R. 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, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. When the company expects
some or all of a provision to be reimbursed, the reimbursement is recognized as a
separate asset, but only when the reimbursement is certain. The expense relating to
a provision is presented in the statement of profit and loss net of any reimbursement.
Contingent liabilities are disclosed when the Company has a possible obligation or a
present obligation and it is probable that an outflow of resources embodying economic
benefits will not be required to settle the obligation. The Company does not recognize a
contingent liability but discloses its existence in the financial statements.
Contingent assets are not recognised in the financial statements since this may result
in the recognition of income that may never be realised. However, when the realisation
of income is virtually certain, then the related asset is not a contingent asset and is
recognized.
a) There are no projects as on each reporting date which have exceeded the cost as
compared to its original plan or where completion is overdue. However, based on
the approval of the Board, the timeline for completion of new manufacturing unit at
Serakole, West Bengal has been extended to third quarter of FY 2026-27 and the
estimated cost of the project has also increased from H3500 Lakhs to H6058 Lakhs due
to further expansion / change in specification from the original plans. Further, another
upcoming project at Umbergaon, Gujarat has been suspended temporarily by the
Company.
b) Capital Work-in-Progress As at 31.03.2026 mainly comprises of construction cost of
Building and Plant & equipment of the Company. (As at 31.03.25 mainly comprises of
construction cost of Building and Plant & equipment of the Company. )
i) There is no outstanding receivables due from the directors or other officers of the
Company.
ii) The above Trade Receivables are pledged to secure borrowings of the Company. (refer
note 22)
iii) Allowances for credit losses of Trade Receivables have been estimated based on ageing
of receivable and customer related specific information on specific case basis. (Refer
Note No. 44 (ii) for credit risk)
iv) Refer Note No. 40 for Trade Receivable from Related parties
Note No. : 15 Financial Assets- Loans (Current) (Contd.)
(ii) As required under section 186(4) of the Companies Act, 2013,the loan given shall be
utilised for purchase of capital goods.
Based on agreed terms mentioned in loan agreeement dated 11th November, 2025,
loan given to subsidiary during the year carries an interest rate of 9.50% p.a. and loan
shall be repayable within 180 days from the disbursement.
(iii) "Information pursuant to Regulation 34(3) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. Loan & Advances (in nature of loan both Current &
Non Current) to subsidiary company are as under":
b. Terms & rights attached to equity shares:
The Company has only one class of equity shares having a par value of H5/- each (
FY 2024-25 H5/- each). Each holder of equity shares is entitled to one vote per share.
The holders of Equity Shares are entitled to receive dividends as declared from time to
time. 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.
e. Aggregate number of share issued for consideration other than cash:
During the year 2019-20, 16,74,806 shares were issued pursuant to scheme of
arrangement and No. of bonus share 2,97,44,582 issued during the previous year.
f. The Company has not bought back any shares during the last 5 years.
g. After the Reporting date, the Board of Directors has proposed a dividend of H 1.50/-
per equity share (i.e. 30% on Face value of H5 each) for the year ended 31st March
2026 (31st March ,2025 - H1.50/- per equity share (i.e. 30% on Face value of H5
each)). The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting and if approved it will lead to cash
outflow amounting to H892.34 Lakhs.
h. Pursuant to resolution passed by the Board at their meeting dated 29th October,
2024 and approval by the Shareholders via Postal Ballot on 6th December, 2024, the
Company has sub-divided its equity shares of face value of H1 0/- each to 2 Equity
Shares of face value of H5/- each. Further, the shareholder's approved issuance of
bonus shares to the shareholders as on record date i.e. 20th December, 2024 in the
ratio of 1:1 i.e. one bonus equity share for each existing equity share. The Stakeholder
Relationship Committee of the Board at their meeting held on 23rd December, 2024
issued and allotted 2,97,44,582 number of Bonus Equity Shares of H5/- each,
by capitalizing a sum of H1487.23 Lakhs from the Securities Premium account.
'The Board of Directors at its meeting held on 29th October, 2024 have also
recommended further increase in Authorized Capital of the Company from H1550 Lakhs
to H3100 Lakhs comprising of 6,20,00,000 no. of Equity Share of face value of H5/-
each ranking pari passu with the existing shares of the Company. The aforesaid increase
in authorised share capital and alteration in the Capital Clause of the Memorandum of
Association has also been approved by the shareholders via the Postal Ballot."
i No ordinary shares have been reserved per issue under options and contract/
commitmemts for the sale of shares/ disinvestment as at the Balance Sheet date.
i No securities convertible into Equity/ Preference shares have been issued by the
Company during the year.
k. No calls are unpaid by any directors/ officers of the Company during the year.
l. The Company does not have any Holding Company or Ultimate Holding Company.
Description of nature and purpose of each reserve
a. Securities Premium
Securities Premium represents the excess of the amount received over the face value
of the shares. This reserve will be utilised in accordance with the provisions of the
Companies Act, 2013.
b. General Reserve
General Reserve is created from time to time by way of transfer profits from retained
earnings for appropriation purposes. General Reserve is created by a transfer from one
component of equity to another and is not an item of other Comprehensive income.
c. Capital Reserve
Capital Reserve represents arisen on business combination on earlier years.
d. Retained Earning
Retained earnings are the profits that the Company has earned till date, less any transfers
to general reserve, dividends or other distributions paid to investors. This includes
remeasurement of defined benefit plans arising due to acturial valuation of gratuity, that
will not be routed through Statement of profit and loss subsequently.
Notes:
a) Working Capital facilities from Banks Sanctioned Limit = H6000.00 Lakhs (Previous
year: Sanctioned Limit = H5000.00 Lakhs) are secured by first charge on current assets
and second charge on moveable fixed assets of the Company and also secured by
personal guarantee of Managing Director and Whole Time Director.
b) The Company is filing monthly statement for inventories and debtors with Banks (IDBI
Bank, Yes Bank, HDFC Bank and ICICI Bank) for working capital facilities . The below
is summary of reconciliation of quarterly statement filed with the banks and books of
accounts :
Note No. :36 Gratuity and Other Post Employment Benefit Plans
a) Defined Contribution Plan :
Employee benefits in the form of Provident Fund and Employee State Insurance
Scheme are considered as defined contribution plan and the contributions are made in
accordance with the relevant statute and are recognized as an expense when employees
have rendered service entitling them to the contributions. The contribution to defined
contribution plan, recognized as expense for the year is as under:
b) Defined Benefit Plan :
The Company has a defined benefit gratuity plan. Every employee who has completed
five years or more of service is entitled to Gratuity on terms not less favourable than
the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an
insurance company.
The following tables summarise the components of net benefit expense recognised in
the statement of profit and loss and the funded status and amounts recognised in the
balance sheet for the Post - retirement benefit plans.
Sensitivities due to mortality and withdrawals rate are not material and hence impact of
changes is not calculated.
Sensitivity analysis above have been determine based on a method that extrapolates
the impact on defined benefit obligation as a result of reasonable changes in key
assumptions occurring at the end of the reporting period.
X. Risk Exposure
i) Interest Rate Risk: The defined benefit obligation calculated uses a discount rate
based on government bonds. If bond yields fall, the defined benefit obligation will
tend to increase.
ii) Salary Inflation Risk: Higher than expected increase in salary will increase the
defined benefit obligation.
iii) Demographic Risk: This is the risk of variability of results due to unsystematic
nature of decrements that include mortality, withdrawal, disability and retirement.
The effect of these decrements on the defined benefit obligation is not straight
forward and depends upon the combination of salary increase, discount rate and
vesting criteria. It is important not to overstate withdrawals because in the financial
analysis the retirement benefit of a short career employee typically costs less per year
as compared to long service employee.
3. On November 21,2025, the Government of India notified the four Labour Codes
- the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on
Social Security, 2020, and the Occupational Safety, Health and Working Conditions
Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour &
Employment published draft Central Rules and FAQs to enable assessment of the
financial impact due to changes in regulations. The Company has assessed impact
of these changes on the basis of the best information available, consistent with
the guidance provided by the Institute of Chartered Accountants of India and
noted that there is no material impact of the said codes. However, the company
continues to monitor the finalisation of Central / State Rules and clarifications from
the Government on other aspects of the Labour Code and shall review its estimates
and assumptions on ongoing basis.
i) The company had received a demand order dated January 31,2025 towards short payment
of Goods & Services Tax ("GST") amounting to H353.39 lakhs and Penalty amounting to
H353.39 lakhs plus applicable interest with respect to HSN classification of pen refills and
other components. The company has contested this demand, filing an appeal against the
order on March 23, 2025. Based on advice from taxation expert, the Company believes that
it has strong case on merits and hence no provision has been made there against.
The amounts shown in (b) above represent the best possible estimates arrived at on the basis
of available information. The uncertainties and timing of the cash flows are dependent on the
outcome of the different legal processes which have been invoked by the Company or the
claimants as the case may be and therefore cannot be estimated accurately.
In the opinion of the management, no provision is considered necessary for the disputes
mentioned above on the grounds that there are fair chances of successful outcome of appeals.
The Company does not expect any reimbursements in respect of the above contingent
liabilities.
ii) Corporate Guarantee is given with respect to Bank borrowings taken by the subsidiary M/s
Gelx Industries Limited, Kenya (Loan outstanding as on 31st March 26 H398.13 Lacs
The Company's financial liabilities comprise long term borrowings, short term borrowings,
capital creditors, trade and other payables. The main purpose of these financial liabilities
is to finance the Company's operations. The Company's financial assets include trade and
other receivables, cash and cash equivalents and deposits.
The Company is exposed to market risk and credit risk. The Company has a Risk management
policy and its management is supported by a Risk management committee that advises on
risks and the appropriate risk governance framework for the Company. The audit committee
provides assurance to the Company's management that the Company's risk activities are
governed by appropriate policies and procedures and that risks are identified, measured
and managed in accordance with the Company's policies and risk objectives. The Board
of Directors reviews and agrees policies for managing each of these risks, which are
summarised below.
(i) 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 risk comprises two types of risk:
currency risk and other price risk, such as commodity price risk and equity price risk.
Financial instruments affected by market risk include trade payables, trade receivables,
etc.
a. Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure
will fluctuate because of changes in foreign exchange rates. The Company's
exposure to the risk of changes in foreign exchange rates relates primarily to the
Company's operating activities. The Company has a treasury department which
monitors the foreign exchange fluctuations on the continuous basis and advises the
management of any material adverse effect on the Company.
Interest Rate Sensitivity
The Company does not have any outstanding variable rate borrowing as at the
reporting date. Hence, interest rate sensitivity has not been disclosed.
(ii) Credit Risks
Credit risk is the risk that counterparty will not meet its obligations under a financial
instrument or customer contract, leading to a financial loss. The Company is exposed to
credit risk from its operating activities (primarily trade receivables).
Trade Receivables
Customer credit risk is managed by the Company's established policy, procedures and
control relating to customer credit risk management. Outstanding customer receivables
are regularly monitored and reconciled. Based on historical trend, industry practice and
the business environment in which the company operates, an impairment analysis is
performed at each reporting date for trade receivables. Based on above, the company
has made provision for expected credit loss of H69.30 Lakhs for the current financial
year (Previous Year H50.04 Lakhs).
Other Financial Assets
Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is
generally low as the said deposits have been made with the banks/financial institutions
who have been assigned high credit rating by international and domestic rating agencies.
(iii) Liquidity Risk
The Company's objective is to maintain optimum levels of liquidity to meet its cash and
collateral requirements at all times. The Company relies on a mix of borrowings and
excess operating cash flows to meet its needs for funds. The current committed lines
(ii) The Company has evaluated the impact of the ongoing geopolitical conflict in the
Middle East involving the U.S. and Iran, which escalated in February 2026. Based on the
Company's current assessment of its operations, supply chains, and financial exposure,
there has been no material impact on the business operations or financial results for the
year ended March 31,2026. The Company continues to monitor the situation closely
for any potential long-term indirect effects on energy prices or global trade routes that
could influence future reporting periods.
Note No. :45 Segment reporting
There is only one primary business segment i.e. "Writing Instrument and Stationary" and
hence no separate segment information is disclosed in this financial.
Geographical segments
The Company primarily operates in India and therefore analysis of geographical segment is
demonstrated into Indian and overseas operation as under:
Note No. : 47 Lease
As Lessee
The Company has lease contracts for various items of buildings (including godowns) used
in its operations. The Company's obligations under its lease are secured by lessor's title to
the leased assets.
The Company also has certain leases of godowns with lease term of twelve months or less
with low value. The Company applies the 'short-term lease' and ' lease of low-value assets'
recognition exemptions for these leases.
The carrying amount of right-of-use assets (Buildings) are disclosed in the Note 4 to the
Financial Statements.
The Company's policy is to maintain a strong capital base so as to maintain investor,
creditor and market confidence and to sustain future development of the business. The
management monitors the return on capital, as well as the level of dividends to equity
shareholders.
The Company's objective when managing capital are to:
(a) to maximise shareholders value and provide benefits to other stakeholders, and
(b) maintain an optimal capital structure to reduce the cost of capital.
In order to achieve this overall objective, the Company's capital management, amongst
other things, aims to ensure that it meets financial covenants attached to the interest¬
bearing loans and borrowings that define capital structure requirements. The Company
has complied with these covenants and there have been no breaches in the financial
covenants of any interest-bearing loans and borrowings.
For the purpose of the Company's capital management, capital includes issued equity
share capital and other equity reserves attributable to the equity holders.
Note No. :50 Other Statutory disclosures:
(i) No funds have been advanced or loaned or invested (either from borrowed funds
or share premium or any other sources or kind of funds) by the Company to or in
any other person(s) or entity(ies), including foreign entities ("Intermediaries") with
the understanding, whether recorded in writing or otherwise, that the Intermediary
shall lend or invest in party identified by or on behalf of the Company (Ultimate
Beneficiaries). The Company has not received any fund from any party(s) (Funding
Party) with the understanding that the Company shall whether, directly or indirectly
lend or invest in other persons or entities identified by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries.
(ii) The Company has no transactions with companies struck off under section 248 of
the Companies Act, 2013 or section 560 of the Companies Act, 1956.
(iii) No proceedings have been initiated on or are pending against the Company for
holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45
of 1988) and Rules made thereunder.
(iv) The Company has not been declared as a wilful defaulter by any bank or financial
institution or government or any government authority.
(v) There has been no charges or satisfaction yet to be registered with ROC beyond the
statutory period.
(vi) The Company has not traded or invested in Crypto currency or Virtual Currency
during the financial year ended 31 March, 2026.
(vii) The Company have 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.
(viii) 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.
(ix) The Company has not filed any Scheme of Arrangements in terms of sections 230
to 237 of the Companies Act, 2013 with any Competent Authority
(x) The Company uses an 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
accounting software at application level except that the audit trail feature is has not
been enabled throughout the year to record any direct data changes at database
level. Further, there is no instance of audit trail feature being tampered in respect of
the accounting softwares where such feature is enabled. Additionally, the audit trail
has been preserved by the Company as per the statutory requirements for record
retention to the extent it was enabled in previous year.
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