(k) Provisions and contingent liabilities
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 not recognised for future
operating losses.
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 interest expense.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events
but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain
future events.
(l) Revenue from Contracts with Customers
The Company recognizes revenue, whenever control over distinct goods or services is transferred
to the customer; i.e. when the customer is able to direct the use of the transferred goods or services
and obtains substantially all of the remaining benefits, provided a contract with enforceable rights
and obligations exists and amongst others collectability of consideration is probable taking into
account customer 's creditworthiness.
Revenue is the transaction price the Company expects to be entitled to. In determining the
transaction price, the Company considers effects of variable consideration, the existence of
significant financing contracts, noncash consideration and consideration payable to the customer,
if any. The Company considers whether there are other promises in the contract that are separate
performance obligations to which the transaction price needs to be allocated.
Sale of goods -
Revenues are recognized at a point in time when control of the goods passes to the buyer, usually
upon either at the time of dispatch or delivery. In case of export sale, it is usually recognised based
on the shipped-on board date as per bill of lading. Revenue from sale of goods is net of taxes and
recovery of charges collected from customers like transport, packing etc.
Other operating revenue - Export incentives -
Export Incentives under the, "Duty Draw back Scheme” , etc. are accounted in the year of export.
Other Income
Dividend income on investments is recognised when the right to receive dividend is established.
I nterest income is recognized on a time proportionate basis taking into account the amounts
invested and the rate of interest. For all financial instruments measured at amortised cost, interest
income is recorded using the Effective interest rate method to the net carrying amount of the
financial assets.
(m) Employee benefits
Defined Contribution Plans such as Provident Fund etc., are charged to the Profit and Loss Account
as incurred.
Defined Benefit Plans - The liability or asset recognised in the balance sheet in respect of defined
benefit gratuity plan is the present value of defined benefit obligations at the end of the reporting
period less fair value of plan assets. The defined benefit obligations is calculated annually by
actuaries through actuarial valuation using the projected unit credit method.
The Company recognises the following changes in the net defined benefit obligation as an expense
in the statement of profit and loss:
(a) Service costs comprising current service costs, past-service costs, gains and losses on
curtailment and non-routine settlements; and
(b) Net interest expense or income
Re-measurement comprising of actuarial gains and losses arising from:
(a) Re-measurement of Actuarial(gains)/losses
(b) Return on plan assets, excluding amount recognized in effect of asset ceiling
(c) Re-measurement arising because of change in effect of asset ceiling are recognised in the
period in which they occur directly in Other comprehensive income. Re-measurement are not
reclassified to profit or loss in subsequent periods.
Other Long term Employee Benefits are recognised in the same manner as Defined Benefit Plans.
Termination benefits are recognised as and when incurred. However, the termination benefits which
fall due more than twelve months after the Balance Sheet date are discounted using the yield on
Government Bonds.
(n) Foreign currency transactions
Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction
dates. Realised gains and losses on settlement of foreign currency transactions are recognised in
the Statement of Profit and Loss.
Monetary foreign currency assets and liabilities at the year-end are translated at the year-end
exchange rates and the resultant exchange differences are recognised in the Statement of Profit
and Loss.
(o) Income tax
The income tax expense or credit for the period is the tax payable on the current period's taxable
income based on the applicable income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method on temporary differences arising
between the tax bases of assets and liabilities and their carrying amount in the financial statement.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are excepted to apply when the related deferred
income tax assets is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax
losses only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are off set where the Company has a legally enforceable right
to offset and intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case,
the tax is also recognised in other comprehensive income or directly in equity, respectively
(p) Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company
- by the weighted average number of equity shares outstanding during the financial year,
adjusted for bonus elements in equity shares issued during the year and excluding treasury
shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account:
- t he after income tax effect of interest and other financing costs associated with dilutive
potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding
assuming the conversion of all dilutive potential equity shares.
(q) Research and Development
Revenue expenditure, including overheads on Research and Development, is charged out as an
expense through the natural heads of account in the year in which incurred. Expenditure which
results in the creation of capital assets is taken as Fixed Assets and depreciation is provided on
such assets which are depreciable.
(r) Cash Flow Statement
Cash flows are reported using the indirect method where by the profit before tax is adjusted for
the effect of the transactions of a non-cash nature, any deferrals or accruals of past and future
operating cash receipts or payments and items of income or expenses associated with investing
or financing cash flows. The cash flows from operating, investing and financing activities of the
Company are segregated
(s) Exceptional Items
When an item of income or expense within profit or loss from ordinary activity is of such size,
nature or incidence that their disclosure is relevant to explain the performance of the Company for
the year, the nature and amount of such items is disclosed as exceptional items.
(t) Dividend
The Company recognizes a liability to pay dividend when the distribution is authorised and the
distribution is no longer at the discretion of the Company i.e. when the dividend distribution is
being approved by the shareholders. A corresponding amount is recognized directly in equity.
(u) Segment Report
Operating segments are reported in a manner consistent with the internal reporting provided to
Chief Operating Decision Maker(CODM).
The Company has identified its Managing Director as CODM who is responsible for allocating
resources and assessing performance of the operating segments and makes strategic decisions.
(v) Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be
received, and all attached conditions will be complied with. Government grants related to revenue
are recognised on a systematic basis in the statement of profit and loss over the periods necessary
to match them with the related costs which they are intended to compensate. When the grant
relates to an asset, it is recognized as income over the expected useful life of the asset. In case
a non-monetary asset is given free of cost it is recognised at a fair value. When loan or similar
assistance are provided by government or related institutions, with an interest rate below the
current applicable market rate, the effect of this favorable interest is recognized as government
grant. The loan or assistance is initially recognized and measured at fair value and the government
grant is measured as the difference between the initial carrying value of the loan and the proceeds
received.
(w) Impairment of Non-Financial Assets
The Company assesses at each reporting date whether there is any objective evidence that a
non-financial asset or a group of non financial assets are impaired. If any such indication exists,
the Company estimates the amount of impairment loss. For the purpose of assessing impairment,
the smallest identifiable group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows from other assets or groups of assets is considered as a
cash generating unit. If any such indication exists, an estimate of the recoverable amount of the
individual asset/cash generating unit is made. An impairment loss is calculated as the difference
between an asset's carrying amount and recoverable amount. Losses are recognised in profit
or loss and reflected in an allowance account. When the Company considers that there are no
realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of
impairment loss subsequently decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, then the previously recognised impairment loss is
reversed through profit or loss.
(x) Recent Accounting Developments
Mentioned below are the new and amended standards as notified by the Ministry of Corporate
Affairs (MCA), which are effective for annual periods beginning on or after April 01, 2025. The
Company has not early adopted any standard, interpretation or amendment that has been issued
but is not yet effective.
(i) Amendments to Ind AS 21 - Lack of exchangeability : The Ministry of Corporate Affairs (MCA)
notified the Companies (Indian Accounting Standards) Amendment Rules, 2025, which amend
Ind AS 21, The Effects of Changes in Foreign Exchange Rates to specify how an entity should
assess whether a currency is exchangeable and how it should determine a spot exchange rate
when exchangeability is lacking. The amendments also require disclosure of information that
enables users of its standalone financial statements to understand how the currency not being
exchangeable into the other currency affects, or is expected to affect, the entity's financial
performance, financial position and cash flows. The amendments are effective for annual
reporting periods beginning on or after April 01, 2025. When applying the amendments, an
entity cannot restate comparative information. The amendments do not have a material impact
on the Company's standalone financial statements.
(ii) Amendments to Ind AS 1 - Classification of Liabilities as Current or Non-current and Non¬
current Liabilities with Covenants In August 2025, the MCA notified amendments to paragraphs
69 to 76 of Ind AS 1 to specify the requirements for classifying liabilities as current or non¬
current. The amendments are effective for annual reporting periods beginning on or after
April 01, 2025 retrospectively in accordance with Ind AS 8. The amendments have not resulted
in additional disclosures and have not had an impact on the classification of the Company's
liabilities.
(iii) Amendments to Ind AS 12 - International Tax Reform Pillar Two Model Rules In August 2025,
the MCA notified amendments to Ind AS 12 Income Taxes in response to the OECD's BEPS Pillar
Two rules and include: A mandatory temporary exception to the recognition and disclosure
of deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules;
and Disclosure requirements for affected entities to help users of the standalone financial
statements better understand an entity's exposure to Pillar Two income taxes arising from
that legislation, particularly before its effective date. The mandatory temporary exception -
the use of which is required to be disclosed - applies immediately. The remaining disclosure
requirements apply for annual reporting periods beginning on or after April 01, 2025, but not
for any interim periods ending on or before March 31, 2026. The amendments had no impact
on the Company's standalone financial statements as the Company is not in scope of the Pillar
Two model rules.
(iv) Standards notified but not yet effective: There are no standards that are notified and not yet
effective as on the date
39 Financial risk management objectives and policies
The Company's financial risk management is an integral part of how to plan and execute its business
strategies. The Company's financial risk management policy is set by the Managing Board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change
in the price of a financial instrument. The value of a financial instrument may change as a result of changes
in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect
market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments
including investments and deposits , foreign currency receivables, payables and loans and borrowings.
The Company's market risk is manage by Senior Management, who evaluates and exercises independent
control over the entire process of market risk management. The Senior Management recommend risk
management objectives and policies, which are approved by the Audit Committee. The activities of Senior
Management include management of cash resources, implementing hedging strategies for foreign currency
exposures, borrowing strategies and ensuring compliance with market risk limits and policies.
i. Market Risk- Interest rate risk
I nterest rate risk is the risk that the fair value of future cash flows of the financial instruments will
fluctuate because of changes in market interest rates. In order to optimize the Company's position with
regards to interest income and interest expenses and to manage the interest rate risk, treasury performs
a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and
floating rate financial instruments in its total portfolio.
ii. Market Risk- Foreign currency risk.
The Company operates internationally and portion of the business is transacted in several currencies
and consequently the Company is exposed to foreign exchange risk through its sales and services
in overseas and purchases from overseas suppliers in various foreign currencies. Foreign currency
exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the
respective currencies.
iii. Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations
as agreed. To manage this, the Company periodically assess financial reliability of customers, taking
into account the financial condition, current economic trends, and analysis of historical bad debts and
ageing of accounts receivable. Individual risk limits are set accordingly.
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 through each reporting period. To
assess whether there is a significant increase in credit risk the Company compares the risk of default
occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It
considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty
iii) Financial or economic conditions that are expected to cause a significant change to the
counterparty's ability to meet its obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the
third-party guarantees or credit enhancements .
40 Fair Value measurementFinancial Instrument by category and hierarchy
The fair values of the financial assets and liabilities are included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables,
other current liabilities, short term loans from banks and other financial institutions approximate their
carrying amounts largely due to short term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on
parameters such as interest rates and individual credit worthiness of the counterparty. Based on this
evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair
value of such instruments is not materially different from their carrying amounts.
The fair values for loans, security deposits were calculated based on cash flows discounted using a current
lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of
unobservable inputs including counter party credit risk.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair
values.
The Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not
based on observable market data.
2 Terms and conditions of transactions: the transactions among the related parties are in the ordinary
course of business based on normal commercial terms, conditions and market rates.
3 Figures in brackets represents amount payable.
42 LEASES
Under Ind AS 116, the nature of expenses in respect of operating leases has changed from "lease rent” to
"depreciation cost” and "finance cost” for the right-to-use assets and for interest accrued on lease liability
respectively
The weighted average lessee's incremental borrowing rate applied to the lease liabilities is 9%.
II. COMPENSATED ABSENCES:
The Company permits encashment of compensated absence accumulated by their employees on retirement,
separation and during the course of service. The liability in respect of the Company, for outstanding balance
of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the
balance sheet date performed by an independent actuary. The Company doesn't maintain any plan assets to
fund its obligation towards compensated absences. Compensented absences charges for the year is ' 74.34
lakhs (Previous year ' 110.49 lakhs) to the statement of profit and loss.
III. Social Security Code 2020:
Pursuant to the notification of the substantive provisions of the New Labour Codes effective November 21,
2025, the Company has evaluated the impact of incremental obligations in respect of its employees. Based
on the existing wage structure, which is aligned with the New Labour Codes, there is no material impact on
these standalone financial statements.
The impact, if any, arising from the remaining rules and State-level regulations will be assessed and recognised
as and when the same become applicable.
44 Capital risk management
The Company's objectives when managing capital are to
8 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
8 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
47 Operating segment
The Company is engaged in the business of manufacture of Fine Chemicals, considering its business
activities primarily operated within India and reviewed by the Chairman and Managing Director to make
decisions about resources to be allocated to the segment and assess its Performance. Accordingly, the
Company has only one business segment.
b. Non-current operating assets
All non -current assets of the Company are located in India.
48 Impairment testing of Goodwill on Amalgamation
Goodwill on amalgamation of ' 4,497.72 Lakh is relating to the merged business of its fragrance and flavours
division ('CGU').
Goodwill is not amortised, instead it is tested for impairment annually or more frequently if indicators of
impairment exist. The recoverable amount is determined based on value-in-use calculation which require the
use of certain assumptions. The calculation use cash flow projections based on management approved cash
flow projections for the 3-5 years period. Cash flow post that is extrapolated using the estimated growth
rates.
As a result of impairment test for the year ended 31st March 2026, no goodwill impairment was identified
as the fair value of the CGU to whom goodwill is relating to exceed their respective carrying amount. An
analysis of the sensitivity of the changes in key parameters (cash flows, Discount rate and Long term average
growth rate), based on reasonable probable assumptions, did not result in any probable scenario in which
the recoverable amount of the CGU would decrease below the carrying amount.
51 Relationship with Struck Off companies
The Company has not entered into transaction with struck off companies under Section 248 of the Companies
Act, 2013.
52 a) No proceeding has been initiated or pending against the Company for holding any Benami property
under the Benami Transactions (Prohibition) Act, 1988, as amended, and rules made thereunder
b) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond
the statutory period.
c) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial
year.
d) There were no transactions relating to previously unrecorded income that have been surrendered and
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
e) The Company has not advanced or loaned to or invested in funds to any other person(s) or entity(is),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
f) The Company has not received any fund from any person(s) or entity(is), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company
shall:
(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
g) The Company has not been declared wilful defaulter by any bank or financial Institution or other lender.
53 The Board of directors of the Company has recommended the payment of final dividend on equity shares
of ' 5 each @ ' 0.50 per shares for the year ended 31st March 2026. The final dividend shall be subject to
approval of shareholders at the ensuing Annual General Meeting.
54 The Standalone Financial Statements have been approved by the Board of Directors in its meeting held on
20th May, 2026.
55 The Company uses an accounting software for maintaining its books of account which has a feature of
recording audit trail (edit log) facility and the same has operated throughout the year for all relevant
transactions recorded in the accounting software, except that audit trail feature is not enabled at the
database level for SAP HANA database. Further no instance of audit trail feature being tampered with was
noted in respect of the accounting software. Presently, the log has been activated at the application and the
privileged access to SAP HANA database continues to be restricted to limited set of users who necessarily
require this access for maintenance and administration of the database. Additionally, the Company has
preserved the audit trail for the previous year in accordance with statutory record requirements for record
retention requirements, to the extent that such audit trail was enabled and recorded.
56 The previous year's figures have been re-grouped / re-classified wherever required to conform to current
year's classification.
All figures of financials has been rounded off to nearest lakh rupees.
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