W. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at the end of the
reporting period.
Contingent Liabilities are disclosed where there is 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 or a present obligation
cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
A contingent asset is disclosed and not recognised, where an inflow of economic benefits is probable.
X. Earnings per share
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the
year. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.
Y. Rounding of amounts
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakhs as per the requirement of
Schedule III, unless otherwise stated.
NOTE 2 - CRITICAL ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in applying the Company’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to
be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about
each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected
line item in the financial statements. In addition, this note also explains where there have been actual adjustments this year as a result of
changes to previous estimates.
(a) Estimated fair value of unquoted securities:
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. This involves fair
valuation based on comparable companies multiple inputs, assessment of maintainable EBIDTA (Earnings before interest, depreciation, tax and
amortisation) and other relevant valuation parameters. Estimated fair values may vary from the actual price that would be achieved in an arms
length transaction at the reporting date. (Refer Note 41)
(b) Useful lives of Property plant and equipment and Intangible assets
Depreciation and amortisation is based on management estimates of the future useful lives of the property, plant and equipment and intangible
assets. Estimates may change due to technological developments, competition, changes in market conditions and other factors and may result
in changes in the estimated useful life and in the depreciation and amortisation charges.
(c) Impairment of Goodwill:
“Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit is
less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions.
The recoverable amount is determined based on higher value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the
level of the cash generating unit or groups of cash generating units which are benefiting from the synergies of the acquisition and which represents
the lower level at which goodwill is monitored for internal management purposes i.e. Chemical Segment.
Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its
determination of recoverable amount include estimated long term growth rates, weighted average cost of capital, and estimated operating margins.
Cash flow projection takes into account past experience and represents management’s best estimate about future developments. (Refer Note 6)
(d) Estimation of defined benefit obligations:
The liabilities of the Company arising from defined benefit obligations are determined on an actuarial basis using various assumptions. (Refer
Note 40)
(v) Estimation of fair value
The Company periodically obtains independent valuations for its investment properties. The best evidence of fair value is current prices in an active
market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:
• income approach by applying market yield percentage to annual rental income.
• current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to
reflect those differences.
The fair values of investment properties have been determined by independent valuer who is a registered valuer as defined under rule 2 of Companies
(Registered Valuers and Valuation) Rules, 2017.
(a) Principal place of business as well as place of incorporation of wholly owned subsidiaries is India.
(b) On transition to Ind AS, interest free loan given to a wholly owned subsidiary was measured at fair value and the difference between transaction value
and fair value was recongnised under Other Equity Investment. This Other Equity Investment will continue to be recognised until the investment in
subsidiary is derecognised or impaired.
(c) Wexsam Limited, Hong Kong, was dissolved on July 15, 2016 and is fully impaired in the financial statements. The Company is in the process of
obtaining necessary approval for write off of this investment.
(d) The Company and M/s Reliable Infra were jointly awarded a project by Rajkot Municipal Corporation to design, build, own, operate and maintain the
Construction & Demolition (C&D) waste management system in Rajkot for a period of 20 years. Pursuant to this, the Company has incorporated a
subsidiary, Excel Rajkot C&D Waste Recycling Private Limited for execution of this project.
(e) The Preference shares are non-cumulative, non-participating, non-convertible but compulsorily redeemable at the option of the holder or issuer, at
par, at the end of 5 years from the receipt of total subscription money, or at any time before. These shares shall not have any voting rights. The rate of
dividend on each Preference Share is 9 % p.a.
(f) As at March 31,2026, the Company has performed an assessment for any impairment of its investment in subsidiaries considering the business plans,
accordingly no impairment is considered necessary at the year end.
(a) The Company has invested Rs. 542.50 lakhs (5,425,000 equity shares at face value of Rs. 10 each per equity share) in First Energy 7 Private Limited
towards 28.83% equity ownership, for the sole purpose of procuring electricity from renewable source. As per the terms of the shareholder agreement of
First Energy 7 Private Limited, the Group does not have power to participate in financial and operating policy decisions of First Energy 7 Private Limited.
The said equity shares carries a dividend coupon of 0.01% of the value of equity shares held by the Group. On termination or otherwise, there is a
restriction to sell the shares at face value to the other shareholder of First Energy 7 Private Limited. Therefore under Ind AS, First Energy 7 Private Limited
is not an associate company. Accordingly, this equity investment is measured at amortised cost in accordance with the requirements of Ind AS 109. Refer
notes 11 and 19 for investment value considered as prepaid expenses for procurement of renewable energy.
(ii) Terms/ rights attached to equity shares
The Company has one class of equity shares having par value of INR 5 per share. Each holder of equity shares is entitled to one vote per share. The
Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in
the ensuing Annual General Meeting, except in case of Interim dividend.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution
of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Capital reserve
Capital reserve can be utilised in accordance with provision of the Act.
Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provisions of the Act.
Capital redemption reserve
The Act requires that when a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal
value of the shares so purchased shall be transferred to a capital redemption reserve. The reserve can be utilised in accordance with the provisions
of Section 69 of the Act.
General reserve
Under the 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. This is a free reserve under the Act.
FVOCI - Equity Investments
The Company has elected to recognise changes in the fair value of certain investments in equity securities in Other Comprehensive Income. These
changes are accumulated within FVOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained
earnings when the relevant equity securities are derecognised.
(iv) Medical Voluntary retirement scheme (MVRS):
(a) The Company has a termination benefit plan for its employees, viz., voluntary early separation scheme on account of continued ill-health not
related to occupational disease and thereby unable to perform normal duties of their post. The benefit computed as per scheme will be given to
such employees for a maximum period upto 10 years or age of retirement, whichever is earlier. In case of early death of the employee, the legal
heir of the employee shall get 50% of separation benefit for the rest of the benefit period. The costs of providing benefits under the said plan is
determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for the plan using the projected unit
credit method. Actuarial gains and losses for the defined benefit plan is recognised in full in the period in which they occur in the statement of
standalone profit and loss. This scheme is not funded.
(iii) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and
measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication
about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed
under the accounting standard. An explanation of each level follows underneath the table.
(iv) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
• I nvestments in quoted equity instruments, exchange traded funds, debentures and others (InvIT) are valued using the closing quoted market
price at the reporting period.
• the fair value of forward foreign exchange contracts is determined using forward exchange rates as at the balance sheet date, prevailing with
the Authorised Dealers dealing in foreign exchange.
• the Net Assets Value (‘NAV’) for valuation of mutual fund investment represents the price at which the issuer will issue further units and will
redeem such units of mutual fund to and from the investors at the reporting period.
• Fair value of investment in unquoted equity shares is arrived based on Comparable Company Market ('COM') Multiples Method by applying EV/EBITDA
multiple of comparable listed companies on maintainable operating EBITDA of the investee company. The same is further adjusted, as appropriate, for
surplus assets (cash and cash equivalent, investments, interest accrued on deposits), debts, deferred tax assets/ liabilities and contingent liabilities.
(v) Increase in EV / EBITDA multiple by 10% would increase fair value of unquoted equity shares by INR 2,748.82 lakhs (March 31,2025: INR 2,982.79
lakhs). Decrease in EV / EBITDA multiple by 10% would have equal and opposite impact on fair value of unquoted equity shares.
I n the course of its business, the Company is exposed to a number of financial risks: credit risk, liquidity risk and market risk. This note presents the
Company’s objectives, policies and processes for managing its financial risks. The key risks and mitigating actions are also placed before the Board of
Directors of the Company. The Company’s risk management policies are established to identify and analyse 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 manages the risk through the finance department that ensures that the Company’s 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. The activities
are designed to:
- protect the Company’s financial results and position from financial risks;
- maintain market risks within acceptable parameters, while optimising returns; and
- protect the Company’s financial investments, while maximising returns.
The note explains the Company’s exposure to financial risks and how these risks could affect the Company’s future financial performance.
(A) Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed.
Credit risk arises from cash and cash equivalents, balances with banks and financial institutions, contractual cash flows of debt instruments, favourable
derivative financial instruments, credit exposures to customers and other outstanding receivables such as security deposits, loans to employees etc.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on
an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of
a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable
and supportive forward-looking information.
For banks and financial institutions, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions having
high credit ratings assigned by the credit rating agencies. The Company periodically assesses financial reliability of customers and other counter
parties, taking into account the financial condition, current economic trends, past experience, analysis of historical bad debts, ageing of financial assets
and other factors. Individual risk limits are set and periodically reviewed on the basis of such information. For certain trade receivables, the Company
also obtains security in the form of guarantees, deed of undertaking or letters of credit which can be called upon if the counterparty is in default under
the terms of the agreement.
The Company has assessed its loans and other financials assets including security deposits and other receivables as high quality, negligible credit risk.
The Company periodically monitors the recoverability and credit risks of its other financials assets. The Company evaluates 12 months expected credit
losses for all the financial assets (other than trade receivables) for which credit risk has not increased. In case credit risk has increased significantly,
the Company considers lifetime expected credit losses for the purpose of impairment provisioning.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix by
taking into consideration payment profiles of product sales over a period of 24 months before the reporting date and the corresponding historical credit
loss experience within this period. The historical loss rates are adjusted to reflect the current and forward looking information on macro economic
factors affecting the ability of customers to settle receivables. The expected credit loss is based on aging of days, the receivables due and the expected
credit loss rate. In addition, in case of event driven situation such as litigations, disputes, change in customer’s credit risk history, specific provision are
made after evaluating the relevant facts and expected recovery. The provision matrix at the end of the reporting period is as follows:
(B) Liquidity risk
The Company determines its liquidity requirements in the short, medium and long term. This is done by drawing up cash forecast for short and medium
term requirements and strategic financing plans for long term needs.
The Company manages its liquidity risk in a manner so as to meet its normal financial obligations without any significant delay or stress. Such risk is
managed through ensuring operational cash flow while at the same time maintaining adequate cash and cash equivalents position. The management
has arranged for diversified funding sources and adopted a policy of managing assets with liquidity in mind and monitoring future cash flows and
liquidity on a regular basis. Surplus funds not immediately required are invested in certain financial assets (including mutual funds, bonds and deposits
with banks) which provide flexibility to liquidate at short notice and are included in current investments and cash equivalents. Besides, it generally has
certain undrawn credit facilities which can be accessed as and when required, which are reviewed periodically.
The Company has plans for managing liquidity risk. This incorporates an assessment of expected cash flows and availability of alternative sources for
additional funding, if required.
(a) Risk Managements
The Company’s objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt. For achieving this, the requirement of capital is reviewed periodically with reference to operating and
business plans that take into account capital expenditure and strategic investments. Apart from internal accrual, sourcing of capital is done through
judicious combination of equity and borrowing. Debt (total borrowings lease liabilities) to equity ratio is used to monitor capital. No changes were
made to the objectives, policies or processes for managing capital during the years ended March 31,2026 and March 31,2025.
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 market
confidence 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.
During the current year, the Company reassessed the basis of segment reporting in accordance with Ind AS 108 - Operating Segments. This reassessment
was necessitated consequent to certain re-organization made for a deeper focus on Company’s business strategy and resultant changes made in the manner
Chief Operating Decision Maker (CODM) (i.e. Executive Chairman and Managing Director as identified by Board of Directors) reviews/ assesses performance
to make decisions and allocate resources. In view of the aforesaid, the CODM has now determined that the Company has only single operating and reportable
segment i.e. “Chemicals”. Consequently, in line with the requirements of Ind AS 108, segment information relating to previous year is considered entirely of
“Chemical” segment to conform with current year disclosure.
Notes:
(a) Movement in debt equity ratio is mainly due to decrease in debt (lease liabilities) during the year.
(b) Movement in trade payable turnover ratio is primary on account of reduction in the credit period for one of the key raw material supplier.
(c) Movement in Net Capital Turnover Ratio (in times) is due to decrease in the working capital during the year mainly on account of higher trade payables and
advance received from the customer as at year end.
(d) Movement in Return on Investment is mainly due to decrease in fair value on investments during the year.
(iii) Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the Company. These are used to maximise
operational flexibility in terms of managing the assets used in the Company’s operations. All extension options held are exercisable by the Company
and termination rights are held by the Company and lessor both as per the respective lease agreements.
NOTE 54 -
During the current year, the Company has classified ‘Salaries, wages, bonus and commission payable’ from ‘Trade payables’ to ‘Other current financial liabilities’.
Accordingly, the Company has reclassified related comparative figures in order to conform with current year’s presentation. This reclassification does not have any
impact on the statement of Profit and Loss and statement of cash flows.
NOTE 55 - OTHER REGULATORY INFORMATION REQUIRED BY SCHEDULE III
(i) Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property under the Prohibition of Benami Property
Transactions Act, 1988 (as amended in 2016) (formally the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder.
(ii) Borrowing secured against assets
The Company has sanctioned borrowing facility from banks on the basis of security of current and non current assets. The quarterly returns or
statements of current assets filed by the Company with banks are in agreement with the books of accounts. During the year, the Company did not have
any borrowings from the financial institutions on the basis of security of current assets.
(iii) Wilful defaulter
The Company have not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013 read with the Companies (Restriction on Number of
Layers) Rules, 2017.
(vi) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(vii) Utilisation of borrowed funds and share premium
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
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
(viii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961,
that has not been recorded in the books of account.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(x) Valuation of property, plant and equipment, right of use assets and intangible asset;
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or
previous year.
(xi) Utilisation of borrowings availed from banks and financial institutions;
The borrowings obtained by the Company from banks have been applied for the purpose for which such loans were taken.
(xii) Registration of charges or satisfaction with Registrar of Companies;
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond statutory period.
(xiii) Title deeds of immovable properties not held in name of the Company;
The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in
favour of the lessee), as disclosed in Note 3 - Property, plant and equipment and Note 5 - Investment property are held in the name of the Company.
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