r. Provisions and Contingencies
Provisions are recognized 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 management's best estimate of the expenditure required to settle the present obligation at
the end of the reporting period. A disclosure for contingent liabilities is made when there is a possible obligation arising from past events,
the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within
the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources
embodying economic benefits will be required to settle or a reliable estimate of the amount cannot be made.
s. Dividend
The Company recognises a liability for dividends to equity holders of the Company when the dividend is authorised and the dividend is no
longer at the discretion of the Company. As per the corporate laws in India, a dividend is authorised when it is approved by the shareholders.
A corresponding amount is recognised directly in equity.
t. Earnings per Share(i) 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
(ii) Diluted Earnings per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:¬
- the 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.
u. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments and has been
identified as the Managing Director of the Company. Presently Company has been working in single segment- Dyes & Dyes Intermediates.
4.3 The Company has taken borrowings from banks which carry charge over certain property, plant and equipment ( Refer Note 42 for details).
4.4 Contractual obligations - Refer Note 35(a) for disclosure of contractual commitments for the acquisition of property, plant and equipment.
4.5 Aggregate amount of depreciation has been included under 'Depreciation and Amortisation Expense' in the Statement of Profit and Loss
(Refer Note 29).
4.6 Title deeds of immovable properties set out in Note 4.1 above, where applicable, are in the name of the Company.
4.7 Lease period of land at GIDC is 95 years. On expiry of the said lease term of 5 years, the Company has an option to renew the lease for a further
period of 5 years which company is certain to excerise the option.
4.8 There is no Capital work in progress in current year as well as in previous year.
4.9 There is no intangibles asset under development during the year as well as in previous year.
4.10 There is no Benami property held by the company.
^Security for Working Capital
(a) First pari passu hypothecation charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on all existing and future current
assets of the Company.
(b) Second pari passu hypothecation charge shared with HDFC Bank, Citi bank and Kotak Mahindra Bank on all Movable Fixed Assets of
the company at Unit 1 (situated at GIDC, Ankleshwar) and Unit 2 (situated at GIDC, Ankleshwar).
(c) Second pari passu hypothecation charge shared with HDFC Bank and Citi bank on Movable Fixed Assets of the company at Unit 3
(situated at GIDC, Dahej).
(d) Second Pari passu registered mortgage charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on immoveable properties
of the Company at Unit 1 (situated at GIDC, Ankleshwar) and Unit 2 (situated at GIDC, Ankleshwar), Unit 3 (situated at GIDC, Dahej)
and Head office (Registered Office situated at Ahmedabad).
*Security for Term loan
(a) Second pari passu hypothecation charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on all existing and future current
assets of the Company.
(b) First pari passu hypothecation charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on all Movable Fixed Assets of the
Company at Unit 1 (situated at GIDC, Ankleshwar) and Unit 2 (situated at GIDC, Ankleshwar).
(c) First pari passu hypothecation charge shared with HDFC Bank and Citi Bank on Movable Fixed Assets and Immovable assets of the
company at Unit 3 (situated at GIDC, Dahej).
(d) First Paripassu registered mortgage charge shared with HDFC Bank, Citi Bank and Kotak Mahindra Bank on immoveable properties
at Unit 1 (situated at GIDC, Ankleshwar), Unit 2 (situated at GIDC, Ankleshwar) and Head office (Registered Office situated at Ah-
medabad).
^Security for ECLGS Loan
(a) Second pari passu hypothecation charge shared with HDFC Bank on all existing and future current assets
(b) Second pari passu hypothecation charge shared with HDFC Bank on all Movable Fixed Assets of the company of Unit 1 (situated at
GIDC, Ankleshwar), Unit 2 (situated at GIDC, Ankleshwar) and Unit 3 (situated at GIDC, Dahej).
(c) Second Paripassu registered mortgage charge shared with HDFC Bankon immoveable properties at Unit 1 (situated at GIDC, Ankle¬
shwar), Unit 2 (situated at GIDC, Ankleshwar) and Unit 3 (situated at GIDC, Dahej) and Head office (Registered Office situated at Ah-
medabad)
36 Employee Benefits :-(I) Post Employment Defined Benefits Plans :(A) Gratuity (Funded)
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the plan, the Gratuity Fund Trusts,
administered and managed by the Trustees and funded primarily with Life Insurance Corporation of India (LICI), make payment to vested
employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and
the tenure of employment. Vesting occurs upon completion of five years of service. The Trustees are responsible for the overall governance
of the plan and to act in accordance with the provisions of the trust deed and rules in the best interests of the plan participants. Each year an
Asset-Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and re¬
turn profiles. Investment and contribution policies are integrated within this study. Liabilities with regard to the Gratuity Plan are determined
by actuarial valuation as set out in Note 2(t)(ii) above, based upon which, the Company makes contributions to the Employees' Gratuity Funds.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of
the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation as it is unlikely that
the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the Defined Benefit Obligation has been calculated using the
projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the Defined Benefit Obli¬
gation as recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.The estimate of future salary
increases takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.
(II) Post Employment Defined Contributions Plans :
(A) Provident Fund
Certain categories of employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and
employer make monthly contributions to a government administered fund at specified percentage of the covered employee's qualifying sala¬
ry. The Company has no further obligations under the plan beyond its monthly contributions. During the year, an amount of Rs. 100.03 Lakhs
(Previous Year Rs. 89.77 Lakhs) has been recognised as expenditure towards above defined contribution plans of the Company.
(III) Leave Obligations
The Company provides for accumulation of leave by certain categories of its employees. These employees can carry forward a portion of the
unutilised leave balances and utilise it in future periods or receive cash (only in case of earned leave) in lieu thereof as per the Company's
policy. The Company records a provision for leave obligations in the period in which the employee renders the services that increases this en¬
titlement. The total provision recorded by the Company towards this obligation was Rs. 56.69 Lakhs, and Rs. 45.00 Lakhs at 31st March, 2026,
and 31st March, 2025 respectively. The amount of the provision is presented as current, since the Company does not have an unconditional
right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take
the full amount of accrued leave or require payment within the next 12 months.
(IV) Risk Exposure
Through its defined benefit plans, the Company is exposed to some risks, the most signifcant of which are detailed below:
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher
provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an
increase in the salary of the members more than assumed level will increase the plan's liability.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to
market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit.
Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income
Tax Rules, 1962, this generally reduces ALM risk.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any lon¬
gevity risk.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out
all the assets. Although probability of this is very low as insurance companies have to follow stringent regulatory
- During the year, there were no plan amendments, curtailments and settlements.
7. Segment ReportingDescription of Segments and Principal Activities
The activities of the company during the year was to manufacture Dyes & Intermediates. Considering the nature of business and operation as
well as based on reviews of operating results by chief operating decision maker to make decision about resource allocation and performances
measurement, there is only one reporting segment in accordance with the requirement of Ind As - 108 - " Operating Segments".
The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values
are consistent with those used for the year ended 31st March, 2026.
The following methods and assumptions were used to estimate the fair values:
(a) In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund units in
the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at
which issuers will redeem such units from the investors. Accordingly, such net asset values are analogous to fair market value with respect to
these investments, as transactions of these mutual funds are carried out at such prices between investors and the issuers of these units of
mutual funds.
(b) The fair value of foreign exchange forward contracts is determined using forward exchange rates at the Balance Sheet date.
(c) The management assessed that fair values, of trade receivables, cash and cash equivalents, other bank balances, other financial assets
(current), investments in commercial papers, trade payables, borrowings (current) and other financial liabilities (current), approximate to their
carrying amounts largely due to the short-term maturities of these instruments. Further, management also assessed the carrying amount of
certain loans and long-term borrowings at floating interest rates which are a reasonable approximation of their fair values and the difference
between the carrying amounts and fair values is not expected to be significant.
(d) The fair value of remaining financial instruments is determined on discounted cash flow analysis using a current lending/discount rate, as
considered appropriate. For financial assets carried at fair value, the carrying amounts are equal to their fair values.
(iii) Fair Value Hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised
and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments
into three levels prescribed under the accounting standard. An explanation of each level follows below.
Level-1 : Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level-2 : Inputs are other than quoted prices included within Level-1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level-3 : Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a
valuation model based on the assumptions that are neither supported by prices from observable current market transactions in
the same instrument nor are they based on available market data.
40 Financial Risk Management
The Company's activities expose it to credit risk, liquidity risk and market risk. In order to safeguard against any adverse effects on the finan¬
cial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered as per Company's
policy to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or specula¬
tive intruments The Company's senior management oversees the management of above risks. The senior executives working to manage the
financial risks are accountable to the Audit Committee and the Board of Directors. This process provides assurance to the Company's senior
management that the Company's financial risks-taking 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 the Company's risk appetite.
This Note explains the sources of risk which the entity is exposed to and how the entity manages the risk. The Board of Directors reviews and
agrees policies for managing each of these risks, which are summarised below:
(A) Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed to credit risk
from its operating activities (primarily Trade Receivables) and from its investing activities (primarily Deposits with Banks and Investments in
Mutual Funds).
Trade Receivables
Trade receivables are typically unsecured and are derived from revenue earned from customers. Customer credit risk is managed by each
business unit subject to the Company's policy and procedures which involve credit approvals, establishing credit limits and continuously mon¬
itoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer
receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit
assurance. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company
uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available
external and internal credit risk factors and the Company's historical experience with customers.
The Company's exposure to customers is diversified and no single customer contributes to more than 10% of total revenues.
Other Financial Assets
Credit risk from balances with banks, term deposits, loans, investments and derivative instruments is managed by Company's finance de¬
partment. Investments of surplus funds are made only with approved counterparties who meet the minimum threshold requirements. The
Company monitors ratings, credit spreads and financial strength of its counterparties. The Company's maximum exposure to credit risk for the
components of the Balance Sheet as of 31st March, 2026 and 31st March, 2025 is the carrying amounts as disclosed in Note 39.
Financial Assets that are Neither Past Due Nor Impaired
None of the Company's cash equivalents with banks, loans and investments were past due or impaired as at 31st March, 2026 and 31st March,
2025 . Of the total trade receivables Rs. 7470.66 Lakhs as at 31st March, 2026 and Rs. 6419.97 Lakhs as at 31st March, 2025 consisted of
customer balances that were neither past due nor impaired.
Financial Assets that are Past Due but Not Impaired
The Company's credit period for customers generally ranges from 0 - 180 days. The ageing of trade receivables that are past due but not im¬
paired (net of provisions/allowances) is given below:
Receivables are deemed to be past due or impaired with reference to the Company's normal terms and conditions of business. These terms
and conditions are determined on a case to case basis with reference to the customer's credit quality and prevailing market conditions. Re¬
ceivables that are classified as 'past due' in the above tables are those that have not been settled within the terms and conditions that have
been agreed with that customer.
Other than trade receivables, the Company has no significant class of financial assets that is past due but not impaired.
(B) Liquidity Risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring un¬
acceptable losses. The Company's objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements.
The Company closely monitors its liquidity position and maintains adequate sources of financing.
(i) Financing Arrangements
The Company had access to the following undrawn borrowing facilities (excluding non-fund based facilities) at the end of the reporting period:
(C) Market Risk
(i) Foreign Currency Risk
Foreign currency risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The Company transacts business in local currency and in foreign currencies (primarily US Dollars and Euro). The Company has
obtained foreign currency loans and has foreign currency trade receivables, trade payables and other financial assets/liabilities and is there¬
fore exposed to foreign currency risk.
(a) Foreign Currency Risk Exposure:
The Company's exposure to foreign currency risk at the end of the reporting period expressed in INR, are as follows:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Company's exposure to risk of changes in market interest rates relates primarily to the Company's debt interest obligation. Further
the Company engages in financing activities at market linked rates, any changes in the interest rate environment may impact future rates of
borrowings. To manage this, the Company may enter into interest rate swaps. The management also maintains a portfolio mix of floating and
fixed rate debt.
The Company's fixed rate borrowings and investments in term deposits with bank are carried at amortised cost. They are therefore not subject
to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of changes in
market interest rates.
(a) Interest Rate Risk Exposure
The exposure of the Company's borrowings to interest rate changes at the end of the reporting period are as follows:
* Holding all other variables constant
(iii) Commodity Price Risk
Exposure to market risk with respect to commodity prices primarily arises from the Company's sales of dyes and intermediates, including the
raw material components for such products. Cost of raw materials forms the largest portion of the Company's cost of sales. Market forces
generally determine prices for the goods sold by the Company. These prices may be influenced by factors such as supply and demand, pro¬
duction costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any
of these factors may reduce the revenue that the Company earns from the sales of goods. Commodity price risk exposure is evaluated and
managed through operating procedures and sourcing policies. The Company has not entered into any derivative contracts to hedge exposure
to fluctuations in commodity prices.
41 Capital Management
Risk Management
The Company's objectives when managing capital are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other
stakeholders, and
-maintain an optimal capital structure to reduce the cost of capital.
The Company monitors capital on the basis of the net debt to equity ratio. Net debt are long-term and short-term debts as reduced by cash
and cash equivalents. The Company is not subject to any externally imposed capital requirements.
Trade Receivables under Bill Discounting
The carrying amount of trade receivables include receivables which are subject to bill discounting arrangement. Under this arrangement, the
Company has discounted the relevant receivables in exchange of cash and is prevented from selling or pledging the receivables. However, the
45 Event Occurring after The Balance Sheet Date
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of financial statement
to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As on date of
signing this statements there were no material subsequent events to be recognized or reported that are not already disclosed.
46 Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet
date.
47 No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohi¬
bition) Act, 1988 (45 of 1988) and the rules made thereunder during the year under audit.
48 Company has not paid any dividend during the year.
The Board of Directors has declared final dividend of Rs. 1.50 per equity share of Rs. 10 each fully paid-up (i.e. 15%) for the Financial Year
2025-26, aggregating to Rs. 186.43 lakhs, subject to the approval of the shareholders at the Annual General Meeting.
49 Company has not been declared willful defaulter by any bank or financial Institution or other lender during the year under audit.
50 Company has no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period during the year under
audit.
51 Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
52 The Company does not have any such 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
53 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds)
any funds to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in
writing or otherwise, 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 (Ulti¬
mate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
54 The Company have 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
55 The financial statements of the Company for the year ended 31st March, 2026 have been reviewed by the audit committee and approved by
the Board of Directors in its meeting held on 29th May, 2026.
56 The figures for the corresponding previous year have been regrouped / reclassified wherever necessary, to make them comparable with cur¬
rent year's figures.
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