(t) Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognized for liabilities that can be
measured only by using a substantial degree of estimation,
if
(a) the Company has a present obligation as a result of a
past event;
(b) a probable outflow of resources is expected to settle
the obligation; and
(c) the amount of the obligation can be reliably
estimated.
Reimbursement expected in respect of expenditure
required to settle a provision is recognised only when it is
virtually certain that the reimbursement will be received.
Contingent liability is disclosed in case of
(a) a present obligation arising from past events, when
it is not probable that an outflow of resources will be
required to settle the obligation;
(b) a present obligation when no reliable estimate is
possible; and
(c) a possible obligation arising from past events where
the probability of outflow of resources is not remote.
Contingent Assets are neither recognised, nor disclosed.
Provision, Contingent Liabilities and Contingent Assets
are reviewed at each balance Sheet date.
(u) Dividend
The Company recognises a liability to make cash
distributions to equity holders when the distribution
is authorised and the distribution is no longer at the
discretion of the Company. As per the Companies
Act,2013 in India, a distribution is authorised when it is
approved by the shareholders. A corresponding amount
is recognised directly in equity.
(v) Segment Reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker of
the Company is responsible for allocating resources and
assessing performance of the operating segments.
1.3 Key accounting estimates and judgements
The preparation of the Company’s financial statements
requires the management to make judgements,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities,
and the accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of
assets or liabilities affected in future periods.
The areas involving critical estimates or judgements are:
a. Property Plant & Equipment - Property, plant and
equipment represent a significant proportion of the
asset base of the Company. The charge in respect
of periodic depreciation is derived after determining
an estimate of an asset’s expected useful life and
the expected residual value at the end of its life. The
useful lives and residual values of Company’s assets
are determined by management at the time the asset
is acquired and reviewed at the end of each reporting
period. The lives are based on historical experience
with similar assets as well as anticipation of future
events, which may impact their life, such as changes
in technology.
b. Provisions - Provision is recognised when the
Company has a present obligation as a result of past
event 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. These are
reviewed at each balance sheet date adjusted to
reflect the current best estimates.
c. Taxes - Significant judgements are involved in
determining the provision for income taxes, including
amount expected to be paid / recovered for uncertain
tax positions. In assessing the realizability of deferred
tax assets arising from unused tax credits, the
management considers convincing evidence about
availability of sufficient taxable income against
which such unused tax credits can be utilized. The
amount of the deferred income tax assets considered
realizable, however, could change if estimates of
future taxable income changes in the future
d. Defined Benefit Obligations - The cost of defined
benefit gratuity plans, and post-retirement medical
benefit is determined using actuarial valuations. The
actuarial valuation involves making assumptions
about discount rates, future salary increases,
mortality rates and future pension increases. Due to
the long-term nature of these plans, such estimates
are subject to significant uncertainty
1.4 Recent Accounting Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
the Companies (Indian Accounting Standards) Rules as
issued from time to time.
During the year, MCA notified amendments to Ind AS
21 - The Effects of Changes in Foreign Exchange Rates,
Ind AS 1 - Presentation of Financial Statements, Ind AS
7 - Statement of Cash Flows and Ind AS 107 - Financial
Instruments: Disclosures, applicable from April 1,2025.
The Company has evaluated the aforesaid amendments
and concluded that the same do not have any material
impact on its financial statements.
35 SEGMENT REPORTING
"Operating segments are defined as components of an enterprise for which discrete financial information is available that is
evaluated regularly by the chief operating decision-maker at respective entity level in assessing the performance and deciding
on allocation of resources. The Company, accordingly, has only one reportable business segment, i.e., ‘Speciality Chemicals’.
As per Ind AS 108- "Operating Segment”(para 4), segment information has been provided under the Notes to Consolidated
Financial Statements and therefore no separate disclosure on segment information is given in standalone financial
statements.”
36 Financial instruments - Fair values and risk management
A. Accounting classification and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not
include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
B. Measurement of fair values
Ind 113, ‘Fair Value Measurement’ requires classification of the valuation method of financial instruments measured at
fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in
the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). Fair value
of derivative financial assets and liabilities are estimated by discounting expected future contractual cash flows using
prevailing market interest rate curves. The three levels of the fair-value-hierarchy under Ind AS 113 are described below:
Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted
equity instruments, government securities and mutual funds (includes FMP) that have quoted price.
Level 2: Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices) such as derivative financial instruments.
Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in
part using a valuation model based on assumptions that are neither supported by prices from observable current
market transactions in the same instrument nor are they based on available market data. This includes unquoted
equity shares which are valued at cost.
Transfers between Levels
There are no transfers betweeen the levels
C. Financial risk management
The Company’s activities expose it to Credit risk, liquidity risk and market risk.
i. Risk management framework
Risk Management is an integral part of the Company’s plans and operations. The Company’s board of directors has overall
responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors is
responsible for developing and monitoring the Company risk management policies.
The Risk Management 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
ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
ii. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt
securities, cash and cash equivalents, mutual funds, bonds etc.
Trade and other receivables
Credit risk is the risk of possible default by the counter party resulting in a financial loss.
The Company manages credit risk through various internal policies and procedures setforth for effective control over credit
exposure. These are managed by way of setting various credit approvals,evaluation of financial condition before supply
terms, setting credit limits, industry trends,ageing analysis and continuously monitoring the creditworthiness of customers
to which the Company grants credit terms in the normal course of business.
Based on prior experience and an assessment of the current economic environment, management believes that sufficient
provision is made based on expected credit loss model for credit risk wherever credit is extended to customers.
Cash and cash equivalents
Credit risk from balances with banks is managed by the Company’s treasury department in accordance with the Company’s
policy. Investment of surplus funds are made in mainly in mutual funds with good returns and with high credit ratings
assigned by International and domestic credit ratings agencies.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.
iii. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s
reputation.
The Company has obtained fund and non-fund based working capital lines from various banks. The Company also
constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.
Accordingly, liquidity risk is perceived to be low.
The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed
undiscounted cash flows as at the Balance Sheet date:
iv. Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes
in market rates and prices (such as interest rates, foreign currency exchange rates ). Market risk is attributable to all
market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long¬
term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk
and the market value of its investments. Thus, the Company’s exposure to market risk is a function of investing and
borrowing activities and revenue generating and operating activities in foreign currencies
a) Currency risk
The Compnay is exposed to currency risk to the extent that there is a mismatch between the currencies in
which sales, purchase, and other expenses are denominated and the functional currency of the Company. The
functional currency of the Company is Indian Rupees (INR). The currencies in which these transactions are
primarily denominated are EURO and USD.
Exposure to currency risk
The summary quantitative data about the Company’s exposure to currency risk as reported to the management
of the Company is as follows:
The Compnay is exposed to currency risk to the extent that there is a mismatch between the currencies in
which sales, purchase, and other expenses are denominated and the functional currency of the Company.
The functional currency of the Company is Indian Rupees (^). The currencies in which these transactions are
primarily denominated are USD.
b) 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. Investment committee manages and constantly reviews the interest rate movements
in the market. This risk is mitigated by the Company by investing the funds in varioustenors depending on the liquidity
needs of the Company. The Company’s exposures to interest rate risk is not significant.
c) Price risk
Quoted Equity & Debt Securities Price Risk is related to the change in market reference price of the investments.
The fair value of some of the Company’s investments in quoted equity & debt securities exposes the Company
to price risks. In general, these securities are not held for trading purposes. These investments are subject to
changes in the market price of securities.
d) Price sensitivity analysis
If prices of quoted equity & debt instruments had been 1% higher/(lower), the unrealised gain/(loss) for the year ended
March 31,2026 and March 31,2025 would increase/(decrease) by ^ 12.18 Lakhs and ^ 11.96 Lakhs respectively.
37 Employee Benefit obligations
(A) Defined Contribution Plan
Contributions are made to Employee Provident Fund (EPF), Employees State Insurance Scheme (ESIC) and other
Funds which covers all regular employees. Both the employees and the Company make predetermined contributions
to the Provident Fund and ESIC. The contributions are normally based on a certain percentage of the employee’s
salary. Amount recognised as expense in respect of these defined contribution plans, is as detailed below :
43 Additional regulatory information not disclosed elsewhere in the financial information
A The Company do not have any Benami property and no proceedings have been initiated or pending against the
Company and its Indian subsidiaries for holding any Benami property, under the Benami Transactions (Prohibitions)
Act, 1988 (45 of 1988) and the rules made thereunder.
B The Company has no transactions with struck off companies under section 248 of the Companies Act, 2013 or section
560 of the Companies Act, 1956.
C 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 Group (Ultimate Beneficiaries) or
provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
D 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 Group shall: 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
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
E The Company have not undertaken 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).
F The Company have not traded or invested in Crypto currency or Virtual Currency during the current or previous year.
G The Company have not been declared as a ‘Wilful Defaulter’ by any bank or financial institution (as defined under the
Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the
Reserve Bank of India.
H The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.
44 Capital Management
For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital
is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.
As at 31st March, 2026, the Company has only one class of equity shares and has no other long term borrowings. Consequent
to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal
capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its
long term financial plans.
47 Working Capital Facilities
The Company has sanctioned credit facilities from Bank of India ' 150 lakhs (i.e cash credit facility ' 100.00 lakhs and Bank
Guarantee - ' 50.00 lakhs) The Company has not utilised cash credit facilities at the year end.
Terms of loan
a) The credit facility carries interest rate of Bank Of India, currently 9.81% p.a. (interest payable on monthly rests).
b) The credit facility is secured by : Hypothecation of stocks and bookdebts.
Utilisation of borrowings :
(a) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was
taken at the balance sheet date.
(b) The quarterly returns/statements of current assets filed by the Company with banks or financial institutions in
relation to secured borrowings wherever applicable, are in agreement with the books of accounts.
48 Audit Trail
The Ministry of Corporate Affairs (MCA) has issued a notification - Companies (Accounts) Amendment Rules, 2021 which
is effective from 1st April, 2023. The amendment requires that every company which uses an accounting software for
maintaining its books of account shall use an accounting software where there is feature of recording audit trail of each and
every transaction and further creating an edit log of each change made to the books of account along with the date when
such changes were made and ensuring that the audit trail cannot be disabled.
The Company uses an accounting software for maintaining books of account which has a feature of recording audit trail
and edit log facility and that has been operative throughout the financial year for the transactions recorded in the software
impacting books of account at the application level. The software being managed on public cloud, users of the company do
not have access to enable, disable, deactivate or tamper with the audit trail setting.
49 Events occurring After Balance sheet date
The Board of Directors have recommended a dividend of ^ 1.25 per share of face value ^ 5/- each for the year ended 31st
March, 2026
aggregating ^ 336.21 Lakhs, subject to the approval of shareholders at the Annual General Meeting.
50 Composite scheme of arrangement: (in ' lakhs except otherwise stated)
The figures for the comparatives figures for the year to date pertaining to the FY 2024-25 are after considering the effect of
demerger and amalgamation pursuant to NCLT order dated 7th April, 2025, as per the method of accounting prescribed in
the composite scheme of arrangement and in accordance with principles of Indian Accounting Standards, including IND
AS 103 (Business Combinations). The impact of the aforesaid demerger and amalgamation on the corresponding previous
year figures (FY 2024-25) is disclosed below. The approved Scheme provides for an appointed date of April 1,2024.
Against the net assets of ^ 8,915.58 Lakhs, the Company had issued equity shares of ^1,344.83 Lakhs (2,68,96,576 shares
of ^ 5 each) after cancellation of existing 10,000 equity shares of ^ 5 each and the balance of ^ 7,571.25 Lakhs has been
recognised in Other equity.
51 The Government of India has consolidated 29 existing labour legislations into a united framework comprising four Labour
Code viz Code on wages 2019, Code on Social Security 2020, Industrial Relation Code 2020, and Occupational Safety,
Health and Working Condition Code 2020 (collectively referred to as the New Labour Codes). These Codes have been made
effective from 21st November, 2025. The corresponding all supporting rules under these codes are yet to be notified. The
incremental impact of these changes on the employee benefit expenses, estimated by the Company, on the basis of the
information available, consistent with the guidance provided by the Institute of Chartered Accountants of India, is ^ 38.94
Lakhs and has been recognised in the standalone financial statements of the Company for the year ended 31st March,
2026.
52 The figures for corresponding previous periods have been restated/regrouped, rearranged and reclassified wherever
necessary to make them comparable.
53 Approval of Standalone Financial Statements
The above Standalone Financial Statements for the year ended 31st March 2026, have been reviewed by the Audit Committee
and approved by the Board of Directors at their meeting held on 16th May 2026. The Statutory Auditors of the Company have
audited the annual financial statements.
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