2.18 Provisions, Contingent Liabilities
2.18.1 Provisions:
A provision is recognized when the Company has a present obligation (legal or constructive) as a result of 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. These estimates are reviewed at each reporting date and adjusted to reflect the current best
estimates. If the effect of the 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.
When the Company expects some or all of a provision to be reimbursed, reimbursement is recognised as a separate asset, but only
when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net
of any reimbursement.
If the effect of the 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
recognised as a finance cost in respective expense.
2.18.2 Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also
arises in extremely rare cases, where there is a liability that cannot be recognized because it cannot be measured reliably. The
Company does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of
outflow of resources is remote.
2.19 Fair value measurement
That would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
• In the principal market for asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or liability is measured
using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act
in their economic best interest. A fair value measurement of a non- financial asset takes into account a market participant's ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use
the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
• Level 1- Quoted(unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable.
• Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is
significant to fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
2.20 Critical accounting estimates and assumptions
The preparation of these standalone financial statements requires the management to make judgments, use estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and
the disclosure of contingent liabilities. Uncertainty about these judgements, assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
i. Taxes
Uncertainties exist with respect to the interpretation of tax regulations, changes in tax laws, and the amount and timing of
future taxable income. Given the wide range of business relationships differences arising between the actual results and the
assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense
already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based
on various factors, such as experience of previous tax assessments and differing interpretations of tax regulations by the
taxable entity and the responsible tax authority.
ii. Employee benefit plans
The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves
making various assumptions which may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the
underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management
considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected
duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for India. Future
salary increases and pension increases are based on expected future inflation rates for India.
iii. Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal,
contractor and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events
occur or fail to occur. The assessment of the existence and potential quantum of contingencies inherently involves the exercise
of significant judgement and the use of estimates regarding the outcome of future events.
iv. Property Plant and Equipment
Property, Plant and Equipment represent significant portion of the asset base of the Company. The charge in respect of periodic
depreciation is derived after determining an estimate of assets expected useful life and expected value at the end of its useful
life. The useful life and residual value of Company's assets are determined by Management at the time asset is acquired and
reviewed periodically including at the end of each year. The useful life is based on historical experience with similar assets, in
anticipation of future events, which may have impact on their life such as change in technology.
v. Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset including intangible assets having
indefinite useful life and goodwill may be impaired. If any indication exists, or when annual impairment testing for an asset is
required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's
CGU'S fair value less cost of disposal and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use , the
estimated future cash flows are estimated based on past trend and discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples, or other fair value indicators.
vi. Provision for expected credit losses (ECL) of trade receivables and contract assets
The company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables. Under this
approach the company does not track changes in credit risk but recognizes impairment loss allowance based on lifetime ECLs at
each reporting date. For this purpose the company uses a provision matrix to determine the impairment loss allowance on the
portfolio of trade receivables. The said matrix is based on historically observed default rates over the expected life of the trade
receivables duly adjusted for forward looking estimates.
For recognition of impairment loss on other financial assets and risk exposures, the company determines whether there has
been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month
expected credit loss(ECL) is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is
used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in
credit risk since initial recognition, then the company reverts to recognizing impairment loss allowance based on 12-month
ECL.
For assessing increase in credit risk and impairment loss, the company combines financial instruments on the basis of shared
credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit
risk to be identified on a timely basis.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial
instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events on a financial instrument that
are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the company in accordance with the contract and all the
cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. The ECL impairment loss
allowance (or reversal) recognized during the period in the statement of profit and loss and the cumulative loss is reduced from
the carrying amount of the asset until it meets the write off criteria, which is generally when no cash flows are expected to be
realised from the asset.
Measurement of Expected Credit Loss:
a. Management utilizes judgment and available information to estimate ECL.
b. Factors considered may include past payment behavior, changes in economic conditions, customer credit ratings, industry
trends, and other relevant data.
c. Regular reviews and adjustments are made based on changes in circumstances or information affecting credit risk.
Determination of Expected Credit Loss (ECL):
a. ECL is estimated based on management's analysis, incorporating historical credit loss experience, current economic
conditions, and relevant qualitative and quantitative factors.
b. For receivables outstanding:
1- 2 years: 50% ECL provision
2- 3 years: 50% ECL provision
More than 3 years: 100% ECL provision.
vii. Impairment for Investments in Subsidiary & Associates
Determining whether the investments in subsidiaries are impaired requires an estimate in the value in use of investments. In
considering the value in use, the Directors have anticipated the future operating margins, resources and availability of
infrastructure, discount rates and other factors of the underlying businesses/operations of the investee companies. Any
subsequent changes to the cash flows due to changes in the above-mentioned factors could impact the carrying value of
investments.
21 Recent Indian Accounting Standards (Ind AS)
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting
Standards) Amendment Rules, 2022, applicable from April 1, 2022, as below:
(i) Ind AS 103 - Reference to Conceptual Framework
The amendments specify that to qualify for recognition as part of applying the acquisition method, the identifiable assets
acquired, and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial
Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of
India at the acquisition date. These changes do not significantly change the requirements of Ind AS 103. The Company does not
expect the amendment to have any significant impact in its Financial Statements.
(ii) Ind AS 16 - Proceeds before intended use
The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts received
from selling items produced while the company is preparing the asset for its intended use. Instead, an entity will recognise such
sales proceeds and related cost in profit or loss. The Company does not expect the amendments to have any impact in its
recognition of its property, plant, and equipment in its Financial Statements.
(iii) Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract
The amendments specify that that the 'cost of fulfilling' a contract comprises the 'costs that relate directly to the contract'.
Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct
labour materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a
clarification, and the Company does not expect the amendment to have any significant impact in its Financial Statements.
(iv) Ind AS 109 - Annual Improvements to IndAS (2021)
The amendment clarifies which fees an enfity includes when it applies the '10 percent' test of Ind AS 109 in assessing whether to
derecognise a financial liability. The Company does not expect the amendment to have any significant impact in its Financial
Statements.
(v) Ind AS 116 - Annual Improvements to Ind AS (2021)
The amendments remove the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve
any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives were
described in that illustration. The Company does not expect the amendment to have any significant impact in its Financial
Statements.
d) CC/EPC limit (under consortium with Bank of India, Axis Bank, Union Bank of India, HDFC Bank and SVC Bank :
Primary Security : Working capital limit are secured by hypothecation of entire current assets of the company (both present and
future) including stock of raw materials, stock-in process, finished goods, stores and spares, book debts
Collateral Security :
1) First Pari Passu Charge on entire fixed assets both present and future, including hypothecation of Plant & Machinery and EQM
of lease hold land and building (Land admeasuring around 11623 Sq Mtr and building admeasuring around 132160 Sq Ft)
located at plot no 192, Sector l, Pithampur (Unit-1) of company.
2) 1st pari-passu charge by way of EQM of freehold Residential house owned by M/s Shree Tirupati Balajee Agro Trading Company
Limited at 203, 2nd Floor Samyak Tower, 16/3 old Palasia, lndore (Area 1400 sqft).
3) 1st pari-passu charge by way of EQM of freehold office owned by M/s Shree Tirupati Balajee Agro Trading Company Limited at
321 3rd Floor Rafael Tower, 812 old Palasia, Indore (Area - 450 Sqft).
4) 1st parl-passu charge by way of EQM of freehold office owned by M/s Shree Tirupati Balajee Agro Trading Company Limited
situated at 418, 41G, 420 & 421 4h Floor Rafael Tower, 812 0ld Falasia, Indore, (Area 1688 Sqft).
5) 1st pari-passu charge by way of pledge of TDR of Rs 0.1 5 Crore in the name of Mr. Binod Kumar Agarwal (Director).
Exclusively for BOI (100%)
1) Exclusive charge by way of EQM of freehold Land at Khasra no 2616 (part), Village -Lasudiya Mori, Dewas Naka; Tehsil & District
lndore (MP) owned by Agroline Tarpoline Pvt Ltd (Now merged in Shree Tirupati Balajee Agro Trading Company Limited) (Area
- 10225.5 sq ft)
Personal Guarantee : Personal Guarantee of Director of the company namely Mr. Binod Kumar Agarwal.
a) The figures for the period ended March 31, 2025 and March 31, 2024 includes the amount of contingent liabilities for the respective
year, where show cause notice or claims have been received after the close of respective reporting period and till the date of approval
of this fianncial statements by the Board of Directors.
b) The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business, the impact of which
presently is not quantifiable. These cases are pending with various courts / authorities. After considering the circumstances and advice
from the legal advisors, management believes that these cases will not adversely affect its financial statements. The above Contingent
Liabilities exclude undeterminable outcome of these pending litigations.
c) Future cash flow in respect of the above, if any, is determinable only on receipt of judgements/decisions pending with the relevant
authorities. Interest, penalty or compensation liability arising on outcome of the disputes has not been considered, since not
determinable at present.
d) The Company did not have any long-term contracts including derivative contracts for which any provision was required for foreseeable
losses.
33 Segment information
a) Business Segment :
The Company is mainly engaged in the business of manufacturing of HDPE/PP Woven Sacks Fabric. All other activities of the Company
revolve around the main business and as such there is no separate reportable business segment.
b) Geographical Segment:
Since all the operations of the Company are conducted within India as such there is no separate reportable geographical segment.
34 Employee benefit plans
Defined contribution plans:
The Company participates in Provident fund as defined contribution plans on behalf of relevant personnel. Any expense recognised in
relation to provident fund represents the value of contributions payable during the period by The Company at rates specified by the rules of
provident fund. The only amounts included in the balance sheet are those relating to the prior months contributions that were not paid until
after the end of the reporting period.
(a) Provident fund and pension
In accordance with the Employee's Provident Fund and Miscellaneous Provisions Act, 1952, eligible employees of the Company are
entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make
monthly contributions at a specified percentage of the covered employees' salary. The contributions, as specified under the law, are
made to the provident fund administered and managed by Government of India (GOI). The Company has no further obligations under
the fund managed by the GOI beyond its monthly contributions which are charged to the statement of Profit and Loss in the period
they are incurred. The benefits are paid to employees on their retirement or resignation from the Company.
Contribution to defined contribution plans, recognised in the statement of profit and loss for the year under employee benefits
expense, are as under:
(b) Defined benefit plans:
Gratuity (Unfunded)
The Company has an obligation towards gratuity, a unfunded defined benefit retirement plan covering all employees. The plan
provides for lump sum payment to vested employees at retirement or at death while in employment or on termination of the
employment of an amount equivalent to 15 days salary, as applicable, payable for each completed year of service. Vesting occurs upon
completion of five years of service. The Company accounts for the liability for gratuity benefits payable in the future based on an
actuarial valuation.
The most recent actuarial valuation of the present value of the defined benefit obligation was carried out for the year ended March 31,
2025 by an independent actuary. The present value of the defined benefit obligation, and the related current service cost and past
service cost, were measured using the projected unit credit method.
A) Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
(1) Investment Risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields
on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit.
(2) Interest Risk:
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on
the plan's debt investments.
(3) Longevity Risk:
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 after their employment. An increase in the life expectancy of the plan participants will increase the plan's
liability.
c) Financial risk management objectives
The Company's principal financial liabilities comprise loans and borrowings and 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 loans, trade and other
receivables, and cash and cash equivalents that derive directly from its operations.The Company is exposed to market risk, credit risk
and liquidity risk. The Company periodically reviews the risk management policy so that the management manages the risk through
properly defined mechanism. The focus is to foresee the unpredictability and minimise potential adverse effects on the Company's
financial performance. The Company's overall risk management procedures to minimise the potential adverse effects of financial
market on the Company's performance are as follows:
(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, such as equity price risk and commodity
risk.
(a) Interest rate risk:
The Company is exposed to cash flow interest rate risk from long-term borrowings at variable rate. Currently the Company has external
borrowings and borowwings from promoter & promoter groups which are fixed and floating rate borrowings. The Company achieves
the optimum interest rate profile by refinancing when the interest rates go down. However this does not protect Company entirely
from the risk of paying rates in excess of current market rates nor eliminates fully cash flow risk associated with variability in interest
payments, it considers that it achieves an appropriate balance of exposure to these risks.
(ii) Credit risk management
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.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the
Company's customer base, including the default risk of the industry and country, in which customers operate, has less influence on the
credit risk.
Credit risk from balances with banks and financial institutions is managed by Company's treasury in accordance with the Company's
policy. The company limits its exposure to credit risk by only placing balances with local banks of good repute. Given the profile of its
bankers, management does not expect any counterparty to fail in meeting its obligations.
(iii) Liquidity risk management
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial
instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial
asset quickly at close to its fair value. The Company has an established liquidity risk management framework for managing its short
term, medium term and long term funding and liquidity management requirements. The Company's exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining
adequate funds in cash and cash equivalents.
Surplus funds not immediately required are invested in certain financial assets which provide flexibility to liquidate at short notice and
are included in cash equivalents.
Liquidity risk table
The table below summarises the maturity profile of the Company's financial liabilities based on contractual undiscounted payments.
37 Fair value measurements
This note provides information about how the Company determines fair values of various financial assets and financial liabilities.
a) Fair value of the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis
The Company has not measure any financial assets and financial liabilities that are measured at fair value on a recurring basis except for
Gold Coins.
b) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)
The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recognised in these
financial statements approximate their fair values.
38 Disclosure as per Section 186 of the Companies Act, 2013
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of
Board and its Powers) Rules, 2014 are as follows:
(i) Details of Investments made by the Company are given in Note 4 in the financial statement.
(ii) Details of Loans Given by the Company are given in Note 10 in the financial statement.
39 Other Notes
39.1 The Company does not own benami properties. Further, there are no proceedings which 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 rules made
thereunder.
39.2 The Company has not traded or invested in Crypto currency or Virtual Currency during each reporting period. During each reporting
period, the Company has not traded or invested in Crypto currency or Virtual Currency.
39.3 There were no Scheme of Arrangements entered by the Company during each reporting period, which required approval from the
Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.
39.4 Relationship with struck-off companies
The Company did not have any transactions with Companies struck off.
39.5 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding 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.
39.6 The Company has not made any delay in Registration of Charges under the Companies Act, 2013.
39.7 Code of Social Security, 2020
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. However, the date on which the Code will
come into effect has not been notified. the Company will assess the impact of the Code when it comes into effect and will record any
related impact in the period when the Code becomes effective.
40 During the year Company has completed an initial public offering (IPO) of 2,04,40,000 equity shares with a face value of INR 10 each at
an issue price of INR 83 per share comprising fresh issue of 1,47,50,000 shares and an offer for sale of 56,90,000 shares.The utilization
of IPO proceeds from fresh issue is summarized below:
42 Previous year's figures have been regrouped / reclassed wherever necessary to correspond with the current year's classification /
disclosure.
As per our report of even date For and on behalf of Board of Directors of
Shree Tirupati Balajee Agro Trading Company Limited
For M.S. Dahiya & Co.
Chartered Accountants Binod Kumar Agarwal Anubha Mishra
Firm Reg. No.: 013855C Managing Director Director
DIN:00322536 DIN:10394874
Harsh Firoda Praveen Raj Jain Rishika Singhai
Partner Chief Financial Officer Company Secretary
M No. 409391 M. No. A72706
Place: Pithampur
Date : 30.05.2025
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