2.10. Provisions, Contingent Liabilities and Contingent assets
A provision is recognized if, as a result of a past event, the
company has a present legal or constructive obligation that
is reasonably estimable, 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 at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to
the liability. Provisions are not recognized for future operating
losses. Provisions are determined based on the best estimate
required to settle the obligation at the balance sheet date.
A contingent liability is disclosed unless the possibility of an
outflow of resources embodying economics benefits is remote.
Contingent assets are not recognized in financial statements
since this may result in the recognition of income that may
never be realized. However, when the realization of income is
virtually certain, then the related asset is not a contingent asset
and its recognition is appropriate.
A contingent asset is disclosed, where an inflow of economic
benefits is probable.
2.11. Earnings per equity share
Basie earnings per share
Basic earnings per share are calculated by dividing:
- the profit attributable to owners of the Company
- by the weighted average number of equity shares
outstanding during the financial year, adjusted for bonus
elements in equity shares issued during the year and
excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust the figures used in the
determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing
costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares
that would have been outstanding assuming the 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 at 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
2.12.Employee Benefit
All employee benefits payable wholly within twelve months
rendering services are classified as short-term employee benefits.
Benefits such as salaries, wages, short-term compensated
absences, performance incentives etc., and the expected cost of
bonus, ex-gratia are recognized during the period in which the
employee renders related service.
Payments to defined contribution retirement benefit plans are
recognized as an expense when employees have rendered the
service entitling them to the contribution.
The cost of providing benefits under the defined benefit plan is
determined using the projected unit credit method with actuarial
valuations being carried out at each balance sheet date, which
recognizes each period of service as giving rise to additional
unit of employee benefit entitlement and measure each unit
separately to build up the final obligation.
Remeasurements, comprising of actuarial gains and losses, the
effect of the asset ceiling, excluding amounts included in net
interest on the net defined benefit liability and the return on
plan assets (excluding amounts included in net interest on the
net defined benefit liability), are recognized immediately in the
balance sheet with a corresponding debit or credit to retained
earnings through other comprehensive income in the period in
which they occur. Remeasurements are not reclassified to the
statement of profit and loss in subsequent periods.
Net interest is calculated by applying the discount rate to the net
defined benefit liability or asset.
The Company recognizes the following changes in the net
defined benefit obligation under employee benefit expenses in
the statement of profit and loss.
• Service costs comprising current service costs, past-service
costs, gains and losses on curtailments and non-routine
settlements,
• Net interest expense or income.
Long-term employee benefits
Compensated absences which are not expected to occur within
twelve months after the end of the period in which the employee
renders the related services are recognised as a liability at the
present value of the defined benefit obligation at the balance
sheet date.
Termination benefits
Termination benefits are recognized as an expense in the period
in which they are incurred.
2.13. Cash flow Statement
Cash flows are reported using the indirect method, whereby
profit for the period 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 item of income or
expenses associated with investing or financing cash flows. The
cash flows from operating, investing and financing activities of
the Company are segregated.
2.14. Cash and cash equivalents:
All highly liquid financial instruments, which are readily
convertible into determinable amounts of cash and which are
subject to insignificant risk of change in value and are having
original maturities of three months or less from the date of
purchase, are considered as cash equivalents. Cash and cash
equivalents includes balances with banks which are unrestricted
for withdrawal and usage.
2.15. Lease
The Company assesses at contract inception whether a contract
is, or contains, a lease. That is, if the contract conveys the right
to control the use of an identified asset for a period of time in
exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and leases
of low-value assets. The Company recognizes lease liabilities
to make lease payments and right-to use assets representing the
right to use the underlying assets.
i) Right of use assets
The Company recognizes right-of-use assets at the
commencement date of the lease (i.e. the date the underlying
assets is available for use). Right-of-use assets are
measured at cost. Less any accumulated depreciation and
impairment losses, and adjusted for any re-measurement
of lease liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognized. initial direct
costs incurred, and lease payments made at or before the
commencement date less any lease incentives received,
Right-of-use assets are depreciated on a straight-line basis
over the shorter of the lease term and the estimated use full
lives of the assets.
If ownership of the Leased asset transfers to the Company
at the end of the lease term or the cost reflects the exercise
of a purchase option, depreciation is calculated using the
estimated useful life of the asset. The right-of-use assets are
also subject to impairment. Refer to the accounting policies
in section Impairment of non-financial assets.
ii) Lease Liability
At the commencement date of the lease, the Company
recognizes lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease
payments include fixed payments (including in substance
fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a
rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the
exercise price of a purchase option reasonably certain to be
exercised by the Company and payments of penalties for
terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments
that do not depend on an index or a rate are recognized as
expenses (unless they are incurred to produce inventories)
in the period in which the event or condition that triggers
the payment occurs.
In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the
lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities
is re-measured if there is a modification, a change in the
lease term, a change in the lease payments (i.e. change in
future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
iii) Short-term leases and lease of low-value assets
The Company applies the short-term lease recognition
exemption to its short-term lease (i.e. those leases that have
a lease term of 12 months or less from the commencement
date and do not contain a purchase option), it also applies
the lease of low-value assets recognition exemption to
lease that are considered to be low value. Lease payment
on short- term leases and leases of low-value assets are
recognized as expense on a straight-line basis over the lease
term.
Company as a lessor
leases in which the Company does not transfer substantially all
the risks and rewards incidental to ownership of an asset are
classified as operating leases. Rental income arising is accounted
for on a straight-line basis over the lease terms.
Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the leased
asset and recognized over the lease term on the same basis as
rental income Contingent rents are recognized as revenue in the
period in which they are earned.
2.16.Exceptional Items
Certain occasions, the size, type or incidence of an item of
income or expense, pertaining to the ordinary activities of the
Company is such that its disclosure improves the understanding
of the performance of the Company, such income or expense is
classified as an exceptional item and accordingly, disclosed in
the notes accompanying to the financial statements.
note 37 : corporate SOCIAL RESPONSIBILITY EXPENDITURE
As per the Companies Act, 2013, amount required to be spent by the Company on Corporate Social Responsibility ( CSR ) activities during
the year was Rs. 59.01 lacs,( 2023-24 Rs.52.02 lacs ) . During the year ended March 31, 2025 the amount approved by the Board to be spent
on CSR activities and was spent 59.01 lacs ( 2023-24 Rs. 52.02 spent ) meeting the applicability threshold, needs to spend at least 2% of
its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The main focus
areas for CSR activities are health care, education, malnutrition and water hygiene and sanitation. A CSR committee has been formed by the
company as per the Act to oversee and execute the company’s CSR policy.
Gross amount spent by the company during the year is ' 59.01 lakhs (Previous year ' 52.02 lakhs).
Notes on Financial Statements for the Year ended 31st March, 2025
Note: 41.1 : The company has adopted Ind-AS, 116 Leases and applied the standerd to all lease contracts approach for tranasitioning existing
on the date of initial application i.e. 1st April 2019 , The company has used the modified retrospctive approach to transitioning to Ind-AS, 116
with right-of -use asset recognised at an amount equal to the lease liability adjusted for any prepayments/accrualsrecognized in the balance
sheet immediately before the date of initial application.
At the commencement date of a lease , the Company has recognised a liability to make lease payments ( i.e.the lease liability ) and an asset
representing the right-of-use the underlying asset during the lease term ( i.e.the right-of-use asset).
The company has separetly recognised the interest expenses on the lease liability and the depreciation expenseon the right-of-use asset.
The operating leases recorded on the balance sheet following implementation of Ind-AS 116 are principally in respect of leasehold asset
representing right-of-use as per contracts excluding low value assets and short term leases 12 month or less.
Leases previously accounted for as operating leases
The company recognised right-of-use assets and lease liabilities for thouse leases previously classified as operating leases , using term of non
cancellable intention to extend except for short-term leases and lease of low value assets.
The right-of-use assets for most leases were recognized based on the carrying amount as if the standard had always been applied , apart from
the use of incremental borrowing rate at the date of initial application. In some leases , the right of use assets were recognised based on the
amount equal to the lease liabilities , adjusted for any related prepaid and accrued lease payments previously recognised. Lease liabilities were
recognized based on the present value of the remaining lease payments, discountedusing the incremental borrowing rate at the date of initial
application.
The company has also applied the available practical expediants wherein it:
* Used a single discount rate to a portfolio of leases with reasonably similar characteristics
* Relied on its assessment of whether leases are onerous immediately before the date of initial application .
* Applied the short-term leases exemptions to leases term that ends within 12 months at the date of initial application .
* Excluded the initial direct costs from the mearsurment of the right-of-use asset at the date of initial application
* Used hindsight in determining the lease term when the contract contains option to extend or terminate the lease
NOTE 45: Financial Risk Management Objectives and Policies
The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk
management policy is set by the Management Board.
Market Risk is the risk of loss of future earning, fair values or future cash flow that may result from a change in the price of a financial
instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity
prices and other market changes that affect market risk sensitive instruments. Market Risk is attributable to all market risk sensitive financial
instruments including investment and deposits , foreign currency receivables, payables and loans and borrowings.
The Company manages market risk through its finance department, which evaluate and exercises independent control over the entire process of
market risk management. The activities of this department include management of cash resources, implementing hedging strategies for foreign
currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.
Credit Risk
Credit risk arises from the possibility that counter party may not be able to settle their obligation as agreed. To manage this, the Company
periodically assesses the financial reliability of customers, taking in to account the financial condition, current economic trends, and analysis
of historical bad debts and ageing of accounts receivable. Individual risk limit are set accordingly.
The company considers the possibility of default upon initial recognition of asset and whether there has been a significant increse in credit risk
on an ongoing basis throughout each reporting period. To assess whether there is a significant increse in credit risk the company compares the
risk of a default occuring on the asset as at the reporting date with the risk of default as at the date of initial recognition.
Raw Material and Fuel Price Risk
The company is impacted by the price volatility of certain commodities like raw materials, packing materials and fuel. The Company is
impacted by the price volatility of Fuels like Gas, Furnace Oil, etc.
To minimize the risk related to fuel price change, the Company uses alternate fuel based on their market prices. The Company swaps and
uses alternate fuels based on the cost of energy efficiency and, hence, quantification of sensitivity is not practical. To mitigate the volatility in
market price of major raw materials, the company has entered into fixed price contract.
Note 46 : Capital Risk Management
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize returns to our
shareholders.
The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to meet its
strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in
economic conditions and the risk characteristics of the underlying assets. The Company may take appropriate steps in order to maintain, or if
necessary adjust, its capital structure.
Note 47 : Fair Value Measurement
Financial Instrument by category and hierarchy
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term
loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these
instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and
individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these
receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
The fair values for Non-Current borrowings, loans and security deposits were calculated based on cash flows discounted using a current
lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter
party credit risk.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or
indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
During the reporting period ending 31st March 2025 and 31st March 2024, there were no transfer between Level 1 and Level 2 fair value
measurement.
Note 48 : Operating Segments:
DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (Ind AS) 108 OPERATING SEGMENTS
Identifications of Segments :
The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision
about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently
with profit or loss in the standalone financial statements, Operating segment have been identified on the basis of nature of products and other
quantitative criteria specified in the Ind AS 108.
Segment revenue and results:
The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure & income.
Segment assets and Liabilities:
Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipments, trade
receivables, Inventory and other operating assets. Segment liabilities primarily includes trade payable and other liabilities. Common assets and
liabilities which can not be allocated to any of the business segment are shown as unallocable assets / liabilities.
Note 49: Additional disclosures under the regulatory requirements:
a) The title deeds of immovable properties are held in the name of the Company as at the balance sheet date.
b) The Company has not revalued its Property, Plant and Equipment during the the year under consideration.
c) During the year under consideration, the company has not given any loan or advances in the nature of loan to its promoters, directors ,
Key Managerial personnel and other related parties ( as defined under Companies Act, 2013 ) either severally or jointly with any other
person which are repayable on demand or without specified any terms or period of repayment.
d) The company has any capital work in progress under development, the details of which are given at Note No. 3B.
e) The company does not have any intangible assets under development.
f) There is no proceeding which has been initiated or pending against the group for holding any Benami property under Benami Transaction
( Prohibition) Act. 1988 ( 45 of 1988) and rules made thereunder.
g) The company has funds from banks or financial institution on the basis of security of current assets. The Company has filed quarterly
returns or statements with such banks, which are in agreement with the books of account.
h) The company is not declared wilful defaulter by any bank or financial institution or other lender.
i) The company has no transactions with the companies struck- off under Companies Act, 2013.
j) The company has not created any charge or satisfaction with the registrarof companies .
k) The company is neither a holding nor a subsidiary of any company.
l) The company has not applied for any scheme of arrangement u/s. 230 to 237 of the Companies Act, 2013.
m) 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 ( whether recorded in writing or otherwise) 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 Beneficires ) or
ii) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiries.
n) The company does not have any transaction not recorded in the books of accounts that has been surrendered or disclosed as income
during the year in the tax assessment under the Income Tax Act. 1961.
o) During the year under consideration the company have not traded or invested in Crypto currency or Virtual Currency.
Note 50: The Company has filed mediation petion with delhi high court against DESNL/OIL, Gabon for the amount receivable of Rs. 48.15
crores which is outstanding for more than two years. The said proceedings are still in the progress. However , based on the facts and
progress of the case the Board/management is of the opinion that 40% of outstanding amount which works out to Rs. 19.26 crores
shall be provided in this quarter and accordingly provision for expected credit loss of Rs. 19.26 crores in respect of DESNL, Gabon
has been provided in books of accounts.
(#) Decrease in Debt Equity ratio is on account of decrease in borrowings and accordingly there is decrease in finance cost which lead
to increase in debt service coverge ratio.
(#) Increase in Trde Receviable ratio is on account of increase in sales and decrease in trde receivables.
Summary of Significant Accounting Policies
Notes to Financial Statements
The notes are an integral part of the Financial Statements.
As per our rep°rt of even date For and on behalf of Board of Directors of
empire industries limited
for a. T. Jain & CO. S. C. MALHOTRA (DIN : 00026704) Chairman
Chartered Accountants RANJIT MALHOTRA (DIN : 00026933) Vice Chairman & Managing Director
FRN 103886W DILEEP MALHOTRA (DIN : 00027168) Joint Managing Director
KABIR MALHOTRA (DIN : 07019714) Executive Director
RAJBIR SINGH (DIN : 00826402)
S T tAIN SUBODH CHANDRA (DIN : 02076844) Directors
S. T tain GEETANJALI NAIDU (DIN : 08713727)
Partner Membership N°.338°9 ANUJA N MOHE (DIN 09263246)
UDIN: 25D33809BMIMAD9034
Place : Mumbai S. C. NANDA
Director Finance & Company Secretary
Date: 30th May, 2025 Mumbai, 30th May, 2025 F J J
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