3.4 Claims, Provisions and Contingent Liabilities
The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable
Ind AS. The Company has ongoing litigations with various regulatory authorities and third parties. Where an outflow of funds is
believed to be probable and a reliable estimate of the outcome of the dispute can be made based on management's assessment
of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability.
Such accruals are by nature complex and can take number of years to resolve and can involve estimation uncertainty. Information
about such litigations is provided in Note 33 to the Standalone Financial Statements.
3.5 Provision against obsolete and slow-moving Inventories
The Company reviews the condition of its Inventories and makes provision against obsolete and slow moving Inventory items
which are identified as no longer suitable for sale or use. Company estimates the Net Realisable Value for such Inventories based
primarily on the latest invoice prices and current market conditions. The Company carries out an Inventory review at each Balance
Sheet date and makes provision against obsolete and slow moving items. The Company reassesses the estimation on each
Balance Sheet date.
3.6 Impairment of Financial Assets/Impairment on Trade Receivables
The Company assesses impairment based on Expected Credit Losses (ECL) model on Trade Receivables. The Company uses a
provision matrix to determine impairment loss allowance on the portfolio of Trade Receivables. The provision matrix is based on
its historically observed default rates over the expected life of the Trade Receivable and is adjusted for forward looking estimates.
At every reporting date, the historically observed default rates are updated and changes in the forward looking estimates are
analysed.
3.7 Taxes
Deferred Tax Assets are recognised to the extent that it is probable that taxable profit will be available against which the
deductible Temporary Differences, and the Carry Forward of Unused Tax Credits and Unused Tax Losses including unabsorbed
depreciation can be utilised. Significant management estimate and assumptions is required to determine the amount Deferred
Tax Assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax
planning strategies.
3.8 Leases - Estimating the Incremental Borrowing Rate
The Company does not determine the interest rate implicit in the lease, therefore, it uses its Incremental Borrowing Rate (IBR) to
measure Lease Liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an Asset of a similar value to the Right-of-Use Asset in a similar economic
environment.
3.9 Impairment of Non-Financial Asset
Impairment exists when the Carrying value of an Asset or Cash Generating Unit exceeds its recoverable amount, which is the
higher of its Fair value less Costs of disposal and its Value-in-use. The fair value less costs of disposal calculation is based on
available data from binding sales transactions, conducted at arm's length, for similar Assets or observable market prices less
incremental costs for disposing off the asset. The Value-in-Use calculation is based on a DCF model.
15.6 There are no Equity Shares issued as bonus and for consideration other than Cash and Shares bought back during the period of five
years immediately preceding the reporting date.
15.7 The Board of Directors in their meeting held on May 24, 2025, have recommended issue of 1 (one) Equity Share of ' 10 each fully
paid up of the Company as Bonus Share for every 1 (one) Equity Shares held, following statutory provisions applicable including
Section 63 and other relevant Sections of the Companies Act, 2013 and Rules framed thereunder, SEBI LODR Regulations, 2015, SEBI
ICDR Regulations, 2018 and subject to approval of the Shareholders of the Company.
Nature and Purpose of Reserves :
(a) Securities Premium is used to record the Premium on Issue of Shares. The same is utilised in accordance with the provisions of
Section 52 of the Companies Act, 2013.
(b) Retained Earnings represents the Profits that the Company has earned till date, less any Dividends or other distributions to the
Shareholders.
(c) Special Economic Zone Reinvestment Reserve had been created out of the Profit for the Financial Year 2022-23 of the eligible
SEZ unit in terms of the provisions of Sec 10AA(1)(ii) of Income Tax Act, 1961 under the Old Tax Regime. The Company had
elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws
(Amendment) Act, 2019 "New Tax Regime" at the time of filing of Income Tax Return for Financial Year ended March 31,2023.
Accordingly, the amount transferred to Special Economic Zone Reinvestment Reserve Utilisation had been transferred to
Retained Earnings during the year ended March 31,2024.
(d) The Board of Directors of the Company in their meeting held on May 7, 2025, has declared Interim Dividend at the rate of 60 %
i.e. ' 6.00 per Equity Share of ' 10/- each face value.
16.1 The Board of Directors, at its meeting on May 24, 2025, have proposed a Final Dividend of Re. 1.00 (10%) per Equity Share for the
financial year ended March 31, 2025 subject to the approval of Shareholders at the forthcoming Annual General Meeting, and
following Policy on Dividend Distribution of the Company. Proposed Dividend is accounted for in the year in which it is approved
by the Shareholders.
The Board of Directors, at its meeting on May 18, 2024, had proposed a Final Dividend of ' 7.00 (70%) per Equity Share for the
financial year ended March 31,2024. The total amount of ' 2,522.75 has been paid out during the year ended March 31,2025, with
approval of Equity Shareholders obtained at the Annual General Meeting.
17.1 Rupee Term Loan from a Bank is secured by the first pari-passu charge over all movable Property, Plant and Equipment of the
Company, both present and future, first pari-passu charge over Land and Building of the Company situated at Visakhapatnam, both
present and future, and second pari-passu charge over Current Assets of the Company, both present and future. The interest rate
on such term loan is 150 basis points over 3 months Treasury Bill and is repayable in 20 equal quarterly instalments after one year
of moratorium period from the date of first disbursement.
17.2 Rupee Term Loan from another Bank is secured by the first pari-passu charge over all movable Property, Plant and Equipment of
the Company, and second pari-passu charge over Current Assets of the Company. The interest rate on such term loan is 190 basis
points over RBI Repo rate and is repayable in 20 equal quarterly instalments after one year of moratorium period from the date of
first disbursement.
The Company has also satisfied all Debt Covenants prescribed in terms of Bank Loans. The Company has not defaulted on any loans
payable.
17.3 For Current Maturities of Term Loans from Banks, Refer Note 20.
20.1 Working Capital and Packing Credit Loans from Banks are secured by hypothecation of Raw Materials, Stock-in-Process, Finished
Goods, Consumables, Spares, Stores, Receivables and Other Current Assets both present and future on pari passu basis and second
charge over all Movable Property, Plant and Equipment of the Company on pari passu basis.
20.2 The Company has been sanctioned Working Capital limits in excess of Rupees Five Crores in aggregate from Banks on the basis of
security as mentioned in Note 20.1 above. The revised intimations in respect of amounts reported in Quarterly Returns/Statements
filed by the Company with such Banks are in agreement with the Unaudited Books of Account of the Company. The Company has
satisfied all Debt Covenants prescribed in Terms of Bank Loans. The Company has not defaulted on any loans payable.
29.1 The Company has recognised in the Standalone Statement of Profit and Loss for the year ended March 31, 2025 an amount of
' 292.98 (March 31,2024 : ' 246.13) as expenses under Defined Contribution Plans.
29.2 Provident Fund (Funded)
Provident Fund contributions in respect of employees upto August 2017 of erstwhile IFGL Refractories Limited are made to a Trustee
managed exempted fund and interest paid to member thereof is not lower than that declared annually by the Central Government.
Shortfall if any is made good by the Company. Membership to said fund has been closed on and from September 1,2017, subject to
necessary approvals and/or permissions. Provident Fund in respect of remaining employees are made to Statutory Provident Fund
established by the Central Government. Based on the final guidance for measurement of Provident Fund liabilities of the Trustee
managed fund issued by the Actuarial Society of India, the Company's Liability at the year ended March 31,2025 is Nil (March 31,
2024 : ' 1.94) has been actuarially determined by an Independent Actuary using the Projected Unit Credit Method and provided
for. Provident Fund in respect of remaining employees of the Company are made to Statutory Provident Fund established by the
Central Government as stated above.
29.3 Gratuity (Funded)
The Company provides Gratuity benefit to its Employees. Gratuity entitlement of the employees is as per the provision of the
Payment of Gratuity Act, 1972. However in case of employees joining before April 1,2003 of erstwhile IFGL Refractories Limited,
they are entitled to Gratuity as per scheme framed by that Company or as per the Payment of Gratuity Act, 1972, which ever is
higher. Liability with regard to Gratuity Plan are determined by the Actuarial Valuation as set out in Note 2.14 (v), based on which
the Company makes contribution to the Fund using the Projected Unit Credit Method. The most recent Actuarial Valuation of the
Fund was carried out as at March 31,2025. Refer Note 29.6 for Actuarial Valuation.
29.4 Superannuation (Funded)
Certain employees joined before March 31, 2004 of erstwhile IFGL Refractories Limited are member of Trustee managed
Superannuation Fund. The said Fund provides for Superannuation benefit on retirement/death/incapacitation/termination and
was amended from the Defined Benefit to Defined Contribution Plan effective April 1,2004. Defined Benefit Plan was frozen as on
March 31,2004. Necessary formalities/approvals have been complied with and obtained. Refer Notes 2.14 (iii) for Accounting Policy
relating to Superannuation and Refer Note 29.6 for Actuarial Valuation.
From December 2022, the Company is not effecting payment of contributions in respect of its employees and Member of Company's
Income Tax recognised Superannuation Fund, IFGL Refractories Ltd - Employees Superannuation Fund following approval by the
Principal Commissioner of Income Tax, Kolkata-2 that surplus lying in Plan-A of the Fund can be adjusted against contributions receivable
from the Company under Plan-B thereof. Amount involved for the year ended March 31,2025 is ' 33.23, March 2024 is '35.46).
29.5 Compensated Absence (Unfunded)
The Company provides for accumulated leave benefit for eligible employees. Liabilities are determined by Actuarial Valuation as
set out in Note 2.14 (vi) using Projected Unit Credit Method.
The above Sensitivity Analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the Sensitivity of the Defined Benefit
Obligation to Significant Actuarial Assumptions, the same method (Present Value of the Defined Benefit Obligation calculated with
the Projected Unit Credit Method at the end of the reporting period) has been applied while calculating the Defined Benefit Liability
recognised in the Balance Sheet.
The methods and types of assumptions used in preparing the Sensitivity Analysis did not change compared to the prior period.
Risk Exposure :
Through its Defined Benefit Plans, the Company is exposed to a number of risks, the most significant of which are detailed below :
a. Investment Risk : The Defined Benefit Plans are funded Government Securities and Units of Insurers. The Company does not have
any liberty to manage the funds provided to Insurance Companies.
b. Interest Risk : A decrease in the interest rate on Plan Assets will increase the Plan Liability.
c. Life Expectancy : The Present Value of the Defined Benefit Plan Liability is calculated by reference to the best estimate of the mortality
of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will
increase the Plan Liability.
d. Salary Growth Risk : The Present Value of Defined Benefit Plan Liability is calculated by reference to the future Salaries of plan
participants. An increase in Salary will increase the Plan Liability.
Defined Benefit Liability and Employer Contributions
Expected contributions to post employment benefit plans for the year ending March 31,2025 is ' 56.92 ( March 31,2024 : 51.03).
The Weighted Average Duration of the Defined Benefit Obligation (Gratuity) is 8 years for the year ended March 31,2025 (March 31,2024 : 8
years). The expected maturity analysis of Undiscounted Gratuity is as follows :
The Management assessed that Cash and Cash Equivalents, Trade Receivables, Trade Payables and Other Current Liabilities
approximate their carrying amounts largely due to the Short-Term maturities of these instruments.
The Fair Value of Lease Liabilities is estimated by discounting future cash flows using rates currently available for Debt on similar
terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash
flows or the discount rate, the Fair Value of the Equity Instruments is also sensitive to a reasonably possible change in the growth
rates. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and
determines their impact on the total Fair Value.
The Fair Values of the Company's interest bearing borrowings are determined by using DCF method using discount rate that
reflects issuer's borrowing rate as at the end of the reporting period. The own non performance risk as at March 31, 2025 was
assessed to be insignificant. The discount for lack of marketability represents the amounts that the Company has determined that
market participants would take into account when pricing the Investments.
35.3 Financial Risk Management Objectives
The Company's activities expose it to a variety of Financial Risks, including Market Risk, Credit Risk and Liquidity Risk. The Company
continues to focus on a system based approach to Business Risk Management. The Company's Financial Risk Management process
seeks to enable the early identification, evaluation and effective management of key risks facing the business. Backed by strong
Internal Control Systems, the current Risk Management System rests on policies and procedures issued by appropriate authorities;
process of regular reviews/audits to set appropriate risk limits and controls; monitoring of such risks and compliance confirmation
for the same.
Fair Value Hierarchy
The following table provides an analysis of Financial Instruments that are measured subsequent to initial recognition at Fair Value,
grouped into Level 1 to Level 3, as described below :
Quoted/Repurchase prices in an active market (Level 1) : This level of hierarchy includes Financial Assets that are measured by
reference to Quoted/Repurchase Prices (unadjusted) in active markets for identical Assets or Liabilities. This category consists of
Investment in Quoted Equity Shares, and Mutual Fund Investments.
Valuation techniques with observable inputs (Level 2) : This level of hierarchy includes Financial Assets and Liabilities, measured
using inputs other than Quoted Prices included within Level 1 that are observable for the Asset or Liability, either directly (i.e., as
prices) or indirectly (i.e. derived from prices). This level of hierarchy does not include any instrument.
Valuation techniques with significant unobservable inputs (Level 3) : This level of hierarchy includes Financial Assets and
Liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair Values are determined
in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current
market transactions in the same instrument nor are they based on available market data.
There have been no transfers between Level 1 and Level 2 during the years ended March 31,2025 and March 31,2024.
In determining Fair Value Measurement, the impact of potential climate related matters, including legislation, which
may affect the Fair Value Measurement of Assets and Liabilities in the Financial Statements has been considered. These
risks in respect of climate related matters are included as key assumptions where they materially impact the measure of
recoverable amount. These assumptions have been included in the Cash Flow forecasts in assessing value-in-use amounts.
At present, the impact of climate related matters is not material to the Company's Financial Statements.
(a) Market Risk
The Company's Financial Instruments are exposed to market changes. The Company is exposed to following significant
Market Risk:
i. Foreign Currency Risk
ii. Interest Rate Risk
iii. Price Risk
Market Risk Exposures are measured using Sensitivity Analysis. There has been no change to the Company's exposure to
Market Risks or the manner in which these risks are being managed and measured.
i. Foreign Currency Risk
The Company undertakes transactions denominated in Foreign Currency which results in Exchange Rate fluctuations.
Such Exchange Rate Risk primarily arises from transactions made in Foreign Exchange and reinstatement risks arising
from recognised Assets and Liabilities, which are not in the Company's functional Currency (Indian Rupees).
A significant portion of these transactions are in US Dollar, Euro, etc. The Carrying Amount of Foreign Currency
denominated Financial Assets and Liabilities are as follows :
ii. Interest Rate Risk
Interest Rate Risk refers to the risk that the Fair Value or Future Cash Flows of a Financial Instrument will fluctuate
because of changes in market interest rates. The objectives of the Company's Interest Rate Risk Management processes
are to lessen the impact of adverse Interest Rate movements on its earnings and Cash Flows and to minimise counter
party risks.
Note : If the rate is decreased by 50 basis Points, profit will increase by an equal amount.
Interest Rate Sensitivity has been calculated assuming the Borrowings outstanding at the reporting date have
been outstanding for the entire reporting period. Further, the calculations for the Unhedged Floating Rate
Borrowing have been done on the closing value of the Foreign Currency.
iii. Price Risk
The Company invests its surplus funds primarily in Mutual Funds, Bonds and others measured at Fair Value through
Profit or Loss. Aggregate value of such Investments as at March 31,2025 is '10,528.42 (March 31,2024 : ' 12,644.13).
Investments in the Mutual Fund schemes are measured at Fair Value. Accordingly, these do not pose any significant
Price Risk.
(b) Liquidity Risk
Liquidity Risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company mitigates its
Liquidity Risks by ensuring timely collections of its Trade Receivables, close monitoring of its Credit Cycle and ensuring
optimal movements of its Inventories. The table below provides details regarding remaining contractual maturities of
significant Financial Assets and Liabilities at the reporting date :
(c) Credit Risk
Credit Risk is the risk that counter party will not meet its obligations leading to a Financial Loss. The Company has its policies
to limit its exposure to Credit Risk arising from outstanding Trade Receivables. Management regularly assess the credit quality
of its customer's basis which, terms of payment are decided. Credit limits are set for each customer which are reviewed on
periodic intervals.
The movement of the Impairment Loss on Receivables made by the Company are as under :
38. AMALGAMATION WITH ERSTWHILE IFGL REFRACTORIES LIMITED (ERSTWHILE HOLDING COMPANY)
Hon'ble National Company Law Tribunal, Kolkata Bench (Tribunal) by passing an Order on August 3, 2017 under Sections 230 and
232 of the Companies Act, 2013 sanctioned a Scheme of Amalgamation (Scheme) for merger of erstwhile IFGL Refractories Ltd
("IFGL") with the Company on and from April 1,2016, being the Appointed Date. Scheme had become effective from August 5, 2017
following filing of Order of Hon'ble Tribunal with the Ministry of Corporate Affairs (Registrar of Companies) by the Company and
IFGL on that date. The Scheme was accordingly given effect to in the Financial Year 2016-17 Financial statements.
In accordance with the provisions of aforesaid Scheme -
a. The amalgamation was accounted under the 'Purchase Method' as prescribed by Accounting Standard 14 - Accounting for
Amalgamation under the previous GAAP.
b. The excess of the value of Equity Shares issued by the Company over the book value of Assets and Liabilities taken over by
the Company and cancellation of Equity Shares held by erstwhile IFGL Refractories Limited in the Company, amounting to
'26,699.46 was recorded as Goodwill arising on Amalgamation.
c. The Goodwill recorded on Amalgamation is being amortised and the Company has estimated its useful life of 10 years.
Accordingly, amortisation for the year amounting to ' 2,669.95 has been recognised in the Standalone Statement of Profit and
Loss.
40. The Company had elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as introduced by
the Taxation Laws (Amendment) Act, 2019 "New Tax Regime" at the time of filing of Income Tax Return for financial year ending
March 31,2023 and onwards. Accordingly, the Company had re-measured Current Tax Liability and Deferred Tax Liability basis the
lower rate prescribed. Consequently, the Current Tax Liability and Deferred Tax Liability for the year ended March 31,2023 had
decreased by ' 62.99 and ' 870.88 respectively, resulting into reduction in tax charge by ' 933.87 during the year ended March 31,
2024.
41. The Company has used SAP B1 and SAP RISE accounting software for maintaining its books of account which has a feature of
recording the audit trail (Edit Log facility) and the same has operated throughout the year for all relevant transactions recorded
in the software except that the audit trail feature is not enabled at the database level for certain changes using privileged/
administrative access rights insofar as it relates to SAP B1 and SAP RISE accounting software. For "SARAL" Payroll Software, the audit
trail was neither operated nor was enabled during the year. Further, no instance of audit trail feature being tampered with was
noted in respect of the accounting softwares except for SARAL application as audit trail was neither operated nor enabled during
the year.
Additionally, the audit trail of the previous year has been preserved by the Company as per the statutory requirements for record
retention, to the extent it was enabled and recorded in the previous year.
43. OTHER STATUTORY INFORMATION
i. No proceedings has been initiated or are pending against the Company for holding any Benami property under the Benami
Transactions (Prohibition) Act, 1988 and rules made thereunder.
ii. There are no charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iii. The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
iv. The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Inter¬
mediaries) 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.
v. The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the under¬
standing (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.
vi. The Company does not have 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).
vii. The Company does not have balance with the Companies struck off under Section 248 of Companies Act, 2013 or Section 560
of Companies Act, 1956.
viii. The Company has not been declared as wilful defaulter by any Bank or Financial Institution or other lender.
ix. There are no exceptional items for the year ended March 31,2024 and March 31,2025.
44. The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post employment benefits received
Presidential assent in September 2020. The Code has been published in the Gazette of India. Certain sections of the Code came into
effect on May 3, 2024. However, the final rules/interpretation have not yet been issued. The Company believes the impact of changes
will not be material.
As per our Report of even date attached
For S. R. Batliboi & Co. LLP For and on behalf of the Board of Directors of
Chartered Accountants IFGL Refractories Limited
ICAI Firm's Registration Number : 301003E/E300005
per Sanjay Kumar Agarwal S K Bajoria James L McIntosh
Partner Chairman Managing Director
Membership No. : 060352 (DIN - 00084004) (DIN - 09287829)
Arasu Shanmugam Amit Agarwal Mansi Damani
Kolkata Director and Chief Executive Officer India Chief Financial Officer Company Secretary
May 24, 2025 (DIN - 02316638) (FCS - 6769)
|