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)
(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
amounting 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 up to 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 Profit and Loss. This scheme is not funded.
(iv) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
• I nvestments in quoted equity instruments and debt instruments (ETF and InvIT) are valued using the closing price at National Stock Exchange
(NSE) 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 2,982.79 lakhs (March 31,2024: INR 3,024.72 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 chemical sales over a period of 24 months and Environment and Biotech sales over a period of 36 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:
(a) Description of segments and principal activities
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM”) of the Company.
The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Chairman
and Managing Director of the Company. The Company operates in following business segment as per Indian Accounting Standard 108 "operating segments”:
(a) Chemicals - Comprises of manufacture of speciality chemicals, intermediates and actives catering to various end user segments like
Agrochemicals, Water Treatment, Soaps & Detergents, Lube Oil Additives, Mining Chemicals, Polymer Additives and Pharmaceuticals.
(b) Environment and Biotech (E&BT) - Comprising of Environmental and Biotech products and services comprises of Organic Waste Management
Composting, Municipal Solid Waste Management, Plastic Waste Management and Construction and Demolition Waste Management.
Segment revenue includes sales, export incentives, processing charges and scrap sales.
Segment Revenue in the geographical segments considered for disclosure are as follows:
(a) Revenue within India includes sales to customers located within India.
(b) Revenue outside India includes sales to customers located outside India.
Segment Revenue, Results, Assets and Liabilities includes the respective amounts identifiable to each of segments and amounts allocated on a
reasonable basis.
(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, investment in Corporate Deposit (including interest thereon) measured at amortised cost and interest accrued on bonds and debentures
measured at amortised cost is classified under Investments. 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 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.
(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 and financial institutions, 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.
The accompanying notes are an integral part of these standalone financial statements.
As per our report of even date.
For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors of Excel Industries Limited
Firm Regulation Not CHOTWNSOOOie ASHWIN C. SHROFF RAVI A. SHROFF HRISHIT A. SHROFF
Executive Chairman Managing Director Executive Director
SACHIN PAREKH DIN: 00019952 DIN: 00033505 DIN: 00033693
Membership No.: 107038 P ^ Sit™ K.SINGHVI
Chief Financial Officer Company Secretary
Place: Mumbai Place: Mumbai
Date: May 14,2025 Date: May 14,2025
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