1.19 Provisions and contingent liabilities
A provision is recognised when the Company has a
present obligation (legal or constructive) as a result
of past events and it is probable that an outflow of
resources will be required to settle the obligation in
respect of which a reliable estimate can be made.
Provisions are determined based on the best estimate
required to settle the obligation at the balance sheet
date and measured using the present value of cash
flows estimated to settle the present obligations
(when the effect of time value of money is material).
These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
Contingent liability is disclosed for (i) Possible
obligations which will be confirmed only by future
events not wholly within the control of the Company
or (ii) Present obligations arising from past events
where it is not probable that an outflow of resources
will be required to settle the obligation or a reliable
estimate of the amount of the obligation cannot be
made. The Company does not recognize a contingent
liability but discloses its existence in the Financial
Statements. Contingent assets are only disclosed
when it is probable that the economic benefits will
flow to the entity.
1.20 Provision for warranty
The estimated liability for product warranties is
recorded when products are sold. These estimates
are established using historical information on the
nature, frequency and average cost of warranty
claims and management estimates regarding
possible future incidence based on corrective actions
on product failures. The timing of outflows will vary as
and when warranty claim will arise - being typically
upto three years.
1.21 Insurance Claims
Insurance claims are accounted for on the basis
of claims admitted/expected to be admitted and
to the extent that the amount recoverable can be
measured reliably and it is reasonable to expect
ultimate collection.
1.22 Financial Instruments
Financial assets and financial liabilities are
recognised when the Company becomes a party to
the contractual provisions of the instruments.
Financial assets and financial liabilities are initially
measured at fair value except in respect of Trade
receivables that do not have a significant financial
component which are measured at transaction price.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit and loss) are
added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or
financial liabilities at fair value through profit and loss
are recognised immediately in profit and loss.
1.23 Financial assets
All regular way purchases or sales of financial assets
are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases
or sales of financial assets that require delivery of
assets within the time frame established by regulation
or convention in the marketplace.
All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of the
financial assets.
Classification of financial assets:
"Debt instruments that meet the following conditions
are subsequently measured at amortised cost (except
for debt instruments that are designated as at fair
value through profit or loss on initial recognition):
• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; an
• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.
Debt instruments that meet the following
conditions are subsequently measured at fair
value through other comprehensive income
(except for debt instruments that are designated
as at fair value through profit or loss on initial
recognition):
• the asset is held within a business model
whose objective is achieved both by collecting
contractual cash flows and selling financial
assets; and
• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.
By default, all other financial assets are measured
subsequently at fair value through profit or loss
(fvtpl).
Despite the foregoing, the Company may make
the following irrevocable election/designation at
initial recognition of a financial asset:
• the Company may irrevocably elect to present
subsequent changes in fair value of an equity
investment in other comprehensive income if
certain criteria are met (see (iii) below); and
• the Company may irrevocably designate a debt
investment that meets the amortised cost or
FVTOCI criteria as measured at FVTPL if doing so
eliminates or significantly reduces an accounting
mismatch (see (iv) below).All other financial
assets are subsequently measured at fair value."
(i) Amortised cost and effective interest method:
The effective interest method is a method of
calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant
period.
For financial assets other than purchased or
originated credit-impaired financial assets (i.e. assets
that are credit-impaired on initial recognition), the
effective interest rate is the rate that exactly discounts
estimated future cash receipts (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) excluding expected
credit losses, through the expected life of the debt
instrument, or, where appropriate, a shorter period,
to the gross carrying amount of the debt instrument
on initial recognition. For purchased or originated
credit-impaired financial assets, a credit-adjusted
effective interest rate is calculated by discounting the
estimated future cash flows, including expected credit
losses, to the amortised cost of the debt instrument
on initial recognition.
The amortised cost of a financial asset is the amount
at which the financial asset is measured at initial
recognition minus the principal repayments, plus the
cumulative amortisation using the effective interest
method of any difference between that initial amount
and the maturity amount, adjusted for any loss
allowance. The gross carrying amount of a financial
asset is the amortised cost of a financial asset before
adjusting for any loss allowance.
Interest income is recognised using the effective
interest method for debt instruments measured
subsequently at amortised cost and at FVTOCI. For
financial assets other than purchased or originated
credit-impaired financial assets, interest income is
calculated by applying the effective interest rate to
the gross carrying amount of a financial asset, except
for financial assets that have subsequently become
credit-impaired (see below). For financial assets that
have subsequently become credit-impaired, interest
income is recognised by applying the effective interest
rate to the amortised cost of the financial asset. If, in
subsequent reporting periods, the credit risk on the
credit-impaired financial instrument improves so
that the financial asset is no longer credit-impaired,
interest income is recognised by applying the
effective interest rate to the gross carrying amount of
the financial asset.
For purchased or originated credit-impaired financial
assets, the Company recognises interest income by
applying the credit-adjusted effective interest rate to
the amortised cost of the financial asset from initial
recognition. The calculation does not revert to the
gross basis even if the credit risk of the financial asset
subsequently improves so that the financial asset is
no longer credit-impaired.
Interest income is recognised in profit or loss and is
included in the 'Other income' line item. "
(ii) Debt instruments classified as at FVTOCI:
The debt instruments are initially measured at fair
value plus transaction costs.
Subsequently, changes in the carrying amount of
these debt instruments as a result of foreign exchange
gains and losses (see below), impairment gains or
losses (see below), and interest income calculated
using the effective interest method (see (i) above)
are recognised in profit or loss. The amounts that
are recognised in profit or loss are the same as the
amounts that would have been recognised in profit
or loss if these debt instruments had been measured
at amortised cost. All other changes in the carrying
amount of these debt instruments are recognised in
other comprehensive income and accumulated in
a separate component of equity. When these debt
instruments are derecognised, the cumulative gains or
losses previously recognised in other comprehensive
income are reclassified to profit or loss.
(iii) Equity instruments designated as at FVTOCI:
On initial recognition, the Company may make an
irrevocable election (on an instrument-by-instrument
basis) to designate investments in equity instruments
as at FVTOCI. Designation at FVTOCI is not permitted if
the equity investment is held for trading:
Investments in equity instruments at FVTOCI are
initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with
gains and losses arising from changes in fair value
recognized in other comprehensive income and
accumulated in a separate component of equity. The
cumulative gain or loss is not reclassified to profit or
loss on disposal of the equity investments, instead, it is
transferred to retained earnings.
Dividends on these investments in equity instruments
are recognised in profit or loss in accordance with
Ind AS 109, unless the dividends clearly represent
a recovery of part of the cost of the investment.
Dividends are included in the 'Other income' line item
in profit or loss.
The Company designates all investments in equity
instruments that are not held for trading as at FVTOCI
on initial recognition.
A financial asset is held for trading if:
• It has been acquired principally for the purpose
of selling it in the near term; or
• On initial recognition it is part of a portfolio of
identified financial instruments that the Company
manages together and has a recent actual
pattern of short-term profit-taking;
(iv) Financial assets at fair value through profit or
loss (FVTPL):
Financial assets that do not meet the criteria for being
measured at amortised cost or FVTOCI (see (i) to (iii)
above) are measured at FVTPL. Specifically:
• Investments in equity instruments are classified
as at FVTPL, unless the Company designates an
equity investment that is neither held for trading
(see (iii) above).
• Debt instruments that do not meet the amortised
cost criteria or the FVTOCI criteria (see (i) and (ii)
above) are classified as at FVTPL. In addition, debt
instruments that meet either the amortised cost
criteria or the FVTOCI criteria may be designated
as at FVTPL upon initial recognition if such
designation eliminates or significantly reduces a
measurement or recognition inconsistency (so
called 'accounting mismatch') that would arise
from measuring assets or liabilities or recognising
the gains and losses on them on different bases.
The Company has not designated any debt
instruments as at FVTPL.
Financial assets at FVTPL are measured at fair value at
the end of each reporting period, with any fair value
gains or losses recognised in profit or loss. The net
gain or loss recognised in profit or loss includes any
dividend or interest earned on the financial asset and
is included in the 'other income' line item.
Foreign exchange gains and losses:
The carrying amount of financial assets that are
denominated in a foreign currency is determined in
that foreign currency and translated at the spot rate
at the end of each reporting period. Specifically:
• for financial assets measured at amortised
cost that are not part of a designated hedging
relationship, exchange differences are recognised
in profit or loss in the 'other income' line item;
• for debt instruments measured at FVTOCI that
are not part of a designated hedging relationship,
exchange differences on the amortised cost of
the debt instrument are recognised in profit or
loss in the 'other income' line item. As the foreign
currency element recognised in profit or loss is the
same as if it was measured at amortised cost, the
residual foreign currency element based on the
translation of the carrying amount (at fair value)
is recognised in other comprehensive income in
a separate component of equity;
• for financial assets measured at FVTPL that are
not part of a designated hedging relationship,
exchange differences are recognised in profit or
loss in the 'other income' line item as part of the
fair value gain or loss; and
• for equity instruments measured at FVTOCI,
exchange differences are recognised in other
comprehensive income in a separate component
of equity.
Impairment of financial assets:
The Company recognises a loss allowance for
expected credit losses on investments in debt
instruments that are measured at amortised cost or
at FVTOCI, lease receivables, trade receivables and
contract assets, financial guarantee contracts, and
certain other financial assets measured at amortised
cost such as deferred consideration receivable on
disposal of subsidiaries. The amount of expected
credit losses is updated at each reporting date to
reflect changes in credit risk since initial recognition of
the respective financial instrument.
Expected credit losses are the weighted average
of credit losses with the respective risks of default
occurring as the weights. Credit loss 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 Company expects to receive (i.e.
all cash shortfalls), discounted at the original effective
interest rate (or credit-adjusted effective interest
rate for purchased or originated credit-impaired
financial assets). The Company estimates cash flows
by considering all contractual terms of the financial
instrument (for example, prepayment, extension, call
and similar options) through the expected life of that
financial instrument.
The Company measures the loss allowance for
a financial instrument at an amount equal to the
lifetime expected credit losses if the credit risk on
that financial instrument has increased significantly
since initial recognition. If the credit risk on a financial
instrument has not increased significantly since
initial recognition, the Company measures the loss
allowance for that financial instrument at an amount
equal to 12-month expected credit losses. 12-month
expected credit losses are portion of the life-time
expected credit losses and represent the lifetime
cash shortfalls that will result if default occurs within
the 12 months after the reporting date and thus, are
not cash shortfalls that are predicted over the next 12
months.
For trade receivables, the Company always measures
the loss allowance at an amount equal to lifetime
expected credit losses. Further, for the purpose of
measuring lifetime expected credit loss allowance for
trade receivables, the Company has used a practical
expedient method as permitted under Ind AS 109. This
expected credit loss allowance is computed based on
a provision matrix which takes into account historical
credit loss experience and adjusted for forward¬
looking information."
De-recognition of financial assets:
The Company derecognises a financial asset only
when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards
of ownership of the asset to another entity. If the
Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues
to control the transferred asset, the Company
recognises its retained interest in the asset and an
associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and
rewards of ownership of a transferred financial asset,
the Company continues to recognise the financial
asset and also recognises a collateralized borrowing
for the proceeds received.
On derecognition of a financial asset measured at
amortised cost, the difference between the asset's
carrying amount and the sum of the consideration
received and receivable is recognised in profit or
loss. In addition, on derecognition of an investment
in a debt instrument classified as at FVTOCI, the
cumulative gain or loss previously accumulated in a
separate component of equity is reclassified to profit
or loss. In contrast, on derecognition of an investment
in an equity instrument which the Company has
elected on initial recognition to measure at FVTOCI,
the cumulative gain or loss previously accumulated
in a separate component of equity is not reclassified
to profit or loss, but is transferred to retained earnings.
1.24 Financial liabilities and equity
instruments
Classification as debt or equity:
Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.
Equity instruments:
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued
by the Company are recognised at the proceeds
received, net of direct issue costs. Repurchase of the
Company's own equity instruments is recognised
and deducted directly in equity. No gain or loss is
recognised in profit or loss on the purchase, sale,
issue or cancellation of the Company's own equity
instruments.
All financial liabilities are measured subsequently at
amortised cost using the effective interest method or
at FVTPL.
However, financial liabilities that arise when a transfer
of a financial asset does not qualify for derecognition
or when the continuing involvement approach
applies, and financial guarantee contracts issued by
the Company, are measured in accordance with the
specific accounting policies set out below.
Financial Liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when
the financial liability is (i) held for trading or (ii) it is
designated as at FVTPL.
A financial liability is classified as held for trading if:
• it has been acquired principally for the purpose
of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio of
identified financial instruments that the Company
manages together and has a recent actual
pattern of short-term profit-taking;
A financial liability other than a financial liability
held for trading may be designated as at FVTPL
upon initial recognition if:
• such designation eliminates or significantly
reduces a measurement or recognition
inconsistency that would otherwise arise; or
• the financial liability forms part of a group of
financial assets or financial liabilities or both, which
is managed and its performance is evaluated
on a fair value basis, in accordance with the
Company's documented risk management or
investment strategy, and information about the
grouping is provided internally on that basis;
Financial liabilities at FVTPL are measured at fair value,
with any gains or losses arising on changes in fair
value recognised in profit or loss The net gain or loss
recognised in profit or loss incorporates any interest
paid on the financial liability and is included in the
'other income' line item in profit or loss.
However, for financial liabilities that are designated
as at FVTPL, the amount of change in the fair value
of the financial liability that is attributable to changes
in the credit risk of that liability is recognised in other
comprehensive income, unless the recognition of the
effects of changes in the liability's credit risk in other
comprehensive income would create or enlarge an
accounting mismatch in profit or loss. The remaining
amount of change in the fair value of liability is
recognised in profit or loss. Changes in fair value
attributable to a financial liability's credit risk that
are recognised in other comprehensive income are
recognised in retained earnings. Gains or losses on
financial guarantee contracts issued by the Company
that are designated by the Company as at FVTPL are
recognised in profit or loss.
Financial liabilities subsequently measured at
amortised cost:
Financial liabilities that are not held-for-trading or
designated as at FVTPL, are measured subsequently
at amortised cost using the effective interest method.
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash 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 financial liability, or
(where appropriate) a shorter period, to the amortised
cost of a financial liability.
Foreign exchange gains and losses:
For financial liabilities that are denominated in a
foreign currency and are measured at amortised
cost at the end of each reporting period, the foreign
exchange gains and losses are determined based on
the amortised cost of the instruments. These foreign
exchange gains and losses are recognised in the
'other income' line item in profit or loss for financial
liabilities.
The fair value of financial liabilities denominated
in a foreign currency is determined in that foreign
currency and translated at the spot rate at the end
of the reporting period. For financial liabilities that
are measured as at FVTPL, the foreign exchange
component forms part of the fair value gains or losses
and is recognised in profit or loss for financial liabilities.
Derecognition of financial liabilities:
The Company derecognises financial liabilities
when, and only when, the Company's obligations are
discharged, cancelled or have expired. The difference
between the carrying amount of the financial liability
derecognised and the consideration paid and
payable is recognised in profit or loss.
When the Company exchanges with the existing
lender one debt instrument into another one with
the substantially different terms, such exchange is
accounted for as an extinguishment of the original
financial liability and the recognition of a new
financial liability. Similarly, the Company accounts
for substantial modification of terms of an existing
liability or part of it as an extinguishment of the original
financial liability and the recognition of a new liability.
It is assumed that the terms are substantially different
if the discounted present value of the cash flows
under the new terms, including any fees paid net of
any fees received and discounted using the original
effective rate is at least 10 per cent different from the
discounted present value of the remaining cash flows
of the original financial liability. If the modification is not
substantial, the difference between: (1) the carrying
amount of the liability before the modification; and (2)
the present value of the cash flows after modification
is recognised in profit or loss as the modification gain
or loss within 'other income'.
1.25 Impairment of Tangible and Intangible
Assets
At the end of each reporting period, the Company
reviews the carrying amounts of its tangible and
intangible assets or cash generating units to
determine whether there is any indication that those
assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the
impairment loss (if any). When it is not possible to
estimate the recoverable amount of an individual
asset, the Company estimates the recoverable
amount of the cash-generating unit to which the
asset belongs. When a reasonable and consistent
basis of allocation can be identified, corporate assets
are also allocated to individual cash-generating units,
or otherwise they are allocated to the smallest group
of cash-generating units for which a reasonable and
consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested
for impairment at least annually, or whenever there is
an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are 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 asset for
which the estimates of future cash flows have not
been adjusted.
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 immediately in the
statement of profit and loss, unless the relevant asset
is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that
would have been determined had no impairment loss
been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is
recognised immediately in the statement of profit and
loss, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
1.26 Investment in subsidiary
Investment in subsidiary is measured at cost. Dividend
income from subsidiaries is recognised when its right
to receive the dividend is established.
1.27 Dividend
Final dividends on shares are recorded as a liability on
the date of approval by the shareholders and interim
dividends are recorded as a liability on the date of
declaration by the Board of Directors of the Company.
The Company declares and pays dividends in Indian
rupees and are subject to applicable taxes.
1.28 Asset held for sale
Non-current assets (and disposal groups) classified
as held for sale are measured at the lower of carrying
amount and fair value less costs to sell. Non-current
assets and disposal groups are classified as held for
sale if their carrying amount will be recovered through
a sale transaction rather than through continuing use.
This condition is regarded as met only when the sale
is highly probable and the asset (or disposal group) is
available for immediate sale in its present condition.
Management must be committed to the sale which
should be expected to qualify for recognition as a
completed sale within one year from the date of
classification.
When the Company is committed to a sale plan
involving loss of control of a subsidiary, all of the
assets and liabilities of that subsidiary are classified
as held for sale when the criteria described above are
met, regardless of whether the Company will retain a
non-controlling interest in its former subsidiary after
the sale.
1.29 Critical Accounting Judgements and
Key Sources of Estimation Uncertainty
The preparation of Financial Statements in
conformity with Ind AS requires management to
make judgements, estimates and assumptions that
affect the application of accounting policies and
the reported amounts of assets, liabilities, income
and expenses and the accompanying disclosures.
Uncertainty about the assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying value of assets or liabilities
affected in future periods.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which
the estimates are revised and in any future periods
affected.
Information about significant areas of estimation
uncertainty and critical judgments in applying
accounting policies that have the most significant
effect on the amounts recognised in Financial
Statements is included in the following notes:
(i) Useful lives of Property, Plant and Equipment
(ii) Carrying values of Property, Plant and Equipment
(iii) Employee Benefits
(iv) Asset held for sale
Determination of functional currency:
Currency of the primary economic environment
in which the Company operates ("the functional
currency") is Indian Rupee (INR) in which the Company
primarily generates and expends cash. Accordingly,
the Management has assessed its functional currency
to be Indian Rupee (INR).
Note:
7.1. Includes Margin Money towards bank guarantee of ' 2.40 Lakhs (PY ' 224.06 Lakhs) which represents balances
with banks that are restricted from being exchanged or used to settle a liability for more than 12 months from
the Balance Sheet date.
7.2. ' 19.92 Lakhs (PY. Nil) is placed as lein as per High court order dt 19/02/2025 with respect to writ petiton
no 2545 of 2025 vs Labour Secretary, Government of Puducherry towards revision of minimum wages for
Pondicherry plant.
1. This represents Share Application Money received
from employees under the ESOP scheme titled
"CAESOS 2020" [Chemfab Alkalis Employees
Stock Option Scheme 2020]. Also Refer Note 47
2. Capital reserve represents reserve recognised
on amalgamation being the difference between
consideration amount and net assets of the
transferor Company and profit on reissue of shares.
3. Capital redemption reserve has been created
pursuant to Section 55 of the Companies Act,
2013 on account of redemption of preference
shares out of the profits of the Company.
4. Securities premium reserve represents amount
of premium recognised on issue of shares to
shareholders at a price more than its face
value. The reserve can be utilised only for limited
purposes in accordance with the provisions of
Section 52 of the Companies Act, 2013.
5. Shares based payment reserve relates to the
share options granted by the Company to its
employees under its share option plan. Refer
Note 47 for further details.
6. Retained earnings refer to net earnings not paid
out as dividends, but retained by the Company
to be reinvested in its core business. This amount
is available for distribution of dividends to its
equity shareholders.
7. Other comprehensive income represents the
cumulative gain and losses arising on the
revaluation of equity instruments measured at
fair value through other comprehensive income,
net of taxes.
8. Dividend is paid at ' 1.25 per share for 1,42,76,602
shares held on record date 13.09.2024 (PY. At 1.25
per share for 1,41,92,702 shares held on record
date 22.08.2023).
Details in respect of Borrowings are as under:
(i) Term Loan carrying an interest rate of 8.61% p.a
average was availed from HDFC Bank Limited.
The borrowings are secured by way of Equitable
Mortgage over:
(a) leasehold land (taken under 99 years lease
by the Company) comprising of 5 acres
located in Domestic Tarrif Zone (DTZ) situated
in Irugulam Village, Satyavedu Mandal, Chittor
District, Andhra Pradesh - Exclusive Charge.
(b) fixed assets (Building, Plant and Machineries),
created out of the term loan of ' 1,800 Lakhs
out of which ' 1,596 Lakhs is outstanding -
Exclusive Charge.
(c) Fixed assets (Plant and Machineries/civil
structures), created out of the term loan of
' 3,150 Lakhs out of which ' 2,677.50 Lakhs is
outstanding - Exclusive Charge.
(d) fixed assets (Plant and Machineries/civil
structures), created out of the term loan of
' 3,780 Lakhs out of which ' 3,780 Lakhs is
outstanding - Exclusive Charge.
Out of the above term loans, ' 1,674 Lakhs
(PY. ' 181.50 Lakhs) have been classified
as current maturities of long-term debt
(secured) under Borrowings - Current.
(ii) Repayment Summary:
Term Loan of ' 1,596 Lakhs as at 31 March 2025:
Repayable in 65 monthly instalments of ' 24
Lakhs each and 1 monthly instalment of ' 36 Lakhs
respectively. Repayment of this tranche of term
loan began from October 2023.
Term Loan of ' 2,677.50 Lakhs as at 31 March 2025:
Repayable in 17 quarterly instalments of ' 157.50
Lakhs each. This loan was availed in part tranches
whose repayment of first availed tranche began
from Sept 2024.
Term Loan of ' 3,780 Lakhs as at 31 March 2025:
Repayable in 60 monthly instalments of ' 63 Lakhs
each. Repayment of this tranche of term loan will
begin from April 2025.
There were no delays in repayments made by the
Company towards the borrowings from banks
during the current year and previous year.
(iii) Quarterly returns or statements of current assets
filed by the Company with banks or financial
institutions are in agreement with the books of
accounts.
Details in respect of Current Borrowings are as under:
(i) Cash Credit facilities are secured by way of first charge over the entire current assets of the Company and
mortgage over land and building comprising of 9.70 acres belonging to the Company situated at East
Coast road, Gnanananda Place, Kalapet, Pondicherry. The cash credits are repayable on demand.
(ii) The Fund Based Cash Credit facilities and Non fund based facilities are sanctioned by HDFC Bank upto
' 2,500 Lakhs (PY ' 2,500 Lakhs). by Axis Bank upto ' 2,500 Lakhs (PY ' 2,500 Lakhs), Standard Chartered Bank
upto ' Nil (PY ' 200 Lakhs) and Shinhan bank upto ' 1,000 Lakhs (py Nil).
(iii) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions
are in agreement with the books of accounts.
The sensitivity analysis presented above may not be
representative of the actual change in the defined
benefit obligations as it is unlikely that the change in
assumptions would occur in isolation of one another
as some of the assumptions may be correlated.
Furthermore in presenting the above sensitivity
analysis the present value of defined benefit obligation
has been calculated using the projected unit credit
method at the end of the reporting period which is
the same as that applied in calculating the defined
benefit obligation liability recognised in the balance
sheet.
There is no change in the methods and assumptions
used in preparing the sensitivity analysis from the
prior years.
(g) Effect of plan on Entity's future cash flows
(i) Funding arrangements and funding policy
The Company has a gratuity fund to provide for
payment of gratuity to the employees. Every year,
the insurance Company carries out a funding
valuation based on the latest employee data
provided by the Company. The deficit in the
assets in funded by the Company
(ii) The Company expects to make a contribution of
' Nil during the next financial year
(iii) The weighted average duration of the benefit
obligation as at 31 March 2025 is 5.1 years
(5.6 years as at 31 March 2024)
(III) Financial Risk Management Framework
The Company manages financial risk relating to the operations through internal risk reports which analyse
exposure by degree and magnitude of risk. These risks include market risk (including currency risk, interest
rate risk and other price risk), credit risk and liquidity risk. The Company does not enter into or trade financial
instruments including derivative financial instruments for speculative purpose.
(IV) Foreign Currency Risk Management:
The Company undertakes transactions denominated in foreign currencies and consequently, exposures to
exchange rate fluctuations arises. The Company has not entered into any derivate contracts during the year
ended 31 March 2024 and there are no outstanding contracts as at 31 March 2025.
(V) Foreign Currency sensitivity analysis:
The following table details the Company's sensitivity to a 5% increase and decrease in INR against the relevant
foreign currencies. 5% is the rate used in order to determine the sensitivity analysis considering the past trends
and expectation of the management for changes in the foreign currency exchange rate. The sensitivity analysis
includes the outstanding foreign currency denominated monetary items and adjusts their translation at the
period end for a 5% change in foreign currency rates. A positive number below indicates a increase in profit/
decrease in loss and increase in equity where the INR strengthens 5% against the relevant currency. For a 5%
weakening of the INR against the relevant currency, there would be a comparable impact on the profit or loss
and equity and balance below would be negative.
(VI) Forward foreign exchange contracts:
There are no forward foreign exchange contracts outstanding as at 31 March 2025.
(VII) Liquidity Risk Management:
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The Company manages
liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and
actual cash flows and by matching maturing profiles of financial assets and financial liabilities in accordance
with the approved risk management policy of the Company.
Liquidity and Interest Risk Tables:
The following tables detail the Company's remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The tables include both interest and principal cash flows.
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.
Interest rate sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to interest rates for term loan
at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount
of the liability outstanding at the end of the reporting period was outstanding for the whole year. A change
(decrease/increase) of 100 basis points in interest rates for term loan at the reporting date would increase/
(decrease) equity and profit or loss by the amounts shown below. This analysis assumes that all other
variables remain constant.
Segment accounting policies
In addition to the significant accounting policies applicable to the business segment as set out in note 1.16, the
accounting policies in relation to segment accounting are as under:
Operating revenues and expenses related to both third party and inter-segment transactions are included in
determining the segment results of each respective segment. Inter segment sales are eliminated in consolidation.
Other income earned and finance expense incurred are not allocated to individual segment and the same has
been reflected at the Company level for segment reporting.
The total assets disclosed for each segment include all operating assets used by each segment, and primarily
include receivables, property, plant and equipment, intangibles, inventories, operating cash and bank balances,
inter-segment assets and exclude, deferred tax assets and income tax etc.
Segment liabilities comprise operating liabilities and exclude external borrowings, provision for taxes, deferred
tax liabilities etc.
50. The Board of Directors have recommended a
final dividend of 12.50% (' 1.25 per Equity Share of ' 10
each) for the financial year 2024-25 which is subject
to the approval of the shareholders in the forthcoming
Annual General Meeting of the Company.
51. ADDITIONAL REGULATORY INFORMATION
(i) The Company has not revalued any of its
property, pla nt a nd equipment and intangible
assets during the year.
(ii) No proceedings have been initiated during the
year or are pending against the Company as at
31 March 2025 for holding any benami property
under the Benami Transactions (Prohibition)
Act,1988 (as amended in 2016) and rules made
thereunder.
(iii) The Company does not have any 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).
(iv) The Company has not defaulted in the repayment
of loans or other borrowings or in the payment of
interest thereon to any lender during the year. The
Company has not been declared wilful defaulter
by any bank or financial institution or government
or any government authority.
(v) The quarterly returns or statements comprising
(stock statements, book debt statements, credit
monitoring arrangement reports, statements on
ageing analysis of the debtors/other receivables,
and other stipulated financial information filed
by the Company with such banks or financial
institutions are in agreement with the unaudited
books of account of the Company of the
respective quarters.
(vi) The Company does not have any charges or
satisfaction which is yet to be registered with ROC
beyond the statutory period.
(vii) The Company has not traded or invested in
Crypto currency or Virtual Currency during the
financial year.
(viii) 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.
(ix) 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,
(x) The Company does not have any Scheme of
Arrangements which have been approved by the
Competent Authority in terms of sections 230 to
237 of the Act.
(xi) The Company has complied with the the number
of layers prescribed under of Section 2(87) of
the Act read with the Companies (Restriction on
number of Layers) Rules, 2017.
(xii) The Company has utilised the borrowing amount
taken from financial institutions for the purpose
as stated in the sanction letter.
(xiii) As per the requirements of rule 3(1) of the
Companies (Accounts) Rules 2014 the Company
uses only such accounting softwares for
maintaining its books of account that have a
feature of recording audit trail of each and every
transaction creating an edit log of each change
made in the books of account along with the date
when such changes were made and who made
those changes within such accounting software.
This feature of recording audit trail has operated
throughout the year and was not tampered with
during the year.
However, in respect of an payroll software and
in respect of an accounting software used for
maintaining the financial records, in the absence
of service organization control reports from the
respective vendors, the Company is unable to
assess whether the audit trail features were
enabled and operated throughout the relevant
periods for all relevent transactions recorded
in the payroll software (for the full year) and
the accounting software (for the audit period
January 01, 2025, to March 31, 2025).
The Company has established and maintained
an adequate internal control framework over its
financial reporting and based on its assessment,
has concluded that the internal controls for the
year ended March 31, 2025 were effective.
The Companies (Accounts) Fourth Amendment
Rules, 2022 dated 06 August 2022, mandates that
the backup of the books of account and other
books and papers of the Company maintained
in electronic mode including at a place located
in India on a daily basis. The Company is
maintaining daily backups for all the accounting
software in a server which is physically located
within India. However, in respect of an accounting
software used for maintaining the financial
records, the management is unable to assess
on the backup of books of accounts due to non¬
availability of the Service Organisation Control
(SOC) report covering the period from January 01,
2025, till March 31, 2025.
52. The Code on Wages, 2019 and Code of Social
Security, 2020 ("the Codes") relating to employee
compensation and post employment benefits that
received Presidential assent and the related rules
thereof for quantifying the financial impact have not
been notified. The Company will assess the impact of
the Codes when the rules are notified and will record
any related impact in the period the Codes become
effective.
53. EVENTS SUBSEQUENT TO THE BALANCE
SHEET DATE:
(i) The Board of Directors of the Company in their
meeting held on 14 May 2025 have approved
the sale of 667.49 acres of land at Salt Division
2 Chemical division which is expected to be
consummated during FY 2025-2026.
(ii) The Company Secretary has been relieved from
the duties and responsibilities of the Company
Secretary and Compliance Officer with effect
from the close of office hours on 18 April 2025,
consequent upon resignation.
54. The Board of Directors of the Company has
reviewed the realisable value of all the current assets and has confirmed that the value of such assets in
the ordinary course of business will not be less than the value at which these are recognized in the financial
statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the
financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these
standalone financial statements in its meeting held on 14 May 2025.
For and on behalf of the Board of Directors
Suresh Krishnamurthi Rao V M Srinivasan
Chairman Chief Executive Officer
DIN: 00127809 Place: Chennai
Place: Chennai
S Prasath
Chief Financial Officer
Place: Chennai
Date: 14 May 2025
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