2.25 Provisions
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is
probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount
of such obligation can be reliably estimated.
If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognized as a finance cost.
2.26 Contingent Liabilities
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably
will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured
reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources
embodying economic benefits is remote, no provision or disclosure is made.
2.27 Significant accounting judgments, estimates and assumptions:
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise Judgement in applying the Company’s accounting policies.
The estimates and judgements involves a higher degree of judgement or complexity, and of items which are more likely to
be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed .Detailed
information about each of these estimates and judgements is included in relevant notes.
Critical estimates and judgements
The areas involving critical estimates or judgements are:
a. Estimation of current tax expenses and payable
b. Estimated useful life of Intangible assets
c. Estimation of defined benefit obligation
d. Estimation of Provisions and Contingencies
e. Estimation of Incremental Borrowing rate —Leases
c) Terms / rights attached to equity shares
(i) The Company has one class of equity shares having par value of '1 per share. Each holder of equity shares is entitled to one
vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors
is subject to approval of the shareholders in the ensuing Annual General Meeting except in case of Interim Dividend.
(ii) 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.
(iii) The Company vide its letter of offer dated 08/04/2024 offered upto 7,89,84,298 Equity shares of face value of Re.1/- each at
a price of Rs. 25.30 per Equity share (including Share premium of Rs. 24.30 per Equity share) for an amount aggregating Rs.
19,983.03 Lakhs to the existing share holders of the Company on right basis in the ratio of 33 Right Equity shares for every
98 fully paid up equity shares held by the Equity shareholders on the record date i.e 15/04/2024. Rights issue has been done
in accordance with Section 62(1)(a) of the Companies Act and other applicable laws.
Pursuant to the Rights issue, earnings per share (EPS) in respect of previous periods have been adjusted as per Indian
Accounting Standard 33 “Earnings per share”, prescribed under Section 133 of the Companies Act, 2013.
Notes:
(i) The Company has transferred amount from Statement of profit or loss to capital redemption reserve on redemption of
preference shares issued by the company. The capital redemption reserve on redemption of preference shares issued by the
company has been utlilised for issue of bonus shares
(ii) Securities premium is created on the premium on issue of shares. This same will be utilised in accordance with the provisions
of the Companies Act 2013.
(iii) Retained earnings represents profits that the Company has earned till March 31, 2025, less any transfers to general reserve,
dividends or other distributions paid to shareholders.
(iv) Cash Dividends paid on equity shares declared and paid
Nature of Security
i) The Company has entered into the banking arrangement for credit facilities with multiple banks, i.e. Bank of Maharashtra,
Indusind Bank, SVC Co-operative Bank Limited, Deustsche Bank and ICICI Bank.
a) Bank of Maharashtra: The credit facilities comprises of Cash Credit and Packing credit which is secured against Hypothecation
of Inventory, Book debts and Current Assets of the company along with the collateral security against Fixed Assets (other than
vehicles and Leasehold Land).
Credit Facilities for Bank of Maharashtra is repayable on demand and carries interest of 11.15% p.a. i.e. one year (MCLR
9.15%) of the bank 1.50% BSS 0.5%.
b) Indusind Bank: The credit facilities comprises of Cash Credit and Packing credit which is secured against Hypothecation of
Inventory, Books debts and Current Assets of the company in paripassu with other banks along with the collateral security
against .Credit Facilities from Indusind Bank is repayable on demand and carries interest of 11.35 p.a. i.e. one year Maximum
Cost of Lending Rate (MCLR) of the bank i.e. 10.55% 0.80% .PCFC and Cash Credit carries interest 11.15% p.a
c) SVC Cooperative Bank Ltd: The credit facilities comprises of Cash Credit and Packing credit which is secured against
Hypothecation of Inventory, Books debts and Current Assets of the company in paripassu with other banks along with the
collateral security against Fixed Assets (other than vehicles and Leasehold Land) .Credit Facilities from SVC Cooperative Bank
Ltd is repayable on demand and carries interest of 12.15 p.a. i.e. (PLR-8.55%) of the bank i.e. PLR 10.50(PLR-10.20%)
d) Deutsche Bank:- The credit facilities comprises of Cash Credit and Packing credit which is secured against Hypothecation
of Inventory, Books debts and Current Assets of the company in paripassu with other banks along with the collateral security
against Fixed Assets (other than vehicles and Leasehold Land) .Credit Facilities from Deutsche Bank is repayable on demand
and carries interest of MBOR 3.50% per annum.PCFC Credit facility is repayable on demand and carries interest rate of RFR
plus 2% on Foreign currency loans
e) ICICI Bank Ltd: The credit facilities comprises of Overdraft facility against Fixed Deposit. Credit Facilities from ICICI Bank
Ltd is repayable on demand and carries interest of 10.15% p.a..
f) State Bank of India The credit facilities comprises of Overdraft facility against Fixed Deposit. Credit Facilities from State
Bank of India is repayable on demand and carries interest of 7.8% p.a..
i) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets
and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax
authority.
ii) The Company has opted for reduced tax rate as per Section 115BAA of the Income Tax Act, 1961 (introduced by the Taxation
Laws (Amended) Ordinance, 2019) for the current financial year. Accordingly the Group has recognised Provision for Income
Tax for the year and re-measured its Deferred tax Liability basis at the rate prescribed in the said section.
Note No. 35: Operating Leases
i) The Company’s lease asset primarily consist of leases for land and buildings for offices. Effective April 1, 2019, the Company
adopted Ind AS 116 “Leases” and applied the standard to all lease contracts existing on April 1, 2019 using the modified
retrospective method. Consequently, the Company recorded the lease liability at the present value of the remaining lease
payments discounted at the incremental borrowing rate as on the date of transition and has measured right of use asset at an
amount equal to lease liability adjusted for any related prepaid and accrued lease payments previously recognised.
(ii) The following is the summary of practical expedients elected on initial application:
(a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end
date
(b) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term
on the date of initial application.
(c) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
(d) Applied the practical expedient by not reassessing whether a contract is, or contains, a lease at the date of initial application.
Instead applied the standards only to contracts that were previously identified as leases under Ind AS 17.
(e) Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease
(ii) Defined benefit plans
The group offers the following employee benefit schemes to its employees:
Gratuity
The group has a defined benefit gratuity plan which is funded with an Insurance group in the form of qualifying Insurance
policy. The group’s defined benefit gratuity plan is a salary plan for employees which requires contributions to be made to a
separate administrative fund.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five
years of service gets a gratuity on separation @ 15 days of last drawn salary for each completed year of service rounded to
nearest integer. The scheme is funded with an insurance group in the form of qualifying insurance policy.
The Management have appointed PNB MetLife to manage its funds. The management aim to keep annual contributions
relatively stable at a level such that no plan deficits (based on valuation performed) will arise.
In case of death, while in service, the gratuity is payable irrespective of vesting. The group makes annual contribution to the
group gratuity scheme administered by PNB MetLife through its gratuity funds.
Interest Rate risk
The plan exposes the group to the risk of all in interest rates. A fall in interest rates will result in an increase in the ultimate
cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial
statements).
Salary Escalation Risk
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants
in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used
to determine the present value of obligation will have a bearing on the plan’s liability.
Regulatory Risk
Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time
to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on
gratuity of ' 20 lakhs).
Investment Risk
The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured and interest free. The company has not recorded any impairment of
receivables relating to the amounts owned by the related parties. This assessment is undertaken each financial year through
examining the financial position of the related party and the market in which related party exists.
The remuneration to the key managerial personnel does not include the provisions made for gratuity as they are determined
on an actuarial basis for the Company as a whole.
Managerial remuneration is computed as per the provisions of section 197 of the Companies Act, 2013.
Note 41 Hedging Activities and Derivatives
Derivatives designated as hedging instruments
The Group uses derivative financial instruments such as foreign currency forward contracts to hedge foreign currency risk arising
from future transactions in respect of which firm commitments are made or which are highly probable forecast transactions. All
these instruments are designated as hedging instruments and the necessary documentation for the same is made as per Ind AS 109.
Cash flow hedges - Foreign currency Risk
Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow hedges
of recognized purchase payables, committed future purchases, recognized sales receivables, forecast sales in US dollar. The forecast
sales transactions are highly probable.
The foreign exchange forward contract balances vary with the level of expected foreign currency sales and purchases and changes
in foreign exchange forward rates.
Note 42 Fair Value Measurements
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value
hierarchy. It does not include fair value information for financial assets and financial liabilities not valued at fair value if the carrying amount is a
reasonable approximation of the fair value.
Note 43 Capital Risk Management
For the purpose of the Company capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to
maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements
of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders,
return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by
total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables,
less cash and cash equivalents.
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. There have
been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2025 and
March 31, 2024.
Note 44 Financial Risk Management
Risk Management Framework
The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables.
The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets
include trade and other receivables, cash and cash equivalents that derive directly from its operations. The Company also enters into
derivative transactions.
The Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified,
measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management
purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors
through its risk management committee reviews and agrees policies for managing each of these risks, which are summarised below
The Company’s has exposure to the following risks arising from financial instruments:
(i) Market Risk
(ii) Commodity Price Risk
(iii) Credit Risk
(iv) Liquidity Risk
(v) Excessive risk Concentration
(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 three types of risk: interest rate risk, currency risk and other price risk. Financial
instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at March 31, 2025 and March 31, 2024
The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates
of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis
of hedge designations in place at March 31, 2025.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at March 31, 2025 and March 31, 2024 including the effect of hedge
accounting.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
long-term debt obligations with floating interest rates.
The Company manages its interest rate risk by having a short term working capital loans which are reviewed on yearly basis.
The following table provides a break-up of Company’s fixed and floating rate borrowing:
Derivatives designated as hedging instruments
The Company uses derivative financial instruments such as foreign currency forward contracts to hedge foreign currency
risk arising from future transactions in respect of which firm commitments are made or which are highly probable forecast
transactions. All these instruments are designated as hedging instruments and the necessary documentation for the same is
made as per Ind AS 109.
Cash flow hedges - Foreign currency Risk
Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow
hedges of recognized purchase payables, committed future purchases, recognized sales receivables, forecast sales in US dollar.
The forecast sales transactions are highly probable.
The foreign exchange forward contract balances vary with the level of expected foreign currency sales and purchases and
changes in foreign exchange forward rates.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure
at the end of the reporting period does not reflect the exposure during the year.
(ii) Commodity Price Risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of
oil and other traded commodities. Due to the significantly increased volatility of the prices of the commodities, the Company
also entered into various derivative contracts.
The Company’s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and
its mitigation.
(iii) Credit Risk
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) and from its
financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial
instruments.
Trade receivables
Customer credit risk is managed by the management subject to the Company’s established policy, procedures and control
relating to customer credit risk management. Trade receivables are non-interest bearing. Generally the company operates on
advance against delivery order principle except for merchant trade transactions wherein the sales is executed on credit terms up
to six months. Also, Export customers are secured against Letter of Credit, bank guarantees and payments against documents.
Credit risk on receivables is also mitigated by securing the same against security deposit, letter of credit and advance payment.
An impairment analysis is performed at each reporting date on an individual basis for major clients. The Company has no
concentration of credit risk as the customer base is widely distributed both economically and geographically.
Other financial assets and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance
with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits
assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis,
and may be updated throughout the year subject to approval as per the Investment policy. The limits are set to minimise the
concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
(iv) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable
price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due. The Company prepares
cash flow on a daily basis to monitor liquidity. Any shortfall is funded out of short term loans. Any surplus is invested in
liquid mutual funds and short term bank deposits. The table below summarises the maturity profile of the Company’s financial
liabilities based on contractual undiscounted payments.
(v) Excessive risk Concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same
geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly
affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s
performance to developments affecting a particular industry.
In order to avoid excessive concentrations of risk, the Group’s policies and procedures include specific guidelines to focus on
the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
Selective hedging is used within the Group to manage risk concentrations at both the relationship and industry levels.
Note-45 Other Accompanying Notes
1. Recent Pronouncements:
The Company applied for the first time these amendments of In AS 8, Ind AS 1 and Ind AS 12 and there is no material impact
on financials.
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has issued a
notification on August 12, 2024, introducing significant amendments to the Companies (Indian Accounting Standards) Rules,
2015. A key focus of these amendments is the introduction of Ind AS 117, which fully replaces the previous Ind AS 104,
offering a more comprehensive framework for the accounting of insurance contracts.
2. 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 Holding Company or its Subsidiary Company incorporated in India 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 Holding Company or its Subsidiary Company
incorporated in India (Ultimate Beneficiaries). The Holding Company or its Subsidiary Company incorporated in India 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.
3. Details of Benami property: No proceedings have been initiated or are pending against the Company for holding any Benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
4. Transactions with Struck off Companies: No transactions have been carried out during the financial year 2024-25 with
Struck off Companies under section 248 of the Companies Act, 2013 by MCA.
5. Compliance with number of layers of companies: The Company has complied with the number of layers prescribed clause
(87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
6. Details of crypto currency or virtual currency: The Company has not traded or invested in crypto currency or virtual
currency during the current or previous year.
7. Undisclosed income: There is no income surrendered or disclosed as income during the current or previous year in the tax
assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
8. The Figures have been rounded off to the nearest lakhs of Rupees upto two decimal Places.
9. Previous Years Figures have been regrouped / rearranged where ever necessary to make them Comparable with the Current
year Figures as per revised Schedule III requirements
10. Note 1 to 45 Forms an Integral Part of the Financial Statements
As per our report of even date
For M. L. SHARMA & CO. For and on behalf of the Board of Directors
Chartered Accountants
FRN: 109963W
Jinendra D. Jain Mr. Saurabh Malhotra
Partner Chairman & Managing Director
M. No. 140827 DIN - 00214500
Place : Mumbai Surbhi Nahata Devesh Mishra
Date : May 30, 2025 Company Secretary Chief Financial Officer
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