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Epigral Ltd.

Notes to Accounts

NSE: EPIGRALEQ BSE: 543332ISIN: INE071N01016INDUSTRY: Agro Chemicals/Pesticides

BSE   Rs 1833.55   Open: 1800.25   Today's Range 1800.25
1846.35
 
NSE
Rs 1834.80
+26.60 (+ 1.45 %)
+24.90 (+ 1.36 %) Prev Close: 1808.65 52 Week Range 1341.00
2408.35
You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (Rs.) 7915.57 Cr. P/BV 4.16 Book Value (Rs.) 441.46
52 Week High/Low (Rs.) 2407/1341 FV/ML 10/1 P/E(X) 22.13
Bookclosure 21/06/2025 EPS (Rs.) 82.91 Div Yield (%) 0.33
Year End :2025-03 

The Company had entered into Share Subscription and Shareholders’ Agreement (SSSA) with ReNew Green (GJS three) Private Limited (“RGPL”) whereby the Company had invested Rs. 20.54 Crore for 26% equity share capital of RGPL. RGPL is in the business of operating 18.34 MW wind-solar hybrid power plant in Gujarat. Based on “Energy Supply Agreement(ESA) with RGPL the Company has exclusive right to purchase the energy produced by RGPL for a period of 25 years. RGPL started its operation in June’23 quarter.

Loans to Employees are interest free and generally given for tenure of 6 to 12 months

Since all the above loans given by the Company are unsecured and considered good, the bifurcation of loan in other categories as required by Schedule III of Companies Act 2013 via: a) Secured, b) Loans which have significant increase in credit risk and c) Credit Impaired is not applicable.

There are no Loans and Advances due by Directors or other Officers of the Company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any Director is a Partner or a Director or a Member.

(i) The Company will be receiving financial assets at the time of realisation, accordingly the same has been classified as other current financial assets.

(ii) Government Grants pertains to SGST refund receivable for the applications made by the Company under Scheme for Incentive to Industries.

(iii) Other Receivables as at March 31, 2025 majorly pertains to inventory generated in trial run the same will be sold in due course. And balance March 31, 2024 pertains to power credit receivable from UGVCL the same is received in current financial year.

(i) Company expects to utilize the export licences for payment of duties, accordingly the same has been classified as other current assets.

(ii) Balance with Government Authorities include VAT / Cenvat / Goods and Service Tax credit Receivable, net of liabilities.

(i) Equity Share:

The Company has only one class of Equity Shares with par value of H10 per share. Each Equity Shareholder is entitled to one vote per share. All Equity Shareholders have equal dividend rights. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive the 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.

(ii) During the year, the Company basis approval of Fund Raising Committee in their meeting dated October 24, 2024 has issued 15,91,180 Equity Shares of face value of H10 each in a Qualified Institutional Placement (QIP) pursuant to Chapter VI of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, at an issue price of H2,093.13 per Equity Share (including securities premium of H2,083.13 per Equity Share) aggregating to H333.05 Crore . The Company has received listing and trading approval for the shares issued from BSE Limited and National Stock Exchange of India Limited on October 25, 2024 and October 28, 2024 respectively.

Pursuant to allotment of above mentioned Equity Shares, the paid up share capital of the Company increased from H41.55 Crore comprising 4,15,50,158 Equity Shares to H43.14 Crore comprising 4,31,41,338 Equity Shares. In accordance with Ind AS 32,the transaction costs amounting H8.33 Crore in relation to QIP has been accounted for as deduction from Equity under Securities Premium.

During the year ended March 31, 2025, the Company has utilised the proceeds for repayment of existing debt of the Company amounting to H250.00 Crore, for funding capital expenditure amounting to H30.00 Crore and for General Corporate Purpose (including share issue expenses) amounting to H53.05 Crore.

Securities Premium

Securities Premium pertains to issue of Equity Shares during the year in a Qualified Institutional Placement (QIP) (refer note 16).

Securities Premium is used to record the premium on issue of shares. The Reserve can be utilised only for limited purposes such as issuance of Bonus Shares, Buy Back of Shares in accordance with the provisions of the Companies Act, 2013.

Capital Reserve

The balance in Capital Reserve represents difference between consideration paid and net asset acquired under common control business combination transactions and cancellation of shares pursuant to Scheme of Arrangement. The Reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfer to General Reserve, Dividend paid to Shareholders. It also includes Re-measurement gain/(loss) on defined benefit plans that will not be re-classified to the Statement of Profit and Loss.

Details of Security and Repayment Terms :

i) The Company has availed following Rupee Term Loan facilities:

1) Term Loan amounting H150.00 Crore from HDFC Bank Limited is for capital expenditure towards setting up of new Caustic Soda Lye Plant with new 36 MW Captive Power Plant. Outstanding balance for this facility is H NIL as the term loan has been paid in full during the year (31st March 2024: H33.33 Crore). This borrowing carries interest @ 1 year MCLR (Benchmark rate) plus NIL spread (to be set every year) payable on monthly rest. The Term Loan was repayable in 18 quarterly instalments of H8.33 Crore each starting from 1st November, 2020.

2) Term Loan amounting H125.00 Crore from Federal Bank Limited is for capital expenditure towards setting up of new Hydrogen Peroxide Plant. Outstanding balance for this facility is H NIL as the term loan has been paid in full during the year (31st March 2024: H26.32 Crore). The borrowing carried interest @ 12 month T-bill rate (benchmark as published by RBI - to be reset every year) plus spread (fixed @ 0.94%) payable on monthly rest. The Term Loan was repayable in 19 quarterly instalments of H6.58 Crore each starting from 29th September, 2020.

3) Term Loan amounting H350.00 Crore from Axis Bank Limited is for capital expenditure towards setting up of new Chloro toluene and its Value Chain Plant and expansion of Chloro Polyvinyl Chloride, the outstanding balance for the facility is H350.00 Crore as at Balance Sheet date (31st March 2024: H213.00 Crore). The borrowing carries interest @ Repo Rate plus spread (fixed@ 1.65%) payable on monthly rest. The Term Laon is repayable in 24 quarterly installment of H14.58 Crore each starting from December 2025

4) Term Loan amounting H190.00 Crore from State Bank of India is for capital expenditure towards setting up of new Epichlorhydrin Plant. Outstanding balance for this facility is H NIL as the term loan has been paid in full during the year (31st March 2024: H131.95 Crore) . The borrowing carried interest at 6 month MCLR (Benchmark rate) plus spread of 0.10% (to be reset every half year) payable on monthly rest. The Term Loan was repayable in 20 quarterly instalments of H9.50 Crore each starting from 31st December. 2022.

5) Term Loan amounting H284.75 Crore from HDFC Bank Limited is for capital expenditure towards setting up of new Chloro Polyvinyl Chloride Plant and expansion of Caustic capacity with 36 MW Captive Power Plant. Outstanding balance for the facility is H185.09 Crore as at the Balance Sheet date (31st March 2024: H242.04 Crore). The borrowing carries interest at 6 month MCLR (Benchmark rate) NIL Spread resets half yearly. The Term Loan is repayable in 20 quarterly instalments of H14.24 Crore each starting from September 2023.

The Company has entered into a cross currency swap (“CCS") transaction on the said Rupee Term loan facility whereby outstanding Rupee Term loan of H256.27 Crore has been swapped with notional principal of EUR 2.83 Crore. As per the terms of CCS agreement, the Company receives interest at 9.15% p.a. on notional principal outstanding in INR and pays interest at 5.18% p.a. on notional principal of EUR at monthly rest. The notional principal will be settled in EURO by the Company in exchange of INR on quarterly basis starting from financial year 2024-25.

6) The Term Loan facilities are secured by first pari passu mortgage charge of all immovable properties of the Company and first pari passu hypothecation charge over all the movable assets of the Company.

ii) The Company has executed an Indenture of Mortgage with Lenders of above term loans (Secured Parties) by creating mortgages on Immovable Properties of the Company by creating a charge by way of registered mortgage. According to the indenture, all the Secured Parties will share pari passu charge with first ranking and priority over the Immovable Properties of the Company, both present and future.

iii) Bank loans availed by the Company are subject to certain covenants relating to Interest Service Coverage Ratio, Current Ratio, Debt Service coverage Ratio, Total Outside Liabilities to Total Net Worth, Fixed Assets Coverage Ratio, Ratio of Total Term Liabilities to Net Worth and Return on Property, Plant and Equipments. The Company has complied with the covenants as per the terms of the loan agreements.

iv) Redeemable Preference Shares NIL (31 March 2024 : 9,50,00,000 ) of Rs 10 each is cumulative and carry coupon/dividend rate of 8.00% p.a. with redeemable tenure of 20 Years from the date of allotment. The Company has the right to exercise the option of early redemption, considering which Company has redeemed H95.00 Crore (31st March 2024 : H55.00 Crore) during the year. Redemption is done at face value. The Company has accrued dividend at the rate of 8% on Redeemable Preference Shares for the year eneded March 31,2025 and March 31,2024.

v) The Company has not defaulted for any repayment of Borrowings and Interest during the year.

The Company has availed Working Capital Facility of H600.00 Crore (31st March 2024: H400.00 Crore) as sanctioned limit from consortium comprising of ICICI Bank Limited H140.00 Crore, Standard Chartered Bank H110.00 Crore, HDFC Bank Ltd. H80.00 Crore, State Bank of India H100.00 Crore, Axis Bank H50.00 Crore and Kotak Mahindra Bank H120.00 Crore.

Rate of interest stipulated by ICICI Bank Limited is 6 Month MCLR Nil spread on the principal amount remains outstanding each day.

Rate of interest stipulated by Standard Chartered Bank is monthly MCLR .

Rate of interest stipulated by HDFC Bank Limited is as per prevailing 6 Month MCLR Nil Spread Rate of interest stipulated by Kotak Mahindra Bank is 6 month MCLR NIL Spread.

Rate of interest stipulated by Axis Bank is 6 month MCLR NIL Spread.

Rate of interest stipulated by State Bank of India is 6 month MCLR NIL Spread.

The Company has executed hypothecation deed on 10th June 2024 creating first pari passu charge on the current asset of the Company in favor the consortium.

The Company has not defaulted for any repayment of Borrowings and Interest during the year.

The Company submits quarterly statements of assets mortgaged and the same are in agreement with the books.

Bank loans availed by the Company are subject to certain covenants relating to Interest Service Coverage Ratio, Current Ratio, Debt Service Coverage Ratio, Total Outside Liabilities to Total Net Worth, Fixed Assets Coverage Ratio, Ratio of Total Term Liabilities to Net Worth and Return on Property, Plant and Equipments. The Company has complied with the covenants as per the terms of the loan agreements.

27.4 Performance Obligation

All sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/ delivery. The Company does not have any remaining performance obligation for sale of goods or services which remains unsatisfied as at March 31, 2025 or March 31, 2024. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognised corresponds directly with the value to the customer of the entity’s performance completed to date

27.5 Information about Major Customers

No single Customer represents 10% or more of the Company’s total Revenue during the year ended 31st March 2025 and 31st March 2024.

37. Gratuity and Other Employment Benefit Plans (a) Retirement Benefits

The Gratuity Plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the respective plans:

(c) Defined Contribution Plans

The Company makes Provident Fund contributions to Defined Contribution Plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of payroll costs to fund the benefits. The Company has recognised Provident Fund contribution of H2.40 Crore (31st March 2024: H2.12 Crore) and contribution to labour welfare of H0.00 Crore (31st March 2024: H0.00 Crore) as expense in Note 31 under the head ‘Contributions to Provident and Other Funds’

38. Transaction with Related Parties (Contd.)

Terms and Conditions of transactions with related parties:

(1) Sales to Related Parties and Concerned balances For terms of transaction

Sales are made to related parties on the same terms as applicable to third parties in an arm’s length transaction and in the ordinary course of business. The Company mutually negotiates and agrees sales price, discount and payment terms with the related parties by benchmarking the same to transactions with non-related parties, who purchase goods and services of the Company in similar quantities. Such sales generally include payment terms requiring related party to make payment within 90 to 180 days from the date of invoice.

For terms of balance

Trade Receivables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other security has been received against these receivables. The amounts are recoverable within 90 to 180 days from the reporting date (31 March 2024: 90 to 180 days from the reporting date). For the year ended 31 March 2025, the Company has not recorded any impairment on receivables due from related parties (31 March 2024: Nil).

(2) Purchases of Goods and Related Balances For terms of transaction

Purchases are made from related parties on the same terms as applicable to third parties in an arm’s length transaction and in the ordinary course of business. The Company mutually negotiates and agrees purchase price and payment terms with the related parties by benchmarking the same to sale transactions with non-related parties entered into by the counter-party and similar purchase transactions entered into by the Company with the other non-related parties. Such purchases generally include payment terms requiring the Company to make payment within 90 to 180 days from the date of invoice.

For terms of balance

Trade payables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other security has been given against these payables. The amounts are payable within 90 to 180 days from the reporting date (31 March 2024: 90 to 180 days from the reporting date).

(3) Services received from Related Parties

During the year 2024-25, the company has obtained renting services of its office premises over which one of the Directors exercises significant influence. The amount billed for this service was INR 1.47 crores (2023-24: 1.48 crores) and it was agreed based on mutual negotiation between parties. The service agreement included payment terms requiring the Company to make upfront payment at the time of receipt of invoice.

(4) Compensation to KMP of the Company

The amounts disclosed in the table are the amounts recognised as an expense during the financial year related to KMP. The amounts do not include expense, if any, recognised toward post-employment benefits and other long-term benefits of key managerial personnel. Such expenses are measured based on an actuarial valuation done for each Company as a whole. Hence, amounts attributable to KMPs are not separately determinable.

(5) The Company’s transactions with Related Parties are at arm’s length. Management believes that the Company’s domestic transactions with related parties post 31st March 2025 continue to be at arm’s length and that the transfer pricing legislation will not have any impact on the Financial Statements particularly on the amount of the tax expense for the year and the amount of the provision for taxation at the period end. Transactions with related parties are disclosed including applicable taxes.

(6) The Company has issued Redeemable Preference Shares of H10 each is cumulative and carry coupon/ dividend rate of 8.00% p.a. with redeemable tenure of 20 Years from the date of allotment. The Company has the right to exercise the option of early redemption, considering which Company has redeemed H95.00 Crore (31st March 2024 : H55.00 Crore) during the year. Redemption is done at face value. The company has

accrued dividend at the rate of 8% on Redeemable Preference Shares for the year ended March 31,2025 and March 31,2024.

39. Segment Reporting

The Company’s Chief Operating Decision Maker (CODM) examines the Company’s performance from business and geographic perspective. In accordance with Ind AS-108 - Operating Segments, evaluation by the CODM and based on the nature of activities performed by the Company, which primarily relate to manufacturing of Chloro Alkali & its Derivatives, the Company does not operate in more than one business segment.

Analysis By Geographical Segment

Segment Revenue is analysed based on the location of Customers regardless of where the goods are produced. The following provides an analysis of the Sales by Geographical Markets.

40. Contingent Liabilities & Commitments

A. Claim against the Company not acknowledged as Debts (excluding Interest and Penalty)

(H in Crores)

Particulars

As at

March 31, 2025

As at

March 31, 2024

Income Tax Liability1

16.63

16.63

Service Tax Liability2

0.25

0.54

Custom Duty Liability3

6.22

6.22

Other Claims4

(In respect of the above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at various Forums / Authorities. The Company has assessed that it is only possible but not probable, the outflow of economic resources will be required)

44.22

2.34

**Service tax demand comprise demand from Service tax Authorities for payment of additional tax of H0.25 Crore (31 March 2024: H0.54 Crore), upon completion of their tax review for the financial year 2012-13 and 2014-15. The tax demands are on account of service tax on sales commission. The matter is pending before Commissioner of Excise Service Tax Appellate Tribunal (CESTAT).

***Customs duty demand comprise demand from Custom Authorities for payment of additional duty of H6.22. Crore (31 March 2024: H6.22. Crore), upon completion of their tax review for the financial year 2012-13. The tax demands are on account of classification of coal. The matter is pending before Commissioner of Excise Service Tax Appellate Tribunal (CESTAT).

****Other claims / litigations comprise demand on account of litigations for alleged non-fulfilment of obligations as per the terms of agreement by the counter party to H44.22 Crore (31 March 2024: H2.34 Crore). The matters are pending at various stages in judicial authorities.

The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be in favour of Company in the appellate process and no tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company’s financial position and results of operations.

B. Capital Commitment

The Estimated amount of Contract to be executed on Capital Account of H186.87 Crore (31st March 2024 H28.78 Crore) and not provided for (Net of Advances).

C. Other Commitment

The Company has imported capital good for the various expansion projects under the EPCG Scheme at Nil rate of custom duty by undertaking obligation to export. Future outstanding export obligation under the scheme is H25.02 Crore (31st March 2024: H1.68 Crore).

The export obligation need to be completed by September 2030.

41 Disclosures as Per MSMED Act, 2006

The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26th August, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its Customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the MSMED Act’).

Accordingly, the disclosure in respect of the amounts payable to such Enterprises as at 31st March, 2025 has been made in the Financial Statements based on information received and available with the Company. The Company has not received any claim for interest from any Supplier as at the Balance-Sheet date.

Above information has been determined to the extent such parties have been identified on the basis intimation received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006.

42.Leases

The Company has lease contracts for office premise and storage facilities. Leases are having lease terms of 2 to 3 years. The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. The Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain premises in good state. The lease contract include extension and termination options. The Company also has certain premises and assets with lease terms of 12 months or less. The Company applies the ‘short-term lease’ recognition exemptions for these leases.

43. Capital Management

For the purpose of the Company’s capital management, capital includes issued Equity Capital, Securities 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 includes within Net debt, Interest Bearing Borrowings, Lease liabilities, less Cash and Cash Equivalents. There were no changes in the objectives, policies or processes during the year ended March 31, 2025 and March 31, 2024.

44. Financial Instruments - Fair Values and Risk Management

The Material Accounting Policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of Financial Asset, Financial Liability and Equity Instrument are disclosed in Note 2 to the Financial Statements.

B. Measurement of Fair values and Sensitivity analysis Fair Value Hierarchy:

The fair value of the Financial Assets and Liabilities is included 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. The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:

(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.

(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Asset or Liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

(iii) Level 3: inputs for the Asset or Liability that are not based on observable market data (unobservable inputs).

In determining fair value measurement, the impact of potential climate related matters which may affect this fair value measurement of assets and liabilities in the financial statements have been considered.

Financial Instrument measured at Amortised Cost

The carrying amount of Financial Assets and Financial Liabilities measured at amortised cost in the Financial Statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Reconciliation of level 1 Fair Values

There have been no transfers between level 1, level 2 and level 3 during the year ended March 31, 2025 and March 31, 2024.

Description of significant unobservable inputs to valuation:

The significant unobservable inputs used in the fair value measurement categorised within Level 2 of the fair value hierarchy is based on the Fair value as ascertained and provided by the banks.

Financial Risk Management Framework

The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company manages market risk through treasury operations, which evaluates and exercises independent control over the entire process of market risk management. The finance team recommends risk management objectives and policies. The activities of this operations include management of cash resources, hedging of foreign currency exposure, credit control and ensuring compliance with market risk limits and policies.

The Company’s principal Financial Liabilities, other than Derivatives, comprises of Long Term and Short Term Borrowings, Trade and Other Payables, and Financial Liabilities. 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, Cash and Cash Equivalents, other Bank Balances and Other Financial Assets that derive directly from its Operations.

The Company has an effective risk management framework to monitor the risks controls in key business processes. In order to minimise any adverse effects on the bottom line, the Company takes various mitigation measures such as credit control, foreign exchange forward contracts to hedge foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company has exposure to the following risks arising from Financial Instruments

Ý Credit Risk ;

Ý Liquidity Risk ; and

Ý Market Risk

i. Credit Risk

Credit Risk is the risk that counter party will not meet its obligation leading to a financial loss. The Company is exposed to credit risk arising from its operating activities primarily from Trade Receivables and from financing activities primarily relating to parking of surplus funds as Deposits with Banks. The Company considers probability of default upon initial recognition of Assets and whether there has been a significant increase in credit risk on an ongoing basis throughout the reporting period.

The carrying amount of following Financial Assets represents the maximum credit exposure:

Financial Instruments and Cash Deposit:

Credit Risk from Balances with Banks and Financial Institutions is managed by the Company’s Treasury Department. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

Trade Receivables

Trade Receivables consist of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined. The exposure in credit risk arising out of major customers is generally backed either by bank guarantee, letter of credit or security deposits. The Company’s exposure and wherever appropriate the credit ratings of its counterparties are continuously monitored and spread amongst various counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management of the Company.

The Company does not have higher concentration of credit risks. Total Trade Receivable as on March 31, 2025 is H232.32 Crore (March 31, 2024 - H178.75 Crore).

Refer Note 10 for ageing of trade receivables.

The Company measures the expected credit loss of Trade Receivables and Loan from individual Customers based on historical trend, industry practices and the business environment in which the Entity operates.Loss rates are based on actual credit loss experience and past trends.

Expected credit loss assessment

For Trade Receivables, as a practical expedient, the Company compute credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated. Accordingly, loss allowances on trade receivables are measured using provision matrix at an amount equal to life time expected losses i.e. expected cash shortfall. There is no history of bad debts and accordingly ECL is Nil for year ended March 31, 2025 and March 31,2024.

Credit Impaired

For expected credit loss as at each reporting date the Company assesses position for the assets for which credit risk has not significantly increased from initial recognition, assets for which credit risk has increased significantly but are not credit impaired and for assets for which credit risk has increased significantly and are credit impaired. The Company assesses detrimental impacts on the estimated future cash flows of the financial asset including loans, receivables and other assets. Based on the assessment of the observable data relating to significant financial difficulty and creditworthiness of the counterparties, the management believes that there are no financial assets which are credit impaired except as disclosed in the notes to the financial statements.

ii. Liquidity Risk

Liquidity Risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Exposure to Liquidity Risk

The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and Actual Cash flows and matching the maturity profiles of the Financial Assets and Liabilities. The table below summarises the remaining contractual maturities of Financial Liabilities at the reporting

The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments. The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that have simultaneous gross cash settlement.

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 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 Company to manage risk concentrations at both the relationship and industry levels

iii. 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: Currency Risk, Interest Rate Risk, and Other Price Risk such as Equity Price Risk. Financial Instruments affected by market risk include Loans and Borrowings, Deposits, FVTOCI and Amortised Cost Investments and Derivative Financial Instruments.

Foreign Currency Risk

Foreign Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12-month period for hedges of actual sales and purchases and 12-month period for foreign currency loans. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Exposure to Currency Risk

The Currency profile of Financial Assets and Financial Liabilities as at 31st March, 2025 and 31st March , 2024 are as below:

The Company’s exposure to Foreign Currency Risk at the end of the reporting period expressed in H, are as follows

The Company has entered into a cross currency swap (“CCS") transaction for Rupee Term loan of H256.27 Crore swapped with notional principal of EUR 2.83 Crore (refer note 18)

Sensitivity Analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against Foreign Currency at March 31 would have affected the measurement of financial instruments denominated in foreign currency and affected Equity and Profit or Loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

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 balanced portfolio of fixed and variable rate Loans and Borrowings.

Exposure to Interest Rate Risk

The Company’s Interest Rate Risk arises from Borrowings obligations. Borrowings is exposed to fair value interest rate risk. The interest rate profile of the Company’s interest-bearing Financial Instruments as reported to the management of the Company is as follows.

Cash Flow Sensitivity Analysis for Variable-Rate Instruments

A reasonably possible change of 100 basis points in Interest Rates at the reporting date would have increased (decreased) Equity and Profit or Loss by the amounts shown below. This analysis assumes that all other variables, in particular Foreign Currency Exchange Rates, remain constant.

46. Events occurred after the Balance Sheet date

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to approval of Financial Statement to determine the necessity for recognition and/or reporting of any of these events and transactions in the Financial Statements. As of 05th May 2025 there were no material subsequent events to be recognized or reported that are not already disclosed.

47. Other Statutory Information for the year ended March 31,2025 and March 31,2024

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company do not have any transactions or balance with companies struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

(iv) The Company has not traded or invested in Crypto currency or Virtual currency during the financial year and in previous financial year.

(v) The Company have 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.

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company does not have transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(viii) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.

48. The Company uses an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting software, except that audit trail feature is not enabled for certain changes made using privileged access rights to the SAP application and the underlying HANA database. Further, no instance of audit trail feature being tampered with was noted in respect of the accounting software. Additionally, the audit trail of prior year(s) has been preserved by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded in the respective years.

1

Income tax demand comprise demand from the Indian Income Tax authorities for payment of additional tax of

2

H16.63 Crore (31 March 2024: H16.63 Crore). The tax demands are mainly on account of adjustment pertaining to

3

80 IA benefits claimed for captive power plant against sale of steam and power. During FY 2024-25, the Holding

4

Company has received a favourable Order amounting to H11.08 Crore from ITAT for AY 2016-17 and AY 2017-18, however the department has further filed an appeal in High Court against the ITAT Order. Further, the Holding Company also received favourable order pertaining to AY 2011-12 from CIT(Appeal).

 
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