(xiv) Provisions, Contingent Liabilities and
Contingent Assets
Provisions are recognized when the Company has a present
legal or constructive obligation as a result of past events,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and the amount can be reliably estimated. The expense
relating to a provision is presented in the Statement of Profit
and Loss, net of any reimbursements.
The amount recognized as a provision is the best estimate
of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligation. When
a provision is measured using the cash flows estimated
to settle the present obligation, it carrying amount is the
present value of those cash flows (when the effect of the
time value of money is material).
A present obligation that arises from past events, where
it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount
cannot be made, is disclosed as a contingent liability.
Contingent liabilities are also disclosed when there is a
possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not
wholly within the control of the Company.
Claims against the Company, where the possibility of
any outflow of resources in settlement is remote, are not
disclosed as contingent liabilities.
Contingent assets are not recognized in standalone
financial statements since this may result in the recognition
of income that may never be realized. However, when the
realization of income is virtually certain, then the related
asset is not a contingent asset and is recognized.
Provisions, contingent liabilities and contingent assets are
reviewed at each Balance Sheet date.
(xv) Employee Benefits
Short-term benefits
Short-term benefit obligations are measured on an
undiscounted basis and are expensed as the related
service is provided. A liability is recognized for the amount
expected to be paid if the Company has a present legal
or constructive obligation to pay this amount as a result of
past service provided by the employee and the obligation
can be estimated reliably.
Defined contribution plans
The Company makes defined contributions to the
Government Employee Provident Fund, which is recognized
in the Statement of Profit and Loss, on an accrual basis. The
Company recognizes contribution payable to the provident
fund scheme as an expense when an employee renders
the related service. The Company has no obligation other
than the contribution payable to the provident fund.
Defined benefit plans
The Company's liabilities under the provisions of the Code
on Social Security, 2020 are determined on the basis of
actuarial valuation made at the end of each financial year
using the projected unit credit method.
The Gratuity obligation is unfunded. Obligation is measured
at the present value of estimated future cash flows using a
discounted rate that is determined by reference to market
yields at the Balance Sheet date on Government bonds,
where the terms of the Government bonds are consistent
with the estimated terms of the defined benefit obligation.
The net interest cost is calculated by applying the discount
rate to the defined benefit obligation. This cost is included
in the 'Employee benefits expense' in the Statement of Profit
and Loss.
Re-measurement gains or losses arising from changes
in actuarial assumptions are recognized in the period
in which they occur, directly in OCI. These are presented
as re-measurement gains or losses on defined benefit
plans under other comprehensive income in other equity.
Remeasurement gains or losses are not reclassified
subsequently to the Statement of Profit and Loss.
Compensated absences
The employees of the Company are entitled to
compensated absences. Accumulated compensated
absences, which are expected to be encashed beyond
twelve months from the end of the year, are treated as
long-term employee benefits. Liability for such benefit
is provided on the basis of actual leave balance as
at the Balance Sheet date. The Company records an
obligation for compensated absences in the period in
which the employee renders the services that increases
this entitlement. The Company measures the expected
cost of compensated absences as the additional amount
that the Company expects to pay as a result of the unused
entitlement that has accumulated at the end of the
reporting period. The Company recognizes accumulated
compensated absences based on actuarial valuation in
the Statement of Profit and Loss.
(xvi) Financial instruments
A financial instrument is any contract that gives rise to a
financial asset for one entity and a financial liability or
equity instrument for another entity.
Financial assets and liabilities are recognized when the
Company becomes a party to the contractual provisions of
the instrument.
Financial assets:
Initial recognition and measurement
Financial assets are classified, at initial recognition, and
subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value
through profit or loss.
The classification depends on the Company's business
model for managing the financial assets and the contractual
terms of the cash flows.
Subsequent measurement
For purposes of subsequent measurement, financial assets
are classified in following categories:
• Debt instruments at amortised cost
• Equity instruments measured at fair value through
other comprehensive income (FVTOCI)
• Debt instruments, derivative financial instruments and
equity instruments at fair value through profit or loss
(FVTPL)
Debt instruments at amortised cost
A 'debt instrument' is measured at the amortised cost if
both the following conditions are met:
a) The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows; and
b) Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount
outstanding.
This category is the most relevant to the Company. After
initial measurement, such financial assets are subsequently
measured at amortised cost using the effective interest
rate (EIR) method. Amortised cost is calculated by taking
into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR.
The EIR amortisation is included in finance income in the
standalone statement of profit and loss. The losses arising
from impairment are recognised in the statement of profit
and loss.
Debt instrument at FVTOCI
A debt instrument is subsequently measured at fair value
through other comprehensive income if it is held within
a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets
and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorization as amortized cost or as FVTOCI, is classified
as FVTPL.
Debt instruments included within the FVTPL category are
measured at fair value with all changes recognised in the
profit and loss.
The Company classifies its debt instruments which are
held for trading under FVTPL category. Held for trading
assets are recorded and measured in the Balance Sheet
at fair value. Gains and losses on changes in fair value
of debt instruments are recognised on net basis through
profit or loss.
Derecognition of financial assets:
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Company's
balance sheet) when:
• The rights to receive cash flows from the asset have
expired, or
• The Company has transferred its rights to receive cash
flows from the asset or has assumed an obligation to
pay the received cash flows in full without material
delay to a third party under a 'pass-through'
arrangement and either (a) the Company has
transferred substantially all the risks and rewards of
the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control
of the asset, the Company continues to recognise the
transferred asset to the extent of the Company's continuing
involvement. In that case, the Company also recognises
an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum
amount of consideration that the Company could be
required to repay.
Impairment of financial assets
The Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss on the
following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are
measured at amortised cost e.g., loans, debt securities,
deposits and bank balances.
b) Trade receivables or any contractual right to receive
cash or another financial asset that result from
transactions that are within the scope of Ind AS 115.
The Company follows 'simplified approach' for recognition
of impairment loss allowance on:
• Trade receivables or contract revenue receivables;
Under the simplified approach the Company does not track
changes in credit risk. Rather, it recognises impairment loss
allowance based on lifetime ECLs at each reporting date,
right from its initial recognition.
For recognition of impairment loss on other financial assets
and risk exposure, the Company determines that whether
there has been a significant increase in the credit risk since
initial recognition. If credit risk has not increased significantly,
12-month ECL is used to provide for impairment loss.
However, if credit risk has increased significantly, lifetime
ECL is used.
ECL is the difference between all contracted cash flows
that are due to the Company in accordance with the
contract and all the cash flows that the Company expects
to receive, discounted at the original EIR. ECL impairment
loss allowance (or reversal) recognised during the period is
recognised as income/(expense) in the statement of profit
and loss (P&L).
The balance sheet presentation for various financial
instruments is described below:
Financial assets measured as at amortised cost
and contractual revenue receivables:
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.
For assessing increase in credit risk and impairment loss,
the Company combines financial instruments on the basis
of shared credit risk characteristics with the objective of
facilitating an analysis that is designed to enable significant
increases in credit risk to be identified on a timely basis.
Financial liabilities:
Initial recognition, measurement and presentation
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables or derivatives, as appropriate.
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.
The Company's financial liabilities include trade payables,
loans and borrowings including bank overdrafts, other
financial liabilities and derivative financial instruments.
For purposes of subsequent measurement, financial
liabilities are classified in two categories:
• Financial liabilities at fair value through profit or loss.
• Financial liabilities at amortised cost (loans and
borrowings).
Financial liabilities at fair value through profit or
loss
Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition at fair value through
profit or loss. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing
in the near term. This category also includes derivative
financial instruments entered into by the Company that
are not designated as hedging instruments in hedge
relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading are recognised
in the statement of profit and loss.
Financial liabilities designated upon initial recognition at
fair value through profit or loss are designated as such at
the initial date of recognition, and only if the criteria in Ind
AS 109 are satisfied. For liabilities designated as FVTPL,
fair value gains/losses attributable to changes in own
credit risk are recognised in OCI. These gains/loss are not
subsequently transferred to profit or loss. However, the
Company may transfer the cumulative gain or loss within
equity. All other changes in fair value of such liability are
recognised in the statement of profit and loss.
The Company classifies its debt instruments which are
held for trading under FVTPL category. Held for trading
assets are recorded and measured in the Balance Sheet
at fair value. Gains and losses on changes in fair value
of debt instruments are recognised on net basis through
profit or loss.
Loans and borrowings
After initial recognition at fair value, interest-bearing loans
and borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised
in the statement of profit and loss when the liabilities are
derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of profit and loss.
This category generally applies to borrowings.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.
Offsetting financial instruments
Financial assets and liabilities are off-set and the net
amount is reported in the Balance Sheet where there is a
legally enforceable right to offset the recognized amounts
and there is an intention to settle on a net basis or realize
the asset and settle the liability simultaneously.
Derivative financial instruments
The Company uses derivative financial instruments, such
as foreign exchange forward contracts, and interest rate
swap to manage its exposure to interest rates and foreign
exchange risks. Such derivative financial instruments are
initially recognized at fair value on the date on which a
derivative contract is entered into and are subsequently re¬
measured at fair value.
Derivatives are carried as financial assets when the fair
value is positive and as financial liabilities when the fair
value is negative.
The Company enters into derivative contracts to hedge
risks which are not designated in any hedging relationship
i.e., hedge accounting is not followed. Such contracts are
accounted for at FVTPL.
(xvii) Cash and cash equivalent
Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits with
an original maturity of three months or less, that are readily
convertible to a known amount of cash and subject to an
insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits,
as defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Company's
cash management.
(xviii) Cash dividend to equity holders
The Company recognises a liability for payment of dividend
to equity holders when the distribution is authorised and the
distribution is no longer at the discretion of the Company. As
per the corporate laws in India, a distribution is authorised
when it is approved by the shareholders. A corresponding
amount is recognised directly in equity.
(xix) Earnings per share
Basic earnings per share are calculated by dividing the
profit for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding
during the period.
For the purpose of calculating diluted earnings per share,
the profit for the period attributable to equity shareholders
and the weighted average number of shares outstanding
during the period are adjusted for the effects of all dilutive
potential equity shares.
(xx) Segment Information
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision-maker. The Chief Operating decision-maker is
responsible for allocating resources and assessing the
performance of the operating segments and makes
strategic decisions.
(xxi) New accounting standards, amendments
and interpretations adopted by the Company
effective from April 01, 2025:
The accounting policies adopted in the preparation of the
standalone financial statements are consistent with those
followed in the preparation of the Company's annual
financial statements for the year ended March 31, 2025,
except for amendments to the existing Indian Accounting
Standards (Ind AS). The Company has not early adopted
any other standard, interpretation or amendment that has
been issued but is not yet effective.
Ministry of Corporate Affairs ("MCA") notifies new standards
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time
to time. During the year ended March 31, 2026, MCA has
notified the Companies (Indian Accounting Standards)
Amendment Rules, 2025 applicable to the Company w.e.f.
April 01, 2025.
(i) Amendments to Ind AS 21 - Lack of
exchangeability
The amendment requires the Effects of Changes in Foreign
Exchange Rates to specify how an entity should assess
whether a currency is exchangeable and how it should
determine a spot exchange rate when exchangeability
is lacking. The amendments also require disclosure of
information that enables users of its financial statements
to understand how the currency not being exchangeable
into the other currency affects, or is expected to affect,
the entity's financial performance, financial position and
cash flows.
The amendments are effective for annual reporting
periods beginning on or after April 01, 2025. When
applying the amendments, an entity cannot restate
comparative information.
The amendments do not have a material impact on the
Company's financial statements.
(ii) Amendments to Ind AS 1 - Classification of
Liabilities as Current or Non-current and Non¬
current Liabilities with Covenants
In August 2025, the MCA notified amendments to
paragraphs 69 to 76 of Ind AS 1 to specify the requirements
for classifying liabilities as current or non-current. The
amendments clarify:
• What is meant by a right to defer settlement.
• That a right to defer must exist at the end of the
reporting period.
• That classification is unaffected by the likelihood that
an entity will exercise its deferral right.
• That only if an embedded derivative in a convertible
liability is itself an equity instrument would the terms
of a liability not impact its classification In addition, a
requirement has been introduced to require disclosure
when a liability arising from a loan agreement is
classified as non-current and the entity's right to defer
settlement is contingent on compliance with future
covenants within twelve months.
If there is a breach of a material covenant of a long
term loan arrangement on or before the end of the
reporting period, resulting in the liability becoming
payable on demand as at the reporting date, and the
lender agrees—after the reporting period but before
the financial statements are approved for issue—not
to demand repayment for at least 12 months as a
consequence of the breach, this shall be treated as an
adjusting event. Accordingly, the entity is not required to
classify the liability as current.
The amendments are effective for annual reporting
periods beginning on or after April 01, 2025 retrospectively
in accordance with Ind AS 8.
The amendments do not have a material impact on the
Company's financial statements.
(iii) Amendments to Ind AS 7 and Ind AS 107 -
Supplier Finance Arrangements
In August 2025, the MCA notified amendments to Ind
AS 7 Statement of Cash Flows and Ind AS 107 Financial
Instruments: Disclosures to clarify the characteristics of
supplier finance arrangements and require additional
disclosure of such arrangements. The disclosure
requirements in the amendments are intended to assist
users of financial statements in understanding the effects
of supplier finance arrangements on an entity's liabilities,
cash flows and exposure to liquidity risk.
The amendments do not have a material impact on the
Company's financial statements.
(iv) International Tax Reform—Pillar Two Model
Rules - Amendments to Ind AS 12
In August 2025, the MCA notified amendments to Ind AS
12 Income Taxes in response to the OECD's BEPS Pillar Two
rules and include:
• A mandatory temporary exception to the recognition
and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two model
rules; and
• Disclosure requirements for affected entities to help
users of the financial statements better understand
an entity's exposure to Pillar Two income taxes
arising from that legislation, particularly before its
effective date.
The mandatory temporary exception - the use of which
is required to be disclosed - applies immediately. The
remaining disclosure requirements apply for annual
reporting periods beginning on or after April 01, 2025,
but not for any interim periods ending on or before
March 31, 2026.
The amendments had no impact on the Company's
financial statements as the Company is not in scope of the
Pillar Two model rules.
1D. SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
The preparation of standalone 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 at the
date of these standalone financial statements and the
reported amounts of revenues and expenses for the year
presented. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed at
each balance sheet date. Revisions to accounting estimates
are recognized in the period in which the estimate is revised
and future periods affected.
Estimates and judgments involved in applying accounting
policies, is in respect of:
• Useful lives of property, plant and equipment
and Intangible assets
Determination of the estimated useful lives of tangible
and intangible assets and the assessment as to which
components of the cost may be capitalized. Useful lives of
tangible assets are based on the life prescribed in Schedule
II of the Companies Act, 2013.
• Defined benefit plans (gratuity benefits)
A liability in respect of defined benefit plans is recognised in
the balance sheet, and is measured as the present value of
the defined benefit obligation at the reporting date less the
fair value of the plan's assets. The present value of the defined
benefit obligation is based on expected future payments
at the reporting date, calculated annually by independent
actuaries. Consideration is given to expected future salary
levels, experience of employee departures and periods of
service. Refer note 29 for details of the key assumptions used
in determining the accounting for these plans.
• Discounts, rebates and sales returns
The Company recognises the accruals for rebates/discount/
incentives and returns based on accumulated experience
and underlying schemes and agreements with customers.
(1) In case of work-in-progress (including intermediate goods), during the year ended March 31, 2026 ' 0.24 millions
(March 31, 2025 ' 1.38 millions) was recognised as expense for inventories at net realizable value.
(2) In case of finished goods, during the year ended March 31, 2026'10.51 millions (March 31, 2025'1.71 millions) was
recognised as expense for inventories at net realizable value.
(3) Finished goods includes goods in transit amounting to ' 110.90 millions (March 31, 2025'103.60 millions).
(4) Stock in trade includes goods in transit amounting to ' 4.22 millions (March 31, 2025'9.15 millions).
(5) The secured cash credit facilities are covered by pari passu charge on inventories (refer note 14).
(6) The above includes inventories held by third parties amounting to ' 86.86 millions (March 31, 2025'91.33 millions).
(7) The mode of valuation of inventories has been stated in note 1C(xii).
(1) No trade or other receivables are due from directors or other officers of the Company either severally or jointly with
any other person nor any trade or other receivables are due from firms or private companies in which any director is
a partner, a director or a member.
(2) Generally, as per credit terms trade receivable are collectable within 90-120 days although the Company provide
extended credit period with interest between 18%-36% considering business and commercial arrangements with the
customers.
(3) The secured cash credit facilities are covered by pari passu charge on trade receivables (refer note 14).
12.5 Terms/rights attached to equity shares:
Equity shares have a par value of ' 10. They entitle the holder to participate in dividends, and to share in the proceeds
of winding up the Company in proportion to the number of and amounts paid on the shares held. Every holder of equity
shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote.
12.6 Issue of shares under bonus shares:
In Financial year 2021-22 the company had issued 82,27,791 bonus shares of face value of ' 10 each. Bonus issue was in
proportion of 1:2 on the record date of November 27, 2021 for 82,27,791 fully paid equity shares to the shareholders. The
shares was issued from securities premium reserve and retained earnings.
12.7 The Company has not issued any shares for consideration other than cash.
Nature & purpose of reserves:
Retained earnings:
Retained earnings are the profits earned till date, less any transfers to other reserves and dividends distributed.
Securities premium:
Securities premium comprises of the premium on issue of shares. The reserve can be utilised in accordance with the specific
provision of the Companies Act, 2013.
14. BORROWINGS (Contd.)
Details of terms and securities for the above
borrowing facilities are as follows:
1) Cash Credit from State Bank of India amounting
to ' 6.26 millions (P.Y ' 6.82 millions) is secured by
Hypothecation and pari passu first charge on entire
present and future current asset of the company
comprises of stocks & receivables and equitable
mortgage of Factory land & buildings: Plot no 408, 409,
410 & 411 at kerala GIDC, Bavla, Ahmedabad; Office
Building: 901 to 903 & 911, B-square-2, Iscon Ambli
Road, Ahmedabad. The cash credit facility carries
interest rate linked to 6 months MCLR Plus spread of
0.30% (March 31, 2025: 6 months MCLR Plus spread of
0.30%). The effective interest rate is 8.95% (March 31,
2025: 9.15%).
2) The term loan from State Bank of India amounting to
' 222.46 millions (P.Y ' 296.85 millions) for construction
& establishment of Saykha technical manufacturing
plant, secured by Hypothecation of all the plant &
machineries, utility item, furniture fixture, lab items,
misc. fixed assets created out of credit facilities
extended by bank situated at Plot no. DP/154, Saykha
to Saran Village Road, Saykha industrial Estate GIDC,
Saykha, Bharuch and equitable mortgage of Factory
land & buildings: Plot no 408, 409, 410 & 411 at
Kerala GIDC, Bavla, Ahmedabad; Factory land and
building situated at Plot no. DP/154, Saykha to Saran
Village Road, Saykha industrial Estate GIDC, Mouje
Saykha, Bharuch; Office Building: 901 to 903 & 911,
B-square-2, Iscon Ambli Road, Ahmedabad. The
loan carries interest rate linked to 6 months MCLR
plus spread of 0.30% (March 31,2025: 6 months
MCLR plus spread of 0.30%). The effective interest
rate is 8.90% (March 31, 2025: 9.20%). The loan is
repayable in 64 monthly installments commencing
from February 2024.
3) Cash Credit from HDFC Bank amounting to
' 349.31 millions (P.Y ' 287.47 millions) is secured by
Hypothecation and pari passu first charge on stocks,
debtors, fixed deposit placed against letter of credit,
plant & machinery and equitable mortgage of Factory
land & buildings: Plot no 408,409,410 & 411 at kerala
GIDC, Bavla, Ahmedabad; Factory land and building
situated at Plot no. DP/154, Saykha to Saran Village
Road, Saykha industrial Estate GIDC, Saykha, Bharuch;
Office Building: 901 to 903 & 911, B-square-2, Iscon
Ambli Road, Ahmedabad. The effective interest rate is
7.61% (March 31, 2025: 8.19%).
4) The term loan from HDFC bank amounting to
' 413.30 millions (P.Y ' 460.57 millions) is sanctioned
for construction & establishment of Saykha technical
manufacturing plant, secured by Hypothecation of
plant & machinery and equitable mortgage of Factory
land & buildings situated at Plot no 408, 409, 410 & 411
at kerala GIDC, Bavla, Ahmedabad; Factory land and
building situated at Plot no. DP/154 Saykha to Saran
Village Road Saykha industrial Estate GIDC Saykha
Bharuch; Office Building situated at 901 to 903 &
911, B-square-2, Iscon Ambli Road, Ahmedabad. The
effective interest rate is 6.77% (March 31, 2025: 8.02%).
The loan is repayable in 109 monthly installments
commencing from April 2024.
5) Company has availed Buyer's credit interchangeably
with Letter of credit facility from HDFC bank
amounting to ' 326.46 millions (P.Y ' 97.29 millions),
secured by Hypothecation of plant & machinery
and equitable mortgage of Factory land & buildings
situated at Plot no 408,409,410 & 411 at kerala
GIDC, Bavla, Ahmedabad; Factory land and building
situated at Plot no. DP/154, Saykha to Saran Village
Road, Saykha industrial Estate GIDC, Mouje Saykha,
Bharuch; Office Building situated at 901 to 903 &
911, B-square-2, Iscon Ambli Road, Ahmedabad.
The buyer's credit facility carries interest rate linked to
SOFR PLUS 85 to 175 bps.The interest rate for buyer's
credit ranges from 5.26% - 6.56%. Additionally, the
buyer's credit/Letter of credit carries bank charges
ranges from 0.85% - 1.00% p.a.
6) All the credit facilities extended by HDFC Bank &
State Bank of India is also secured by personal
guarantee of Rameshbhai R Talavia, Jamankumar
H Talavia, Jagdish R Savaliya, Muktaben
Jamankumar Talavia, Manjulaben Rameshbhai
Talavia, Vishalbhai H Domadia.
7) Vehicle loans are secured against the same vehicles
for which loan is taken. All vehicle loan are repayable
in 60 monthly installments commencing from date
of sanction. The loan carries fixed interest rate of
7.25% - 9.10%.
F. Performance obligation
The performance obligation is satisfied when control of the goods has been transferred to customers. There are no material
unsatisfied performance obligation outstanding at the year end. The performance obligations of the Company are part
of contracts that have an original expected duration of less than one year and accordingly, the Company has applied the
practical expedient and opted not to disclose the information about it's remaining performance obligations in accordance
with Ind AS 115.
27. EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity shareholders of the Company by
the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders of the Company by the
weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity
shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.
(a) The GST authorities have raised demands against the Company relating to indirect tax matters. The Company is
contesting the aforesaid demands before the Commissioner (Appeals) of CGST at Ahmedabad appellate authority and
based on internal assessment and legal opinion, believes that the ultimate outcome of these matters will not have any
material adverse effect on the financial position of the Company. Accordingly, no provision has been recognised in the
financial statements.
(b) The current patent infringement litigation initiated against the company before the Hon'ble Delhi High Court, is at
a pre-trial stage. The pleadings have been completed and the Company has an arguable case in defence in terms of
invalidity. The Company's appeal against the interim order is also pending before the Division Bench (2 Judge Bench) of
the Delhi High Court. There is no immediate likelihood of financial liability being imposed upon the Company as that would
only be adjudicated by the Courts post-trial which is likely to take a few months to years.
ii) Defined benefits plan
The Company provides for gratuity for employees in India as per the provisions of the Code on Social Security, 2020.
Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable
on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days
salary multiplied for the number of years of service calculated on actuarial basis. The gratuity plan is a unfunded plan. The
retirement age for the employees is 58 years.
29.2 Other long term employee benefits:
i) Defined benefit plan (privilege leave):
Entitlements to annual leave, which are expected to be availed or encashed within 12 months from the end of the year
are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of leave
encashment as the additional amount expected to be paid as a result of the unused entitlement as at the year end.
Entitlements to annual leave, which are expected to be availed or encashed beyond 12 months from the end of the year
are treated as other long term employee benefits. The Company's liability is actuarially determined (using the Projected
Unit Credit method) at the end of each year. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the
year in which they arise. Amount of ' 8.66 millions (March 31, 2025'5.44 millions) has been recognised in the Statement
of Profit and Loss on account of provision for long-term employment benefit.
ii) Defined benefit plan (sick leave):
Amount of ' 0.59 millions (March 31, 2025 ' (1.97) millions) has been recognised in the Statement of Profit and Loss on
account of provision for long-term employment benefit.
Terms and conditions of transactions with related parties:
(i) The future liability for gratuity and compensated absence is provided on aggregated basis for all the employees of the
company taken as a whole, the amount pertaining to KMPs is not ascertainable separately and therefore not included
above.
(ii) The names of the related parties and nature of the relationships where control exists are disclosed irrespective of
whether or not there have been transactions between the related parties. For others, the names and the nature of
relationships is disclosed only when the transactions are entered into by the Company with the related parties during
the existence of the related party relationship.
(iii) The loan granted to DCGL Industries Ltd. is intended to finance operational/working capital requirement, business
expansion and operational expenses .The loan has been utilized by the subsidiary for the purpose it was obtained. The
loan is unsecured. The loan carries interest at 7.50% p.a.
31. CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least
2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR)
activities. The areas for CSR activities are Schedule VII(ii) promoting education,including special education and employment
enhancing vocation skills. A CSR committee has been formed by the company as per the Act. The funds are utilized through
the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
33. SEGMENT REPORTING
Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision
Maker (CODM) i.e. the Board of Directors. The Company's activities comprise manufacturing and dealing in pesticides
including concessionaires of public health products for pest control, insecticides, herbicides, fertilizers and allied products
related to research and technical formulations. As the Company's business activity falls within a single business segment viz.
"Agri-Inputs" and hence there is no separate reportable segment as per Ind AS 108 "Operating Segment".
B. Fair value measurements
The fair value of the Financial Assets and Liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The Company uses the following
hierarchy for determining and/or disclosing the fair value of Financial Instruments by valuation techniques:
(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.
(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Assets or Liabilities, either
directly (i.e., as prices) or indirectly (i.e., derived from prices).
(iii) Level 3: inputs for the Assets or Liabilities that are not based on observable market data (unobservable inputs).
The fair value of derivative financial instruments, including foreign exchange forward contracts, has been determined
using valuation techniques based on observable market inputs. The valuation techniques include discounted cash flow
models using forward exchange rates and yield curves derived from observable market data at the reporting date. These
derivative contracts are classified within Level 2 of the fair value hierarchy under Ind AS 113.
C. Financial instrument measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are
a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be
significantly different from the values that would eventually be received or settled.
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The company's principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose
of these financial liabilities is to finance the company's operations. The company's principal financial assets include trade
and other receivables and cash and cash equivalents that derive directly from its operations.
The company is exposed to market risk, credit risk and liquidity risk. The company's senior management oversees the
management of these risks and ensures that financial risk activities are governed by appropriate policies and procedures
and that financial risks are identified, measured and managed in accordance with the company's policies and risk objectives.
(A) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial
instruments affected by market risk include borrowings and derivative financial instruments.
(i) Exposure to 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. The Company exposure to the risk of changes in market interest rates relates primarily to the
Company's long-term debt obligations with floating interest rates.
(ii) 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's exposure to the risk of changes in foreign exchange rates relates to the company's
operating activities denominated in United States Dollar (USD), Chinese Yuan (CNY).Further, to hedge foreign currency
future transactions in respect of which firm commitment are made or which are highly probable forecast transactions (for
instance, foreign exchange denominated income) the Company has entered into foreign currency forward contracts as per
the policy of the Company.
The Company takes various types of derivative instruments. The category-wise outstanding position of derivative instruments
are as under:
(B) 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. Credit risk arises principally from the Company's receivables, from deposits with landlords and
other security deposits and also arises from cash held with banks and financial institutions. The maximum exposure to credit
risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent
losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial
position, past experience and other factors.
Trade receivables
Trade receivables of the company are unsecured. Credit risk is managed through periodic monitoring of the creditworthiness
of customers in the normal course of business. The allowance for impairment of Trade receivables is created to the extent
and as and when required, based upon the past and expected collection pattern of accounts receivables.
(C) Liquidity risk
Liquidity risk is the risk that the company may not be able to meet its present and future cash and collateral obligations
without incurring unacceptable losses. The company's objective is to, at all times maintain optimum levels of liquidity to
meet its cash and collateral requirements. The company closely monitors its liquidity position and deploys a robust cash
management system. It maintains adequate sources of financing through various short term and long term loans at an
optimized cost.
36. CAPITAL MANAGEMENT
i) For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all
other equity reserves attributable to the equity holders. The primary objective of the Company's capital management
is to maximize the shareholder value, to optimize returns to the shareholders and to ensure the Company's ability to
continue as a going concern.
The capital structure of the company is based on management's judgement of the appropriate balance of key elements
in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and
manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to
shareholders, return capital to shareholders or issue new shares.
The company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain
investor, creditors and to sustain future development and growth of its business. The company will take appropriate
steps in order to maintain, or if necessary adjust, its capital structure.
ii) Loan covenants
The Company has complied with all loan covenants as at March 31, 2026.
iii) Dividends
The Company has not declared any dividend during the current and previous year.
40. OTHER STATUTORY INFORMATION
(i) The Company does not have any Benami property,
where any proceeding has been initiated or pending
against the Company for holding any Benami property
under the Benami Transactions (Prohibition) Act, 1988
and rules made thereunder.
(ii) The Company does not have any transactions
with companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies
Act, 1956.
(iii) The Company does not have any charges or
satisfaction which is yet to be registered with ROC
beyond the statutory period.
(iv) The Company has not traded or invested in Crypto
currency or Virtual Currency during the financial year.
(v) Utilisation of Borrowed funds and share premium:
(i) 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:
(a) directly or indirectly lend or invest in other
persons or entities identified in any manner
whatsoever by or on behalf of the company
(Ultimate Beneficiaries); or
(b) provide any guarantee, security or the like to
or on behalf of the Ultimate Beneficiaries.
(ii) 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:
(a) directly or indirectly lend or invest in other
persons or entities identified in any manner
whatsoever by or on behalf of the Funding
Party (Ultimate Beneficiaries); or
(b) provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
(vi) 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 Income Tax Act, 1961).
(vii) The Company has not been declared a Wilful
Defaulters by any bank or financial institution or
consortium thereof in accordance with the guidelines
on wilful defaulters issued by the RBI.
(viii) Title deeds of all 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. The
title deeds of immovable properties aggregating to
' 22.14 millions as at March 31, 2026, are pledged
with the banks and original copies are not available
with the Company.
(ix) The Company has complied with the number of layers
prescribed under clause (87) of section 2 of the Act
read with the Companies (Restriction on number of
Layers) Rules, 2017.
(x) The Company has not entered into any scheme of
arrangement in terms of sections 230 to 237 of the
Companies Act, 2013.
(xi) The borrowings obtained by the company from banks
and financial institutions have been applied for the
purposes for which such borrowings were taken.
(xii) The Company has availed loans from banks on the
basis of security of current assets. The Company
files statement of current assets with the bank on
periodical basis. Reconciliation of quarterly returns
or statements of current assets filed with banks or
financial institutions.
Notes:
The reason for reconciliation between quarterly returns
or statements of current assets filed with banks are as
follows:
1) Inventories:
a) Inter-branch stock in transit.
b) Exclusion of stores and spares inventory.
c) Adjustments arising from the application of sales
cut-off reversals.
d) Inter-branch profit elimination.
e) Overhead allocation and impact of net realisable
value provision.
2) Trade Receivables:
a) Reversal of interest income on overdue trade
receivables.
b) Loss allowance made for trade receivables.
c) Adjustments to trade receivables due to period-
end sales cut-off reversals.
d) Remeasurement of balances due to foreign
exchange rate fluctuations.
e) Recognition of discounts and rebates applied to
revenue within trade receivables.
3) Trade Payables:
a) Only inclusion of payables related to raw material and
packing material vendor balances.
b) Remeasurement of balances due to foreign exchange
rate fluctuations.
c) Provision for expenses.
41. The Company has used an accounting software for
maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same
has been operated throughout the year for all relevant
transactions recorded in the software. Further, we did
not come across any instance of audit trail feature
being tampered with at application level. Additionally,
the audit trail has been preserved by the Company as
per the statutory requirements for record retention for
application level.
However, with respect to the database level of the said
software which has been managed and maintained by
a third-party service provider. In the absence of SOC
report we are unable to comment whether the database
of the software to log any direct changes has a feature
of recording audit trail (edit log) facility and whether the
same has been enabled and operated throughout the
year for all relevant transaction recorded or whether
there is any instance of audit trail feature being tampered
with. Also, we are unable to comment whether the audit
trail feature of prior years has been preserved by the
Company as per the statutory requirements for record
retention at database level.
42. During the Financial year ended March 31, 2024, the
Board of Directors in their meeting held on November 03,
2023 considered and approved the Employee Stock Option
Scheme, viz., Dharmaj Employees Stock Option Plan 2023
('Scheme'), in terms of the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021. The
maximum number of options that may be issued pursuant
to this scheme is 300,000 Share options, to be convertible
into equal number of Equity shares of the Company. This
Scheme was approved by the members through Postal
Ballot with the facility of E-voting by December 05, 2023.
The detailed terms and conditions of the grants, including
the final number of options to be granted to eligible
employees, grant date, exercise price, vesting schedule
and other grant-specific conditions, are yet to be finalised
by the Board of Directors. As on March 31, 2026, no stock
options were granted to eligible employees.
43. There were no amounts which were required to be
transferred to the Investor Education and Protection Fund
by the Company.
44. The Government of India has consolidated 29 existing
labour legislations into a united framework comprising 4
Labour Codes which were made effective from November
21, 2025. The corresponding supporting rules under these
codes are yet to be notified. The Company has considered
the impact on the basis best information and estimate
available and accordingly, financial implications of ' 4.75
millions has been disclosed under "Employee benefits
expense" in the standalone financial statements. The
Company continues to monitor the finalisation of rules by
the Central and State Governments and clarifications from
the Government on other aspects of the New Labour Codes
and will account for such developments as needed.
45. STANDARDS ISSUED BUT NOT EFFECTIVE
The amendments to standards that is issued, but not yet
effective, up to the date of issuance of the Company's
financial statements is disclosed below. The Company
intends to adopt this standard, if applicable, as and when
they become effective.
Ind AS 1 - Presentation of Financial Statements.
This amendment will come into effect from April 01, 2026.
Accordingly, the Company will adopt the amendment from
the effective date, as applicable.
46. EVENTS AFTER THE REPORTING PERIOD
The Company evaluates events and transactions that
occur subsequent to the balance sheet date but prior to
approval of the financial statements to determine the
necessity for recognition and/or reporting of any of these
events and transactions in the financial statements. As
of May 27, 2026, there are no subsequent events to be
recognized or reported.
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