3.6 Provisions, Contingent Liabilities and Contingent Assets
Provisions:
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the
Company expects some or all of a provision to be reimbursed, reimbursement is recognised as a
separate asset, but only when the reimbursement is virtually certain. The expense relating to a
provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognised as a finance cost in respective
expense.
Contingent Liabilities and Contingent Assets:
Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither
recognized nor disclosed in the financial statements.
3.7 Income Tax
Current Tax:
Provision for current tax is made as per the provisions of the Income Tax Act, 1961. 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 recognised outside profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity). Current tax items are recognised in correlation to
the underlying transaction either in OCI or directly in equity. 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.
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 utilised. Unrecognised deferred tax assets are re-assessed at each reporting
date and are recognised to the extent that it has become probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to
the underlying transaction either in OCI or directly in equity.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised 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 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 taxation
authority.
3.8 Employee Benefits
Short-term Employee Benefits:
Employee benefit liabilities such as salaries, wages and bonus, etc. that are expected to be settled wholly
within twelve months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are measured at
an undiscounted amount expected to be paid when the liabilities are settled.
Post-employment benefit plans:
Defined Contribution Plans
State governed Provident Fund Scheme and Employees State Insurance Scheme are defined
contribution plans. The contribution paid / payable under the schemes is recognised during the period
in which the employees render the related services.
Defined Benefit Plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The
Company's gratuity scheme is a defined benefit plan. The Company recognises the defined benefit
liability in Balance sheet. The present value of the obligation under such defined benefit plan and the
related current service cost and, where applicable past service cost is determined based on an actuarial
valuation done using the Projected Unit Credit Method by an independent actuary, which recognises
each period of service as giving rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The obligations are measured at the present value
of the estimated future cash flows.
Re-measurements, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if
applicable) is reflected immediately in Other Comprehensive Income in the Statement of Profit and loss.
All other expenses related to defined benefit plans are recognised in Statement of Profit and Loss as
employee benefit expenses. Re-measurements recognised in Other Comprehensive Income will not be
reclassified to Statement of Profit and Loss hence it is treated as part of retained earnings in the
Statement of Changes in Equity.
3.9 Fair Value Measurement
Fair value is the price 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. The fair value measurement is based
on the presumption that the transaction to sell the asset or transfer the liability takes place either:
? In the principal market for the asset or liability, or
? In the absence of a principal market, in the most advantageous market for the asset or Liability
? The principal or the most advantageous market must be accessible to/ by the Company
Fair value hierarchy
All financial instruments for which fair value is recognised or disclosed are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole;
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: valuation techniques for which the lowest level input that has a significant effect on the fair
value measurement are observable, either directly or indirectly.
Level 3: valuation techniques for which the lowest level input which has a significant effect on the fair
value measurement is not based on observable market data.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by reassessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above.
3.10 Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement:
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the
financial asset.
Subsequent measurement:
For purposes of subsequent measurement, financial assets are measured in their entirety at either
amortized cost or fair value, depending on the classification of financial asset.
? Financial Assets at amortized cost:
A Financial Asset is measured at the amortized cost if both the following conditions are met:
• The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the
effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR.
The EIR amortization and losses arising from impairment are recognized in the Statement of Profit &
Loss. The amortized cost of the financial asset is also adjusted for loss allowance, if any
? Financial Assets at FVTOCI:
A Financial Asset is measured at fair value through other comprehensive income if both the following
conditions are met:
• The asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets, and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at fair value and changes
therein are recognized directly in other comprehensive income, net of applicable taxes.
? Financial Assets at FVTPL:
FVTPL is a residual category for Financial Assets.
Any Financial Asset, which does not meet the criteria for categorization as at amortized cost or as
FVTOCI, is classified as at FVTPL.
In addition, the company may elect to designate a Financial Instrument which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so
reduces or eliminates a measurement or recognition inconsistency (referred to as 'accounting
mismatch').
Financial Assets included within the FVTPL category are measured at fair value with all changes
recognized in the Statement of Profit & Loss.
Presentation in Financial Statements:
The company has made an election for classification and subsequent measurement for its investments
based on its business model and is disclosed in relevant note of investments respectively.
Derecognition of Financial Assets:
The Company derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
which the Company neither transfers nor retains substantially all of the risks and rewards of ownership
and it does not retain control of the financial asset. Any gain or loss on de-recognition is recognized in
the Statement of Profit and Loss.
Impairment of financial assets:
In accordance with Ind AS 109, the company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:
? Financial assets that are debt instruments, and are measured at amortised cost e. g. Loans and trade
receivables.
? The company follows 'simplified approach' for recognition of impairment loss allowance on Trade
receivables that do not contain a significant financing component.
The application of simplified approach does not require the Company to track changes in credit risk.
Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.
Financial liabilities
Initial recognition and measurement:
All financial liabilities are initially recognised when the Company becomes a party to the contractual
provisions of the instrument.
All financial liabilities are initially measured at fair value deducted by, in the case of financial liabilities
not recorded at fair value through profit or loss, transaction costs that are attributable to the liability.
Subsequent measurement:
Financial liabilities are classified as measured at amortised cost using the effective interest method. The
Company's financial liabilities include trade payables, borrowings and other financial liabilities.
Under the effective interest method, the future cash payments are exactly discounted to the initial
recognition value using the effective interest rate. The cumulative amortization using the effective
interest method of the difference between the initial recognition amount and the maturity amount is
added to the initial recognition value (net of principal repayments, if any) of the financial liability over
the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The
corresponding effect of the amortization under effective interest method is recognized as expense over
the relevant period of the financial liability in the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the Derecognition of the original liability and the recognition of a new liability.
The difference between the carrying amount of the financial liability derecognized and the
consideration paid is recognized in the Statement of Profit and Loss.
Offsetting of financial instruments:
Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet
when, and only when, the Company currently has a legally enforceable right to set off the amounts and
it intends either to settle them on a net basis or to realise the assets and settle the liabilities
simultaneously.
3.11 Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures are carried at cost/deemed cost applied on
transition to Ind AS, less accumulated impairment losses, if any. Where an indication of impairment
exists, the carrying amount of investment is assessed and an impairment provision is recognised, if
required immediately to its recoverable amount. On disposal of such investments, difference between
the net disposal proceeds and carrying amount is recognised in the statement of profit and loss.
3.12 Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short- term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.
3.13 Inventories
Inventories are stated at lower of cost and net realizable value. Costs comprise the direct materials and
includes all duties, taxes and other expenses incurred to bring the inventories to their present location
and condition except those taxes which are subsequently recoverable from the taxing authorities. Net
realizable value is the price at which the Inventories can be realized in the ordinary course of business
after allowing for the cost of conversion from their existing state to a finished condition and for the cost
of marketing, selling and distribution.
Raw Materials are valued 'at Cost' or Net Realisable whichever is lower on FIFO basis.
Finished products are valued at lower of cost determined by reducing a standard margin of profit from
the expected sales price or net realizable value whichever is lower
Semi-Finished Goods have been valued at Raw Material cost increased by a proportion of overheads and
semi-finished goods of job work valued at cost of own raw materials involved in the process increased
by overheads in consonance with the stage of completion as certified by the management.
3.14 Foreign currency
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of
transaction. Foreign currency denominated monetary assets and liabilities are re-measured into the
functional currency at the exchange rate prevailing on the balance sheet date.
Exchange differences arising on settlement of transactions and translation of monetary items are
recognized in the statement of Profit or Loss except to the extent, exchange differences which are
regarded as an adjustment to interest costs on foreign currency borrowings, are capitalized as part of
borrowing costs.
3.15 Revenue Recognition
Sale of Products
Revenue is recognized on transfer of property in goods or on transfer of significant risks and rewards of
ownership to the buyer, for a consideration, without the seller retaining any effective control over the
goods. This occurs when the products have been shipped or delivered to the specific location as the case
may be, the risks of loss has been transferred, and either the customer has accepted the products in
accordance with the sales contract, or the Company has objective evidence that all criteria for
acceptance have been satisfied. Sale of products include related ancillary services, if any.
Revenue is only recognised to the extent that it is highly probable that a significant reversal will not
occur. A liability is recognised for expected volume discounts payable to customers in relation to sales
made until the end of the reporting period. Any obligation to provide a refund is recognised as a
provision. A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the payment is due.
The Company considers whether there are other promises in the contract that are separate
performance obligations to which a portion of the transaction price needs to be allocated. In
determining the transaction price, the Company considers the effects of variable consideration, the
existence of significant financing component and consideration payable to the customer like return and
trade discounts.
Domestic Sales
Domestic sales are recognized at transaction prices & consideration receivable in terms of above net of
sales returns and Goods and Service Tax (GST).
Sale of Scrap
Revenue from sale of scrap is recognized as and when scrap is sold.
Interest Income
Interest Income is recognized on a time proportionate basis including interest accrued based on the
amount outstanding and rate applicable and shown under "Other Income".
Export Benefits
The benefits accrued under the duty drawback scheme and other schemes as per the Import and export
Policy in respect of Exports under the said scheme are recognized when there is a reasonable assurance
that the benefit will be received and the company will comply with all attached conditions. The above
benefits have been included under the head 'Export Incentives'.
Dividend income
Revenue is recognized when the Company's right to receive the payment is established, which is
generally when shareholders approve the dividend.
Insurance Claims:
Insurance claims are accounted on accrual basis when there is reasonable certainty of realisability of
the claim amount.
Other Non-Operating Income :
Other Items of Income not connected directly with the operations of the Company are disclosed under
"Other Non Operational Income" under the head "Other Income" depending on certainty of accrual /
realization of the same.
3.16 Earnings Per Share
Basic earnings per share is computed using the net profit for the year attributable to the shareholders'
and weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed using the net profit for the year attributable to the shareholders'
and weighted average number of equity shares.
3.17 Dividends
Any dividend declared by Chemcrux Enterprises Limited is based on the profits available for
distribution as reported in the statutory financial statements of Chemcrux Enterprises Limited
(standalone) prepared in accordance with Generally Accepted Accounting Principles in India or Indian
GAAP or Ind AS. Indian law permits the declaration and payment of dividend out of profits for the year
or previous financial year(s) as stated in the statutory financial statements of Chemcrux Enterprises
Limited (Standalone) prepared in accordance with Generally Accepted Accounting Principles in India, or
Ind AS after providing for depreciation in accordance with the provisions of Schedule II to the
Companies Act.
However, in the absence or inadequacy of the said profits, it may declare dividend out of free reserves,
subject to certain conditions as prescribed under the Companies (Declaration and Payment of Dividend)
Rules, 2014. Accordingly, in certain years the net income reported in these financial statements may not
be fully distributable.
3.18 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the
effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments and item 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.
3.19 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets
are capitalised as part of the cost of such assets up to the assets are substantially ready for their
intended use. The loan origination costs directly attributable to the acquisition of borrowings (e.g. loan
processing fee, upfront fee) are amortised in the year in which they occur.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All
other borrowing costs are recognised in the statement of profit and loss in the period in which they are
incurred.
3.20 Segment Reporting
With respect (Ind AS - 108 Segment Reporting), the Management of the Company is of the view that the
products offered by the Company are in the nature of Bulk Drug Intermediates and its related products,
having the same risks and returns, same type and class of customers and regulatory environment.
Hence, the business of production and sale of Bulk Drug Intermediates and its related products belong
to one business segment only.
3.21 Government grants
Government grants are recognised at its fair value, where there is a reasonable assurance that such
grants will be received and compliance with the conditions attached therewith have been met.
Government grants related to expenditure on property, plant and equipment are credited to the
statement of profit and loss over the useful lives of qualifying assets or other systematic basis
representative of the pattern of fulfilment of obligations associated with the grant received. Grants
received less amounts credited to the statement of profit and loss at the reporting date are included in
the balance sheet as deferred income.
3.22 Goods and Services Tax :
GST is a destination-based tax and is levied at the point of supply. It is collected on sale of goods and
services on behalf of Government and is remitted by way of payment or adjustment of credit on input
goods or services.
Accordingly, Purchases & Sales are accounted net of GST. Similarly, other items of expenditure on which
credit for GST is available ore items or revenue on which GST is chargeable are also accounted net of GST
elements.
GST Accounts are created under Balance Sheet Groupings for liability towards GST collected on Sales /
Other Revenue and asset towards GST paid on purchases or other expenditure for which credit is
available. For Each month, as applicable, the GST liability is worked out after offsetting the credit available
against the GST collected and balance is reflected as an Asset or Liability.
(e) The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of
equity shares is entitled to one vote per share. The holders of Equity Shares are entitled to receive dividends
as declared from time to time. The dividend proposed by the Board of Directors is subject to the approval of
the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the
holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all
preferential amounts. The distribution will be in proportion to the number of equity shares held by the
shareholders.
41 Trade Payables and Trade Receivables are as per books and have been corroborated by circulation /
confirmation of balances / reconciliation of accounts in case of few major parties. Confirmations of other parties
concerned, for the amount receivable / due to them as per accounts of the company, are under process and any
reconciliation and adjustments required, will be made thereupon.
42 In the opinion of the Board, the Current Assets, Loans and Advances which are considered good are expected to
realize at least the amount at which they are stated, if realized in the ordinary course of business. Further, in the
opinion of the Board, provision of all known liabilities has been adequately made in the accounts.
43 Company has used the borrowing from Bank for the specific purpose for which it was taken at Balance sheet
date.
51 EMPLOYEE BENEFIT:
Provident Fund dues amounting to Rs. 30.51 Lakhs (P.Y. Rs. 30.29 Lakhs) paid during the year/period being
defined contributions have been charged to the Statement of Profit and Loss.
The Company has a policy of providing leave salary to its employees, under which an employee may accumulate
earned leave up to a maximum of 50 days. Any accumulated leave in excess of this limit lapses. The accumulated
leave is eligible for encashment only at the time of an employee's separation from the Company.
The obligation towards leave encashment is classified as short-term compensated absences and is determined
on the basis of the accumulated leave entitlement of employees as at the year-end, valued at current salary
levels. Accordingly, a sum of Rs. 43,913 (Previous year Rs.1,28,048) has been recognised as liability towards
leave encashment and charged to the Statement of Profit and Loss.
The Company has a defined benefit gratuity plan. Every employee who has completed five or more years of
service is eligible for gratuity @ 15 days salary (last drawn) for every completed year of service with a overall
ceiling of Rs. 20 lakhs. The Company has taken a Group Gratuity cum Life Insurance Policy from Life Insurance
Corporation of India (a qualifying policy) and makes annual contributions to the same to create a fund to meet
this defined benefit gratuity obligation.
The estimates of rate escalation in salary is considered in actuarial valuation, take into account inflation,
seniority, promotion and other relevant factors including supply and demand in the employment market. The
above information is certified by the actuary.
The expected contributions for Defined Benefit Plan for the next financial year will be in line with FY 2024-25.
The plan typically exposes the Company to actuarial risks such as: interest rate risk, liquidity risk, salary
escalation risk and regulatory risk.
Interest Rate Risk:
The plan exposes the Company to the risk off all in interest rates. A fall in interest rates will result in an increase
in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability
(as shown in financial statements).
Liquidity Risk:
This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non¬
availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in
time.
Salary Escalation Risk:
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan
participants in future. Deviation in the rate of increase in salary in future for plan participants from the rate of
increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
Regulatory Risk:
Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 ( as amended
from time to time). There is a risk of change in regulations requiring higher gratuity pay-outs (e.g. Increase in the
maximum limit on gratuity of Rs. 20,00,000)
52 DUES TO MICRO & SMALL ENTERPRISES:
Information as required under Section 22 of MSME Act, 2006 is given below:
The Company deals with various Micro and Small Enterprises on mutually accepted terms and conditions.
Accordingly, no interest is payable if the terms are adhered to by the Company. Consequently, no interest has
been paid or is due and no provision for interest payable to such units is required or has been made under Micro,
Small and Medium Enterprises Development Act, 2006.
53 ADDITIONAL REGULATORY INFORMATION:
i. There are no immovable properties (other than properties where the Company is a lessee and the lease
agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the
Company
ii. The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets)
during the year.
iii. The Company has not granted any Loans or Advances in the nature of loans to Promoters, Directors, KMPs
and Related Parties either severally or jointly with other persons that are repayable on demand or without
specifying any terms or period of repayment.
vi. The Company does not have any Benami property and no proceeding has been initiated or pending against
the Company for holding any Benami property.
vii. The Company is not declared as wilful defaulter by any bank or financial institution (as defined under the
Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on wilful
defaulters issued by the Reserve Bank of India.
viii. The Company has not entered into any transactions with Struck-off Companies.
ix. There are no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory
period or otherwise.
x. The Company has a direct investment in it's Subsidiary which does not have any further downstream
investment. Hence, it is in compliance with the number of layers prescribed under Section 2 (87) of the
Companies Act, 2013 read with Companies (Restriction on Number of Layers ) Rules, 2017.
xi. There was no Scheme of Arrangements during the year.
xii. The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), 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.
xiii. 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: (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.
xiv. The Company does not have 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.
xv. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
54 The Company has been sanctioned Working Capital Limits of Rs 500 Lakhs which are inter-alia against security
of current assets. The Company has filed the Statements of Current Assets on monthly basis. Quarterly statement
of current assets submitted by company with Banks are in agreement with books of accounts.
58 CAPITAL MANAGEMENT:
For the purpose of the Company's Capital Management, Capital includes issued Equity Capital and all
Other Reserves attributable to the Equity shareholders of the Company. The Primary objective of the
Company's Capital Management is to maximise the shareholders' value. The Company's Capital
Management objectives are to maintain equity including all reserves to protect economic viability and
to finance any growth opportunities that may be available in future so as to maximise shareholder's
value. The Company is monitoring Capital using debt equity ratio as its base, which is total debt
divided by total equity.
59 FINANCIAL INSTRUMENTS DISCLOSURES:
This section gives an overview of the significance of financial instruments for the Company and provides
additional information on balance sheet items that contain financial instruments
The details of significant accounting policies, including the criteria for recognition, the basis of measurement and
the basis on which income and expenses are recognized, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 3.10 to the financial statements
Valuation technique and key input: NAV declared by respective Asset Management Companies.
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 level 1, level 2 and level 3 for the year ended March 31, 2025 and year
March 31, 2024.
60 CLASSIFICATION OF EXPENDITURES BETWEEN REVENUE AND CAPITAL NATURE AND CAPITALIZATION
OF INTEGRATED PLANT COMPONENTS:
Refer to Note 3.2 of Property, Plant and Equipment (PPE)
During the year, the Company has undertaken significant expansion and modernization activities involving
integrated plant components such as steel structures, gratings, piping systems, civil construction works,
electrification, and modifications or additions of chemical processing vessels.
Given the nature of the chemical plant, the physical segregation or identification of these components becomes
impractical after installation. Consequently, management has applied significant judgment in determining
whether such expenditures should be classified as capital in nature and recognized as part of PPE or expensed as
revenue expenditures.
The classification assessment involves technical evaluations regarding the functional enhancements, assessment
of whether future economic benefits are expected to flow to the Company, and adherence to the capitalization
criteria defined in the Company's accounting policy and Ind AS 16 - Property, Plant and Equipment. Where
individual identification is not feasible, the expenditure is aggregated and capitalized based on management's
technical assessment.
Management believes that the judgments applied are reasonable and consistent with the applicable accounting
framework.
61 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES:
The company's principal financial liabilities comprise loans and 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 trade and other receivables and cash and cash equivalents that are derived directly from its
operations.
The Company's financial risk management is an internal part of how to plan and execute its business strategies.
The company is exposed to market risk, credit risk and liquidity risk.
The Company's senior management oversees the management of financial risks. Senior professionals
responsible for managing these risks operate within an established financial risk governance framework and are
accountable to the Board of Directors and the Audit Committee. This framework ensures that financial risk¬
taking activities are governed by appropriate policies and procedures, and that financial risks are identified,
measured, and managed in alignment with the Company's policies and risk management objectives. In times of
financial stress or uncertainty, the management assesses the recoverability of assets and the maturity profile of
liabilities to factor these into cash flow forecasts, ensuring adequate liquidity is maintained through internal and
external sources of funds. These forecasts and underlying assumptions are reviewed and approved by the Board
of Directors.
1. Risk Management Framework
The Company's board of directors has overall responsibility for establishment and Oversight of the company's
risk management framework. The board of directors has established the processes to ensure that executive
management controls risks through the Mechanism of property defined framework. The Company's risk
management policies are established to identify and analyse the risks faced by the company, to set appropriate
risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed by the board annually to reflect changes in market conditions and company's activities. The company,
through its training and management standards and procedures, aims to maintain a disciplined and constructive
control environment in which all employees understand their roles and obligations.
2. Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the company's receivables from customers.
The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit
risk very closely both in domestic and export market. The management impact analysis shows credit risk and
impact assessment as low.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk of the industry and country in which customers operate. The company management
has established a credit policy under which each new customer is analysed individually for creditworthiness
before the Company's standard payment and delivery terms and conditions are offered. The Company's review
includes market check, industry feedback, past financials and external ratings, if they are available, and in some
cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding
those limits require approval from the Directors of the company. Most of the Company's customers have been
transacting with the company for over Five to Ten years against those customers. In monitoring customer credit
risk, Customers are reviewed according to their credit characteristics, including whether they are an individual
or a legal entity, their geographic location, industry and existence of previous financial difficulties. The company
has not written off any amount in recent past for impairment in receivables. In view of the same no provision for
impairment is done in current financial year. Management uses practical experience for deriving expected credit
losses based on historical credit loss experience & adjustment for forward looking assumptions. Financial
instruments that are subject to concentrations of credit risk, principally consist of balance with banks, trade
receivables and loans and advances.
Balances with banks were not past due or impaired as at the year end. In other financial assets that are not past
dues and not impaired, there were no indication of default in repayment as at the year end.
3. Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to
managing liquidity is to ensure, as for as possible, that it will have sufficient liquidity to meet its liabilities when
they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Company's reputation.
4. Market Risk
Market risk is the risk that changes in market prices- such as foreign exchange rates, interest rates and equity
prices- will affect the Company's income or the value of its holdings of financial instrument. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters while
optimising the return. The major components of market risk are foreign currency risk, interest rate risk and
price risk.
i. Interest Rate Risk
It 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 the risk of changes in market interest rates relates primarily
to the Company's debt obligations with floating interest rates.
ii. Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company undertakes transactions denominated in foreign currencies;
consequently, exposures to exchange rate fluctuations arise.
The carrying amount of the Company's foreign currency denominated monetary assets and monetary liabilities
at the end of the reporting period are as follows:
Foreign Currency Sensitivity
The Company is principally exposed to foreign currency risk against USD. Sensitivity of profit or loss arises mainly from USD
denominated receivables and payables.
As per management's assessment of reasonable possible changes in the exchange rate of /- 5% between USD-INR, EURO-
INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items at the
period end is presented below:
iii. Price Risk
The Company has deployed its surplus funds into units of mutual fund. The Company is exposed to NAV (net
asset value) price risks arising from investments in these funds. The value of these investments is impacted by
movements in liquidity and credit quality of underlying securities.
NAV price sensitivity analysis
The Sensitivity analyses below have been determined based on the exposure to NAV price risks at the end of the
reporting period. If NAV prices had been 1% higher/lower :
Profit for the year ended 31st March 2025 would increase/decrease by Rs. 19.78 lakhs (Previous Year Rs. 19.77
Lakhs).
The Board of Directors of the Company in its meeting held on May 20, 2025 has approved and recommended
final dividend of Re. 1/- i.e., (10%) per equity share of the Company having face value of Rs 10/- each amounting
to 148.09 Lakhs for the financial year 2024-2025, subject to approval from shareholders
63 BORROWING COST:
During the year, the company capitalized borrowing costs amounting to Rs. 80.14 Lakhs (PY Rs. 123.27 Lakhs).
64 SEGMENT REPORTING:
The products offered by the Company are in the nature of Bulk Drug Intermediates and its related products,
having the same risks and returns, same type and class of customers and regulatory environment. Hence, the
Company effectively has a single reportable business segment. Hence, segment-wise disclosure of information is
not applicable.
66 The figures in respect of previous year have been re-grouped / recast wherever necessary to confirm to the
current year's classification.
67 The Standalone financial Statements for the year ended 31st March 2025 were approved by the Board of
Directors in their meeting held on 20th May 2025.
For Naresh & Co For and on behalf of the Board of Directors
Chartered Accountants For Chemcrux Enterprises Limited
FRN: 106928W
Sd/- Sd/-
Sd/- Girishkumar Shah Sanjay Marathe
CA Harin Parikh Whole-Time Director Managing Director
Partner DIN: 00469291 DIN: 01316388
Membership No: 107606
Sd/- Sd/-
UDIN: 25107606BMOJDV5387 Ramesh Kambariya Dipika Rajpal
Place: Vadodara CFO CS
Dated: 20.05.2025 Place: Vadodara Dated: 20.05.2025
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