P. Provisions, Contingent liabilities and Commitments
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a
If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liability:
Contingent liability is a possible obligation that may arise from past events and its existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the same are not recognized but disclosed in the financial statements.
Contingent asset
Wherever there is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent asset is disclosed when the inflow of economic benefit is probable.
Q. Revenue Recognition
Revenue from sale of goods is recognized when control of the products being sold is transferred to customer and when there are no unfulfilled performance obligations.
The Performance Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.
Revenue is measured at transaction price allocated to the performance obligation. The transaction price of goods sold is net of variable consideration on account of various discounts offered by the Company as part of the contract and any taxes or duties collected on behalf of the government such as goods and services tax, etc.
The Company provides discounts to customers on the achievement of the performance criteria based on agreed terms and conditions. There is no significant financing component with regard to sale of products for the Company as per Ind AS 115. The Company do not have any non-cash consideration.
Revenue is only recognized to the extent that it is highly probable a significant reversal will not occur.
Our customers have the contractual right to return goods only when authorized by the Company.
Income from services rendered is recognized based on agreements/arrangements with the customers as the service is performed and there are no unfulfilled obligations.
Interest income is recognized using the effective interest rate (EIR) method.
The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income / interest expenses over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts / payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Dividend income on investments is recognized when the right to receive dividend is established.
Other Operating Income and Other Income:
Revenue with respect to Other Operating Income and Other Income including incentives are recognized when a reasonable certainty as to its realization exists.
R. Employee Benefits
Short term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the services are classified as short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of Bonus, Ex-gratia, Leave Travel Allowance, Reimbursement of Medical Expenses, Personal Accident Policy, and Deposit Linked Insurance Policy are recognized in the period in which the employee renders the related services.
Post-Employment Benefits:
(i) Defined Contribution Plan:
The Company's contribution to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense to the statement of profit and loss based on the amount of contribution required to be made and when services are rendered by the employees.
(ii) Defined Benefit Plans:
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit and loss. Past service cost is recognised in statement of profit and loss when the plan amendment or curtailment occurs. Gains or losses on settlement of a defined benefit plan are recognised when the settlement occurs. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
• Net interest expense or income; and
• Re-measurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss in the line item 'Employee benefits expense.
The employees of the Company are entitled to Leave Encashment. The employees can carry-forward a portion of the unutilised accrued paid leaves and utilise it in future periods or receive cash compensation at retirement or termination of employment for the unutilised accrued paid leaves. The Company records an obligation for leave encashment in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of Leave Encashment based on actuarial valuation made by an independent actuary as at the balance sheet date on projected unit credit method. Leave encashment expected to be maturing after 12 months from the date of balance sheet are classified as non-current.
S. Earnings per share
Basic earnings per share are computed by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equities shares outstanding during the period. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
T. Estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Useful lives and residual value of property, plant and equipment:
The Company reviews the useful life and residual value of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Allowance for expected credit losses:
Note 1.2(L) describes the use of practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The expected credit allowance is based on the aging of the days receivables which are past due, and the rates derived based on history of defaults in the provision matrix.
Defined benefit plans
The liabilities and costs for defined benefit plans and other post-employment benefits are determined using actuarial valuations. The actuarial valuation involves making assumptions relating to discount rates, future salary increases, mortality rates and
future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.
Recognition of Deferred Tax Assets and Liabilities:
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Inventories are stated at the lower of cost and net realisable value. In estimating the net realisable value of inventories, the Company makes an estimate of future selling prices and costs necessary to make the sale.
Contingent liability judgment:
Note 33 describes claims against the Company not acknowledged as debt. Contingencies may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.
Schedule III:
(i) Title deeds of Immovable Property all the immovable properties owned by the company are held in the name of the company.
(ii) The Company has no investment property held as at 31.03.2024 and 31.03.2023
(iii) The Company has not revalued Property, Plant and Equipment (including Right of Use assets) and Intangible assets during the year under report.
(iv) The company has not granted any Loans or Advances to Promoters, Directors, KMPs and the related parties during the year under report.
(v) The Company has no Intangible assets under development.
(vi) During the year no proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988.
(vii) The Company has borrowed from bank on the basis of security of current assets.
(viii) There was a variance of Rs. 42.63 lakhs, as given in the table below, in the Inventory statements furnished to the Bank in respect of Cash Credit Facility availed . The Variance was on account of the difference between Cost and NRV.
(ix) The company is not a declared willful defaulter by any bank or financial institution or other lender.
(x) The company has no transactions with companies struck off under section 248 of the Companies Act, 201 3 or section 560 of Companies Act, 1956.
(xi) There is no charges or satisfaction to be registered with Registrar of Companies beyond the statutory period.
(xii) The Company has no investments in subsidiaries hence Compliance with number of layer of companies is not applicable.
(xiii) There was a variance of Rs. 42.63 lakhs, as given in the table below, in the Inventory statements furnished to the Bank in respect of Cash Credit Facility availed . The Variance was on account of the difference between Cost and NRV.
Note: 1. During the current financial year ended, March 31, 2024, there has been a significant increase in the all analytical/ financial ratios, as the company plant operational period was much higher as compared to previous year.
(xiv) The Company has not applied for any scheme of arrangements under section 230 to 237 of the companies' act, 201 3 during the year.
(xv) Utilization of borrowed funds and share premium:
A) The Company has not advanced or loaned or invested funds (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries"); or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
B) The Company has not received any funds from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:
(a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries"); or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
There are no transactions not recorded in books of accounts that has been surrendered/ disclosed as income during the year in the income tax assessments under Income Tax Act, 1961.
(xvii) Corporate Social Responsibility:
The company is not obligated to comply with section 1 35 of Companies Act, 2013.
(xviii) Virtual Currency/ Crypto Currency transactions:
During the year the company has not entered into any transactions involving crypto currency/ virtual currency.
Disclosers in accordance with Indian accounting standards
Note 35: Segment Reporting
The business activity and geographical operations of the company is in one segment of cement product and hence segment reporting is not applicable.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.
Note: There are no transfers between levels 1,2 and 3 during the year.
Note 38: Capital Management & Risk management
The Company being in a capital-intensive industry, its objective is to maintain a strong credit rating healthy capital ratio and establish a capital structure that would maximize the return to stakeholders through optimum mix of debt and equity. The Company's capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from borrowings. The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and align maturity profile of its debt commensurate with life of the assets, and closely monitors its judicious allocation amongst competing capital expansion projects to capture market opportunities at minimum risk.
Gearing ratio
The Company monitors its capital using gearing ratio, which is total debt divided to total equity as given below:
Financial risk management and objectives and policies
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact in the financial statements. The Company's activities, exposed it, to market risk (including price risk), credit risk and liquidity risk. A Special Team with Senior Executives having exposure in various fields is going to be formed to assist Managing director in (a) Overseeing and approving the Company's enterprise wide risk management framework, and (b) Overseeing that all the risks that the organization faces such as market risk(including currency risk, interest rate risk and other price risk), Credit risk and liquidity risk have been identified and assessed and there is an adequate risk management infrastructure to be in place capable of addressing those risks. The Managing Director and CFO, monitors and reports on the principal risks and uncertainties that can impact the company and its ability to achieve strategic objectives. The Company's management systems, organizational structures, processes, standards, code of conduct and behaviors together form the Management and business of the Company.
A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices and equity prices. Financial assets/ liabilities affected by this risk are borrowings, letter of credits and trade receivables and investments.
The Company's investments in listed equity securities are susceptible to price risk arising from uncertainties about future value of the investment securities. The Company's non-current investment in equity shares are strategic investments and hence are considered as Fair Value through Other Comprehensive Income. The Company's Board of Directors reviews and approves all equity investment decisions.
Interest Rate Risk
The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.
B. Credit risk
Credit risk refers to the risk that the counter party will default on its contractual obl igations resulting in financial loss to the Company. The Company is operating through network of dealers based at different locations. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, steps will be taken by the Marketing departments and after discussing with the management of the Company will decide whether to stop or not further supplies to the specific dealer till the amount outstanding is recovered. The marketing team of the Company meets regularly to discuss the credit risks, measures taken to address them and the status and level of risk after the measures taken.
C. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company maintains flexibility in funding by maintaining availability under committed credit lines. Ultimate responsibility for liquidity risk management rests with the board of directors and it is going to establish an appropriate liquidity risk management framework for the management of the Company's short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Nature of Lease activity by the company-Operating lease commitments:
The Company's lease assets primarily consist of leases for buildings. The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date.
During the year under report there is no current tax liability since the company incurred loss for the year.
Deferred tax assets are not recognized for unused tax losses considering the probability of non-available of taxable profits in the near future to recover the deferred tax asset.
The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March 2024 MCA has not notified any new standard or amendments to the existing standards applicable to the Company.
As per our attached report of even date For and on behalf of the Board
For K S Rao & Co M/s Panyam Cements & Mineral Industries Limited
Chartered Accountants
Firm's Regn No.003109S Sd/- Sd/-
Jagathrakshakan Srinisha Narayanasamy Elamaran
Sd/- Managing Director Director
(CA P.GOVARDHANA REDDY) DIN: 01728749 DIN: 01744259
Partner
Membership No.029193 Sd/- Sd/-
Amaranath Sachu Sai Prashanth Gujja
Place: Hyderabad Chief Financial Officer Company Secretary
Date: May 29, 2024