5.12 Provisions, Contingent Liabilities and Contingent Assets
5.12.1 Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow of resources embodying economic benefits in respect of
which a reliable estimate can be made.
5.12.2 Provisions are discounted if the effect of the time value of money is material, using pre-tax rates that reflects the risks
specific to the liability. When discounting is used, an increase in the provisions due to the passage of time is recognised as
finance cost. These provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
5.12.3 Insurance claims are accounted on the basis of claims admitted or expected to be admitted and to the extent that the
amount recoverable can be measured reliably and it is reasonable to expect ultimate collection. Any subsequent change in
the recoverability is provided for Contingent Assets are not recognised.
5.12.4 Contingent liability is a possible obligation that may arise from past events and its existence will be confirmed only by
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or it is
not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the same
are not recognised but disclosed in the financial statements.
5.13 Intangible Assets
5.13.1 The costs of computer software acquired and its subsequent improvements are capitalised. Internally generated software is
not capitalized and the expenditure is recognized in the Statement of Profit and Loss in the year in which the expenditure is
incurred.
5.13.2 Intangible Assets are amortised over their estimated useful life on straight line method. The estimated useful lives of
intangible assets are assessed by the internal technical team. Its accounting classification is given below:
5.13.3 The intangible assets that are under development phase are carried at cost including related expenses and attributable
interest, and are recognised as Intangible assets under development.
5.13.4 The residual values, useful lives and methods of depreciation of intangible asset are reviewed at each reporting date and
adjusted prospectively, if appropriate.
5.14 Investment Properties
5.14.1 An investment in land or buildings both furnished and unfurnished, which are held for earning rentals or capital appreciation
or both rather than for use in the production or supply of goods or services or for administrative purposes or sale in the
ordinary course of business, are classified as investment properties.
5.14.2 Investment properties are stated at cost, net of accumulated depreciation and impairment loss, if any except freehold land
which is carried at cost.
5.14.3 The company identifies the significant parts of investment properties separately which are required to be replaced at
intervals. Such parts are depreciated separately based on their specific useful lives determined on best estimate basis upon
technical advice. The cost of replacement of significant parts are capitalised and the carrying amount of replaced parts are
de-recognised. Other expenses including day-to-day repair and maintenance expenditure and cost of replacing parts that does
not meet the capitalisation criteria, are charged to the Statement of Profit and Loss for the period during which such expenses
are incurred.
5.14.4 Depreciation on investment properties are calculated on straight-line method based on useful life of the significant
components.
5.14.5 Investment properties are eliminated from the financial statements on disposal or when no further benefit is expected from
its use and disposal. Gains or losses arising from disposal, measured as the difference between the net disposal proceeds
and the carrying amount of such investment properties, are recognised in the Statement of Profit and Loss. Amount received
towards investment properties that are impaired and derecognized in the financial statements, are recognized in Statement
of Profit and Loss, when the recognition criteria are met.
5.14.6 The residual values, useful lives and methods of depreciation of investment properties are reviewed at each reporting date
and adjusted prospectively, if appropriate.
5.15 Operating Segments
Operating segment has been identified on the basis of nature of products and reported in a manner consistent with the
internal reporting provided to Chief Operating Decision Maker.
The Company has three operating/reportable segments viz. building products, textile and wind power generation.
The inter-segment transfers of units of power from windmills are recognized at the applicable tariff rates of the electricity
boards for the purpose of segment reporting as per the relevant accounting standard.
Costs are allocated to the respective segment based upon the actual incidence of respective cost. Unallocated items include
general other income and expenses which are not allocated to any business segment.
5.16 Financial Instruments
5.16.1 The Company initially determines the classification of financial assets and liabilities. After initial recognition, no re¬
classification is made for financial assets which are categorised as equity instruments at FVTOCI and financial assets /
liabilities that are specifically designated as FVTPL. However, other financial assets are re-classifiable when there is a change
in the business model of the Company.
Financial Assets
5.16.2 Financial assets comprise of investments in equity and mutual funds, trade receivables, cash and cash equivalents and other
financial assets.
Initial recognition and measurement
5.16.3 All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset. However, Trade
receivables that do not contain a significant financing component are measured at transaction price.
5.16.4 Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between
the fair value and the transaction price is recognised as a gain or loss in the Statement of Profit and Loss at initial recognition
if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or
through a valuation technique that uses data from observable markets (i.e. level 2 input).
5.16.5 In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair
value and transaction price is deferred appropriately and recognised as a gain or loss in the Statement of Profit and Loss only
to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing
the financial asset.
Subsequent measurement
5.16.6 For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:
(a) The Company’s business model for managing the financial asset and,
Financial Liabilities
5.16.10 Financial liabilities comprise of Borrowings from Banks, Trade payables, Derivative financial instruments, Financial guarantee
obligation and other financial liabilities.
Initial recognition and measurement:
5.16.11 All financial liabilities are recognised initially at fair value minus, in the case of financial liabilities not recorded at fair value
through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.
5.16.12 Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between
the fair value and the transaction price is recognised as a gain or loss in the Statement of Profit and Loss at initial recognition
if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or
through a valuation technique that uses data from observable markets (i.e. level 2 input).
5.16.13 In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair
value and transaction price is deferred appropriately and recognised as a gain or loss in the Statement of Profit and Loss only
to the extent that such gain or loss arises due to a change in factor that market.
Subsequent measurement
5.16.14 All financial liabilities of the Company are subsequently measured at amortised cost using the effective interest method
except for certain items like foreign exchange forward contracts that do not qualify for hedge accounting are measured at
fair value through profit or loss (FVTPL).
5.16.15 Transaction cost of financial guarantee contracts that are directly attributable to the issuance of the guarantee are recognised
initially as a liability at fair value. Subsequently, the liability is measured at the higher of the amount of loss allowance
determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortization.
5.17 Fair value measurement
5.17.1 The fair value of an asset or a liability is measured using the assumptions that the market participants would use when pricing
the asset or liability, assuming that the market participants act in the economic best interest.
5.17.2 All assets and liabilities for which fair value is measured are disclosed in the financial statements are categorised within fair
value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value
hierarchy is described as below:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level inputs that are significant to the fair value measurement are
directly or indirectly observable.
Level 3: Valuation techniques for which the lowest level inputs that are significant to the fair value measurement are
unobservable.
5.17.3 For assets and liabilities that are recognised in the Balance sheet on a recurring basis, the company determines whether
transfers have occurred between levels in the hierarchy by reassessing categorisation at the end of each reporting period (i.e)
based on the lowest level input that is significant to the fair value measurement as a whole.
5.17.4 For the purpose of fair value disclosures, the company has determined the classes of assets and liabilities based on the nature,
characteristics and risks of the assets or liabilities and the level of the fair value hierarchy as explained above.
6. SIGNIFICANT ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of
contingent liabilities. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed
on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the
revision effects only that period or in the period of the revision or future periods, if the revision affects both current and
future years.
Accordingly, the management has applied the following estimates / assumptions / judgements in preparation and presentation
of financial statements:
Property, Plant and Equipment, Intangible Assets and Investment Properties
The residual values and estimated useful life of PPEs, Intangible Assets and Investment Properties are assessed by technical
team duly reviewed by the management at each reporting date. Wherever the management believes that the assigned useful
life and residual value are appropriate, such recommendations are accepted and adopted for computation of depreciation/
amortisation. Also, management judgement is exercised for classifying the asset as investment properties or vice versa.
Revenue Recognition
Significant management judgement is exercised in determining the transaction price and discounts to customer which is based
on market factors namely demand and supply. The Company offers credit period to customers for which there is no financing
component.
Current Taxes
Calculations of income taxes for the current period are done based on applicable tax laws and management’s judgement by
evaluating positions taken in tax returns and interpretations of relevant provisions of law.
Deferred Tax Asset
Significant management judgement is exercised by reviewing the deferred tax assets at each reporting date to determine the
amount of deferred tax assets that can be retained / recognised, based upon the likely timing and the level of future taxable
profits together with future tax planning strategies.
Contingent Liabilities
Management judgement is exercised for estimating the possible outflow of resources, if any, in respect of contingencies /
claims / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.
Impairment of Trade receivables
The impairment for financial assets are done based on assumptions about risk of default and expected loss rates. The
assumptions, selection of inputs for calculation of impairment are based on management judgement considering the past
history, market conditions and forward looking estimates at the end of each reporting date.
Impairment of Non-financial assets
The impairment of non-financial assets is determined based on estimation of recoverable amount of such assets. The
assumptions used in computing the recoverable amount are based on management judgement considering the timing of future
cash flows, discount rates and the risks specific to the asset.
Provisions
The timing of recognition requires application of judgement to existing facts and circumstances that may be subject to
change. The litigations and claims to which the company is exposed are assessed by the management and in certain cases
with the support of external experts. The amounts are determined by discounting the expected future cash flows at a pre-tax
rate that reflects the current market assessments of the time value of money and the risks specific to the liability.
Defined Benefit Plans and Other long term benefits
The cost of the defined benefit plan and other long term benefits, and the present value of such obligation are determined
by the independent actuarial valuer. Management believes that the assumptions used by the actuary in determination of the
discount rate, future salary increases, mortality rates and attrition rates are reasonable. Due to the complexities involved in
the valuation and its long term nature, this obligation is highly sensitive to changes in these assumptions.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active
markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value
the inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of
judgement is exercised in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit
risk and volatility.
Impairment of Investments in Subsidiaries /Associates
Significant management judgement is exercised in determining whether the investment in subsidiaries / associates are
impaired or not is on the basis of its nature of long term strategic investments and business projections.
Interests in other entities
Significant management judgement is exercised in determining the interests in other entities. The management believes that
wherever there is significant influence over certain companies belong to its group, such companies are treated as Associate
companies even though it holds less than 20% of the voting rights.
(c) Industrial Promotion Assistance from:
- Deferred Grant recognised as income -'9.77 lakhs [PY-'9.77 lakhs]
(d) Out of 252.78 lakhs units [PY - 278.22 lakhs units] generated by our windmills, 50.59 lakhs units [PY - 54.42 lakhs units] were
sold to concerned state Electricity Board, 201.89 lakhs units [PY - 226.08 lakhs units] were consumed at our plant and 2.99
lakhs units [PY - 2.69 lakhs units] remain unadjusted.
(e) The Company’s Revenue from sale of products is recognised upon transfer of control of such products to the customer at a
point of time. Revenue from windmills is recognised upon transmission of energy to the grids of state electricity boards. The
revenue from project contract is recognised on using percentage of completion method.
40.2.1 Income tax demands amounting to ^3,348.09 Lakhs (Previous Year: ^3,784.52 Lakhs) have been disputed by the Company.
Appeals have been filed before the appellate authorities against various disallowances in assessments, and the matters are
currently pending. Out of this total demand, ^969.71 Lakhs (Previous Year: ^1,176.00 Lakhs) has been provided for in the
books of accounts. The balance amount of ^2,378.39 Lakhs (Previous Year: ^2,608.52 Lakhs) has not been acknowledged as
a liability by the Company. In the opinion of the management, no further tax liability is expected to arise in connection with
this matter, and hence, no additional provision has been considered necessary.
40.2.2 Sales tax demands amounting to ^125.42 Lakhs (Previous Year: ^219.85 Lakhs) have been disputed by the Company. Appeals
have been preferred before the appellate authorities against various disallowances across several assessments, and the
appeals are pending. The entire disputed amount has been provided for in the books of accounts.
40.2.3 The Company had set up a plant in Silvassa (Union Territory of Daman, Diu, Dadra & Nagar Haveli) in 1998 and availed of VAT
and CST exemptions for a period of 15 years, ending March 2013, based on a certificate issued by the competent authority
under the relevant provisions of the CST Act, 1956. However, this power to grant exemption was retrospectively withdrawn by
an amendment introduced through the Finance Act, 2002. Subsequently, the Sales Tax Department issued a circular mandating
the compulsory submission of concessional sales tax forms to continue availing CST exemption.
This could have led to a differential sales tax liability of ^3700 lakhs for the period 1998-2002. However, no formal demand
had been received from the authorities. As a precautionary measure, the Company filed a writ petition with the Hon’ble
Bombay High Court, which quashed the said circular and upheld the Company’s eligibility for the CST exemption, despite the
retrospective amendment.
The Commercial Tax Department, Silvassa, appealed this decision before the Hon’ble Supreme Court. The Supreme Court
decided the case in the Company’s favour in February 2025.
40.2.4 Entry tax demands amounting to ^204.69 Lakhs (Previous Year: ^19.48 Lakhs) have been disputed by the Company. Appeals
have been filed before the appropriate appellate authorities, and the matters are pending. The entire amount has been
provided for in the books of accounts.
The Government of West Bengal enacted “The West Bengal Tax on Entry of Goods into Local Areas Act, 2012,” which was
legally challenged by the Company. The Hon’ble Calcutta High Court, via its order dated 20.04.2017, transferred jurisdiction
of the matter to the West Bengal Taxation Tribunal. The Tribunal, via its order dated 25.03.2022, held that the State had
no legislative competence to introduce Sections 5 and 6 (Entry Tax) of the West Bengal Finance Act, 2017 and declared the
provisions unconstitutional.
Subsequently, the Department filed an appeal before the Hon’ble High Court, which, in January 2025, ruled in favour of the
Government. The Company has challenged this ruling and filed a further appeal before the Hon’ble Supreme Court, based on
legal advice received from consultants.
The Company has paid and expensed the entry tax up to May 2013. It has also made provisions in its books amounting to
^295.37 Lakhs for the period June 2013 to June 2017. Additionally, provision for interest has been made to the extent of
^711.56 Lakhs (Previous Year: ^640.67 Lakhs).
40.2.5 GST demands amounting to ^285.96 Lakhs (Previous Year: ^52.80 Lakhs) have been disputed by the Company. Appeals have
been filed before the Deputy Commissioner/Assistant Commissioner/Superintendent against various disallowances during
assessment and audit proceedings. The entire disputed amount of ^285.96 Lakhs (Previous Year: ^16.14 Lakhs) has been
provided for in the books of accounts. The balance amount of NIL (Previous Year: ^36.66 Lakhs) has not been acknowledged
as a liability by the Company. In the opinion of the management, no further tax liability is expected to arise, and accordingly,
no additional provision has been considered necessary.
40.2.6 In respect of electricity matters related to the Textile Division, the Company has filed appeals/writ petitions amounting to
' 291.87 lakhs (PY: ' 291.87 lakhs) concerning various issues. These matters are currently pending before the Tamil Nadu
Electricity Regulatory Commission (TNERC), the Honourable High Court, and the Honourable Supreme Court. The Company is
confident of a favourable outcome and, therefore, no provision has been made in the books of accounts.
40.2.7 Under the Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligations) Regulations, 2010,
consumers operating grid-connected captive power generating plants and open access consumers with a sanctioned demand
of more than 2 MVA are required to source a minimum of 0.5% of their energy requirement from solar sources. Non-compliant
entities must either purchase Renewable Energy Certificates (RECs) from the market at the rate of 1 REC per 1,000 units of
shortfall or deposit an equivalent amount in a designated fund. Although the Company uses wind energy generated from its
own wind farms, it has been excluded from fulfilling this obligation due to its wheeling and banking arrangement with TNEB.
Aggrieved by this exclusion, the Company, along with other affected producers, has approached the Honourable High Court of
Madras and obtained an interim stay on the implementation of the said regulation
40.2.8 The Company has commissioned windmills with the Electricity Board (EB) under a banking arrangement. For four of the Wind
Energy Generators (WEGs), the banking period expired in March (three units) and September (one unit) 2023. The Company
filed a case before the Madras High Court, which directed the EB to adjust the wind energy generated from the said WEGs
from March 2023 onwards. Following receipt of the court order, the Company approached the EB, and the lapsed banking units
were accordingly adjusted. The Company is in the process of entering into addendum agreements with TNGECL, in compliance
with the High Court’s order.
40.2.9 The Company made a representation to the Chairman of the Electricity Board (EB) seeking a tariff concession for establishing
a new industry at Arakkonam prior to 14.02.1997, under the scheme outlined in GO Ms.17 Energy (A2), which was active at
that time. The EB denied the concession.
Consequently, the Company filed a writ petition before the Madras High Court, seeking a refund of ' 8.22 lakhs along with
interest up to April 2008 (' 15.21 lakhs), aggregating to ' 23.43 lakhs, with further interest at 18% per annum till the date of
payment. On 01.02.2019, the High Court disposed of the case, allowing the writ petition by setting aside the EB’s order dated
04.11.2009. The EB was directed to reconsider the Company’s claim for the tariff concession after providing an opportunity
to submit documentary evidence. Pursuant to the court’s direction, the Company has made several representations to the EB
and is currently awaiting a hearing from TNEB, Vellore. A further representation has also been made to the Chairman, TNEB,
and a response is awaited
40.2.10 The Company received a notice from the Directorate of Revenue Intelligence (DRI) demanding ' 41.23 lakhs (excluding
interest and penalty) for the financial year 2009-10, in relation to the short payment of customs duty. The demand pertains to
the use of DEPB scrips purchased by the Company in the open market, which the DRI alleges were fraudulently obtained by the
original exporters. The Company has denied any wrongdoing and its liability for the duty, as detailed in its letter dated August
4, 2014. A personal hearing was attended by the Company before the Assistant Commissioner of Customs, JNPT, Mumbai, in
October 2016. The Company is awaiting a favourable order and, based on legal opinion and internal assessment, is confident
of a favourable outcome. Accordingly, no provision has been made in the accounts.
40.3.1 The Company is eligible for incentives under the “Bihar Industrial Incentive Policy 2006” in respect of its Fibre Cement Plant
at Bihiya in the State of Bihar. During the year under review,
• We have recognised a sum of ' 9.77 Lakhs (PY. '9.77 Lakhs) due to fair valuation of Govt. Grants as per Ind AS.
• Incentive Scheme under GST regime from 1st July, 2017 has been announced by the Govt. of Bihar. Company has applied
for the same and is awaiting for approval from Govt.
42. DISCLOSURES PERTAINING TO SHARE BASED PAYMENTS AS PER IND AS 102
Employee Stock Option Schemes (ESOS)
Employee Stock Option Schemes (ESOS)
The Company instituted Employee Stock Option Schemes (ESOS 2021) approved by shareholders at the Annual General Meeting
held on 19.08.2021. The Board of Directors and Nomination & Remuneration Committee granted 1,46,000 options to its
eligible employees under various ESOS schemes at its meeting held on January 20, 2022 and 146000 shares have been fully
exercised by respective employees within the period.
The Board of Directors and Nomination & Remuneration Committee granted further 32,500 options to its eligible employees
under ESOS 2021 - Plan A scheme at its meeting held on May 28, 2024. Each option entitles the option holder thereof to apply
for one equity share of the company, upon satisfaction of performance condition during the vesting period and payment of
exercise price during the exercise period. Options are granted for no consideration and carries no dividend or voting rights.
There are no market conditions attached to the grant / vesting of options. There are no cash settlement options alternatives.
The Company has recognized ' 64.30 Lakhs [PY: NIL Lakhs] as Employee stock options expense towards equity-settled share-
based transactions. There are no cash settlement options alternatives.
1. It includes bonus, sitting fees, and value of perquisites.
2. It includes contribution to Provident fund and Superannuation fund
3. As the liability for gratuity and compensated absences are provided on actuarial basis for the Company as a whole,
amounts accrued pertaining to key managerial personnel are not included above.
46. DISCLOSURE OF FAIR VALUE MEASUREMENTS
The fair values of financial assets and liabilities are determined at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value of cash and short-term
deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks
and other financial instruments approximate their carrying amounts largely due to their short term maturities of these
instruments.
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
Level 1 : Quoted (Unadjusted) prices in active markets for identical assets or liabilities
Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either
directly or indirectly.
Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data.
The details of financial instruments that are measured at fair value on recurring basis are given below:
The Board of Directors (BOD) has overall responsibility for the establishment and oversight of the Company’s risk management
framework and thus established a risk management policy to identify and analyses the risk faced by the Company. Risk
Management systems are reviewed by the BOD periodically to reflect changes in market conditions and the Company’s
activities. The Company through its training and management standards and procedures develop a disciplined and constructive
control environment in which all employees understand their roles and obligations. The Audit Committee oversees how
management monitors compliance with the Company’s risk management policies and procedures, and reviews the risk
management framework. The Audit committee is assisted in the oversight role by Internal Audit. Internal Audit undertakes
reviews of the risk management controls and procedures, the results of which are reported to the Audit Committee.
Credit Risk is the risk of financial loss to the Company if the customer or counterparty to the financial instruments fails
to meet its contractual obligations and arises principally from the Company’s receivables, treasury operations and other
operations that are in the nature of lease.
Receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer. The Company
extends credit to its customers in the normal course of business by considering the factors such as financial reliability of
customers. The Company evaluates the concentration of the risk with respect to trade receivables as low, as its customers
are located in several jurisdictions and operate in largely independent markets. The Company maintains adequate security
deposits from its customers in case of wholesale and retail segment. The exposures with the Government are generally
unsecured but they are considered as good. However, unsecured credits are extended based on creditworthiness of the
customers on case to case basis.
Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy
or failing to engage in a repayment plan with the company and where there is a probability of default, the company creates
a provision based on Expected Credit Loss for trade receivables under simplified approach as below:
Financial Instruments and Cash deposits
Investments of surplus funds are made only with the approved counterparties. The Company is presently exposed to counter
party risk relating to short term and medium term deposits placed with banks, and also investments made in mutual funds.
The Company places its cash equivalents based on the creditworthiness of the financial institutions.
Liquidity Risk
Liquidity Risks are those risk that the Company will not be able to settle or meet its obligations on time or at reasonable
price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed
adequate by the management to finance the company’s operations and to mitigate the effects of fluctuations in cash flows.
Fund Management
Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping both
committed and uncommitted credit lines available. The Company has laid well defined policies and procedures facilitated
by robust information system for timely and qualitative decision making by the management including its day to day
operations
The Company’s exposure in USD and other foreign currency denominated transactions in connection with import of raw
material, capital goods and spares, besides exports of finished goods and borrowings in foreign currency, gives rise to exchange
rate fluctuation risk. The Company has following policies to mitigate this risk:
Decisions regarding borrowing in Foreign Currency and hedging thereof, (both interest and exchange rate risk) and the
quantum of coverage is driven by the necessity to keep the cost comparable. Foreign Currency loans, imports and exports
transactions are hedged by way of forward contract after taking into consideration the anticipated Foreign exchange inflows/
outflows, timing of cash flows, tenure of the forward contract and prevailing Foreign exchange market conditions.
Cash flow and fair value interest rate risk
Interest rate risk arises from long term borrowings with variable rates which exposed the company to cash flow interest rate
risk. The Company’s fixed rate borrowing are carried at amortized cost and therefore are not subject to interest rate risk
as defined in Ind AS 107 since neither the carrying amount nor the future cash flows will fluctuate because of the change in
market interest rates. The Company is exposed to the evolution of interest rates and credit markets for its future refinancing,
which may result in a lower or higher cost of financing, which is mainly addressed through the management of the fixed/
floating ratio of financial liabilities. The Company constantly monitors credit markets to strategize a well-balanced maturity
profile in order to reduce both the risk of refinancing and large fluctuations of its financing cost. The Company believes that it
can source funds for both short term and long term at a competitive rate considering its strong fundamentals on its financial
position.
For the purpose of the Company’s capital management, capital includes issued equity share capital and all other equity
reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is
to maximize the shareholders’ wealth.
The Company manages its capital structure and makes adjustments in the light of changes in economic conditions and the
requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by
total capital plus Debt.
49. PROJECT REVENUE RECOGNITION
Contract revenue from Project activity on fixed price contracts is recognized when the outcome of the contract is ascertained
reliably, contract revenue is recognized at cost of work performed on the contract plus proportionate margin, using percentage
of completion method. Percentage of completion is determined based on work certified by the customer.
Disclosure as per Indian Accounting Standard - 11 in respect of projects in progress
[a] Contract Revenue during the year '121.48 Lakhs [PY: '58.70 Lakhs]
[b] Aggregate amount of cost incurred '93.63 Lakhs [PY: ' 66.83 Lakhs] and recognised Profit ' 27.85 Lakhs
[PY: ' (8.12)Lakhs]
[c] Advances received [Outstanding] Nil [PY: ' 21.25 Lakhs]
[d] Retention Money [Outstanding] '24.98 Lakhs [PY: ' 32.38 Lakhs]*
[e] Gross Amount due from Customers for Contract Work [including Retention at (d) above] ' 49.18 Lakhs [PY: '75.38 Lakhs]
[f] Gross Amount due to Customers for Contract Work [other than advances at (c) above] - Nil
[g] Unbilled revenue - Nil
* Retention Money [Outstanding] is after adjusting amounts released against furnishing of Bank Guarantees.
Unbilled Revenue represents revenue recognised based on percentage of completion method over and above the amount due
from the customers as per the agreed payment plans.
e. Unbilled Revenue Ageing Schedule
The Company do not have any such transaction.
f. Undisclosed Income
The Company do not have any transaction which are not recorded in the books of accounts that has been surrendered or
disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the years.
g. CSR Disclosure:
Disclosure has been given in Note no:36(b) and (c) of note on accounts.
h. Compliance with approved Scheme(s) of arrangements.
The Company do not have any such approved Scheme(s) of arrangements.
i. Relationship with Struck off Companies
The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or Section
560 of Companies Act, 1956 considering the information available with the Company.
j. Details of Crypto Currency or Virtual Currency
The Company did not trade or invest in Crypto Currency or virtual currency during the financial year.
k. Disclosure on loans / advance to directors / KMP / related parties:
Disclosure has given in note on accounts Note no:10 (a) and (b) as per the Schedule III.
l. Benami Property
The Company did not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
m. The Company has neither advanced or loaned or invested, nor received any fund, to or from, any other persons or
entities including foreign entities (intermediaries) with the understanding 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 or
ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
Formula adopted for above Ratios:
Current Ratio = Total Current Assets / Total Current Liabilities
(a) Debt-Equity Ratio = Total Debt / Total Equity
(b) Debt Service Coverage Ratio = (EBITDA - Current Tax) / (Principal Repayment Gross Interest)
(c) Return on Equity Ratio = Total Comprehensive Income / Average Total Equity
(d) Inventory Turnover Ratio = (Average Inventory days) = 365 / (Net Revenue / Average Inventories)
(e) Trade receivable Turnover Ratio = (Average Receivables days) = 365 (Net Revenue / Average Trade receivables)
(f) Trade payable Turnover Ratio = (Average Payables days) = 365 (Net Revenue / Average Trade payables)
(g) Net Capital Turnover Ratio = (Inventory Turnover Ratio Trade Receivable Turnover Ratio - Trade Payable Ratio)
(h) Net Profit Ratio = Net Profit / Total Income
(i) Return on Capital Employed = (Total Comprehensive Income Interest) / (Average of (Equity Total Debt))
(j) Return on Investment (Assets) = Total Comprehensive Income / Average Total Assets
Reasons for Variation if more than 25%
The Increase in Debt-Service Coverage Ratio by 154% from 2.21 times in previous year to 5.62 times in current year is mainly
due to higher profits, decrease in interest cost and decrease in term loan repayments.
The Increase in Net Profit Ratio by 37% from 4.5% in previous year to 6.1% in current year is mainly due to cost decrease.
52. DISCLOSURES ON LEASES
COMPANY AS A LESSEE
Nature of leasing activities
The Company has entered into operating lease on certain assets i.e land and building. Lease rentals are determined based on
agreed terms. There is escalation clause in certain lease agreements after a specified period and no restriction imposed by
the lease arrangements.
55. THE CODE ON SOCIAL SECURITY, 2020 AND INDUSTRIAL RELATIONS CODE, 2020
The Central Government has published The Code on Social Security, 2020 and Industrial Relations Code,2020 (“the codes”) in
the Gazette of India, inter alia, subsuming various existing labour and industrial laws which deals with employees including
post-employment period. The effective date of the code and the rules are yet to be notified. The impact of the legislative
changes if any will be assessed and recognised post notification of relevant provisions
57. The previous period figures have been re-grouped / restated wherever considered necessary.
As per our Report Annexed For and on behalf of the Board
For M/s. SRSV & Associates For M/s. Ramakrishna Raja and Co., P.R. VENKETRAMA RAJA PREM G SHANKER
Chartered Accountants Chartered Accountants Chairman Chief Executive Officer
Firm Registration No.: 015041S Firm Registration No.: 005333S (DIN: 00331406) K SANKARANARAYANAN
V. RAJESWARAN M. VIJAYAN P.V. ABINAV RAMASUBRAMANIAM RAJA Chief Financial Officer
Partner Partner Managing Director s. BALAMURUGASUNDARAM
Membership No. 020881 Membership No.026972 (DIN: 07273249) Company Secretary & Legal Head
UDIN: 25020881BMKQGE2477 UDIN: 25026972BMGDZU7137
Place : Chennai
Date : 23rd May, 2025
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