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అకౌంట్స్ గమనికలుMidwest Ltd.
(d) Provision, contingent liabilities and
contingent assets
A provision is recognized if, as a result of
a past event, the Company has a present
legal or constructive obligation that can
be estimated reliably, and it is probable
that an outflow of economic benefits
will be required to settle the obligation.
Provisions are determined by discounting
the expected future cash flows (representing
the best estimate of the expenditure
required to settle the present obligation
at the balance sheet date) at a pre-tax rate
that reflects current market assessments
of the time value of money and the risks
specific to the liability. The unwinding of
the discount is recognized under finance
costs. Expected future operating losses
are not provided for. Provision in respect
of loss contingencies relating to claims,
litigations, assessments, fines and penalties
are recognized when it is probable that a
liability has been incurred and the amount
can be estimated reliably.
Contingent liabilities and contingent assets:
A contingent liability exists when there
is a possible but not probable obligation,
or a present obligation that may, but
probably will not, require an outflow of
resources, or a present obligation whose
amount cannot be estimated reliably.
Contingent liabilities do not warrant
provisions, but are disclosed unless the
possibility of outflow of resources is remote.
Contingent assets has to be recognized in
the standalone financial statements in the
period in which if it is virtually certain that
an inflow of economic benefits will arise.
Basic Earnings Per Share (''EPS'') is
computed by dividing the net profit
attributable to the equity shareholders by
the weighted average number of equity
shares outstanding during the period.
Diluted earnings per share is computed
by dividing the net profit by the weighted
average number of equity shares
considered for deriving basic earnings
per share and also the weighted average
number of equity shares that could have
been issued upon conversion of all dilutive
potential equity shares. Dilutive potential
equity shares are deemed converted as of
the beginning of the year, unless issued at
a later date. In computing diluted earnings
per share, only potential equity shares
that are dilutive and that either reduces
earnings per share or increases loss per
share are included. The number of shares
and potentially dilutive equity shares are
adjusted retrospectively for all periods
presented for the share splits.
(f) Property, plant and equipment
i) Recognition and measurement
Property, Plant and Equipment
(âPPEâ) are stated at historical cost
less accumulated depreciation and
accumulated impairment loss, if any.
Cost of an item of property, plant and
equipment comprises its purchase
price, including import duties and
non refundable purchase taxes,
after deducting trade discounts and
rebates, any directly attributable cost
of bringing the item to its working
condition for its intended use and
estimated costs of dismantling and
removing the item and restoring the
site on which it is located. If significant
parts of an item of property, plant and
equipment have different useful lives,
then they are accounted for as separate
items (major components) of property,
plant and equipment.
Subsequent costs are included in the
assetâs carrying amount or recognized
as a separate asset, as appropriate,
only when it is probable that future
economic benefits associated with
the item will flow to the Company and
the cost of the item can be measured
reliably. The carrying amount of any
component accounted for as a separate
asset is derecognized when replaced.
All other repairs and maintenance are
charged to statement of profit or loss
during the reporting period in which
they are incurred. If an item of property,
plant and equipment is purchased with
deferred credit period from supplier,
such asset is recorded at its cash price
equivalent value.
ii) Depreciation
Depreciation is provided using the
Straight-line Method over the useful
lives of the assets as estimated by
the Management. Depreciation on
additions and deletions are restricted
to the period of use. Depreciation is
charged to statement of profit and loss.
Depreciation is calculated over the
depreciable amount, which is the cost
of an asset, or other amount substituted
for cost, less its residual value.
The Company, based on technical
assessment and management
estimate, depreciates property, plant
and equipment over estimated useful
life prescribed in Schedule II to the Act.
The Management believes that these
estimated useful lives are realistic and
reflect fair approximation of the period
over which the assets are likely to be
used. The Company has estimated
the following useful lives to provide
depreciation on its property, plant and
equipment:
An assetâs carrying amount is written
down immediately to its recoverable
amount if the assetâs carrying
amount is greater than its estimated
recoverable amount. Gains or losses
arising from disposal of property, plant
and equipment which are carried at
cost are recognized in the statement
of profit and loss.
Depreciation method, useful lives
and residual values are reviewed at
each reporting date and adjusted if
appropriate.
iii) Expenditure during development period:
Capital work-in-progress (CWIP)
includes cost of PPE under
installation/ under development, net
of accumulated impairment loss, if
any, as at the balance sheet date.
Expenditure during construction/
development period is included under
Capital Work-in-Progress, and the same
is allocated to the respective PPE on
the completion of their construction/
development.
Depreciation is not recorded on capital
work-in-progress until development
and installation is complete and the
asset is ready for its intended use.
Advances given towards acquisition
or construction of PPE outstanding
at each reporting date are disclosed
as Capital advances under "Other
non-current Assets.
The Company assesses at contract
inception whether a contract is, or contains,
a lease. That is, if the contract conveys the
right to control the use of an identified
asset for a period of time in exchange for
consideration.
The Company recognises right-of-use
assets and lease liabilities for all leases
except for short-term leases and leases of
low-value assets.
The Company applies the available practical
expedients wherein it:
(a) Used a single discount rate to a
portfolio of leases with reasonably
similar characteristics
(b) Relies on its assessment of whether
leases are onerous immediately before
the date of initial application
(c) Applies the short-term leases
exemptions to leases with lease term
that ends within 12 months at the date
of initial application
(d) Includes the initial direct costs from the
measurement of the right-of-use asset
at the date of initial application
(e) Uses hindsight in determining the
lease term where the contract contains
options to extend or terminate the lease
The company recognises right-of-use
assets at the commencement date of the
lease (i.e., the date the underlying asset is
available for use.
The cost of right-of-use assets includes the
amount of lease liabilities recognised, initial
direct costs incurred, and lease payments
made at or before the commencement
date less any lease incentives received.
They are subsequently measured at cost less
accumulated depreciation and impairment
losses. ROU assets are depreciated from the
commencement date on a straight-line
basis over the shorter of the lease term and
useful life of the underlying asset. The lease
liability is initially measured at amortised
cost at the present value of the future
lease payments. The lease payments are
discounted using the interest rate implicit
in the lease or, if not readily determinable,
using the incremental borrowing rates.
Lease liability and ROU assets have been
separately presented in the Balance Sheet
and lease payments have been classified as
financing cash flows.
The right-of-use assets are also subject to
impairment. Refer note âmâ for impairment
of non-financial assets.
The Company recognise the lease liability
at the present value of the lease payments
discounted at the incremental borrowing
rate at the date of initial application.
The lease payments include fixed payments
(including in substance fixed payments)
less any lease incentives receivable, variable
lease payments that depend on an index
or a rate, and amounts expected to be paid
under residual value guarantees. The lease
payments also include the exercise price of
a purchase option reasonably certain to be
exercised by the Company and payments
of penalties for terminating the lease, if the
lease term reflects the Company exercising
the option to terminate. Variable lease
payments that do not depend on an index
or a rate are recognised as expenses (unless
they are incurred to produce inventories) in
the period in which the event or condition
that triggers the payment occurs For a lease
modification that is not a separate lease, at
the effective date of the modification, the
lessee accounts for the lease modification
by remeasuring the lease liability using
a discount rate determined at that date
and the lessee makes a corresponding
adjustment to the right-of-use asset.
Low value Asset covers all leases which are
short term in nature.
Subsequent measurement of lease liability
The lease liability is remeasured when
there is change in future lease payments
arising from a change in an index or a
rate, or a change in the estimate of the
guaranteed residual value, or a change in
the assessment of purchase, extension or
termination option. When the lease liability
is measured, the corresponding adjustment
is reflected in the right-of-use asset.
Intangible assets acquired separately are
measured on initial recognition at cost.
Following initial recognition, intangible
assets are carried at cost less any accumulated
amortization and accumulated impairment
losses. Intangible assets are amortized
over the useful economic life assessed
which ranges from 3-6 years and tested
for impairment whenever there is an
indication that the intangible asset may
be impaired. The amortization period and
the amortization method for an intangible
asset are reviewed at the end of each
reporting period. Changes in the expected
useful life or the expected pattern of
consumption of future economic benefits
embodied in the asset are considered to
modify the amortization period or method,
as appropriate, and are treated as changes
in accounting estimates. The amortization
expense on intangible assets recognized in
the statement of profit and loss unless such
expenditure forms part of carrying value of
another asset.
(i) Intangible assets under development
The company capitalises intangible
asset under development for a project
in accordance with the accounting
policy. Initial capitalisation of costs is
based on managementâs judgement
that technological and economic
feasibility is confirmed, usually when
a product development project has
reached a defined milestone according
to an established project management
model. In determining the amounts
to be capitalised, management makes
assumptions regarding the expected future
cash generation of the project, discount
rates to be applied and the expected period
of benefits.
(j) Investment in subsidiaries and Joint venture
Investments in subsidiaries and joint
ventures are initially accounted for at
cost of acquisition less impairment, if any.
Dividend Income from subsidiaries and
joint venture are recognized when its right
to receive the dividend is established.
A financial instrument is any contract that
gives rise to a financial asset of one entity
and financial liability or equity instrument
of another entity.
i) Initial Recognition and measurement
Financial assets and financial
liabilities are initially recognized
when the Company becomes a
party to the contractual provisions of
the instrument. A financial asset or
financial liability is initially measured
at fair value plus, for an item not at fair
value through profit and loss (FVTPL),
transaction costs that are directly
attributable to its acquisition or issue.
ii) Classification and subsequent
measurementFinancial assets
All financial assets except Trade
receivables are initially measured at
fair value plus, for an item not at fair
value through profit and loss (FVTPL),
transaction costs that are directly
attributable to its acquisition or issue.
For the purpose of subsequent
measurement, financial assets are
categorised as under:
- Amortised cost;
- Fair Value through Other
Comprehensive Income (FVOCI); or
- Fair Value through Profit or
Loss (FVTPL)
Financial assets are not reclassified
subsequent to their initial recognition,
except if and in the period the
Company changes its business model
for managing financial assets.
A financial asset is measured at
amortised cost if it meets both of
the following conditions and is not
designated as at FVTPL:
- the asset is held within a business
model whose objective is to hold
assets to collect contractual cash
flows; and
- the contractual terms of the
financial asset give rise on
specified dates to cash flows that
are solely payments of principal
and interest on the principal
amount outstanding.
On initial recognition of an equity
investment that is not held for trading,
the Company may irrevocably elect
to present subsequent changes
in the investmentâs fair value in
OCI (designated as FVOCI - equity
investment). This election is made on
an investment-by-investment basis.
All financial assets not classified
as measured at amortised cost
or FVOCI as described above are
measured at FVTPL. This includes
all derivative financial assets.
On initial recognition, the Company
may irrevocably designate a financial
asset that otherwise meets the
requirements to be measured at
amortised cost or at FVOCI as at FVTPL
if doing so eliminates or significantly
reduces an accounting mismatch that
would otherwise arise.
Financial assets at amortised cost: These
assets are subsequently measured
at amortised cost using the effective
interest method. The amortised cost
is reduced by impairment losses.
Interest income, foreign exchange
gains and losses and impairment are
recognized in profit or loss. Any gain or
loss on derecognition is recognized in
profit or loss.
Equity investments at FVOCI: These
assets are subsequently measured at
fair value. Dividends are recognized
as income in profit or loss unless
the dividend clearly represents a
recovery of part of the cost of the
investment. Other net gains and losses
are recognized in OCI and are not
reclassified to profit or loss.
Financial assets at FVTPL: These assets
are subsequently measured at fair
value. Net gains and losses, including
any interest or dividend income, are
recognized in profit or loss.
Impairment of financial assets
In accordance with Ind AS 109,
Financial Instruments, the Company
applies expected credit loss (ECL) model
for measurement and recognition of
impairment loss on financial assets
that are measured at amortized cost
and FVOCI.
For recognition of impairment loss
on financial assets and risk exposure,
the Company determines that
whether there has been a significant
increase in the credit risk since initial
recognition. If credit risk has not
increased significantly, 12-month ECL
is used to provide for impairment loss.
However, if credit risk has increased
significantly, lifetime ECL is used. If in
subsequent years, credit quality of the
instrument improves such that there
is no longer a significant increase in
credit risk since initial recognition,
then the entity reverts to recognizing
impairment loss allowance based on
twelve (12) month ECL.
Life time ECLs are the expected credit
losses resulting from all possible
default events over the expected life of
a financial instrument, The twelve (12)
month ECL is a portion of the lifetime
ECL which results from default events
that are possible within twelve (12)
months after the year end.
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 shortfalls), discounted at the
original EIR. When estimating the
cash flows, an entity is required to
consider all contractual terms of
the financial instrument (including
prepayment, extension etc.) over
the expected life of the financial
instrument. However, in rare cases
when the expected life of the financial
instrument cannot be estimated
reliably, then the entity is required to
use the remaining contractual term of
the financial instrument.
In general, it is presumed that credit
risk has significantly increased if the
payment is over due.
ECL impairment loss allowance (or
reversal) recognized during the year is
recognized as income/expense in the
statement of profit and loss. In balance
sheet ECL for financial assets measured
at amortized cost is presented as an
allowance, i.e, as an integral part of the
measurement of those assets in the
balance sheet, The allowance reduces
the net carrying amount. Until the asset
meets write off criteria, the Company
does not reduce impairment allowance
from the gross carrying amount.
Financial liabilities are classified
as measured at amortised cost or
FVTPL. A financial liability is classified
as at FVTPL if it is classified as
held-for-trading, or it is a derivative
or it is designated as such on initial
recognition. Financial liabilities at
FVTPL are measured at fair value and net
gains and losses, including any interest
expense, are recognized in statement
of profit or loss. Other financial
liabilities are subsequently measured
at amortised cost using the effective
interest method. Interest expense
and foreign exchange gains and
losses are recognized in statement of
profit or loss.
iii) Derecognition
Financial assets
A Financial asset is primarily
derecognized when the right to
receive the contractual cash flows in a
transaction in which substantially all of
the risks and rewards of ownership of
the financial asset are transferred or in
which the Company neither transfers
nor retains substantially all of the risks
and rewards of ownership and does
not retain control of the financial
asset. If the Company enters into
transactions whereby it transfers assets
recognized on its balance sheet, but
retains either all or substantially all of
the risks and rewards of the transferred
assets, the transferred assets are not
derecognized.
The Company derecognizes a financial
liability when its contractual obligations
are discharged or cancelled, or expired.
The Company also derecognizes a
financial liability when its terms are
modified and the cash flows under
the modified terms are substantially
different. In this case, a new financial
liability based on the modified terms is
recognized at fair value. The difference
between the carrying amount of the
financial liability extinguished and the
new financial liability with modified
terms is recognized in profit or loss.
Financial assets and financial liabilities
are offset and the net amount reported
in the balance sheet if there is a
currently and legally enforceable right
to set off the amounts and it intends
either to settle them on a net basis or to
realize the asset and settle the liability
simultaneously.
Inventories are stated at the lower of cost
and net realizable value. Cost of inventories
comprises all cost of purchase, cost of
conversion and other costs incurred in
bringing the inventories to their present
location and condition. Net realizable value
is the estimated selling price in the ordinary
course of business, less the estimated costs
of completion and costs to be incurred
in marketing, selling and distribution.
Costs incurred in bringing each product
to Its present location and condition are
accounted for as follows.
Cost includes purchase price, (excluding
those subsequently recoverable by
the Company from the concerned
revenue authorities), freight inwards
and other expenditure incurred in
bringing such inventories to their
present location and condition. Cost is
determined on weighted average basis.
Raw Materials are valued at lower of
cost and net realisable value (NRV).
However, these items are considered
to be realisable at cost, if the finished
products, in which they will be used,
are expected to be sold at or above
cost. These items are considered to
be realizable at replacement cost
if the finished goods, in which they
will be used, are expected to be sold
below cost.
(ii) Finished goods and work in
progress (WIP):
Cost includes cost of direct materials
and labour and a proportion of
manufacturing overheads but excludes
borrowing costs.
It is valued at lower of cost and NRV.
Cost of finished goods and WIP
includes cost of raw materials, cost of
conversion and other costs incurred
in bringing the inventories to their
present location and condition. Cost of
inventories is computed on weighted
average basis.
(iii) Provision for inventory
Provision of obsolescence on
inventories is considered basis the
managementâs estimate, based on
demand and market of the inventories.
(m) Impairment of non-financial assets
The Company''s non-financial assets, other
than inventories and deferred tax assets,
are reviewed at each reporting date to
determine whether there is any indication
of impairment. If any such indication exists,
then the asset''s recoverable amount is
estimated.
In respect of assets for which impairment
loss has been recognised in prior periods,
the Company reviews at each reporting
date whether there is any indication that
the loss has decreased or no longer exists.
An impairment loss is reversed if there
has been a change in the estimates used
to determine the recoverable amount.
Such a reversal is made only to the extent
that the asset''s carrying amount does not
exceed the carrying amount that would
have been determined, net of depreciation
or amortisation, if no impairment loss has
been recognised.
(a) Short-term employee benefits
A liability is recognised for benefits
accruing to employees in respect
of wages and salaries, including
non-monetary benefits that are
expected to be settled wholly within
12 months after the end of the period
in which the employees render the
related service are recognised in
respect of employees'' services up to
the end of the reporting period and
are measured on an undiscounted
basis at the amounts expected to be
paid when the liabilities are settled.
The liabilities are presented as current
employee benefit obligations in the
balance sheet.
(b) Other long-term employee benefit
obligations
Liabilities recognised in respect of
other long-term employee benefits
are measured at the present value of
the estimated future cash outflows
expected to be made by the Company
in respect of services provided by
employees up to the reporting date.
(i) Defined contribution plans
A defined contribution plan
is a post-employment benefit
plan under which an entity
pays fixed contributions into a
separate entity and will have no
legal or constructive obligation
to pay further amounts.
The Company makes specified
monthly contributions towards
Government administered
provident fund scheme and other
funds. Obligations for contributions
to defined contribution plans are
recognised as an employee benefit
expense in statement of profit and
loss in the periods during which
the related services are rendered
by employees.
A defined benefit plan is a
post-employment benefit plan
other than a defined contribution
plan. The liability or asset
recognised in the balance sheet
in respect of defined benefit plans
is the present value of the defined
benefit obligation at the end of the
reporting period less the fair value
of plan assets.
The present value of the defined
benefit obligation is determined
by discounting the estimated
future cash outflows by reference
to market yields at the end of the
reporting period on government
bonds that have terms
approximating to the terms of the
related obligation.
Remeasurement gains and
losses arising from experience
adjustments and changes
in actuarial assumptions are
recognised in the period in which
they occur, directly in other
comprehensive income. They are
included in retained earnings in
the statement of changes in equity
and in the balance sheet.
A liability for a termination benefit
is recognised at the earlier of when
the entity can no longer withdraw
the offer of the termination benefit
and when the entity recognises
any related restructuring costs.
Changes in the present value of
the defined benefit obligation
resulting from plan amendments
or curtailments are recognised
immediately in profit or loss as
past service cost.
(iii) Compensated Absences:
Compensated Absences:
Accumulated compensated
absences, which are expected
to be availed or encashed within
12 months from the end of the
year are treated as short term
employee benefits. The obligation
towards the same is measured at
the expected cost of accumulating
compensated absences as the
additional amount expected to
be paid as a result of the unused
entitlement as at the year end.
Cash flows are reported using the indirect
method, whereby net profit/ (loss) before
tax is adjusted for the effects of transactions
of a non-cash nature and any deferrals or
accruals of past or future cash receipts or
payments and item of income or expenses
associated with investing or financing cash
flows. The cash flows from regular revenue
generating (operating activities), investing
and financing activities of the Company are
segregated.
Cash and cash equivalents in the Balance
Sheet comprise cash at bank and in hand
and short-term deposits with banks that
are readily convertible into cash which
are subject to insignificant risk of changes
in value and are held for the purpose of
meeting short-term cash commitments.
(q) Foreign currency transactions
and balances
In preparing the Standalone Financial
Statements of the Company, transactions
in currencies other than the Companyâs
functional currency (i.e. foreign currencies)
are recognised at the rates of exchange
prevailing at the dates of the transactions.
At the end of each reporting period,
monetary items denominated in foreign
currencies are translated at the rates
prevailing at that date.
Monetary assets and liabilities denominated
in foreign currencies are translated at INR
spot rates of exchange at the reporting
date. Exchange differences arising on
settlement or translation of monetary
items are recognised in the statement of
profit and loss.
Net loss relating to translation or settlement
of borrowings denominated in foreign
currency are reported within finance costs.
Non-monetary items that are measured in
terms of historical cost in a foreign currency
are translated using the exchange rates
at the dates of the initial transactions.
Non-monetary items measured at fair value
in a foreign currency are translated using
the exchange rates at the date when the
fair value is determined. The gain or loss
arising on translation of non-monetary
items measured at fair value is treated in
line with the recognition of the gain or loss
on the change in fair value of the item (i.e.,
translation differences on items whose fair
value gain or loss is recognised in OCI or
profit or loss are also recognised in OCI or
profit or loss, respectively).
In determining the spot exchange rate
to use on initial recognition of the related
asset, expense or income (or part of it) on the
derecognition of a non-monetary asset or
non-monetary liability relating to advance
consideration, the date of the transaction
is the date on which the Company initially
recognises the nonmonetary asset or
non-monetary liability arising from the
advance consideration. If there are multiple
payments or receipts in advance, the
Company determines the transaction date
for each payment or receipt of advance
consideration.
Non-current assets or disposal assets are
classified as held for sale if its carrying
amount will be recovered principally
through a sale transaction rather than
through continuing use. Assets classified
as held for sale are measured at the lower
of their carrying value and fair value less
costs to sell.
(s) Recent accounting pronouncements
The Ministry of corporate Affairs ("MCA")
notified amendments on 7 May 2025 and
13 August 2025 under the Companies
(Indian Accounting Standards) Amendment
Rules, 2025 and the Companies
(Indian Accounting Standards) Second
Amendment Rules, 2025, respectively,
which is effective from annual reporting
periods beginning on or after 1 April 2025.
(A) Amendment to Ind AS 7 and Ind AS
107 - Supplier Finance Arrangement:
The amendments to Ind AS 7
''Statement of Cash Flows'' and Ind
AS 107 ''Financial Instruments:
Disclosures'' clarify the characteristics
of supplier finance arrangements
and require additional disclosures for
such arrangements. The disclosure
requirements in the amendments
are intended to assist users of
financial statements in understanding
the effects of supplier finance
arrangements on an entityâs liabilities,
cash flows and exposure to liquidity risk.
The Company does not have any
supplier finance arrangements during
the reporting period.
(B) Amendment to Ind AS 1 -Classification of liabilities as current
or non-current and non-current
liabilities with covenants:
The amendment specifies the
requirements for classifying liabilities
as current or non-current in the balance
sheet, and clarifies the following:
a) An entity''s right to defer settlement
of a liability for at least twelve
months after the reporting period
must have substance and must
exist at the end of the reporting
period. The classification of a
liability as current or non-current
is unaffected by the likelihood that
the entity will exercise its right to
defer settlement.
b) If an entity''s right to defer
settlement of a liability is subject to
covenants, such covenants affect
whether that right exists at the
end of the reporting period only
if the entity is required to comply
with the covenant on or before the
end of the reporting period.
c) In case of a liability that can
be settled, at the option of the
counterparty, by the transfer of the
entity''s own equity instruments,
such settlement terms do not
affect the classification of the
liability as current or non-current
only if the option is classified as an
equity instrument.
These amendments have no effect on
the measurement of any items in the
standalone financial statements of the
company. The company did not make
retrospective adjustments as a result of
adopting the amendments to Ind AS 1.
(C) Amendment to Ind AS 12 - Pillar-Two
Tax Reforms
The Company is not within the scope
of the OECD Pillar Two Model Rules, as
Pillar Two legislation has not yet been
enacted in any of the jurisdiction in
which the Company operates.
(D) Amendment to Ind AS 21-Lack of
exchangeability
The Amendments introduces
requirement to assess when a currency
is exchangeable into another currency
and when it is not. The amendment
requires an entity to estimate the spot
exchange rate when it concludes that
a currency is not exchangeable into
another currency. These amendments
had no effect on the standalone
financial statements of the Company.
The below amendments are notified
but not yet effective
Amendment to Ind AS 1 âPresentation
of Financial Statementsâ- Classification
of Liabilities as current or non-current
and non-current liabilities with
covenants:
The amendment includes specific
provisions that will take effect for
reporting periods beginning on or
after 1 April 2026, retrospectively, as
outlined below:
(a) Breach of material covenant for
long-term loan arrangement on
or before end of reporting period
with effect that liability becomes
payable on demand as on reporting
date, then it shall be classified as
current liability, if lender agreed
after reporting period and before
approval of financial statements
to not demand payment as a
consequence of breach.
(b) Classify as non-current liability, if
lender agreed by end of reporting
period to provide grace period
ending at least 12 months after
reporting period within which
entity can rectify the breach
provided lender does not demand
immediate repayment.
(c) Disclose information about the
timing of settlement to understand
the impact of the liability on the
financial statements.
The Company does not expect this
amendment to have an impact on
its operations or standalone financial
statements.
(a) During the financial year 2024-25, sub-division of authorised share capital consist of 1,257,000
equity shares of the company having face value of H100 each into 25,140,000 equity shares
having face value of H5 each with effect from June 11, 2024 with out altering the aggregate
amount of the same.
(b) During the financial year 2024-25, the authorised share capital of company (post split) is
increased from 25,140,000 equity shares having face value of H5 each to 50,000,000 equity
shares having face value of H5 each with effect from July 09, 2024.
(a) Pursuant to resolutions passed by Board at their meeting held on May 15, 2024 and the
Shareholders at their EGM held on June 11, 2024, the Company has sub-divided 966,069
equity shares of face value of H100 each to 19,321,380 Equity Shares of face value of H5 each.
(b) Pursuant to resolutions passed by Board at their meeting held on July 5, 2024 and the
Shareholders at their EGM held on July 9, 2024, the Company has approved the issuance of
14,491,035 Equity Shares of face value of H5 each as a part of bonus issue to the existing
equity shareholders, whose name appears in the list of beneficial owners on the record date
i.e., July 9, 2024 in the ratio of 3 equity shares for 4 equity shares held, which were allotted on
July 15, 2024.
iii) Rights, preferences and restrictions attached to equity shares of ^ 5 each, fully paid up:
The Company had only one class of equity shares having par value of H5 per share. Each holder
of equity shares is entitled to one vote per share. The Company declares and pays dividends in
Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting except in case of interim dividend, if any.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the shareholders.
As per records of the Company, including its register of shareholders/ members and other declarations
received from shareholders regarding beneficial interest, the above shareholding represents both
legal and beneficial ownerships of shares.
vi) Aggregate number of shares issued for consideration other than cash, bonus shares allotted and
shares bought back during the period of five years immediately preceding the reporting date
(a) During the year ended March 31, 2024, Pursuant to resolutions passed by Board at their
meeting held on October 03, 2023 and the Shareholders at their EGM held on October 03,
2023, the Company has approved the issuance of 891,756 Equity Shares of face value of H100
each as a part of bonus issue to the existing equity shareholders, whose name appears in the
list of beneficial owners on the record date i.e., October 03, 2023 in the ratio of 12 equity shares
for 1 equity shares held, which were allotted on October 03, 2023.
(b) During the year ended March 31, 2021, the Company concluded the buyback of 17,030 equity
shares of H100 each as approved by the Board of Directors on September 14, 2020. This has
resulted in a total cash outflow of H94.42 Mn (including tax on buyback of H17.78 Mn). In line
with the requirement of the Companies Act, 2013, total amount has been utilised from general
reserve respectively. Further, capital redemption reserve of H0.18 Mn (representing the nominal
value of the shares bought back) has been created as an apportionment from retained earnings.
(c) No class of share has been issued for consideration other than cash.
(a) Details of terms and security in respect of the current borrowings.
From HDFC Bank Limited
Primary security:
First Paripassu Charge in favour of the Bank by way of Hypothecation of the company''s entire current
assets present and future, First Paripassu charge on unencumbered fixed assets of the company
present and future with Kotak Mahindra Bank.
First Paripassu Charge - Equitable Mortgage of properties mentioned in the property collateral
template with Kotak Mahindra Bank for working capital limits.
Second Paripassu Charge - Equitable Mortgage of properties mentioned in the property collateral
template with Kotak Mahindra Bank for GECL limits.
For WCTL GECL 2: Second charge on company''s entire current assets present and future, second
charge on unencumbered fixed assets of the company present and future with Kotak Mahindra
Bank. Exclusive charge on Cash Margin (10%) in the form of FDR with Lien of HDFC Bank Ltd.
marked on it for the Bank Guarantees/ Letter of credit.
Security deposit - Margin money deposit with principals.
First Pari passu charge - Equitable mortgage of the Property located at Plot no.44/C, Admeasuring
of 3413.70sq.yards situated at phase IV,IDA, Patancheru, Medak District - Telangana with Kotak
Mahindra Bank.
The above loans carry''s interest @ 3 Months T Bill rate plus 2.40 %
From RBL Bank Limited
Primary Security:
First Pari Passu Charge on entire Current Assets of the Company both present and future.
Second Pari Passu Charge on entire Movable and Immovable
Fixed Assets of Company both present and future.
Industrial Property situated at: Plot No. 24, Survey No. 41 and 42, Krishna Sagara Village, Attibele
Hobli, Anekal Taluk, Attibele, Karnataka.
The above loans carry interest @ 1MCLR p.a.
Personal Guarantee by two relatives of Directors of the company (Kollareddy Rama Raghava Reddy
and Ranganayakamma Kollareddy).
From Kotak Mahindra Bank Limited
Primary security:
First and pari passu charge on all present and future current assets & un encumbered movable fixed
charge along with HDFC bank.
First and pari passu charge on Self occupied industrial property along with HDFC Bank on below
property located at Plot No 44-C Phase v, ida Patancheru, Sangareddy Dist, Telangana, 502319 in
the name of Midwest Ltd. (Nature of Charge-Equitable Mortgage).
The above loans carry interest @ 1MCLR plus 0.05%.
Note (ii) Details of Corporate social responsibility (CSR) expenditure:
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to
spend at least 2% of its average net profit for the immediately preceding three financial years on corporate
social responsibility (CSR) activities. The areas for CSR activities are Education, Health & Wellness. A CSR
committee has been formed by the company as per the Act. The funds are utilized through the year on
these activities which are specified in Schedule VII of the Companies Act, 2013.
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities. The deferred tax assets and deferred tax liabilities relate
to income taxes levied by the same tax authority.
Significant management judgment is required in determining provision for income tax, deferred
income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability
of deferred income tax assets is based on estimates of taxable income in which the relevant entity
operates and the period over which deferred income tax assets will be recovered.
Basic Earnings Per Share ("EPS") is computed by dividing the net profit attributable to the equity
shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the net profit by the weighted average number of
equity shares considered for deriving basic earnings per share and also the weighted average number
of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
(a) Defined benefit plan
Gratuity:
The Company provides Gratuity for employees in India as per the Payment of Gratuity Act, 1972.
All employees are entitled to gratuity benefits on exit from service due to retirement, resignation
or death. There is a vesting period of 5 years on exits due to retirement or resignation. This defined
benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and
market (investment) risk. The present value of the defined benefit obligation and the relevant current
service cost are measured using the Projected Unit Credit Method, with actuarial valuations being
carried out at each Balance sheet date.
Provident fund and employee state insurance:
Contributions were made to provident fund and employee state insurance in India for the employees
of the company as per the regulations. These contributions are made to registered funds administered
by the Government of India.
The obligation of the company is limited to the amount contributed and it has no further contractual
nor any other constructive obligation.
(c) Amount recognised as expenses
(i) Defined benefit plan:
Gratuity expenses for the year March 31, 2026 aggregate to H14.93 Mn (March 31, 2025: H6.41
Mn). The gratuity plan is unfunded (refer note 33)."
(ii) Provident fund and employee state insurance:
Contribution towards employee provident fund and others, which is a defined contribution plan
for the year ended March 31, 2026 aggregated to H7.12 Mn (March 31, 2025: 6.55 Mn).
It is not practicable for the company to estimate the timings of cash flows, if any, in respect of the
above pending resolution of the respective proceedings.
The Assessing Officer (AO) disallowed the deduction under Section 10B claimed by the
Company, asserting that the extraction and processing of granite blocks do not qualify as a
manufacturing activity, and thus, the company is not eligible for the deduction under Section
10AA. Additionally, the AO disallowed the additional depreciation claimed under Section 32(1)
(iia). However, both the CIT(A) and the ITAT held that cutting, polishing, and sizing of granite
blocks constitute a manufacturing activity. Consequently, they allowed the deduction under
Section 10B and the additional depreciation under Section 32(1)(iia) of the Act. Based on the
information provided, it is understood that the Revenue has filed an appeal before the High
Court (HC) against the ITAT''s order, and the HC''s verdict is still pending. The Company has
received favourable order from lower appellate authorities. Further, the Company is relying on
the favourable judicial precedents for its argument to this subject matter. However, considering
that the revenue wants to litigate the matter before HC and the amount involved which is
H125.16 Mn.
A.O. reopened the assessment under section 147 of the Act and issued notice under section
148 of the Act on March 30, 2019, based on the information received from DCIT wherein
it was mentioned that a search action was conducted against Shri Praveen Agarwal group
and during the course of search operation it was found out that the assessee-Company had
received an amount of H1.70 Mn from Grow fast Realtors (P) Ltd., a company controlled by Shri
Praveen Agarwal through Dhanalaxmi Bank Ltd. during the year. AO passed reassessment
order, wherein an addition of H1.70 Mn as unexplained credit under section 68 of the Act was
made. The amount involved is H2.50 Mn.
The issue involves payment of tax under RCM on royalty @ 18% from 2017 to 2020. In this
regard, the company contends that they have discharged RCM for royalty for the period 2018-19
@ 12% as applicable rate in case of granites. Further, post clarification issued by circular no.
164/20/2021 GST dated October 06, 2021, the company has discharged tax under RCM @
18% starting from 2019-20. However, the department has issued notice for the differential tax
for 2018-19 and also demanding tax for 2017-18. Amounting of contingent liability involved
in this matter is H9.96 Mn.
The issue is related to royalty paid to the Government against the license for the mining of
granite from the quarry. The company''s contention is that the transaction being the transfer
of property in goods, it does not amount to service and hence is not liable to service tax and
that it amounts to tax on tax considering the royalty as ''tax''. The taxability of Royalty on mining
operations or explorations is a matter of litigation with regard to whether it is "serviceâ or âtax
â. The said issue is pending before the larger Bench of nine judges of the Supreme Court in
respect of Service Tax liability in the pre-GST Period. The recovery of the service tax on Royalty
on mining lease has been stayed by the Supreme Court. Similarly, whether the taxability of
royalty on account of mining operations is âgoodsâ or âservicesâ is also a matter of conflicting
views. Considering the complexity of the taxability of the transaction involved, we are of the
view that the pending litigation could be contingent liability amounting to H16.93 Mn.
(iii) Excise duty and Customs duty
Contingent liability araised due to exemption availed towards central excise duty for violation
of conditions of U/ Notification Nos. 52/2003-Customs: dt: March 31, 2003 and towards
central excise duty for violation of conditions of U/Notification Nos. 22/2003-Central Excise:
dt: March 31, 2003. The issue pertains to EOU unit moving goods out of the bonded premises
is in violation of conditions specified U/ Notification Nos. 52/2003-Customs: dt: March 31,
2003. However, as contended by the Company, the place where the granites are moved is
also part of same EOU. Hence, there is no violation of conditions specified and the assessee is
eligible for the exemption mentioned. Further, the assessee contended that they have claimed
exemption based on clause d of the said notifications. However, the commissioner alleged that
there is no processing or manufacture of production carried out by the company in the instant
case and hence denying the benefits under both notifications. In this regard, the assessee has
contended on the ground that the development commissioner has allowed the license only
after due verification and acknowledges the fact that the assessee is engaged in manufacturing.
Assessee also relied on various case laws and considered the definition of manufacture which is
much wider to accommodate all the activities carried out. Further the assessee also mentioned
about the income tax benefits availed by them are with respect to manufacturing entity.
Whether the mining qualifies as manufacture is a matter of debate as manufacture typically
involves conversion from one form to another.
The erstwhile Andhra Pradesh(AP) government enacted the Entry Tax Act levying taxes on
notified goods that were brought into the State of AP. Under this Act, any notified good that was
imported from other States was to face an entry tax. The AP High Court before its bifurcation in
the year 2007 had struck down the Entry Tax Act as unconstitutional. The Revenue appealed
the decision to the Supreme Court. In the case of Jindal Stainless Limited 2016 (11) SCALE 1,
the Apex Court reversed the decision and upheld the levy of entry tax. Pursuant to the orders of
the Supreme Court, assessing authorities started proceedings against businesses. Section 3(2)
does not levy entry tax on goods that are imported "to be used as an input for the manufacture
of other goods.â The crucial words here are "inputsâ "forâ and "manufacture". Every importer
will need to assess whether goods that have been imported have been used as inputs for
manufacturing other goods. The Supreme Court in a catena of cases has interpreted "inputsâ
broadly to include goods that are not just present in the final items but also items that are
consumed in the manufacturing process. The High Court of AP has held that an input is any
item that enters into the system and should be interpreted for any item which is a raw material
in the widest sense possible in the case of KGF Cottons Private Limited (81 VST 1) In the current
scenario, diesel is used for the machinery or vehicle used for quarrying operations, whether
the mining qualifies as manufacture is a matter of debate as manufacture typically involves
conversion from one form to another. Since mining involves extraction of minerals, it may not
qualify as a typical manufacturing activity. As of now, there is a conditional order passed by the
High Courts to deposit 25% of the disputed tax in order to seek a stay of the remainder 75% of
the disputed tax. The final hearings for this batch of matters are pending.
(a) Case of a past employee against the company
A past employee filed a case in the regional labour court (RLC), Hyderabad against the
company claiming additional wages contesting the wage paid to him was not satisfying
the minimum wages Act i.e. April 01, 2018 to April 12, 2022. The documents are under
Scrutiny by RLC, Hyderabad. The company has responded to a complaint filed by another
former employee regarding an alleged accident claim under the Employees'' Compensation
Act, 1923, The Company has denied liability, stating the incident occurred outside the
workplace and that no "employment injury" was claimed at the time of the employee''s
resignation. Furthermore, the Company contends that the claim is barred by limitation as
it was filed after a delay of nearly 11 years. The matter is currently pending adjudication
before the Employees'' Compensation Commissioner, Ongole.
(b) APMDC - CLAUSE 17 case against the company:
APMDC has filed a cased against the company for recovery of penalty imposed against
non-performance of a contract vide case no. W.P.20301/2010. The company has submitted
its counter affidavit and the case is under adjudication.
(c) Liquidator of BEML has filed Petition against the company:
An unsettled creditor of BEML Midwest Limited called Action Group Associates filed an
IRP against the company claiming that the monies which are due to this entity from
the entities i.e. BEML Ltd. And Midwest Limited shall be recovered and settle their dues.
Citing the claim of the creditor, the Resolution Professional has intern filed the IRP against
BEML Ltd. and Midwest Limited Vide Petition No.CP (IB) No.231/9/Hdb/2023 U/s 9
of IBC for the amount H106.79 Mn. Midwest Limited has submitted its counter to the
NCLT and the NCLT has rejected the application vide judgement dated August 14, 2024.
Thereafter, the Resolution Pro
(d) Provision, contingent liabilities and contingent assets
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably,
and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the
expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the
discount is recognized under finance costs. Expected future operating losses are not provided for. Provision in respect of loss contingencies
relating to claims, litigations, assessments, fines and penalties are recognized when it is probable that a liability has been incurred and the amount
can be estimated reliably.
Contingent liabilities and contingent assets:
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an
outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are
disclosed unless the possibility of outflow of resources is remote.
Contingent assets has to be recognized in the standalone financial statements in the period in which if it is virtually certain that an inflow of
economic benefits will arise.
(e) Earnings per share
Basic Earnings Per Share (''EPS'') is computed by dividing the net profit attributable to the equity shareholders by the weighted average number of
equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the net profit by the weighted average number of equity shares considered for deriving basic
earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential
equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. In computing
diluted earnings per share, only potential equity shares that are dilutive and that either reduces earnings per share or increases loss per share are
included. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for the share splits.
(f) Property, plant and equipment
i) Recognition and measurement
Property, Plant and Equipment (âPPEâ) are stated at historical cost less accumulated depreciation and accumulated impairment loss, if any. Cost of
an item of property, plant and equipment comprises its purchase price, including import duties and non refundable purchase taxes, after deducting
trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of
dismantling and removing the item and restoring the site on which it is located. If significant parts of an item of property, plant and equipment
have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of
any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to statement of
profit or loss during the reporting period in which they are incurred. If an item of property, plant and equipment is purchased with deferred credit
period from supplier, such asset is recorded at its cash price equivalent value.
ii) Depreciation
Depreciation is provided using the Straight-line Method over the useful lives of the assets as estimated by the Management. Depreciation on
additions and deletions are restricted to the period of use. Depreciation is charged to statement of profit and loss.
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.
The Company, based on technical assessment and management estimate, depreciates property, plant and equipment over estimated useful life
prescribed in Schedule II to the Act. The Management believes that these estimated useful lives are realiztic and reflect fair approximation of the
period over which the assets are likely to be used. The Company has estimated the following useful lives to provide depreciation on its property,
plant and equipment:
Asset category Management estimate of useful life & Useful life as
Buildings 5 to 60 Years
Plant & Machinery 10 to 15 Years
Mining Equipment 8 Y ears
Vehicles 8 to 10 Years
Computers 3 to 6 Y ears
An assetâs carrying amount is written down immediately to its recoverable amount if the assetâs carrying amount is greater than its estimated
recoverable amount. Gains or losses arising from disposal of property, plant and equipment which are carried at cost are recognized in the
statement of profit and loss.
Depreciation method, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(iii) Expenditure during construction period:
Capital work-in-progress (CWIP) includes cost of PPE under installation/ under development, net of accumulated impairment loss, if any, as at the
balance sheet date. Expenditure/ income during construction period (including financing cost related to borrowed funds for construction or
acquisition of qualifying PPE) is included under Capital Work-in-Progress, and the same is allocated to the respective PPE on the completion of
their construction.
Depreciation is not recorded on capital work-in-progress until construction and installation is complete and the asset is ready for its intended use.
Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital advances under "Other non¬
current Assets"
(g) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company recognises right-of-use assets and lease liabilities for all leases except for short-term leases and leases of low-value assets.
The Company applies the available practical expedients wherein it:
(a) Used a single discount rate to a portfolio of leases with reasonably similar characteristics
(b) Relies on its assessment of whether leases are onerous immediately before the date of initial application
(c) Applies the short-term leases exemptions to leases with lease term that ends within 12 months at the date of initial application
(d) Includes the initial direct costs from the measurement of the right-of-use asset at the date of initial application
(e) Uses hindsight in determining the lease term where the contract contains options to extend or terminate the lease
Right of Use Assets:
The company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received.
The right-of-use assets are also subject to impairment. Refer note âmâ for impairment of non-financial assets.
Lease Liability
The Company recognise the lease liability at the present value of the lease payments discounted at the incremental borrowing rate at the date of
initial application. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments
also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating
the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a
rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the
payment occurs For a lease modification that is not a separate lease, at the effective date of the modification, the lessee accounts for the lease
modification by remeasuring the lease liability using a discount rate determined at that date and the lessee makes a corresponding adjustment to
the right-of-use asset.
Low value Asset covers all leases which are short term in nature.
Subsequent measurement of lease liability
The lease liability is remeasured when there is change in future lease payments arising from a change in an index or a rate, or a change in the
estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination option. When the lease liability is
measured, the corresponding adjustment is reflected in the right-of-use asset.
(h) Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost
less any accumulated amortization and accumulated impairment losses. Intangible assets are amortized over the useful economic life assessed
which ranges from 3-6 years and tested for impairment whenever there is an indication that the intangible asset may be impaired. The
amortization period and the amortization method for an intangible asset are reviewed at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization
period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets recognized in
the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
(i) Intangible assets under development
The company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is
based on managementâs judgement that technological and economic feasibility is confirmed, usually when a product development project has
reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management
makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits.
(j) Investment in subsidiaries and Joint venture
Investments in subsidiaries and j oint ventures are initially accounted for at cost of acquisition less impairment, if any. Dividend Income from
subsidiaries and joint venture are recognized when its right to receive the dividend is established.
(k) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and financial liability or equity instrument of another entity.
i) Initial Recognition and measurement
Financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the
instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss
(FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii) Classification and subsequent measurement
Financial assets
All financial assets except Trade receivables are initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL),
transaction costs that are directly attributable to its acquisition or issue.
Subsequent measurement:
For the purpose of subsequent measurement, financial assets are categorised as under:
- Amortised cost;
- Fair Value through Other Comprehensive Income (FVOCI); or
- Fair Value through Profit or Loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for
managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the
investmentâs fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the Company may irrevocably designate a financial
asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
Financial assets at amortised cost: These assets are subsequently measured at amortised cost using the effective interest method. The amortised
cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain
or loss on derecognition is recognized in profit or loss.
Equity investments at FVOCI: These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless
the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are not
reclassified to profit or loss.
Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income,
are recognized in profit or loss.
Impairment of financial assets
In accordance with Ind AS 109, Financial Instruments, the Company applies expected credit loss (ECL) model for measurement and recognition
of impairment loss on financial assets that are measured at amortized cost and FVOCI.
For recognition of impairment loss on financial assets and risk exposure, the Company determines that whether there has been a significant
increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment
loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the instrument improves
such that there is no longer a significant increase in credit risk since inital recognition, then the entity reverts to recognizing impairment loss
allowance based on twelve (12) month ECL.
Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument, The twelve
(12) month ECLis a portion of the lifetime ECL which results from default events that are possible within twelve (12) months after the year end.
ECL isthe 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 shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider all
contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in
rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining
contractual term of the financial instrument.
In general, itis presumed that credit risk has significantly increased if the payment is over due.
ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the statement of profit and loss. In
balance sheet ECL for financial assets measured at amortized cost is presented as an allowance, i.e, as an integral part of the measurement of those
assets in the balance sheet, The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Company does not reduce
impairment allowance from the gross carrying amount.
Financial liabilities:
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-
for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net
gains and losses, including any interest expense, are recognized in statement of profit or loss. Other financial liabilities are subsequently measured
at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in statement of profit
or loss.
iii) Derecognition
Financial assets
A Financial asset is primarily derecognized when the right to receive the contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the
risks and rewards of ownership and does not retain control of the financial asset.If the Company enters into transactions whereby it transfers assets
recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are
not derecognized.
Financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also
derecognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case,
a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial
liability extinguished and the new financial liability with modified terms is recognized in profit or loss.
iv) Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if there is a currently and legally enforceable
right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
(l) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost of inventories comprises all cost of purchase, cost of conversion and other
costs incurrred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and costs to be incurred in marketing, selling and distribution. Costs incurred in bringing
each product to Its present location and condition are accounted for as follows .
(i) Raw materials:
Cost includes purchase price, (excluding those subsequently recoverable by the Company from the concerned revenue authorities), freight inwards
and other expenditure incurred in bringing such inventories to their present location and condition. Cost is determined on weighted average basis.
Raw Materials are valued at lower of cost and net realisable value (NRV). However, these items are considered to be realisable at cost, if the
finished products, in which they will be used, are expected to be sold at or above cost. These items are considered to be realizable at replacement
cost if the finished goods, in which they will be used, are expected to be sold below cost.
(ii) Finished goods and work in progress (WIP):
Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but
excludes borrowing costs.
It is valued at lower of cost and NRV. Cost of finished goods and WIP includes cost of raw materials, cost of conversion and other costs incurred
in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average basis.
(iii) Provision for inventory
Provision of obsolescence on inventories is considered basis the managementâs estimate, based on demand and market of the inventories.
(m) Impairment of non-financial assets
The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU
represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based
on the estimated future cash flows, 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 CGU (or the asset).
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its
estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss.
In respect of assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is
any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss has been recognised.
(n) Employee benefits
(a) Short-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, including non-monetary benefits that are expected to
be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of
employees'' services up to the end of the reporting period and are measured on an undiscounted basis at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(b) Other long-term employee benefit obligations
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows
expected to be made by the Company in respect of services provided by employees up to the reporting date.
(i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have
no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government
administered provident fund scheme and other funds. Obligations for contributions to defined contribution plans are recognised as an employee
benefit expense in statement of profit and loss in the periods during which the related services are rendered by employees.
(ii) Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The liability or asset recognised in the balance
sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of
plan assets.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields
at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which
they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance
sheet.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and
when the entity recognises any related restructuring costs.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in
profit or loss as past service cost.
(iii) Compensated Absences:
Compensated Absences: Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the
year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated
absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.
(o) Cash flow statement
Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from regular revenue generating (operating activities), investing and financing activities of the Company are
segregated.
(p) Cash and Cash Equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand and short-term deposits with banks that are readily convertible
into cash which are subject to insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.
(q) Foreign currency transactions and balances
In preparing the Standalone Financial Statements of the Company, transactions in currencies other than the Companyâs functional currency (i.e.
foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary
items denominated in foreign currencies are translated at the rates prevailing at that date.
Monetary assets and liabilities denominated in foreign currencies are translated at INR spot rates of exchange at the reporting date. Exchange
differences arising on settlement or translation of monetary items are recognised in the statement of profit and loss.
Net loss relating to translation or settlement of borrowings denominated in foreign currency are reported within finance costs. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain
or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or
loss are also recognised in OCI or profit or loss, respectively).
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a
non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company
initially recognises the nonmonetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or
receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.
(r) Recent accounting pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has not notified any new standards or amendments to the
existing standards applicable to the Company.
From HDFC Bank Limited
Primary security:
First Paripassu Charge in favor of the Bank by way of Hypothecation of the company''s entire current assets present and future, First Paripassu charge on unencumbered fixed assets of the
company present and future with Kotak Mahindra Bank.
First Paripassu Charge - Equitable Mortgage of properties mentioned in the property collateral template with Kotak Mahindra Bank for working capital limits.
Second Paripassu Charge - Equitable Mortgage of properties mentioned in the property collateral template with Kotak Mahindra Bank for GECL limits.
For WCTL GECL 2: Second charge on company''s entire current assets present and future, second charge on unencumbered fixed assets of the company present and future with Kotak Mahindra
Bank. Exclusive charge on Cash Margin (10%) in the form of FDR with Lien of HDFC Bank Ltd. marked on it for the Bank Guarantees/ Letter of credit.
Security deposit - Margin money deposit with principals.
Collateral security:
First Pari passu charge - Equitable mortgage of the Property located at Plot no.44/C, Admeasuring of 3413.70sq.yards situated at phase IV,IDA, Patna Cheru, Medak District - Telangana with
Kotak Mahindra Bank.
The above loans carry''s interest @ 3 Months T Bill rate plus 2.40 %
From South Indian Bank
Security:
Land admeasuring 10861.11 Sq. yards situated in D- Block of Industrial development area, in Sy no 48 part of Chinagantyada village, Visakhapatnam belonging to the company.
Personal guarantee:
Personal guarantee by two Directors (Mrs Soumya Kukreti and Mr. Kollareddy Ramachandra) and a two relative of Directors of the company (Mr. Kollareddy Rama Raghava Reddy and Mrs.
Ranganayakamma Kollareddy)
First and pari passu charge on all present and future current assets & un encumbered movable fixed charge along with HDFC bank.
First and pari passu charge on Self occupied industrial property along with HDFC Bank on below property located at Plot No 44-C Phase v, ida Patancheru, Sangareddy Dist, TELANGANA,
502319 in the name of Midwest Ltd. (Nature of Charge-Equitable Mortgage).
The above loans carry interest @ 1M MCLR 00.05bps
From RBL Bank Limited
Primary Security:
First Pari Passu Charge on entire Current Assets of the Company both present and future.
Second Pari Passu Charge on entire Movable and Immovables Fixed Assets of Company both present and future.
Industrial Property situated at: Plot No. 24, Survey No. 41 and 42, Krishna Sagara Village, Attibele Hobli, Anekal Taluk, Attibele, Karnataka.
Personal Guarantee:
Personal Guarantee by two relatives of Directors of the company (Mr. Kollareddy Rama Raghava Reddy and Mrs Ranganayakamma Kollareddy).
The above loans carry interest @ 1MCLR p.a.
From Shinhan Bank
Security: Duly and unconditionally accepted documents (bills) backed by Letter of Credits.
The above loans carry''s interest @ SOFR plus spread p.a
(b) The quarterly return submitted with bank are in agreement of the books of accounts.
38. Employee benefits
(a) Defined benefit plan
Gratuity:
The Company provides Gratuity for employees in India as per the Payment of Gratuity Act, 1972. All employees are entitled to gratuity benefits on exit from
service due to retirement, resignation or death. There is a vesting period of 5 years on exits due to retirement or resignation. This defined benefit plans
expose the Company to actuarial risks, such as longevity risk, interest rate risk and market (investment) risk. The present value of the defined benefit
obligation and the relevant current service cost are measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each
Balance sheet date.
(b) Defined contribution plan
Provident fund and employee state insurance:
Contributions were made to provident fund and employee state insurance in India for the employees of the company as per the regulations. These
contributions are made to registered funds administered by the Government of India. The obligation of the company is limited to the amount contributed and
it has no further contractual nor any other constructive obligation.
(c) Amount recognised as expenses
(i) Defined benefit plan:
Gratuity expenses for the year March 31,2025 aggregate to ? 6.41 Mn(March 31, 2024: ? 5.24 Mn). The gratuity plan is unfunded (refer note 33).
(ii) Provident fund and employee state insurance:
Contribution towards employee provident fund and others, which is a defined contribution plan for the year ended March 31, 2025 aggregated to ? 6.55 Mn
(March 31, 2024: 6.13 Mn).
(i) Direct Tax
The Assessing Officer (AO) disallowed the deduction under Section 10B claimed by the Company, asserting that the extraction and processing of granite blocks
do not qualify as a manufacturing activity, and thus, the company is not eligible for the deduction under Section 10AA. Additionally, the AO disallowed the
additional depreciation claimed under Section 32(1 )(iia). However, both the CIT(A) and the ITAT held that cutting, polishing, and sizing of granite blocks
constitute a manufacturing activity. Consequently, they allowed the deduction under Section 10B and the additional depreciation under Section 32(1 )(iia) of the
Act. Based on the information provided, it is understood that the Revenue has filed an appeal before the High Court (HC) against the ITAT''s order, and the HC''s
verdict is still pending. The Company has received favourable order from lower appellate authorities. Further, the Company is relying on the favourable judicial
precedents for its argument to this subject matter. However, considering that the revenue wants to litigate the matter before HC and the amount involved which is
? 125.16 Mn.
The Assessing Officer (AO) initiated proceedings under Section 163(1) of the Act and issued a notice to assess or reassess the income of a non-resident in the
hands of the company as a representative assessee. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO''s order. Aggrieved by the CIT(A) order,
the company filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the validity ofthe notice. The ITAT held that, according to Subsection
(3) of Section 149, the assessment under Section 148 on the representative assessee cannot be made after the expiry of two years from the end of the relevant
assessment year. Consequently, the ITAT set aside the AO''s order and allowed the company''s appeal.
Subsequently Revenue filed a cross appeal before the ITAT, and the company filed cross objections. The ITAT reaffirmed its earlier decision and dismissed both
the Revenue''s appeal and the company''s cross objections. Aggrieved by the ITAT''s order, the Revenue has filed an appeal before the High Court (HC). As the
Company has received favourable order from ITAT and the hearings before High Court on the income tax appeal is yet to be scheduled, amount involved in this
matter is ? 11.84 Mn.
A.O reopened the assessment under section 147 of the Act and issued notice under section 148 of the Act on March 30, 2019, based on the information received
from DCIT wherein it was mentioned that a search action was conducted against Shri Praveen Agarwal group and during the course of search operation it was
found out that the assessee-Company had received an amount of ? 1.70 Mn from Ms. Grow fast Realtors (P) Ltd., a company controlled by Shri Praveen Agarwal
through Dhanalaxmi Bank Ltd. during the year. AO passed reassessment order, wherein an addition of ? 1.70 Mn as unexplained credit under section 68 of the
Act was made.
(ii) Goods and Service Tax
The issue involves payment of tax under RCM on royalty @ 18% from 2017 to 2020. In this regard, the company contends that they have discharged RCM for
royalty for the period 2018-19 @ 12% as applicable rate in case of granites. Further, post clarification issued by circular no. 164/20/2021 GST dated October 06,
2021, the company has discharged tax under RCM @ 18% starting from 2019-20. However, the department has issued notice for the differential tax for 2018-19
and also demanding tax for 2017-18. Amounting of contingent liability involved in this matter is ? 9.96 Mn.
The issue is related to royalty paid to the Government against the license for the mining of granite from the quarry. The company''s contention is that the
transaction being the transfer ofproperty in goods, it does not amount to service and hence is not liable to service tax and that it amounts to tax on tax considering
the royalty as ''tax''. The taxability of Royalty on mining operations or explorations is a matter of litigation with regard to whether it is âserviceâ or âtax â. The said
issue is pending before the larger Bench of nine judges of the Supreme Court in respect of Service Tax liability in the pre-GST Period. The recovery of the service
tax on Royalty on mining lease has been stayed by the Supreme Court. Similarly, whether the taxability of royalty on account of mining operations is âgoodsâ or
âservicesâ is also a matter of conflicting views. Considering the complexity of the taxability of the transaction involved, we are of the view that the pending
litigation could be contingent liability amounting to ? 16.93 Mn
(iii) Excise duty and Customs duty
Contingent liability araised due to exemption availed towards central excise duty for violation of conditions of U/ Notification Nos. 52/2003-Customs: dt: March
31, 2003 and towards central excise duty for violation of conditions of U/Notification Nos. 22/2003-Central Excise: dt: March 31, 2003. The issue pertains to
EOU unit moving goods out of the bonded premises is in violation of conditions specified U/ Notification Nos. 52/2003-Customs: dt: March 31, 2003. However,
as contended by the Company, the place where the granites are moved is also part of same EOU. Hence, there is no violation of conditions specified and the
assessee is eligible for the exemption mentioned. Further, the assessee contended that they have claimed exemption based on clause d of the said notifications.
However, the commissioner alleged that there is no processing or manufacture ofproduction carried out by the company in the instant case and hence denying the
benefits under both notifications. In this regard, the assessee has contended on the ground that the development commissioner has allowed the license only after
due verification and acknowledges the fact that the assessee is engaged in manufacturing. Assessee also relied on various case laws and considered the definition
of manufacture which is much wider to accommodate all the activities carried out. Further the assessee also mentioned about the income tax benefits availed by
them are with respect to manufacturing entity. Whether the mining qualifies as manufacture is a matter of debate as manufacture typically involves conversion
from one form to another.
(iv) Entry Tax
The erstwhile AP government enacted the Entry Tax Act levying taxes on notified goods that were brought into the State of AP. Under this Act, any notified good
that was imported from other States was to face an entry tax. The AP High Court before its bifurcation in the year 2007 had struck down the Entry Tax Act as
unconstitutional. The Revenue appealed the decision to the Supreme Court. In the case of Jindal Stainless Limited 2016 (11) SCALE 1, the Apex Court reversed
the decision and upheld the levy of entry tax. Pursuant to the orders of the Supreme Court, assessing authorities started proceedings against businesses. Section
3(2) does not levy entry tax on goods that are imported âto be used as an input for the manufacture of other goods.â The crucial words here are âinputsâ âforâ and
âmanufacture". Every importer will need to assess whether goods that have been imported have been used as inputs for manufacturing other goods. The Supreme
Court in a catena of cases has interpreted âinputsâ broadly to include goods that are not just present in the final items but also items that are consumed in the
manufacturing process. The High Court ofAP has held that an input is any item that enters into the system and should be interpreted for any item which is a raw
material in the widest sense possible in the case of KGF Cottons Private Limited (81 VST 1) In the current scenario, diesel is used for the machinery or vehicle
used for quarrying operations, whether the mining qualifies as manufacture is a matter of debate as manufacture typically involves conversion from one form to
another. Since mining involves extraction of minerals, it may not qualify as a typical manufacturing activity. As of now, there is a conditional order passed by the
High Courts to deposit 25% of the disputed tax in order to seek a stay of the remainder 75% of the disputed tax. The final hearings for this batch of matters are
pending.
(v) Other disputes/ matters
(a) Case of a past employee against the company
A past employee filed a case in the regional labour court (RLC), Hyderabad against the company claiming additional wages contesting the wage paid to him was
not satisfying the minimum wages Act, and also claiming gratuity for the period of services i.e. April 01, 2018 to April 12, 2022. The documents are under
Scrutiny by RLC, Hyderabad.
(b) APMDC - CLAUSE 17 case against the company:
APMDC has filed a cased against the company for recovery of penalty imposed against non-performance of a contract vide case no. W.P.20301/2010. The
company has submitted its counter affidavit and the case is under adjudication.
(c) Liquidator of BEML has filed Petition against the company:
An unsettled creditor of BEML Midwest Limited called Action Group Associates filed an IRP against the company claiming that the monies which are due to this
entity from the entities i.e. BEML Ltd. And Midwest Limited shall be recovered and settle their dues. Citing the claim of the creditor, the Resolution Professional
has intern filed the IRP against BEML Ltd. and Midwest Limited Vide Petition No.CP (IB) No.231/9/Hdb/2023 U/s 9 of IBC for the amount ? 106.79 Mn.
Midwest Limited has submitted its counter to the NCLT and the NCLT has rejected the application vide judgement dated August 14, 2024 .
(d) Recovery Case against Debtor
The company has filed the case for recovery of receivable dues amounting to ? 1.02 Mn against the party. The party has inturn filed a counter claim of ? 4.13 Mn
for recovery of damages caused against supply of poor material. Both the cases are under adjudication in City Civil Court.
(e) Demand of Royalty from Office of ADMG - Telangana:
The Office of the ASST. Director of Mines and Geology - Suryapet has issued a demand notice for royalty for the quarry of ChimiryalaVillage, Kodad Mandal for
an amount of ? 74.38 Mn. The Company filed petion at High Court of Telangana against the demand notice. The Court has given stay order against the demand
notice and the company is pursuing legal course.
(vi) Other claims and Guarantees
(a) Corporate guarantees:
The company has given corporate guarantees to:
(i) HDFC Bank Ltd for the credit facilities extended to its subsidiary company Midwest Neostone Private Limited
(ii) Kotak Mahindra Bank/ RBL Bank for the working capital facilities extended to its subsidiary company Andhra Pradesh Granite (Midwest) Private Limited.
(b) Bank Guarantee and Letter of Credit:
(i) The company has provided a bank guarantees amounting to ? 21.00 Mn in favour of APMDC Ltd. These guarantees are given towards the performance
security for operation of black galaxy granite mine of Block -IV at Chimakurthy, Andhra Pradesh.
(ii) Other guarantees has given to Assistant Director of Mines & Geology towards security deposits.
(c) On account of Bonds executed with Customs authorities:
Bonds executed with the Customs Authorities to claim the import duty exemption on import of machinery against an obligation to export goods as per the terms of EPCG
License.
The management assessed that fair value of investments, cash and short-term deposits, trade receivables, trade payables, and other current financial assets and
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
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.
44 Financial risk management
The Board oversees the risk management frame work, develops and monitors the company''s risk management policies. The risk management policies are
established to ensure timely identification and evaluation of the risks, setting acceptable risk thresholds, identifying and mapping controls against these risks,
monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in
the market conditions and company''s activities to provide reliable information to the management and the Board to evaluate the adequacy of the risk
management frame work in relation to the risk faced by the Company.
The Management policies aims to mitigate the following risks arising from the financial instruments
A. Market Risk
B. Credit Risk
C. Liquidity Risk
A. Market Risk
Market risk is the risk of any loss in future earnings, in realising fair values or in future cash flows that may result from a change in the price of a financial
instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates and other market changes.
Future specific market movements cannot be normally predicted with reasonable accuracy.
(i) Foreign Currency Exchange Risk
The Company''s functional currency is Indian National Rupees (?). The Company undertakes transactions denominated in foreign currencies; consequently,
exposure to exchange rate fluctuations arise. Fluctuation in exchange rates affects the Company''s revenue from export markets and the cost of imports, primarily
in relation to capital goods, Spares and consumables.
(ii) 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 is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow
sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees with mix of fixed and floating rates of
interest. The Company has exposure to interest rate risk, arising principally on changes in base lending rates. The Company uses a mix of interest rate sensitive
financial instruments to manage the liquidity and fund requirement for its day to day operations like short term loans. The risk is managed by Company by
maintaining an appropriate mix between fixed and floating rate borrowings, ensuring the most cost-effective strategies are applied.
B. Credit Risk
(i) Credit risk management
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises
principally from the company''s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as
well as credit exposure to clients, including outstanding accounts receivable. Credit risk is managed through credit approvals, establishing credit limits and
continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes
an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
(ii) Trade Receivables
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk
management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with
this assessment. Outstanding customer receivables are regularly monitored.
45 Capital management
The Companyâs capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that
supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.
The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met
through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity
profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, Retained earnings and all other reserves. Net debt includes all long and short-term
borrowings as reduced by cash and cash equivalents and investment in mutual funds .
The Companyâs Management reviews the capital structure of the Company on monthly basis. As part of this review, the Management considers the cost of
capital and the risks associated with each class of capital.
The table below summarises the total equity, net debt and net debt to equity ratio of the Company.
50 Note on Social Security Code:
The date on which the Code of Social Security, 2020 (âThe Codeâ) relating to employee benefits during employment and post-employment benefits will come into effect is yet
to be notified and the related rules are yet to be finalised. The Company will evaluate the code and its rules, assess the impact, if any and account for the same once they
become effective.
51 Statutory disclosures
a. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
b The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
c The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
d The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.
e 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:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
f The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in
writing or otherwise) that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
g The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year
(and previous 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".
h The Company does not have any borrowings from banks and financial institutions that are used for any other purpose other than the specific purpose for which it was
taken at the reporting balance sheet date.
i The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers)
Rules, 2017.
j The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
k The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
l The company has neither declared nor paid any dividend during the reporting period.
o The stock statements filed by the company with the banks are in agreement with the books of account of the company
p The Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility, except that audit trail
feature was enabled at the application level from May 17, 2024 and the database level from June 06, 2024 in respect of an accounting software to log any direct data
changes.
Further, where enabled, audit trail feature has operated for all relevant transactions recorded in the accounting software. Also, during the course of our audit, we did not
come across any instance of audit trail feature being tampered with in respect of such accounting software. Further, preservation of audit trial during the previous year
did not arise as the audit trail was enabled at the application level from May 17, 2024 and the database level from June 06, 2024 by the company as per the statutory
requirements for record retention prescribed under Rule 11(g) of the companies (Audit and Auditors) Rules, 2014.
52 The financial statements were approved for issue in accordance with a resolution of the directors on September 30, 2025.
As per our report of even date
For M S K A & Associates For and
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