a) Terms/rights attached to equity shares:
The Company has only one class of shares referred to as equity shares having a par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share.
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.
Nature of reserves
Reserve from Contingencies are created in earlier years to meet any contingencies in future and in the nature of free reserve.
General reserve amount transferred/ apportioned represents is in accordance with Indian Corporate law (The Companies Act, 1956) wherein a portion of profit is apportioned to general reserve, before a company can declare dividend.
Other comprehensive Income Reserve represent the balance in equity for items to be accounted in Other Comprenhensive Income. oCi is classified into i) Items that will not be reclassified to profit & loss ii) Items that will be reclassified to profit & loss.
1 The Term Loans inter-se, are secured / to be secured by mortgage of all immovable properties of the Company both present and future and hypothecation of all movable properties of the Company (save and except book debts) including movable machinery, machinery spares, tools and accessories, both present and future subject to prior charges created and / or to be created in favour of the bankers of the Company on stocks, book debts and other specified movable properties for working capital requirements / Buyers Credit.
2 Vehicle Loan & others include loan of ? 308.86 lakhs (Previous Year ? 437.86 lakhs) secured by hypothecation of Motor Vehicles purchased there under which is repayable on different date.
3 Term Loan from bank of ? 5,777 lakhs (Previous year ? 7,428 lakhs), is repayable in 20 equal quarterly installments commenced from Feb 23.
4 Term Loan from NBFC of ? 1,664 lakhs (Previous year ? 2,340 lakhs), is repayable in 20 equal quarterly installments commenced from March 22.
5 Term Loan from bank of ? 3,135 lakhs (Previous year ? 4,275 lakhs), is repayable in 20 equal quarterly installments commenced from Feb 22.
6 Term Loan from bank of ? 3,003 lakhs (Previous year ? Nil), is repayable in 20 quarterly equal installments commenced from Oct 2024.
7 Term Loan from bank of ? 2,500 lakhs (Previous year ? 3,750 lakhs), is repayable in 20 equal quarterly installments commenced from July 22.
8 Term Loan from bank of ? Nil (Previous year ? 5,332 lakhs), is repayable in 12 equal quarterly installments commencing from July 2022.
9 Term Loan from bank of ? 8,000 lakhs (Previous year ? 5,000 lakhs), is repayable in 20 equal quarterly installments commenced from June 23.
10 Term Loan from bank of ? Nil (Previous year ? 2,000.00 lakhs), is repayable in 20 equal quarterly installments of ? 500.00 lakhs commencing from February 2019.
11 Term Loan from bank of ? 1,500 lakhs (Previous year ? 2,500 lakhs), is repayable in 48 equal monthly installments commencing from end of 13th months from the date of disbursement.
12 Term Loan from bank of ? 7,125 lakhs (Previous year ? Nil), is repayable in 20 quarterly equal installments commenced from March 2024.
13 Term Loan from bank of ? 2,000 lakhs (Previous year ? 3,000 lakhs), is repayable in 20 equal quarterly installments commenced fron June 2021.
14 Term Loan from bank of ? 4,273 lakhs (Previous year ? 5,172 lakhs), is repayable in 24 quarterly equal installments commenced from Feb 2023.
15 Term Loan from bank of ? 3,467 lakhs (Previous year ? 3,515 lakhs), is repayable in 24 quarterly equal installments commenced from Dec 2022.
16 Term Loan from NBFC of ? 5,875 lakhs (Previous year ? 8,069 lakhs), is repayable in 24 quarterly structured installments commenced from Sept 2022.
17 Foreign Currency Term loan (converted from Term loan) from bank of USD 5947744 (Term loan - Previous Year - ? 6,283 lakhs), is repayable in 28 quarterly installments commenced from Jan 2022.
18 Foreign Currency Term loan (converted from Term loan) from bank of USD 6655435 (Term loan - Previous Year - ? 6,727 lakhs), is repayable in 28 equal quarterly instalments commenced from March 2021.
19 Term Loan from NBFC of ? 4,861 lakhs (Previous year ? Nil), is repayable in 36 monthly equal installments commenced from March, 2024.
20 Term Loan from bank of ? 3,503 lakhs (Previous year ? Nil), is repayable in 24 quarterly equal installments commenced from Sep 2024.
21 Term Loan from bank of ? 1,619 lakhs (Previous year ? Nil), is repayable in 24 quarterly equal installments commenced from Dec 2024.
22 Term Loan from bank of ? 7,500 lakhs (Previous year ? Nil), is repayable in 28 quarterly installments commenced from June 2025.
23 Term Loan from bank of ? 4,800 lakhs (Previous year ? Nil), is repayable in 81 monthly installments commenced from July 2024.
24 Term Loan from NBFC of ? 5,000 lakhs (Previous year ? Nil), is repayable in 8 monthly equal installments commenced from May 2024.
25 Term Loan from bank of ? 3,426 lakhs (Previous year ? Nil), is repayable in 24 quarterly equal installments commenced from June 2024.
26 Loan from Body Corporate of ? 3,000 lakhs (Previous Year ? 6,375 lakhs) is repayable only post confirmation from consortium banks and balance loan of ? 4500 lakhs (Previous Year ? 2213 lakhs) is payable after one year of balance sheet date.
(B) Custom duty saved on import of raw material under Advance License pending fulfillment of export obligation amounting to ^ 663.98 Lakhs (Previous Year ^ 1,447.70 Lakhs). The Management is of the view that considering the past export performance and future prospects there is certainty that pending export obligation under advance licenses will be fulfilled before expiry of the validity of respective advance licenses, accordingly and also on “Going Concern Concept” basis there is no need to make any provision for custom duty saved.
40. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances of ^ 392.87 Lakhs, Previous Year ^ 567.11 Lakhs) are ^ 7,878.46 Lakhs (Previous Year ^ 72,45.03 Lakhs).
41. In the earlier years, the State Government of Uttar Pradesh (UP) had imposed a levy of license fee on transfer of alcohol from the distillery to the chemical plant. The levy was challenged by the Company in the Hon’ble Supreme Court and on October 18, 2006 the matter was finally decided by The Hon’ble Supreme Court in favour of the Company. Accordingly, Company had filed an application for refund of amount paid ^ 507.05 Lakhs (Previous Year ^ 507.05 Lakhs) (shown as recoverable under the head “Other Current Assets”) with State Government of Uttarakhand, which is still pending for refund of the amount.
42. In the earlier year, Directorate of Revenue Intelligence (DRI) issued summons to the Company in connection with investigation in respect to import of Denatured Ethyl Alcohol by importer other than manufacturer of Excisable Goods and as per DRI, Company was not eligible for lower rate of BCD @ 2.5% under notification no. 50/2017 dated 30.06.2017. The Company has filed Writ Petition before Gujarat High Court that Company is eligible to avail benefit of concessional rate of 2.5% BCD on import of DEA and for quashing of investigations initiated by DRI.
Thereafter, a Show Cause notice no. 06//PC/2022-23 dated 03.08.2022 was issued alleging incorrect availment of Basic Customs Duty @2.5% instead of 5% during 01.07.2017 to 01.02.2021, as the imported DEA was not used for manufacture of Excisable Goods in terms of amended definition of Excisable Goods which now means to include only (a) Petroleum, (b) High Speed Diesel, (c) Motor Spirit, (d) Natural Gas, (e) Aviation Turbine Fuel, and (f) Tobacco.
Upon hearing, the Additional Commissioner has vide Order-in-Original No. 69/ADC/NOIDA-CUS/2023-24 dated 23.03.2024 has confirmed the duty demand of ^ 4,093.05 lakhs along with interest and has also imposed Redemption fine of ^ 19,175.83 lakhs and penalty of ^ 4,100.00 lakhs under sec 112(a)(i) of customs act and penalty of ^ 4,100.00 lakhs under Sec. 114AA of customs act and has also appropriated the amount of ^ 750.00 lakhs (Previous Year ^ 750.00 Lakhs) paid against the duty demand under protest is shown as recoverable from department, under the head “Other Current Assets”. The Company are in the process of filing appeal before Commissioner Of Customs (Appeals), GST Bhawan, NOIDA against the impugned order.
43. The Board of Directors of Company in its meeting held on 31.10.2022 has considered and approved execution of a Share Purchase Agreement (‘SPA’) for sale of Company’s entire investment in equity shares in joint venture namely Kashipur Infrastructure and Freight Terminal Private Limited (‘JV Co’) to Gateway Distriparks Limited (‘the Buyer’). In terms of SPA, the company has sold entire investment in equity shares in JV company on 23rd December, 2022 and recognised gain of ^ 2,813.60 Lakhs (net of expenses) on sale of said investment, which has been disclosed as exceptional items in financial statements. Further, in terms of SPA, the company has given indemnity to buyer in proportionate of its shareholding, in respect of any liability arising till the date of transaction.
44. (a) (i) In earlier years, Company has Investment of ^ 5,427.50 Lakhs Company in equity share capital and 10% cumulative
redeemable preference share capital in subsidiary company namely Shakumbari Sugar and Allied Industries Limited (SSAIL) whose net worth has been fully eroded and SSAIL has also been declared sick industrial undertaking as per provision of Sick Industrial Companies Act. 1985. During the earlier year, the company has sold 242.50 lakhs equity shares and 49.00 lakhs preference shares of its subsidiary, Shakumbari Sugar and Allied Industries Limited @ ^ 0.05 per share (Fair value - Nil) & carried at Nil value in the financial statement of the Company and recognized gain of ^ 14.58 lakhs on such transaction as approved by the Board of Directors at their meeting held on 30th March 2022.
(ii) The Board of Directors of the Company in its meeting held on 30th March, 2023 has, considered and approved the execution of a Share Purchase Agreement (‘SPA’) and other relevant transaction documents for sale of Company’s entire investment in equity shares and 10% cumulative redeemable Preference shares in Subsidiary Company namely Shakumbari Sugar and Allied Industries Limited (‘subsidiary company’ or ‘SSAIL’). The sale of the Company’s entire investment in equity shares and preference shares of the Subsidiary Company is contemplated in one or more tranches to be completed as per timelines of SPA, subject to terms and conditions (including fulfillment of conditions precedent) of the SPA and other relevant transaction documents. The Company has transferred 1,11,48,962 equity shares and 22,00,000 preference shares of SSAIL to the Acquirers on 31st March 2023, in first tranche,@ ^ 0.10 per share (fair value - Nil) & carried at Nil value in the financial statement of the Company and recognised gain of ^ 13.35 Lakhs on such transaction in accordance with the term of Transaction Documents and balance investment in 1,47,13,138 equity and 29,00,000 Preference shares has been disclosed under Assets held for sale and discontinued operations as on 31.03.2023.
During the current year 2023-24, the company has sold balance investment in 1,47,13,138 equity and 29,00,000 Preference shares of SSAIL @ ^ 0.10 per share (fair value - Nil) & carried at Nil value in the financial statement of the Company and recognised gain of ^ 17.61 Lakhs on such transaction. Further, in terms of SPA, the company has given indemnity to buyer in respect of any liability arising till the date of transaction.
(i) During the previous year, the company has written - off ICD and interest receivable of ^ 4177.20 Lakhs and ^ 393.40 lakhs respectively from its subsidiary, Shakumbari Sugar and Allied Industries Limited, which has been disclosed as exceptional items in financial statement.
(b) (i) In earlier year the company had given (included in current Loan) Inter Corporate Deposit (ICD) of ^ 14,649.64 Lakhs
(Previous Year ^ 14,649.64 Lakhs) to its subsidiary IGL Finance Ltd. (IGLFL) (A 100% subsidiary). iGlFL in earlier year had invested funds for short term in commodity financing contracts offered by National Spot Exchange Ltd. (NSEL). NSEL had defaulted in settling the contracts on due dates, for which IGlFl has initiated legal and other action and in turn IGLFL did not pay back due amount to the company. Accordingly considering the prudence no interest on above ICD has been accrued for the period from 01-09-2013 onwards.
(ii) In respect of the above, the Company has made a loss allowance of ^ 11,719.71 Lakhs based on expected credit loss Policy and other estimation made by the management and for balance ^ 2,041.93 Lakhs (and also fully provided for against equity investment of ^ 125.00 Lakhs), the management and IGLFL is confident for recovery of dues from NSEL over a period of time and hence shown as good (considering the measure which have so far been taken for and pending before the Govt. and other authorities and current scenario/present state of affairs.). However, during the earlier year, the Company has written off ICD of ^ 11,719.71 Lakhs and adjusted the same against the provision, which was created in earlier year. Hence there was no impact on profitability of the company.
(c) In earlier years, Company has Investment of ^ 27.41 Lakhs & ^ 127.00 lakhs in equity share capital in subsidiaries company namely IGL ChEm International PTE Ltd, Singapore & IGL CHEM International USA LLC respectively, whose net worth has been fully eroded. Therefore, during the current year, the company has created the provision for diminution in value of investment for the same.
The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds. The estimate of rate of escalation in salary considered in actuarial valuation, taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.
The above sensitivity analysis is based on change in an assumption while holding all other assumption constant in practice, this is unlikely to occur, and change in some of the assumption may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumption the same method [projected unit credit method] has been applied as when calculating the defined benefit obligation recognized within the balance sheet.
46. Financial risk management objectives and Policies
The Company’s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk, interest rate risk and commodity risk etc.), credit risk and liquidity risk. The company’s overall risk management policy seeks to minimize potential adverse effects on company’s financial performance.
(i) Market Risk: Market risk is the risk that the fair value of future cash flow of a financial instruments will fluctuate because of change in market prices. Market risk comprises mainly three types of risk: interest rate, currency risk and other price risk such as commodity price risk.
(a) Foreign Currency Risk: Foreign Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The company has obtained foreign currency borrowing and has foreign currency trade payable and receivable and is therefore, exposed to foreign currency risk.
After taking cognizance of the natural hedge, the company takes appropriate hedge to mitigate its risk resulting from fluctuation in foreign currency exchange rate(s).
(b) Interest rate risk:-Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any change in the interest rates environment may impact future rates of borrowing. The company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiation with the lenders for ensuring the cost effective method of financing.
Interest Rate Sensitivity: The following table demonstrates the sensitivity to a reasonable possible change in interest rate on financial assets affected. With all other variable held constant, the company’s profit before tax is affected through the impact on finance cost with respect to our borrowing, as follows:
(c) Commodity Price risk: The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw material therefore, requires a continuous supply of certain raw materials.To mitigate the commodity price risk, the Company has an approved supplier base to get competitive prices for the commodities and to assess the market to manage the cost without any comprise on quality.
(ii) Credit Risk:
Credit risk refers to risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, Inter Corporate deposit, derivative financial instruments, other balances with banks, loans and other receivables. The Company’s exposure to credit risk is disclosed in Note 6, 7, 8, 11, 14 & 15.
Credit risk arising from investment derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counter parties are banks and recognised financial institutions with high credit ratings.
The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:
i. Trade receivables
ii. Financial assets measured at amortized cost (other than trade receivables)
In case of trade receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance. The ageing of the trade receivables are given below:
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss under the head ‘Other expenses’. The balance sheet presentation for financial instruments is described below:
Financial assets measured as at amortised cost: ECL 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.
(iii) Liquidity Risk: Liquidity risk is the risk, where 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 ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
47. Capital risk management
The Company’s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders. The primary objective of the Company’s capital management is to maintain an optimal structure so as to maximize the shareholder’s value. In order to strengthen the capital base, the company may use appropriate means to enhance or reduce capital, as the case may be.
The Company is not subject to any external imposed capital requirement. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.
Disclosure of payableto vendors as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” is based on the information available with the company regarding the statusof registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts/ interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.
(B) The Company has derivative instruments for hedging possible losses and exchange fluctuation losses. During the year company has incurred net off loss of ? 75.42 Lakhs (previous year ? 28.73 Lakhs - loss) out of which gain of ? 64.78 Lakhs (previous year gain of ? 208.48 Lakhs) relating to provision for mark to market gain/loss on account of outstanding financial transactions as on 31st March 2024.
53. Fair valuation techniques
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
1) Fair value of cash and 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.
2) Fair value of borrowings from banks and other non-current financial liabilities, are estimated by discounting future cash flows using rates currently available for debt on similar terms and remaining maturities.
3) Other non-current receivables are evaluated by the Company, based on parameters such as interest rates, individual creditworthiness of the counterparty etc. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.
4) The fair values of derivatives are calculated using the RBI reference rate as on the reporting date as well as other variable parameters.
Fair Value hierarchy
All financial assets and liabilities for which fair value is measured in the financial statements are categorised within the fair value hierarchy, described as follows: -
Level 1 - Quoted prices in active markets.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3 - Inputs that are not based on observable market data.
The following table presents the fair value measurement hierarchy of financial assets and liabilities, which have been measured subsequent to initial recognition at fair value as at 31st March, 2024 and 31st March 2023:
58. Segment Information:
Disclosures as required by Indian Accounting Standard (Ind AS) 108 Operating Segments Identifications of Segments:
Segments have been identified in line with Indian Accounting Standard on ‘Operating Segments’ (Ind AS -108), taking into account the organizational structure as well as the differential risk and returns of this segment and as per the quantitative criteria specified under IND AS. The Company has identified the following segments:
Operating Segments:
Bio-based Specialities and Performance Chemicals Segment comprises Glycols, Specialty Chemicals, Natural Gum & other related goods etc. Potable Spirits Segment comprises manufacture and sale of Ethyl Alcohol (Potable). Ennature Biopharma comprises manufacture and sale of Nutraceutical Products.
*The variation in Return on equity/capital employed as at March 31,2024 as compared to March 31,2023 is primarily due to increase in profit after tax for the year 2023-24.
** The variation in Trade receivables turnover ratio as at March 31,2024 as compared to March 31,2023 is primarily due to increase in Net Turnover
# The variation in Net capital turnover ratio as at March 31, 2024 as compared to March 31, 2023 is primarily due to decrease in working capital.
# The variation in Debt service coverage ratio as at March 31, 2024 as compared to March 31, 2023 is primarily due to decrease in Earning for Debt Service
63. Other Statutory Information:
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. There are no transactions and / or balance outstanding with companies struck off under section 248 of the Companies Act, 2013.
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 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) provided any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
e. 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 Group 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) provided any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
f. The Company does not any transactions which are not recorded in the books of accounts that have 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).
g. The company does not have any investments through more than two layers of investment companies as per section 2(87) (d) and section 186 of Companies Act, 2013.
h. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
i. The Title deeds of the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company
j. The Company has sanctioned facilities from banks on the basis of security of current assets. The periodic returns filed by the Company with such banks are in agreement with the books of accounts of the Company
k. The Company has adhered to debt repayment and interest service obligations on time. Wilful defaulter related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable.
l. Term loans availed by the Company were, applied by the Company during the year for the purposes for which the loans were obtained.
64. The figures of the previous period/year have been restated/regrouped wherever necessary, to make them comparable.
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