(xii) Provisions and Contingencies:
Provisions
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 has been
reliably estimated.
Provisions are measured at the present value of
management's best estimate of the expenditure
required to settle the present obligation at the
end of the reporting period. The discount rate
used to determine the present value is a pre-tax
rate that reflects current market assessments
of the time value of money and the risks specific
to the liability. The increase in the provision
due to the passage of time is recognised as an
interest expense.
Contingent liabilities
Contingent liabilities are 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. 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 reliable estimate
of the amount cannot be made, is termed as
contingent liability.
Contingent assets
A contingent asset is a possible asset that
arises from past events and whose existence
will be confirmed only by the occurrence or
non-occurrence of one or more uncertain
future events not wholly within the control of
the entity. Contingent assets are not recognised
but disclosed only when an inflow of economic
benefits is probable.
(xiii) Employee benefits:
(a) Short-term obligations
Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the
period in which the employees render the related
service are recognized in respect of employees'
services up to the end of the reporting period
and are measured at the amounts expected to be
paid when the liabilities are settled. The liabilities
are presented as current employee benefit
obligations in the balance sheet.
(b) Post Employment obligations
The Company operates the following post¬
employment schemes:
- defined benefit plans such as gratuity
contributions made to a trust in case of
certain employees.
- defined contribution plans such as provident
fund and superannuation fund.
Gratuity obligations
The liability or asset recognized in the balance
sheet in respect of gratuity plans is the present
value of the defined benefit obligation at the
end of the reporting period less the fair value
of plan assets. The defined benefit obligation
is calculated annually by actuaries using the
projected unit credit method.
The present value of the defined benefit obligation
is determined by discounting the estimated future
cash outflows by reference to market yields at the
end of the reporting period on government bonds
that have terms approximating to the terms of the
related obligation.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense
in the Statement of Profit and Loss.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognized in the period in
which they occur, directly in Other Comprehensive
Income. They are included in Retained Earnings
in the Statement of Changes in Equity and in the
Balance Sheet.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognized immediately in profit
or loss as past service cost.
Defined contribution plans
The Company pays provident fund contributions
to publicly administered provident funds as
per local regulations and superannuation
contributions to superannuation fund. The
Company has no further payment obligations
once the contributions have been paid. The
contributions are accounted for as defined
contribution plans and the contributions are
recognized as employee benefit expense when
they are due.
(c) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave
are not expected to be settled wholly within 12
months after the end of the period in which the
employees render the related service. They are
therefore measured as the present value of
expected future payments to be made in respect
of services provided by employees up to the end
of the reporting period using the projected unit
credit method. The benefits are discounted using
the market yields at the end of the reporting period
that have terms approximating to the terms of the
related obligation. Remeasurements as a result of
experience adjustments and changes in actuarial
assumptions are recognized in Statement of
Profit or Loss.
The obligations are presented as current liabilities
in the balance sheet if the entity does not have
an unconditional right to defer settlement for at
least twelve months after the reporting period,
regardless of when the actual settlement is
expected to occur.
(xiv) Earnings per share:
Basic earnings per share is computed by
dividing the net profit for the period attributable
to the equity shareholders of the Company by
the weighted average number of equity shares
outstanding during the period. The weighted
average number of equity shares outstanding
during the period and for all periods presented is
adjusted for events, such as bonus shares, other
than the conversion of potential equity shares
that have changed the number of equity shares
outstanding, without a corresponding change in
resources. For the purpose of calculating diluted
earnings per share, the net profit for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period is adjusted for the effects of all
dilutive potential equity shares.
(xv) Exceptional items:
Exceptional items include income or expense
that are of such significance and nature that
separate disclosure enables the user of the
financial statements to understand the impact
in a more meaningful manner. Exceptional
items are identified by virtue of their size, nature
and incidence.
If the management believes that losses/gain are
material and is relevant to an understanding of
the entity's financial performance, it discloses the
same as an exceptional item.
(xvi) Rounding of amounts:
All amounts disclosed in financial statements and
notes have been rounded off to the nearest lakhs
as per the requirement of Schedule III, unless
otherwise stated.
3) Critical accounting 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 from those
originally assessed.
Estimation of defined benefit obligation
The present value of obligations under defined
benefit plan is determined using actuarial valuations.
An actuarial valuation involves making various
assumptions that may differ from actual development
in the future. These include the determination of the
discount rate, future salary escalations, attrition
rate and mortality rates etc. Due to the complexities
involved in the valuation and its long-term nature,
these obligations are highly sensitive to changes in
these assumptions. All assumptions are reviewed
at each reporting date. Refer note 32 for the details
of the assumptions used in estimating the defined
benefit obligation.
Impairment of trade receivables
The impairment provisions for trade receivables
are based on assumptions about risk of default and
expected loss rates. The Company uses judgement in
making these assumptions and selecting the inputs to
the impairment calculation, based on Company's past
history, existing market conditions as well as forward
looking estimates at the end of each reporting period.
Fair value measurements and valuation
processes
Some of the assets and liabilities are measured
at fair value for financial reporting purposes. The
Management determines the appropriate valuation
techniques and inputs for the fair value measurements.
In estimating the fair value of an asset or a liability, the
Company uses market-observable data to the extent it
is available. Where Level 1 inputs are not available, fair
values are determined on the basis of the third-party
valuations. The models used to determine fair values
including estimates/ judgements involved are validated
and periodically reviewed by the management.
Taxes
Deferred tax assets are recognized for temporary
differences to the extent that it is probable that taxable
profit will be available against which the losses can
be utilised. Significant management judgement is
required to determine the amount of deferred tax
assets that can be recognized, based upon the likely
timing and the level of future taxable profits together
with future tax planning strategies.
(c) Post employment obligations
Gratuity
The Company has a defined benefit plan, governed by the Payment of Gratuity Act, 1972. The plan entitles an
employee, who has rendered at least five years of continuous service, to gratuity. Where the period of service
is more than 5 years but less than 10 years, gratuity will be calculated at the rate of fifteen days basic salary for
every completed years of services or part thereof in excess of six months, based on the rate of basic salary last
drawn by the employee concerned. Where the period of service is more than 10 years but less than or equal to
15 years, gratuity will be calculated at the rate of two third of the one month's salary for each completed year of
service, being calculated over and above the provisions of the Gratuity Act, 1972. Where the period of service is
more than 15 but less than or equal to 20 years, gratuity will be calculated at the rate of one month's salary for
each completed year of service over 15 years, being calculated over and above the provisions of the Gratuity Act,
1972. Where the period of service is more than 20 years, gratuity will be calculated at the rate of one month's
salary for each completed year of service over 20 years, being calculated over and above the provisions of the
Gratuity Act, 1972. This is subject to maximum of 20 months' salary in case of resignation and termination of
service. In case of Pre-mature retirement, the maximum Ex-gratia gratuity is 30 months' salary.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. While
calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method
(present value of the defined benefit obligation calculated with the projected unit credit method at the end of the
reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to
the prior period.
(iv) Defined benefit liability and employer contributions
The above defined benefit gratuity plan was administered 100% by a trust of Group Company National Peroxide
Limited (formerly known as NPL Chemicals Limited) as at March 31, 2025.
The weighted average duration of the defined benefit obligation is 13.38 years (March 31, 2024 - 13.49 years).
(v) Risk exposure
Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: Investment
risk, interest rate risk and salary risk.
(c) Valuation techniques used to determine fair value
Fair value of all equity instruments which are traded in the stock exchanges are valued using the closing price
as at the reporting date. The mutual funds are valued using closing Net Assets Value (NAV). The fair value of
investment in equity shares which are unquoted are valued using adjusted book value method.
34 Financial risk management
The Company's business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit
risk. In order to manage these risks the Company has adopted a Risk Management Policy wherein all material risks
faced by the Company are identified and assessed. The Risk Management framework defines the risk management
approach of the Company and includes collective identification of risks impacting the Company's business and
documents their process of identification, mitigation and optimization of such risks.
(a) Credit risk
The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation
resulting in a financial loss to the Company. Credit risk arises from cash and cash equivalents, financial assets
carried at amortised cost as well as credit exposures to trade customers including outstanding receivables.
The board provides written principles for overall risk management, as well as policies covering specific areas,
such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non¬
derivative financial instruments, and investment of excess liquidity.
Credit risk management
Trade receivables mainly arise from lease income receivable from National Peroxide Limited ("NPL”)(formerly
known as NPL Chemicals Limited) in pursuant to Composite Scheme of Arrangement and account receivables
from sale of traded good. Since NPL is part of the promoter group and the lease rentals are measurely received in
advance, the management believes that the credit risk is minimal. As far as trading receivables are concerned the
Company has a credit risk policy in place to ensure that sales are made to customers only after an appropriate
credit risk assessment and credit line allocation process. The Company has adopted a policy of only dealing with
creditworthy counterparties.
The Company provides for life time allowance on trade receivable using simplified approach and on a case to case
basis on specified customers. Specific debtors represents debtors facing bankruptcy cases, operation shutdown
and other scenario as determined by the management. Such debtors are categorised as specific debtors upon
intimation/news. Such specific debtors has no nexus with the macro economy factor. The Company recognises
expected credit loss on specified receivables as determined by the management.
For banks and financial institutions, only highly rated banks / institutions are accepted. Generally all policies
surrounding credit risk have been managed at Company level.
There are no trade and other receivables which have significant increase in credit risk.
(b) Liquidity risk
Liquidity risk is the risk that the Company will fail in meeting its obligations to pay its financial liabilities. The
Company's approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities
when due.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet
obligations when due. In respect of its operations, the Company funds its activities primarily through cash
generated in operations.
Management monitors the Company's liquidity position and cash and cash equivalents on the basis of expected
cash flows. Cash which is not needed in the operating activities of the Company is invested in marketable
liquid funds.
Based on recent trends observed, marketable securities held, cash generation, cash surpluses held by the
Company, the Company does not envisage any material liquidity risks.
(c) Market risk
Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because
of volatility of prices in the financial markets. The Company is exposed to price risks arising from equity
investments and mutual funds. Further, equity investments are subject to changes in the market price of
securities. Equity investments are held for strategic purpose rather than for trading purposes. The Company
does not actively trade in these investments.
Sensitivity
If equity prices had been 10% higher / lower, other comprehensive income before tax for the year ended March
31, 2025 would increase / decrease by C 11,866.48 lakhs & (11,866.48) lakhs (March 31, 2024: C 10,626.43
lakhs & (10,626.43) lakhs as a result of the changes in fair value of shares measured at FVOCI.
If NAV of Mutual funds had been 10% higher / lower, profit before tax for the year ended March 31, 2025
would increase / decrease by C 30.75 lakhs & (30.75) lakhs (March 31, 2024: C 20.81 lakhs & (20.81) lakhs as
a result of the changes in fair value of mutual funds measured at FVTPL.
35 Capital Management
(a) Risk Management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to 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.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. Gearing
ratio is determined as net debt (total borrowings and lease liabilities net of cash and cash equivalents) divided by
total 'equity'.
36 Micro, small and medium enterprise
Disclosure in respect to Micro and Small Enterprises as per Micro, Small and Medium Enterprises Development Act,
2006 ('MSMED') Act, 2006 is as follows:
The information as required under Micro, Small and Medium Enterprises Development Act, 2006, has been determined
to the extent such parties have been identified on the basis of information available with the Company and relied
upon by the auditors. The principal amounts / interest payable amounts for delayed payments to such vendors as at
Balance Sheet date during the current year and previous year mentioned below
(ii) Contingent liability relating to determination of provident fund liability, based on judgement of the Hon'ble
Supreme Court, is not determinable at present for the period prior to March 2019, due to uncertainty on the
impact of the judgement in the absence of further clarification relating to applicability. The Company has paid
provident fund to employees as applicable with effect from March 2019. The Company will continue to assess
any further developments in this matter for their implications on Ind AS financial statements, if any.
(iii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where
provisions are required and disclosed as contingent liability, where applicable in its Ind AS financial statements.
The Company's management does not reasonably expect that these legal notices, when ultimately concluded
and determined, will have a material and adverse effect on Company's results of operations or financial condition.
38 Capital and other commitments
Capital commitments
(i) There are no estimated amount of contracts remaining to be executed on capital account and not provided as at
balance sheet date (March 31, 2024: Nil).
39 Additional regulatory information required by Schedule III to the Companies Act, 2013
(i) Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property under
the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Borrowing secured against current assets
The Company has not been sanctioned any borrowings against current assets at any point of time during the
year.
(iii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act,
1956.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(vi) 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
(vii) 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.
(viii) 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.
(ix) Valuation of Property, plant and equipment, intangible asset and investment property
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.
43 Events Occurring after the Balance Sheet Date
No material events have occurred after the Balance Sheet date and upto the approval of the Ind AS financial
statements.
44 The Company received substantial unusual dividends from group companies, as a result of which its income from
financial assets exceeded 50 percent of the total income of the Company for the year ended March 31, 2025 and it's
financial assets constitute more than 50 percent of the total assets as of March 31, 2025. The Company holds not less
than 90% of its net assets in the form of equity shares in group companies and has not accessed public funds, thus
satisfying the criteria of an Unregistered Core Investment Company.
45 Other expense includes C 18.71 Lacs as settlement fees paid by the Company, being one of the Promoters of The
Bombay Burmah Trading Corporation, Limited, under settlement order dated January 10, 2025, issued by SEBI, in
connection with certain violation of provisions of securities laws.
46 Ind AS Financial statements of the Company for the year ended March 31,2025 are approved by the Board of Directors
on May 06, 2025.
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