(h) Provisions, contingent liabilities and
contingent assets
Provisions
A provision is recognized in the statement
of profit and loss if, as a result of a past
event, the Company has a present legal or
constructive obligation that can be estimated
reliably, and it is probable that an outflow of
economic benefits will be required to settle
the obligation. If the effect of the time value of
money is material, provisions are determined
by discounting the expected future cash
flows at a pre-tax rate that reflects current
market assessments of the time value of
money and the risks specific to the liability.
Where discounting is used, the increase in
the provision due to the passage of time is
recognized as a finance cost.
Contingent liabilities and contingent assets
A disclosure for a contingent liability is made
when there is a possible obligation or a
present obligation that may, but probably will
not, require an outflow of resources. Where
there is a possible obligation or a present
obligation in respect of which the likelihood
of outflow of resources is remote, no provision
or disclosure is made.
Contingent assets are not recognized in the
financial statements. However, contingent
assets are assessed continually and if it is
virtually certain that an inflow of economic
benefits will arise, the asset and related
income are recognized in the period in which
the change occurs.
Onerous contracts
A provision for onerous contracts is
recognized in the statement of profit and loss
when the expected benefits to be derived by
the Company from a contract are lower than
the unavoidable cost of meeting its obligations
under the contract. The provision is measured
at the present value of the lower of the
expected cost of terminating the contract and
the expected net cost of continuing with the
contract. Before a provision is established,
the Company recognizes any impairment loss
on the assets associated with that contract.
Reimbursement rights
Expected reimbursements for expenditures
required to settle a provision are recognized
in the statement of profit and loss only when
receipt of such reimbursements is virtually
certain. Such reimbursements are recognized
as a separate asset in the balance sheet, with
a corresponding credit to the specific expense
for which the provision has been made.
i. Revenue
Ind AS 115 recognizes revenue on transfer of
the control of goods or services, either over
a period of time or at a point in time, at an
amount that the entity expects to be entitled
in exchange for those goods or services. In
order to align with Ind AS 115, the Accounting
policy on revenue recognition was reviewed
and revised.
The Company primarily earns revenue from
manufacture, distribute and market a wide
range of product categories consisting of
(a) soil health management products; (b)
crop nutrition products; (c) bio stimulant
products; (d) bio pesticide products (e)
Integrated Pest Management (IPM) products;
(f) new technologies.
Revenue from sale of goods is recognized
when control of the products being sold is
transferred to the customers and when there
are no longer any unfulfilled obligations. The
Performance Obligations in our contracts are
fulfilled at the time of dispatch, delivery or
upon formal customer acceptance depending
on customer terms.
Revenue is measured at transaction price,
after deduction of any trade discounts,
volume rebates and any taxes or duties
collected on behalf of the government such
as goods and services tax, etc. Accumulated
experience is used to estimate the provision
for such discounts and rebates. Revenue is
only recognized to the extent that it is highly
probable a significant reversal will not occur.
Our customers have the contractual right to
return goods only when authorized by the
Group. An estimate is made of goods that will
be returned and a liability is recognized for
this amount using a best estimate based on
accumulated experience.
Refund Liability:
The Company accounts for sales returns
accrual by recording refund liability
concurrent with the recognition of revenue
at the time of a product sale. This liability
is based on the Company’s estimate of
expected sales returns. The Company
deals in various products and operates in
various markets. Accordingly, the estimate
of sales returns is determined primarily by
the Company’s historical experience in the
markets in which the Company operates.
With respect to established products, the
Company considers its historical experience
of actual sales returns, levels of inventory in
the distribution channel, estimated shelf life,
any revision in the shelf life of the product,
product discontinuances, price changes of
competitive products, and the introduction
of competitive new products, to the extent
each of these factors impact the Company’s
business and markets. With respect to
new products introduced by the Company,
such products have historically been either
extensions of an existing line of product where
the Company has historical experience or in
therapeutic categories where established
products exist and are sold either by the
Company or the Company’s competitors. At
the time of recognizing the refund liability the
Company also recognizes an asset, (i.e., the
right to the returned goods) which is included
in inventories for the products expected to
be returned. The Company initially measures
this asset at the former carrying amount of the
inventory, less any expected costs to recover
the goods, including any potential decreases
in the value of the returned goods. Along with
re-measuring the refund liability at the end of
each reporting period, the Company updates
the measurement of the asset recorded for
any revisions to its expected level of returns,
as well as any additional decreases in the
value of the returned products.
j. Tax Expenses
I ncome tax expense comprises current and
deferred tax. It is recognized in profit or loss
except to the extent that it relates to a business
combination, or items recognized directly in
equity or in other comprehensive income.
The Company has determined that interest
and penalties related to income taxes,
including uncertain tax treatments, do not
meet the definition of income taxes, and
therefore accounted for them under Ind AS
37 Provisions, Contingent Liabilities and
Contingent Assets.
Current tax
Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. The tax rates and tax laws
used to compute the amount are those
that are enacted or substantively enacted,
at the reporting date. Current income tax
relating to items recognized outside the
statement of profit and loss is recognized
outside the statement of profit and loss
(either in OCI or in equity in correlation to
the underlying transaction). Management
periodically evaluates positions taken in
the tax returns with respect to situations in
which applicable tax regulations are subject
to interpretation and establishes provisions,
where appropriate.
Deferred tax
Deferred tax is provided using the liability
method on temporary differences between
the tax bases of assets and liabilities and
their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities and assets
are recognized for all taxable
temporary differences and deductible
temporary differences.
Deferred tax assets are recognized to the
extent that it is probable that taxable profit
will be available against which the deductible
temporary differences, and the carry forward
of unused tax credits and unused tax losses
can be utilized.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to
allow all or part of the deferred tax asset to
be utilized.
Unrecognized deferred tax assets are re¬
assessed at each reporting date and are
recognized to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the period when the asset is
realized or the liability is settled, based on tax
rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognized
outside the statement of profit and loss is
recognized outside the statement of profit and
loss (either in OCI or in equity in correlation to
the underlying transaction).
Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
tax liabilities and the deferred taxes relate
to the same taxable entity and the same
taxation authority.
Goods and Service Tax (GST) paid on
acquisition of assets or on incurring
expenses
When the tax incurred on purchase of assets
or services is not recoverable from the
taxation authority, the tax paid is recognized
as part of the cost of acquisition of the asset
or as part of the expense item, as applicable.
Otherwise, expenses and assets are
recognized net of the amount of taxes paid.
The net amount of tax recoverable from, or
payable to, the taxation authority is included
as part of receivables or payables in the
balance sheet.
K. Leases
The Company assesses at contract inception
whether a contract is, or contains, a lease.
That is, if the contract conveys the right to
control the use of an identified asset for a
period of time in exchange for consideration.
The Company as a lessee
The Company applies a single recognition
and measurement approach for all leases,
except for short-term leases and leases of
low-value assets. The Company recognizes
lease liabilities to make lease payments and
right-of-use assets representing the right to
use the underlying assets.
Right-of-use assets
The Company recognizes right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available
for use). Right-of-use assets are measured
at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities.
The cost of right-of-use assets includes the
amount of lease liabilities recognized, initial
direct costs incurred, and lease payments
made at or before the commencement date
less any lease incentives received.
Right-of-use assets are depreciated on a
straight-line basis over the shorter of the
lease term and the estimated useful lives of
the assets. If ownership of the leased asset
transfers to the Company at the end of the
lease term or the cost reflects the exercise of
a purchase option, depreciation is calculated
using the estimated useful life of the asset.
The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section of Impairment of non-financial assets.
Lease liabilities
At the commencement date of the lease,
the Company recognizes lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include fixed payments
(including in-substance fixed payments) less
any lease incentives receivable, variable
lease payments that depend on an index
or a rate, and amounts expected to be paid
under residual value guarantees. The lease
payments also include the exercise price of
a purchase option reasonably certain to be
exercised by the Company and payments of
penalties for terminating the lease, if the lease
term reflects the Variable lease payments
that do not depend on an index or a rate are
recognized as expenses (unless they are
incurred to produce inventories) in the period
in which the event or condition that triggers
the payment occurs.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.
The Company’s lease liabilities are included
in Borrowings.
Short-term leases and leases of low-value
assets
The Company applies the short-term lease
recognition exemption to its short-term leases
(i.e., those leases that have a lease term of
12 months or less from the commencement
date and do not contain a purchase option).
It also applies the lease of low-value assets
recognition exemption to leases that are
considered to be of low value. Lease
payments on short-term leases and leases of
low-value assets are recognized as expense
on a straight-line basis over the lease term.
l. Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated
by dividing the net profit or loss for the
year attributable to equity shareholders
(after deducting preference dividends and
attributable taxes) by the weighted average
number of equity shares outstanding during
the year.
The weighted average number of equity
shares outstanding during the year is adjusted
for events such as bonus issue, bonus
element in a rights issue, share split, and
reverse share split (consolidation of shares)
that have changed the number of equity
shares outstanding, without a corresponding
change in resources.
Diluted earnings per share
Diluted earnings per share is computed by
dividing the profit (considered in determination
of basic earnings per share) after considering
the effect of interest and other financing
costs or income (net of attributable taxes)
associated with dilutive potential equity
shares by the weighted average number of
equity shares considered for deriving basic
earnings per share adjusted for the weighted
average number of equity shares that would
have been issued upon conversion of all
dilutive potential equity shares.
m. Treasury Shares:
The Company has created an ESOP Trust
(Nova Agritech employee welfare trust) which
acts as a vehicle to execute its ESOP plan.
The ESOP trust is considered as an extension
of the Company and the shares held by the
ESOP trust are treated as Treasury shares.
The ESOP Trust purchases Company’s share
from secondary market for issuance to the
employees on exercise of the granted stock
options. These shares are recognized at cost
and are disclosed separately as reduction
from Other Equity as treasury shares. No
gain or loss in is recognized the Statement of
Profit and Loss on purchase, sale, issuance, or
cancellation of treasury shares.
n. Segment Reporting:
The Company is engaged in the “manufacture,
distribute and marketing bio pesticide
products” and the same constitutes a single
reportable business segment as per Ind AS
108. And hence segment reporting specified
as per IND AS 108 is not applicable.
o. Investment in subsidiary and associate
Companies
The Company has elected to recognize its
investments in subsidiary and associate
companies at cost in accordance with the
option available in Ind AS 27, ‘Separate
Financial Statements’. Cost includes cash
consideration paid on initial recognition,
adjusted for embedded derivative and
estimated contingent consideration (earn
out), if any.
Contingent consideration (earn out) is
remeasured at fair value at each reporting
date and changes in the fair value of the
contingent consideration are recognized in
the Statement of Profit and Loss.
p. Foreign Currency Translation
Initial Recognition:
On initial recognition, transactions in foreign
currencies entered into by the Company are
recorded in the functional currency (i.e. Indian
Rupees), by applying to the foreign currency
amount, the spot exchange rate between the
functional currency and the foreign currency
at the date of the transaction.
Measurement of foreign currency items at
reporting date:
Foreign currency monetary items of the
Company are translated at the closing
exchange rates. Non monetary items that
are measured at historical cost in a foreign
currency, are translated using the exchange
rate at the date of the transaction. Non¬
monetary items that are measured at fair
value in a foreign currency, are translated
using the exchange rates at the date when
the fair value is measured.
Exchange differences arising out of foreign
exchange translations and settlements during
the year are recognized in the Statement of
Profit and Loss.
q. Borrowing Cost:
Borrowing cost includes interest, amortization
of ancillary costs incurred in connection with
the arrangement of borrowings and exchange
differences arising from foreign currency
borrowings to the extent they are regarded
as an adjustment to the interest cost.
Borrowing costs, if any, directly attributable to
the acquisition, construction or production of
an asset that necessarily takes a substantial
period of time to get ready for its intended
use or sale are capitalized, if any. All other
borrowing costs are expensed in the period
in which they occur.
r. Events after reporting date:
Where events occurring after the Balance
Sheet date provide evidence of conditions
that existed at the end of the reporting period,
the impact of such events is adjusted within
the Financial Statements. Otherwise, events
after the Balance Sheet date of material size
or nature are only disclosed.
s. Exceptional items:
An ordinary item of income or expense which
by its size, nature, occurrence or incidence
requires a disclosure in order to improve
understanding of the performance of the
Company is treated as an exceptional item in
the Statement of Profit and Loss account.
t. Recent pronouncements
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 31
March 2025, MCA has notified the following
standards or amendments to the existing
standards which are effective for annual
periods beginning on or after 1 April 2024:
I.Ind As 117 - Insurance Contracts : This
Standard is not applicable to the company.
2.Ind As 116 - Sale and leaseback :
Amendments to this standard are not
applicable to the company.
Note 39: Financial instruments & fair value measurements:
All assets and liabilities for which fair value is measured or disclosed in the Ind AS financial statements are categorised within
the fair value hierarchy, as below, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
There has been no transfers between levels during the year. The management has assessed that the carrying values of
financial assets and financial liabilities for which fair values are disclosed, reasonably approximate their fair values because
these instruments have short-term maturities.
Note 40: Financial Risk management objectives and policies
The Company’s principal financial liabilities comprise 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 investments,
trade and other receivables, cash and cash equivalents, bank balances and security deposits.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the
management of these risks. The Company’s risk management is carried out by a treasury department under policies approved
by the Board of Directors. The Board of Directors provides written principles for overall risk management, as well as policies
covering specific areas, such as foreign exchange risk, interest rate risk, credit risk.
a. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of
changes in market prices. Market risk comprises three types of risk i.e. interest rate risk, currency risk and other price
risk, such as commodity risk. Financial instruments affected by market risk include borrowings, derivatives financial
instruments and trade payables.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate
because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rate
relates primarily to the Company’s borrowings with floating interest rates. The following table demonstrates the sensitivity
to a reasonably possible change in interest rates on borrowings affected. With all other variables held constant, the
Company’s profit before tax is affected through the impact on floating rate borrowings, without considering impact of
derivatives not designated as hedges, as follows:
b. Credit Risk:
Credit risk is the risk of loss that may arise on outstanding financial instruments if counterparty default on its obligations.
The Company’s exposure to credit risk arises majorly from trade and other receivables. Other financial assets like
security deposits and bank deposits are mostly with government authorities and scheduled banks and hence, the
Company does not expect any credit risk with respect to these financial assets.
Trade and other receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the customer, including the default risk of the industry and country in which the customer operates,
C. Liquidity risk
The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all
times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The
current committed lines of credit are sufficient to meet its short to medium/long term expansion needs. The Company
monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while
maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does
not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
Note 41: Details of CSR expenditure:
As per Section 135 of the Companies Act, 2013 (‘Act), 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 focus areas of Company’s CSR activities are Education and Health care & while also pursuing CSR activities for
the benefit of community around its local areas of operations. The CSR activities of the Company are in line with the Schedule
VII of the Act. A CSR committee has been formed by the Company as per the Act. The CSR Committee shall recommend the
amount of expenditure to be incurred on the CSR activities to be undertaken by the Company as specified in Schedule VII of
the Act, as amended from time to time.
Note 42: Other statutory information
1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
2. The Company does not have any transactions with struck off companies.
3. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
4. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
5. 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)
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
6. 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
7. The Company has not entered in to any transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as,
search or survey or any other relevant provisions of the Income Tax Act, 1961).
8. The Company has not been declared as willful defaulter by any bank or financial institution or other lender.
9. 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.
10. No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the
Companies Act, 2013, during the year.
11. The Company have borrowings from banks or financial institutions against security of its current assets.
12. The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for
which such loans were taken.
Note 43: Issue of shares
In the financial year 2023-24 ,The Company has completed Initial Public Offer of 3,50,75,693 Equity Shares of the face value
of ' 2 each at an issue price of ' 41 per Equity Share, comprising offer for sale of 77,58,620 shares by selling shareholders
aggregating to ' 3,181.03 Lakhs and fresh issue of 2,73,17,073shares aggregating to ' 11,200 Lakhs. The Equity Shares of
the Company were listed on January 31, 2024 with BSE Limited and the National Stock Exchange of India Limited.
The Company had received an amount of 10094.83 Lakhs (net off IPO expenses of 1105.17 Lakhs) from proceeds out of
fresh issue of equity shares.
Note 45: Capital Management
The Company’s capital management Primary objective is to maximise the total shareholder return by optimising cost of
capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to
maintain/enhance credit rating.
The Company manages its capital to ensure that the Company will be able to continue as going concern while maximizing
the return to stakeholders through the optimization of the debt and equity balance.
The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans.
The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors
the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves.
Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents, Bank deposits and inter¬
corporate deposits with financial institutions.
Note 48: Previous period/year figures have been regrouped/re-classified wherever necessary, to conform to current
period’s classification in order to comply with the requirements of the amended Schedule III to the Companies Act, 2013.
For and on behalf of the Board of Directors
For NSVR & ASSOCIATES LLP Nova Agritech Limited
Chartered Accountants
Firm Registration No:008801S/S200060
P. VENKATA RATNAM KIRAN KUMAR A
Partner Managing Director
Membership Number: 230675 (DIN: 08143781)
UDIN:25230675BMINDP4013
RAJESH CHERUKURI SRINIVAS RAO M
Whole-Time Director Chief Executive Officer
(DIN: 09840611)
Place: Hyderabad K SRINIVAS GUNUPUDI NEHA SONI
Date: 30-05-2025 Chief financial officer Company Secretary
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