17.2 The Company has only one class of shares i.e. equity shares.All equity shares carry equal rights with respect to voting and dividend.
17.3 In the event of liquidation of the Company the equity shareholders shall be entitled to proportionate share of their holding in the assets remaining after distribution of all preferential amounts.
17.4 Subsequent to Balance Sheet date, the Board of Directors has recommended a dividend of Rs. 0.75 per share to be paid on fully paid equity shares in respect of financial year ended on March 31,2025. The equity dividend is subject to approval by shareholders at the ensuing annual general meeting and has not been included as a liability in these financial statements. The total estimated equity dividend to be paid is Rs. 60.25 Lakhs.
17.5 Shares held by holding/ultimate holding company/or their subsidiaries/associates: Not Applicable
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 provisions of the Companies Act, 2013.
Capital Redemption Reserve:
Capital Redemption Reserve represents reserve created during buy back of Equity Shares and it is a non-distributable reserve.
General Reserve:
General Reserve has been created by transfer out of profit generated by the Company and is available for distribution to shareholders. Underthe erstwhile Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn.
Retained Earnings:
Retained earnings are the profits that the Company has earned till date including effect of remeasurement of defined benefit obligations 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. Effective portion of Cash Flow Hedges:
This Reserve represents the cumulative effective portion of changes in FairValue of derivatives that are designated as Cash Flow Hedges. It will be reclassified to profit or loss or included in the carrying amount of the non-financial asset in accordance with the Company's accounting policy.
19.1 Details of security and rate of interest for term loan from HDFC Bank Limited Primary Security:
a) First exclusive charge over factory land and building located at plot No. D-2/CH/152, GIDCDahej, Gujarat.
b) First exclusive charge over movable fixed assets including Plant and Machinery located at Plot No. D-2/CH/152, GIDC Dahej, Gujarat.
c) First exclusive charge over ground mounted solar plant Repayment Terms:
a) 20 quarterly installments of Rs. 150.00 Lakhs each starting from January 2022
b) 14 quarterly installment of Rs. 71.43 Lakhs each starting from April 2025
c) 75 monthly installment of Rs. 22.67 Lakhs each starting from January 2026 Rate of Interest:
Interest rate for the year ranges between 8.37% to 8.9%
22.1 Details of security for working capital facilities from State Bank of India Repayment Schedule:
Repaybleon Demand Primary Security:
Exclusive charge by way of hypothecation over entire present and future current assets of the company.
Collateral Security:
"Exclusive charge, by way of Equitable Mortgage and Hypothecation on entire fixed assets (Land, Building, Plant & Machinery) both present and future of the company situated at Survey Nos. 166,167,168 and 169 of Mouje Indrad Village, Kadi - Kalol Road, Chhatral,Taluka Kadi, Dist. Mehsana, Gujarat
- Lien overTDR worth Rs. 25 Lakhs in lieu of waiverof ECGC policy.
Rate of Interest:
Interest rate for the year ranges between 7.41% to 10.20% (PY.2023-24 between 7.80% to 9%)
43.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, Liquidity Risk and Market 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 analyze 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.
43.1 Credit Risk Management
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company’s receivables from customers and loans.The carrying amounts of financial assets represent the maximum credit riskexposure.
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 analyzed 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 five years, and none of these customers’balances are credit-impaired atthe reporting date.
Confirmation of balances from Debtors & Loans and Advances received, are being reconciled.
Cash and Cash Equivalents
The company holds cash and cash equivalents of Rs. 14.44 Lakhs at March 31,2025 (P.Y. Rs. 15.99 Lakhs).The cash and cash equivalents are held with bank and cash on hand.
43.2 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.
43.3 Market Risk
Market risk is the riskthat changes in market prices-such as foreign exchange rates and interest rates-will affect the company’s income orthe 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.
43.4 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.
43.5 Foreign Currency Risk
The company operates internationally and is exposed to currency risk on account of its receivables in foreign currency. The functional currency of the company is Indian Rupee. The company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one yearfromthe reporting date.
The company does not use derivative financial instruments for trading or speculative purposes.
43.6 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 Material for company’s products is Acetanilide, CPC Blue & Sodium Silicate. Company sources its raw material requirements from domestic 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.
44. Capital Management
For the purposes of the Company’s capital management, capital includes issued capital and all other equity reserves.The primary objective of the Company’s Capital Management is to maximise shareholder value.The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.
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 interest-bearing 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.
45. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated in the balance sheet, if realised in the ordinary course of the business. Provision for depreciation and all known liabilities have been made in accounts.
46. In terms of Ind As 36- Impairment of Assets issued by ICAI, the management has reviewed its fixed assets and arrived at the conclusion that impairment loss which is difference between the carrying amount and recoverable value of assets, was not material and hence no provision is required to be made.
47. Financial Instruments - Fair Values & Risk Management 47.1 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, otherthan 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 creditworthiness 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.
5 The company uses the following hierarchy for determining and disclosing the fair values of financial instruments by valuation technique: Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs otherthan the quoted prices included within Level 1 that are observable forthe asset or liability, either directly or indirectly.
Note- ’Reason for material discrepancies’
- 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.
- The management, basis their understanding with banks, submits stock statement of physical stock as available at respective locations at the period end. Accordingly adjustment for goods in transit (inward and outward) is not considered for the purpose of filing returns with banks.
- There are other differences on account of regrouping and reclassification of trade receivable balances .The Company has filed provisional return with banks for the quarter ended March 31 2025, as per the due date and subsequently filed final return with respective banks where amounts as per return matches with underlying books of accounts as at March 31,2025.
50 The Company does not held any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. Hence any proceeding has not been initiated or pending against the company for holding any benami property under the BenamiTransactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
51 The Company does not have any transactions with companies struck off.
52 As on March 31,2025 there is no unutilised amounts in respect of any issue of securities and long term borrowings from banks and financial institutions.The borrowed funds have been utilised for the specific purpose for which the funds were raised.
53 The Company does not have 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 IncomeTaxAct, 1961).
54 The Company has not traded or invested in crypto currency or virtual currency during the financial year.
55 The company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period.
56 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:
- 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
- provide any guarantee, security orthe like to or on behalf of the Ultimate Beneficiaries
57 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:
58 The company does not have any investment in any subsidiary company.Therefore, there is no requirement to comply with the number of layers prescribed under clause (87) of section 2 of Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
59 There was no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the year ended March 31,2025 and March 31,2024.
60 The Company has borrowings from banks and financial institutions on the basis of security of assets and the quarterly returns filed by the Company with the banks and financial institutions are in accordance with the books of accounts of the Company for the respective quarters.
61 The Company has taken borrowings from banks and financial institutions and utilised them for the specific purpose for which they were taken as at the Balance sheet date.
62 On 3rd May, 2024 the Company has informed to BSE and NSE that afire broke out on 2nd May, 2024 at around 04:30 p.m. (IST) in the Dry zone of VS Plant of the Company located at Village: lndrad, Chhatral-Kadi Road, Mahesana-382715. Due to a fire incident, production operation of the said Dry Zone plant was disrupted. However, there were no human injuries or casualties reported. The Company has lodged claim of this incident with the insurance company and the process is currently ongoing. The Company has adequate insurance coverage for the aforesaid loss and based on its assessment of loss and terms and conditions of the policy, the insurance claim is fully admissible. Further the claim is not disputed by the insurance company.
During the Quarter-3 of FY 2024-25, the Company was able to e-auction scrap of the Property, Plant & Equipment damaged due to fire and realized Rs. 32.29 Lakhs. On the basis of the same, Company has estimated and recognised loss of Rs. 402.18 Lakhs on account of damage to Property, Plant & Equipment and Inventory and has recognised insurance claim receivable to the extent of aforesaid losses, net of amount realized from sale of scrap. Further, the Company is in the process of determining final claim for reinstatement of assets. The aforesaid losses of Rs. 402.18 Lakhs and corresponding credit of Rs. 402.18 Lakhs arising from insurance claim receivables has been presented on a net basis (Nil) under Exceptional Items.
63 Previous year's figures have been regrouped/re-arranged/recasted, wherever necessary, so as to make them comparable with current year's figures.