b) Terms/rights attached to Equity shares
The Company has issued only one class of equity shares having a par value of ' 10 per share. Each holder of equity shares are entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realised value of the assets of the Company, remaining after the payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.
Description of nature and purpose of each reserves:
General Reserve: General reserve is created from time to time by way of transfer profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income. General Reserve is a free reserve available to the Company. As per Companies Act 2013, transfer of profits to general reserve is not mandatory.
Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. The reserve is utilised in accordance with the specific provision of the Companies Act, 2013.
Capital Redemption Reserve: In accordance with Section 69 of the companies Act. 2013, the Company has created capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from general reserve.
Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained Earnings is a free reserve available to the Company.
Equity instruments through other comprehensive income: This represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, under an irrevocable option, net of amounts reclassified to retained earnings when such assets are disposed off.
Other Comprehensive Income: Other Comprehensive Income includes re-measurement loss on defined benefit plans, net of taxes that will not be reclassified to profit and loss.
I.a Indian Rupee term loan from banks are secured by: i Primary security:
HDFC Bank Ltd. term loan: Exclusive charge on fixed assets purchased out of the term loan of HDFC Bank Ltd.
I.b Interest on term loan ranges from floating rate of Interest 7.5% to 8.50% p.a. linked to various benchmarks like T-Bill, MCLR etc.
I.c Term of repayment.
i Term Loan from HDFC Bank Ltd. ' 559.33 Lakhs (Previous year ' 838.99 Lakhs), Repayable in 24 equal monthly Instalments of ' 23.30 Lakhs will end on April-2027.
iI Term Loan from HDFC Bank Ltd. ' 797.13 Lakhs (Previous year ' 1,398.05 lakhs), Repayable in 21 equal monthly Instalments of ' 37.78 Lakhs will end on January-2027.
iii There was no default in repayment of loan or interest.
The working capital limits from bank are secured by:
i. Primary security:
First charge in favour of State Bank of India by way of hypothecation over entire present and future current assets of Company.
ii. Collateral security:
First charge in favour of State Bank of India on the entire Fixed Assets of the Company (Excluding vehicles purchased) of which includes:
- Equitable mortgage and/or hypothecation charge on entire fixed assets (Land, building, plant and machinery) both present and future of the Company situated at Survey No. 437 to 440 ECP Channel Road, Village Dudhwada, Taluka Padra, District Vadodara, Gujarat.
- Lien of TDR worth of ' 25 Lakhs.
iii. Interest on working capital loan ranges from 7.40% to 9.50% p.a. linked to various benchmarks like T-Bill, MCLR etc.
The Code on Social Security, 2020 ('Code') relating to employees benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
47. CAPITAL MANAGEMENT
For the purpose of the Company capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interestbearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest bearing loans and borrowing in the current period.
As at March 31, 2025 the Company has only one class of equity shares. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2025 and March 31, 2024.
48. DIVIDEND
The Board of Directors has recommended final dividend for the financial year 2024-25 on Equity Share Capital 15% (' 1.50 Per Equity of face value of ' 10/- each) subject to approval of the shareholders in the ensuing Annual General Meeting (AGM).
49. FINANCIAL RISK MANAGEMENT -OBJECTIVES AND POLICIES
The Company's financial liabilities comprise other than derivatives mainly of borrowings, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets, other than derivatives, include trade and other receivables, other balances with banks, loans, investments and cash and cash equivalents that arise directly from its operations.
The Company's activities are exposed to Credit risk, Market risk and Liquidity risk.
The Board of directors of the Company are overall responsible for the establishment and oversight of the
Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.
The Company's audit committee oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
49.1 Credit Risk
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 loans. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade receivables and loans
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base. The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the management of the Company.
The Company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of 120 days for customers. More than 85% of the Company's customers have been transacting with the Company for over four years, and none of these customers' balances are credit-impaired at the reporting date.
Confirmation of balances from Debtors & Loans and Advances have been received and the same is being reconciled.
Cash and cash equivalents
The Company holds cash and cash equivalents of ' 361.76 Lakhs at March 31, 2025 (March 31, 2024: ' 34.97 Lakhs/-). The cash and cash equivalents are held with bank and cash on hand.
49.2 Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Company's reputation. The Company uses process costing to cost its products, which assists it in monitoring cash flow requirements and optimizing its cash return on investments.
49.3 Market Risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
49.4 Interest rate risk
Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in it total portfolio.
With all other variables held constant, the following table demonstrates the impact of the borrowing cost on floating rate portion of loans and borrowings and excluding loans on which interest rate swaps are taken.
49.5 Foreign Currency Risk
The Company is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and functional currency. The functional currency of the Company is INR. The currencies in which these transactions are primarily denominated are US dollars.
The Company Forex risk management policy is to hedge currency exchange fluctuation and mitigate currency volatility and risks and to avoid uncertainties in cash flows. All foreign currency exposures - financial assets and liabilities and firm commitments (imports) & probable forecast transactions (exports) which are off-balance sheet exposures are covered under Forex risk management policy.
Hedging of trade exposures viz., imports and exports are generally hedged on net exposures basis. The Company mostly uses forward exchange contracts to hedge its currency risks mostly with the maturity of less than one year from the reporting date. The Company does not use derivative financial instruments for trading or speculative purposes.
Price Risk
Investment Price Risk
The Company's exposure to price risk arises from investments in equity and mutual fund held by the Company and classified in the balance sheet at fair value through profit or loss. To manage its price risk arising from investments, the Company diversifies its portfolio.
Sensitivity Analysis
The table below summarises the impact of increase/decrease of the index on the Company's equity and profit for the period. The analysis is based on the assumption that the price of the instrument has increased by 3% or decreased by 3% with all other variables held constant.
Commodity Price Risk
Principal Raw Materials for Company's products are Phthalic Anhydride and Cuprous Chloride. Company sources its raw material requirements from domestic markets as well as from International Markets. Company effectively manages availability of material as well as price volatility through well planned procurement and inventory strategy and also through appropriate contracts and commitments.
50. FINANCIAL INTRUMENTS- FAIR VALUES & RISK MANAGEMENT
Accounting Classifications & Fair Value Measurements
The fair values of the financial assets and liabilities are measured 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.
All financial instruments are initially recognized and
subsequently re-measured at fair value as described below:
1 The fair value of investment in quoted equity shares and mutual funds is measured at quoted price or NAV.
2 Fair values of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short-term maturities of these instruments.
3 Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on the evaluation, allowances are taken to account for the expected losses of these receivables.
4 The fair value of forward foreign exchange contracts and currency swaps is determined using forward exchange rates and yield curves at the balance sheet date.
The Company uses the following hierarchy for determining and disclosing the fair values of financial instruments by valuation technique:
Level 1: Th is includes financial instruments measured using quoted prices. The fair value of all equity instruments that are traded on 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 over-the-counter derivatives) is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity-specific estimates. The mutual fund units are valued using the closing net assets value. 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.
51. OFFSETTING FINANCIAL ASSETS AND LIABILITIES
The Company has not offset any financial asset and financial liability. It offsets a financial asset and a financial liability when it currently has a legal enforceable right to set-off the recognised amounts and it intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
a) Master netting arrangements - not currently enforceable
Under the terms of these arrangements, only where certain credit events occur (such as default), the net position owing/ receivable to a single counterparty in the same currency will be taken as owing and all the relevant arrangements are considered as terminated. As the Company does not presently have a legally enforceable right of set-off, these amounts have not been offset in the Standalone Balance Sheet.
b) Collateral against borrowings
The Company has hypothecated/mortgaged assets as collateral against a number of its sanctioned line of credit (Refer Note 20)for further information on assets hypothecated | mortgaged as security). In case of default as per borrowing arrangement, such collateral can be adjusted against the amounts due.
Note: Reason for Differences
- The differences in inventories and trade receivables are majorly on account of goods in transit where the goods have been physically dispatched from the Company location however, the same has not been considered as revenue from the purpose of revenue recognition principles and hence reversed from books of accounts for respective quarter ends. Similarly, goods in transit for goods which have not reached respective Company locations are not considered however, considered as purchases as per accounting principles. This has lead to offsetting differences between Inventory, trade receivables and trade payable balances.
- The management, basis their understanding with banks, submits stock statement of physical stock as available at respective locations at the period end. Accordingly adjustmentforgoodsintransit(inwardandoutward)isnot considered for the purpose of filing returns with banks.
53. EXCEPTIONAL ITEMS
Exceptional Item in FY 2023-24 include sale of leasehold land located at Saykha Industrial Estate, Village Saykha, Tal. Vagra, Dist. Bharuch for a total consideration of ' 4,657.21 Lakhs resulting into a gain of ' 2,561.03 Lakhs (net of transaction cost and incidental costs). Tax expense on the exceptional item amounting to ' 294 Lakhs is included in current tax expense.
54. EVENTS AFTER THE REPORTING DATE
There was no significant event after the end of the reporting period, which require any adjustment or disclosure in the Standalone Financial Statements.
55 . The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
56. The Company do not have any transactions with companies struck off.
57. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
58. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
59. The Company do not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
60. The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or
b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
61 . The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
62. AUTHORISATION FOR ISSUE OF THE STANDALONE FINANCIAL STATEMENTS
The Standalone Financial Statements are approved for by Audit Committee and the Board of Directors at their respective meeting conducted on May 08, 2025.
The figures of the previous period have been regrouped/ reclassified, wherever necessary, so as to be in conformity with the figures of the current period's classification/ disclosure.
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