(xv) Provisions, Contingent Liabilities and
Contingent Assets:
Provisions involving substantial degree of
estimation in measurement are recognized when
there is a present obligation as a result of past
events and it is probable that there will be an
outflow of resources. Contingent Liabilities are
not recognized but are disclosed in the notes to
accounts. Contingent Assets are neither recognized
nor disclosed in the financial statements.
(xvi) Earnings per Share:
The basic Earnings Per Share (“EPS”) is computed
by dividing the net profit after tax for the year by
the weighted average number of equity shares
outstanding during the year. For the purpose
of calculating diluted earnings per share, net
profit after tax for the year attributable to equity
shareholders and the weighted average number of
shares outstanding during the year are adjusted for
the effects of all dilutive potential equity shares.
(xvii) Dividend :
Under Indian GAAP, proposed final dividend is
recognized as a liability in the period to which they
relate, irrespective of when they are approved.
Under Ind AS, such dividend is recognized as a
liability when approved by shareholders.
(xviii) Leases (as lessee):
The company recognises a right-of-use asset and
a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease
liability adjusted for any lease payments made at
or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it
is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of
the lease term. The estimated useful lives of right
of-use assets are determined on the same basis as
those of property, plant and equipment. In addition,
the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain
re measurements of the lease liability.
The lease liability is initially measured at the
present value of the lease payments that are
not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if
that rate cannot be readily determined, company's
incremental borrowing rate. Generally, the
company uses its incremental borrowing rate as
the discount rate.
Lease payments included in the measurement of
the lease liability comprise the following: -
• Fixed payments, including in-substance fixed
payments;
• Variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date;
• Amounts expected to be payable under a
residual value guarantee; and
• The exercise price under a purchase option
that the company is reasonably certain to
exercise, lease payments in an optional
renewal period if the company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the company is reasonably certain not
to terminate early.
The lease liability is measured at amortised cost
using the effective interest method. It is remeasured
when there is a change in future lease payments
arising from a change in an index or rate, if there is
a change in the company's estimate of the amount
expected to be payable under a residual value
guarantee, or if company changes its assessment
of whether it will exercise a purchase, extension or
termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of
use asset has been reduced to zero.
The company presents right-of-use assets that
do not meet the definition of investment property
in ‘property, plant and equipment' and lease
liabilities in ‘Non-Current Financial Liabilities” in the
statement of financial position.
(xix) Segment Reporting - ( Ind AS-108):
For management purposes, the Company is
organized into two operating divisions - Lead
and Wind energy. Lead Division produces Lead
and Lead alloys and the Windmills generate
electrical energy. However, for the purpose of
segment reporting as per IND-AS 108, Segment
Reporting, since Wind energy division is not
meeting the criteria laid down in the Standard as a
reportable segment, the same is not considered as
a reportable segment. Hence, the operations are
reported under one segment only.
1.3 SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES, ASSUMPTIONS AND EXPLANATORY
NOTES
Preparation of the financial statements requires
management to make judgements, estimates and
assumptions, as described below, that affect the
reported amounts and the disclosures. The Company
based its assumptions and estimates on parameters
available when the financial statements were prepared
and reviewed at each Balance Sheet date. Uncertainty
about these assumptions and estimates could result in
outcomes that may require a material adjustment to the
reported amounts and disclosures.
1.3.1 Defined Benefit Plans (Gratuity and Leave
Encashment):
The cost of the defined benefit plans such as
gratuity and leave encashment are determined
using actuarial valuations. An actuarial valuation
involves making various assumptions that may
differ from actual developments in the future due
to changing market and economic conditions,
regulatory events, judicial rulings, higher or lower
withdrawal rates, or longer or shorter participant
life spans. The assumptions include determination
of the discount rate, salary growth rate, mortality
rate, retirement age and attrition rate. Due to
the complexities involved in the valuation and its
longterm nature, a defined benefit obligation is
highly sensitive to changes in these assumptions.
All assumptions are reviewed at each year end.
1.3.2 Leases:
The Company determines the lease term as the
non-cancellable term of the lease, together with
any periods covered by an option to extend the
lease if it is reasonably certain to be exercised, or
any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
The Company applies judgement in evaluating
whether it is reasonably certain whether or not to
exercise the option to renew or terminate the lease.
That is, it considers all relevant factors that create
an economic incentive for it to exercise either the
renewal or termination. After the commencement
date, the Company reassesses the lease term
if there is a significant event or change in
circumstances that is within its control and affects
its ability to exercise or not to exercise the option
to renew or to terminate (e.g., construction of
significant leasehold improvements or significant
customisation to the leased asset).
1.3.3 Property Plant and Equipment:
Depreciation methods, useful lives and residual
values are reviewed at each financial year end and
adjusted prospectively, as appropriate.
1.3.4 Taxes:
Significant judgments are involved in determining
the provision for income taxes including judgment
on whether tax positions are probable of being
sustained in tax assessments. A tax assessment
can involve complex issues, which can only
be resolved over extended time periods. The
recognition of taxes that are subject to certain legal
or economic limits or uncertainties is assessed
individually by management based on the specific
facts and circumstances.
Nature and purpose of reserve:
Security Premium: This is the premium received on issue of equity shares and will be utilised as per the applicable provisions
of the Act
General Reserve: This amount is transferred from the retained earnings and will be utilised as per the applicable provisions
of the Act
Cash Flow Hedge Reserve: The Company uses hedging instruments as part of its management of Lead price fluctuation
risk associated with its highly probable forecast sale and inventory purchases.For hedging LME price risk, the Company
uses futures & options trades in London Stock Exchange. They are designated as cash flow hedges to the extent these
hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve.
Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged item affects profit
or loss (for example, forecasted purchases are done). When the forecast transaction results in the recognition of a non¬
financial asset (for example, inventory), the amount recognised in the cash flow hedging reserve is adjusted against the
carrying amount of the non-financial asset.
Notes:
(i) Total Open Cash Credit limits of Rs.6000 lakhs [(Current Year Rs.2000 lakhs with Kotak Mahindra Bank and 4000 lakhs
with HDFC Bank), (Previous Year Rs.2000 lakhs with Kotak Mahindra Bank and Rs.4000 lakhs with HDFC Bank)]; Total
FUBD backed by LC Rs.3000 lakhs [(Current Year Rs.2000 lakhs with Kotak Mahindra Bank and Rs.1000 lakhs - with
HDFC Bank), (Previous year Rs.000 lakhs with Kotak Mahindra Bank and Rs.1000 lakhs HDFC Bank)] carries interest @
6 months MCLR 0.55% p.a. for Kotak Mahindra Bank, and Repo rate 3% interest rate p.a. for HDFC Bank (Previous
year @ 6 months MCLR 0.55% p.a for Kotak mahindra Bank, and @ Tbill 3 months 2.43 % p.a. for HDFC Bank), and
secured by hypothecation of all raw materials, work-in-progress, finished goods, receivables and collaterally secured by
book value of unencumbered fixed assets of the company Fixed assets i.e Land & Buildings, Plant & Machinery and other
assets of Lead Units situated at Choutuppal and Tirupathi (including land and building of corporate office at Hyderabad),
and till the renewal of limits kotak Mahindra bank during 31st December,26 & HDFC Bank during 31st January,27
The company is organized into two operating divisions - Lead and Wind energy. Lead Division Produces Lead and Lead Alloys
and the Windmill generate electrical energy. However, for the purpose of segment reporting as per Ind-As 108, since the Wind
Energy division is does not meet the criteria laid down in the standard as a reportable segment, the operations are reported under
one segment only.
Geographical Segments
The company primarily operates in India and therefore the analysis of Geographical segment is demarcated into its Indian and
overseas operations as under:
The Company's financial liabilities comprise short-term borrowings and 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 has a Risk Management Policy based on which risks are identified, measured and managed. The Board of
Directors review these risks and related risk management policy.
The different kinds of risks the company exposed to and its mitigation is discussed as under:
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 commodity price risk.
(i) 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 raw material purchase activity. Such foreign currency exposures are mostly
hedged by the Company.
(ii) Commodity price risks
The Company is effected by the price volatility of lead in the open market. The company's operating activity
requires supply of lead on a continuous basis. Due to significant volatility in the lead price, the Company enters
into purchase contract with vendors wherein the prices are linked to the quoted London Metal Exchange rates.
Similarly, the Company's selling price of lead to battery manufacturers are linked to such rates.
As the Company's significant revenue is linked to cost of lead, the impact of change in lead prices on Company's
profit is not expected to be significant.
II) Credit risk :
Credit risk is the risk that the 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:
Impairment analysis is performed at each reporting date on an individual basis for all the large customers. In addition
to a number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.
The calculation is based on historical data of credit losses. The maximum exposure to credit risk at the reporting
date is the carrying value of trade receivables disclosed in these financial statements as the Company does not hold
collateral as security.
The Company has evaluated the concentration of risk with respect to trade receivables as low based on historical
data.
Capital Management:
The Company's objective when managing capital (defined as net debt and equity) is to safeguard the Company's
ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders,
while protecting and strengthening the Balance Sheet through the appropriate balance of debt and equity funding.
The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions
and strategic objectives of the Company.
Note no 31: Contingent Liabilities and commitments:-
(to the extent not provided for)
(A) Contingent Liabilities:
i) Claims against the company not acknowledged as debt:
a) The Commissioner of Central Excise, Tirupati, had issued a show-cause notice C.No.127/TCCE/2014-
Adjn. (C.Ex.) dated 03.09.2014 alleging short payment of central duty on clearances of excisable goods
manufactured in the guise of job work and cleared the same to M/s. Amara Raja Energy & Mobility Limited.
The main contention of the Show cause notices were that the company has cleared job worked goods to
M/s. Amara Raja Energy & Mobility Limited and claimed exemption under Notification No. 214/86 dated
25.03.1986, however, the said exemption is not available to M/s. Nile Limited inasmuch as they have
contravened the provisions of the exemption notification as when providing job work services on the goods
of M/s. Amara Raja Energy & Mobility Limited, M/s. Nile Limited had used their own inputs to manufacture
the final products and therefore are not eligible for the said exemption.
The above Show cause notices were adjudicated and decided by the Commissioner of Central Tax, Tirupati
vide Order-in-Original No. TTD-EXCUS-000-COM-03 to 06-19-20 dated 31.07.2019. The adjudicating
authority had confirmed the above demands along with interest and penalties.
M/s. Nile Limited has filed an appeal along with a pre-deposit appeal amount of Rs.124.85 lakhs before
the Hon'ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Hyderabad against the order
passed by the Commissioner of Central Tax, Tirupati.
Further, on 19.03.2025, the Appellate Tribunal has confirmed the above demands along with interest
and penalties. M/s Nile Limited has filed an Appeal before the Honorable Andhra Pradesh High Court
- Amravati against the order passed by the CESTAT Hyderabad along with the carry forward of the Pre¬
deposit amount as stated above. The issue is pending before the High Court.
The Company's Legal Counsel confirmed the validity of the appeals filed by the company in the above
matters. Considering the Legal Advice, the demand has not been provided for, but disclosed as a
Contingent Liability.
(ii) Guarantees and letters of credit:
(a) Letters of Credit issued by Bankers - Rs. NIL (Previous year - Rs.299.29 lakhs) .
(b) Customers' bills discounted with Banks backed by LC - Rs. NIL/-
(Previous year - NIL)
(c) Customers' bills discounted with Banks - Rs. NIL (Previous Year - Rs.922.67 lakhs)
(d) Bank Guarantee out standing 1000.00 lakhs (Previous year - Nil)
(iii) Other money for which the company is contingently liable:
Amount claimed by a supplier, not accepted as liability - Rs.197.74 lakhs (Previous year Rs. 197.74 lakhs). The
City Civil Court, Secunderabad, in their order dated 2nd June, 2016, directed the company to pay Rs.39.22 Lakhs
plus interest @18% p.a. from the date of filing of the suit till the date of realisation.
The company preferred an appeal before the Hon'ble High Court at Hyderabad. The Hon'ble High Court on 31st
October, 2016 gave an interim stay on the trial court's order, and directed the company to deposit Rs.60 Lakhs
to the credit of the suit. Accordingly, the Company deposited Rs.60 Lakhs to the credit of the suit. Based on legal
opinion, no liability will arise to the Company in this regard.
(iv) Corporate Guarantee provided for the Project/Term Loan sanctioned by Axis Bank to the company's
wholly owned Subsidiary - “Nile Li Cycle Private Limited” having a limit of Rs. 4000 lakhs and outstanding
Rs. 1745.79 lakhs as on 31.03.2026.
B) Commitments:
Estimated amount of works remaining to be executed on capital account, net of advances - NIL (Previous Year - NIL)
There is no adverse impact of pending litigations on the Financial Position of the company.
Note no 35: Employee Benefits ( Ind AS-19):
The company has classified various benefits to employees as under:
A) Defined Contribution Plans:
i) Provident Fund:
Provident fund is operated through the Regional Provident Fund Authority under the scheme. The company
is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the
benefits. This fund is recognized by Income tax authorities. The company has recognized the following amounts
in the Statement of Profit and Loss for the year:
*Reasons for the Variances above 25%:
a) The decrease in Debt-Equity Ratio is majorly due to decrease in outstanding borrowings at the end of the year.
b) The increase in Debt-Service Coverage Ratio is majorly due to decrease in Borrowings of the company.
c) The net profit of the company is higher compared to previous year and having better margins on the turnover for the
year.
Note no 38: Disclosure U/s.186(4) of the Companies Act, 2013
(i) Loans given, guarantees issued, security provided - as below (PY : Rs. 1997.72 lakhs to Nile Li Cycle Private Limited)
Loans granted to Wholly Owned Subsidiaries without specifying any terms or period of repayment (Interest Charged
at 10 year Bond yield rate ):
(ii) Investments made:
Name of the company in which investment was made and Amount of investment:
1. Nirmalya Extracts Pvt Ltd - Equity Instrument - as reported in note 34 above
2. Nile Li-Cycle Pvt Ltd - Equity Instrument - as reported in note 34 above
3. Nile Overseas Enterprise FZE - Equity Instrument - as reported in note 34 above
Note no 39: Other Disclosures
1. The company has complied with the number of layers prescribed under Clause 87 of Sec.2 of the Act read with the
Companies (Restriction on number of layers) Rules 2017.
2. During the year, no scheme of arrangements has been approved by the competent authority in terms of Sec.230 to
237 of the Act, in which the company is a party.
3. a) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any
other sources or kind of funds) to any other person(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 Beneficiaries); or (ii) 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 (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
4. Additional Regulatory Disclosures to the extent applicable has been reported in the Notes to Accounts under
appropriate note.
Note no 40 Other Notes:
(i) In the opinion of the Board, the assets other than fixed assets and non-current investments, have a value on realization in
the ordinary course of business of at least equal to the amount at which they are stated in the balance sheet.
(ii) Previous year's figures have been regrouped wherever necessary to conform to the layout adopted in the current year.
(iii) Amounts in the Financial Statements have been rounded off to nearest lakhs.
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