper and Paper Boards. The products being sold under
this segment are of similar nature and comprises of paper products only.
Operating segments are defined as components of a Company for which discrete financial information is available that
is evaluated regularly by the Managing Director (Chief Operating Decision Maker) ("CODM”), in deciding how to allocate
resources and assessing performance.
Note 43: Corporate Social Responsibility (CSR)
As per section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The proposed areas
of CSR activities are promoting health care, promoting education and rural development activities. The expenditure
incurred during the year on these activities are as specified in schedule VII on the Companies Act, 2013:
Note 43: Corporate Social Responsibility (CSR) (Contd)
(e) Reason for Shortfall - Nil
(f) Not being eligible for set off**
(g) Details of related party transactions, e.g., contribution to a trust controlled by the company in relation to CSR
expenditure as per relevant Accounting Standard - Nil
(h) Where a provision is made with respect to a liability incurred by entering into a contractual obligation, the
movements in the provision during the year shall be shown separately.
Note 44: Financial Instruments by category
This section explains the judgements and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are
disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining
fair value, the company has classified its financial instruments into the three levels prescribed under the accounting
standard. An explanation of each level follows underneath the table.
Fair value hierarchy
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity
instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is
valued using the closing price as at the reporting period.
Note 44: Financial Instruments by category (Contd)
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
During the years mentioned above, there have been no transfers amongst the levels of hierarchy. The fair values of
unquoted equity instruments are not significantly different from their carrying value and hence the management has
considered their carrying amount as fair value.
Valuation processes
The finance department of the company includes a team that performs the valuations of financial assets and liabilities
required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial
officer (CFO) and the audit committee (AC). Discussions of valuation processes and results are held between the CFO,
AC and the valuation team at least once every three months, in line with the company's quarterly reporting periods.
Note 45: Financial risk management objectives and policies
The Company's principal financial liabilities, comprise of borrowings, security deposits, trade and other payables. The
main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial
assets include investments, loans, trade and other receivables, cash and cah equivalents and other bank balances that
are derived directly from its operations.
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The
Company is exposed to market risk, credit risk and liquidity risk.
The Company's senior management oversees the management of these risks. The senior professionals working to
manage the financial risks and the appropriate financial risk governance framework for the Company are accountable
to the Board of Directors and Audit Committee.
This process provides assurance to Company's senior management that the Company's financial risk-taking activities
are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in
accordance with Company policies and Company risk objective.
The management reviews and agrees policies for managing each of these risks which are summarized as below:
(a) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices.
Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as
equity price risk and commodity price risk. Financial instruments affected by market risks include borrowings,
security deposits, investments and foreign currency receivables and payables.
(i) Foreign Currency Risk
The Company operates internationally and portion of the business is transacted in several currencies.
Consequently the Company is exposed to foreign exchange risk through its sales and services in overseas
and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly
(ii) Interest rate risk:
Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. Company's financial liabilities comprises of interest bearing loans, vehicle
loans and advances and security deposits; the following table demonstrates composition of fixed and floating
rate borrowing of the company and impact of floating rate borrowings on company's profitability.
(iii) Commodity price risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the
ongoing manufacture of paper and paper boards and therefore require a continuous supply of raw materials
i.e. waste paper, chemicals, coal etc. being the major input used in the manufacturing. Due to the significantly
increased volatility of the price of waste paper and coal the Company had entered into various purchase
contracts for these material for which there is an active market. The Company's management has developed
and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company
partly mitigated the risk of price volatility by entering into the contract for the purchase of these material
and further the Company increases prices of its products as and when appropriate to minimize the impact of
increase in raw material prices.
(b) Credit Risk
Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument, leading to
a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables)
and from its financing activities, including deposits with banks, foreign exchange transactions and other
financial instruments.
i) Trade receivables
The Company has established a credit policy under which each new customer is analysed individually for
creditworthiness before orders are accepted and the payment and delivery terms and conditions are offered.
The Company's review includes external ratings, if they are available, financial statements, credit agency
information, industry information and business intelligence. Sales limits are established for each customer
and reviewed annually. Any sales exceeding those limits require approval from the appropriate authority as
per policy.
Expected credit loss for trade receivables:
The Company estimates its allowance for trade receivable using lifetime expected credit loss. The Company
has also taken advances and trade deposits from its customers which mitigate the credit risk to an extent. The
Company considers the probability of default upon initial recognition of asset and whether there has been a
significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether
there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset
as at the reporting date with the risk of default as at the date of initial recognition. It considers available
reasonable and supportive forwarding-looking information.
ii) Financial Instruments and cash deposits
The Company considers factors such as track record, size of the institution, market reputation, financial strength/
rating and service standards to select the banks with which balances and deposits are maintained. Generally
the balances are maintained with the institutions with which the Company has also availed borrowings.
(c) Liquidity Risk
The Company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated
from operations. The Company believes that the working capital is sufficient to meet its current requirements.
Further, the Company's approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its
liabilities when due and Company monitors rolling forecasts of its liquidity requirements.
Note 48 : Ind AS 116 - Leases
The Company's lease asset primarily consist of leases for land and buildings for offices and warehouses having the
lease terms between 5 and 30 years.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Note 49 : Registration of charges or satisfaction with Registrar of Companies (ROC)
AH charges or satisfaction are registered with within the statutory period. No charges or satisfactions are yet to be
registered with beyond the statutory period.
Note 50 : Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.
Note 51 : Compliance with approved Scheme(s) of Arrangements
The Company has no scheme of arrangements which have been approved by the competent Authority in terms of Sec
230 to 237 of the Companies Act, 2013 during the reporting period.
Note 52 : Utilisation of borrowed funds and share premium
A. 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:
(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 to or 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:
(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.
Note 53 : Undisclosed income
The Company has not any such 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)
Note 54 : Title deeds of Immovable properties not held in name of the Company
The Company does not possess any immovable property (other than properties where the Company is the lessee
and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of
the Company.
Note 55 : Details of crypto currency or virtual currency
The Company has not traded or invested in Crypto currency or Virtual currency.
Note 57 : Details of Benami Property Held
No proceedings have been initiated or pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
Note 58 : Wilful Defaulter
The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.
Note 60 : Audit Trail
The software used by the company includes an audit trail feature, which is enabled from 1st April, 2023. The audit trail
has feature of recording each and every transactional changes made in the books of account along with the date when
such changes were made.
Note 61 : Previous year figures have been regrouped/ rearranged, wherever considered necessary to conform to
current year's classification.
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