P. Provisions, Contingent liabilities and Commitments
Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Company will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation.
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.
Contingent liability is disclosed in the case of;
• A present obligation arising from past events, when it is not probable that an outflow of
resources will not be required to settle the obligation.
• Apresent obligation arising from past events, when no reliable estimate is possible
• A possible obligation arising from past events, unless the probability of outflow of resources is
remote
Commitments include the amount of purchase order (net of advances) issued to parties for
completion of assets. Provisions, contingent liabilities, contingent assets and commitments are
reviewed at each reporting period.
Contingent asset
Wherever there is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the entity. A contingent asset is disclosed when the inflow of economic benefit is
probable.
Q. Revenue Recognition
Effective 1st April, 2018 the Company has applied Ind AS 115: Revenue from Contracts with Customers
which establishes a comprehensive framework for determining whether, how much and when
revenue is to be recognised.
Ind AS 115 replaces Ind AS 18 Revenue. The impact of the adoption of the standard on the financial
statements of the Company is insignificant.
Revenue from sale of goods is recognised when control of the products being sold is transferred to our
customer and when there are no longer any unfulfilled obligations.
The Performance Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon
formal customer acceptance depending on customer terms.
Revenue is measured at fair value of the consideration received or receivable, after deduction of any
trade discounts, volume rebates and any taxes or duties collected on behalf of the government such
as goods and services tax, etc. Accumulated experience is used to estimate the provision for such
discounts and rebates.
Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.
Our customers have the contractual right to return goods only when authorised by the Company. An
estimate is made of goods that will be returned and a liability is recognised for this amount using a
best estimate based on accumulated experience.
Income from services rendered is recognised based on agreements/arrangements with the
customers as the service is performed and there are no unfulfilled obligations.
Interest income is recognized using the effective interest rate (EIR) method.
Dividend income on investments is recognised when the right to receive dividend is established.
R. Leases
Ind AS 116 'Leases' was notified on 30th March, 2019 and it replaces Ind AS 17 'Leases', including
appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1st April, 2019. Ind
AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of
leases and requires lessees to account for all leases under a single on-Balance Sheet model similar to
the accounting for finance leases under Ind AS 17.
The standard includes two recognition exemptions for lessees - leases of 'low-value' assets (e.g.,
personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the
commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the
lease liability) and an asset representing the right to use the underlying asset during the lease term
(i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on
the lease liability and the depreciation expense on the right-of-use asset.
Lease is 'a contract or part of a contract that conveys the right to use an asset (the underlying asset)
for a period of time in exchange for consideration'. An underlying asset has been defined to mean an
asset that is the subject of lease, for which the right to use that asset has been provided by a lessor or
lessee.
Measurement of lease liability
On the date of transition lease liability is measured at present value of lease payments that are not
paid as at the date of transition.
After the transition date lease liability is measured at amortised cost using the effective interest
method.
Subsequently the company measures the lease liability by increasing the carrying the amount to
reflect the interest on the lease liability; reducing the carrying amount of reflect the lease payments
made; and re-measuring the carrying amount to reflect any reassessment or lease modifications or to
reflect revised in-substance fixed lease payments.
The Company uses the incremental borrowing rate which is the rate of interest that a lessee would
have to pay over a similar term, and with a similar security, the funds necessary to obtain an asset of
similar value of the right-to-use asset in a similar economic environment.
Right-of-use asset (ROU)
This is measured as lease liability adding any initial direct costs, prepaid lease payments, cost to
dismantle or restore less lease incentives.
After the commencement date, the Company measures the ROU at cost:
• Less any accumulated depreciation and any accumulate impairment losses; and
• Adjusted for any re-measurement of the lease liability on subsequent to lease
commencement date
A Company applies the depreciation requirement in Ind AS 16 while depreciating ROU asset. The said
asset is depreciated over a period of lease term unless in case where ownership of underlying asset is
transferred. In such case, the asset is depreciated over the useful life of underlying asset. Also,
impairment requirements as per Ind AS 36 is applied by the Company.
S. Foreign Currencies
(i) Functional Currency:
The functional currency of the Company is the Indian rupee. These financial statements are
presented in Indian rupees (rounded off to lakhs).
(ii) Transactions and translations:
In preparing the financial statements, transactions in currencies other than the Company's
functional currency (foreign currencies) are recognised at the rates of exchange prevailing at
the dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing at the date when the fair value was determined. Non¬
monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which
they arise except for exchange differences on foreign currency borrowings relating to assets
under construction for future productive use, which are included in the cost of those assets
when they are regarded as an adjustment to interest costs on those foreign currency
borrowings.
T. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Borrowing costs consist of interest and other costs that the Company incurs in connection with the
borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an
adjustment to the borrowing costs.
U. Employee Benefits
Short term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the services are classified as
short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of Bonus,
Ex-gratia, Leave Travel Allowance, Reimbursement of Medical Expenses, Personal Accident Policy,
Deposit Linked Insurance Policy are recognised in the period in which the employee renders the
related services.
Post-Employment Benefits:
(i ) Defined Contribution Plan:
The Company's contribution paid / payable during the year to Provident Fund,
Superannuation Fund and other welfare funds are considered as defined contribution plans.
The Contribution paid / payable under these plans are recognised in the Statement of Profit
and Loss during the period in which the employee renders the services.
(ii) Defined Benefit Plans:
The Gratuity Scheme managed by Life Insurance Corporation of India through a Trust is
considered as defined benefit plan. The present value of the obligation is determined based on
actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses are
recognised immediately in the Statement of Profit and Loss and Other Comprehensive Income.
The fair value of the plan assets is reduced from the gross obligation under the defined benefit
plan to recognise the obligation on net basis.
Gains or losses on the curtailment or settlement of any defined benefit plan are recognised
when the curtailment or settlement occurs.
(iii) Long term Employee Benefits:
The obligation for long term employee benefits such as long term compensated absences, long
service awards, etc. is recognised in the same manner as in the case of defined benefit plans as
mentioned in (b) (ii) above except that the actuarial gains and losses are recognised
immediately in the Statement of Profit and Loss.
V. Earnings per share
Basic earnings per share are computed by dividing the profit or loss attributable to equity
shareholders of the Company by the weighted average number of equity shares outstanding during
the period. The Company has made preferential allotment of Share Warrants convertible into equity
shares. The warrants that are yet to be converted are treated as dilutive shares.
W. Estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future periods.
Revenue recognition:
The Company applies judgement to determine whether each product or services promised to a
customer are capable of being distinct, and are distinct in the context of the contract, if not, the
promised product or services are combined and accounted as a single performance obligation. The
Company allocates the arrangement consideration to separately identifiable performance obligation
deliverables based on their relative stand-alone selling price. Because the financial reporting of these
contracts depends on estimates that are assessed continually during the term of these contracts,
recognized revenue and profit are subject to revisions as the contract progresses to completion.
Useful lives and residual value of property, plant and equipment:
The Company reviews the useful life and residual value of property, plant and equipment at the end of
each reporting period. This reassessment may result in change in depreciation expense in future
periods.
Allowance for expected credit losses:
Note 2(J) describes the use of practical expedient by computing the expected credit loss allowance for
trade receivables based on provision matrix. The expected credit allowance is based on the aging of
the days receivables which are past due and the rates derived based on past history of defaults in the
provision matrix.
Fair value of investments:
The Company has invested in the equity instruments of various companies. However, the percentage
of shareholding of the Company in such investee companies is very low and hence, it has not been
provided with future projections including projected profit and loss account by those investee
companies. Hence, the valuation exercise carried out by the Company with the help of available
historical annual reports and other information in the public domain.
Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable
profit will be available against which the losses can be utilised. Significant management judgement is
required to determine the amount of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits together with future tax planning strategies.
Contingent liability judgement:
Note 26 describes claims against the Company not acknowledged as debt. Contingencies may arise
from the ordinary course of business in relation to claims against the Company, including legal,
contractor and other claims. By their nature, contingencies will be resolved only when one or more
uncertain future events occur or fail to occur. The assessment of the existence, and potential
quantum of contingencies inherently involve the exercise of significant judgement and the use of
estimates regarding the outcome of future events.
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the
year ended 31st March, 2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to
Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Group w.e.f. 1st
April, 2024. The Company has reviewed the new pronouncements and based on its evaluation has
determined that it does not have any significant impact in its financial statements.
April, 2024. The Company has reviewed the new pronouncements and based on its evaluation has
determined that it does not have any significant impact in its financial statements.
Nature and purpose of reserves
Securities premium reserve
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in
accordance with the provisions of the Act.
Fair value of Equity Instruments through Other Comprehensive Income (FVOCI)
The Company has elected to recognise changes in the fair value of certain investments in equity securities in
other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve
within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity
securities are derecognised.
General Reserve
The General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation
purpose. As General Reserve is created by a transfer from one component of Equity to another and is not an
item of other comprehensive income, items included in the General reserve will not be reclasified subsequently
to profit or loss.
There is no default as at 31st March, 2025 and 31st March 2024, in repayment of loans and interest payments on
Term Loans.
Terms of repayment
* Indian Bank Term Loan (Rs. 10000 Lakhs sanctioned for Chloromethanes expansion is repayable in 20
quarterly instalment from June 2022 at interest rate of 1 Year MCLR 0.70%).
Security
Term loans
The above Term Loan from Banks i.e., Indian Bank is secured by first pari passu charge on all fixed assets of the
company including fixed assets of Chlorometahnes expansion project (excluding specific LC charges) and
personal guarantee of Shri T.G.Venkatesh.
Letter of credit
Letters of credit for capital goods secured by exclusive charge on specific asset procured and guaranteed by
Shri T.G.Venkatesh.
There is no default as at 31st March, 2025, 31st March 2024, in repayment of loans and interest payments on
Working capital Loans, Letters of Credit issued and Bills discounted with Banks and others.
Security
a) Short Term Loans from Banks:
The above Working Capital Demand Loans and Cash Credits are with various banks at interest rate of MCLR plus
Spread. Spread varies from 0.20% to 1.10%.
The Working Capital Demand Loans, Cash Credits and Bills discounted by Banks are secured by 1st pari passu
charge by way of hypothecation of inventories and receivable of the Company and further secured by 2nd pari
passu charge on land, building and Plant and machinery and guaranteed by Shri T.G.Venkatesh.
b) Letters of Credit from Banks:
The above Letter of credit facility availed from Banks were secured by 1st pari passu by way of hypothecation of
inventories and receivable of the Company and further secured by 2nd pari passu charge on land, building and
Plant and machinery and Letters of credit for capital goods secured by exclusive charge on specific asset
procured and guaranteed by Shri T.G. Venkatesh.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed
equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity
instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the
reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded
bonds, over-the-counter derivatives) is determined using valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or indirectly observable. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted equity securities included in level 3.
There are no transfers between levels 1 and 2 during the year.
The Company being in a capital intensive industry, its objective is to maintain a strong credit rating healthy
capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum
mix of debt and equity.
The Company's capital requirement is mainly to fund its capacity expansion, repayment of principal and interest
on its borrowings. The principal source of funding of the Company has been, and is expected to continue to be,
cash generated from its operations supplemented by funding from bank borrowings.
The Company regularly considers other financing and refinancing opportunities to diversify its debt profile,
reduce interest cost and align maturity profile of its debt commensurate with life of the assets, and closely
monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to
capture market opportunities at minimum risk.
Gearing ratio
The Company monitors its capital using gearing ratio, The Company's startegy is to maintain gearing ratio
below 1, which is total debt divided to total equity as given below:
I' in lakhs)
Financial risk management and objectives and policies
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the
impact in the financial statements.
A Special Team with Senior Executives having exposure in various fields has been formed to assist Executive
Director and CEO in
(a) Overseeing and approving the Company's enterprise wide risk management framework, and
(b) Overseeing that all the risks that the organisation faces such as market risk(including currency risk, interest
rate risk and other price risk), Credit risk and liquidity risk have been identified and assessed and there is an
adequate risk management infrastructure in place capable of addressing those risks.
The Executive Director and CEO, monitors and reports on the principal risks and uncertainties that can impact
the Company and its ability to achieve strategic objectives. The Company's management systems,
organisational structures, processes, standards, code of conduct and behaviors together form the
Management and business of the Company.
A.Market risk
The Company is exposed to market risk through changes in foreign currency exchange rates and changes in
interest rates. Financial assets/liabilities affected by this risk are borrowings, letter of credits and trade
receivables.
The Company's investments in listed and non-listed equity securities are susceptible to price risk arising from
uncertainties about future value of the investment secutities. The Company's non-current investment in equity
shares are strategic investments and hence are considered as Fair Value through Other Comprehensive Income.
The company's Board of Directors reviews and approves all equity investment decisions.
Foreign Currency risk management
The Company operates internationally and is exposed to foreign currency risk arising from foreign currency
transactions, primarily with respect to the US$, EUR, JPY. Foreign exchange risk arises from import as well as
exports of goods. The risk is measured through a forecast of highly probable foreign currency cash flows.
The special team as mentioned above analysis the options for hedging. Based on the analysis the management
takes decision regarding hedging of foreign currency exposures. Currently, the Company has not hedged any of
the foreign currency transactions in the veiw of the natural hedging. The natural hedging is sufficient to manage
the current foreign currency risk management.
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary
liabilities are restated at the end of each quarter. The same at the end of the reporting period are as follows :
Interest rate risk is the risk that the fair value or future cash flows of a financial instruments 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 borrowing with floating base interest rates. Based on the interest rate
sensitivity the Company decides on the management of interest rate risk.
Interest Rate Sensitivity:
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of loans and borrowing affected. With all other variables held constant, the Company's profit before tax
is affected through the impact on floating base rate borrowing, as follows:
B. Credit risk
Credit risk refers to the risk that the counter party will default on its contractual obligations resulting in financial
loss to the Company. The Company is operating through network of dealers based at different locations. Regular
monitoring of the receivables is undertaken by the marketing department and in case the limits are exceeded,
steps will be taken by the marketing departments and after discussing with the management the Company will
decide whether to stop or not further supplies to the concerned dealer till the amount outstanding is recovered.
For the export made by the Company, the sales are backed by ECGC Coverage or advance receipts. The internal
risk management committee of the Company meets regularly to discuss the dealers and credit risks, measures
taken to address them and the status and level of risk after the measures taken.
Export sales are fully secured through ECGC Coverage or against advance receipts. (refer Note No.8(a) for Trade
Receivables outstanding).
C. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when due
and to close out market positions. Due to the dynamic nature of the underlying businesses, Company maintains
flexibility in funding by maintaining availability under committed credit lines.
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an
appropriate liquidity risk management framework for the management of the Company's short-term, medium-
term and long-term funding and liquidity management requirements. The Company manages liquidity risk by
maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
33. Discontinued Operations
Description:
The Power Purchase Agreement with Karnataka Electricity Board (Power Distribution Companies) pertaining to
Bellary power plant was expired on 31st August, 2012 and the agreement was not renewed and generation of
power was stopped from September, 2012. The company has discontinued the operations of this segment from
the year 2013-14 and exploring the possibilities for disposal of its Plant.
35. Under the Micro, Small and Medium Enterprises Development Act, 2006 and in accordance with the
notification issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating
to Micro, Small and Medium Enterprises as defined in the said Act. The company is in the process of
compiling the relevant information from its suppliers about their coverage under the said Act and hence
required disclosures made to the extent available.
B. Remaining Performance Obligations
The remaining performance obligation disclosure provides the aggregate amount of transaction price yet to be
recognized as at the end of the reporting period and an explanation as to when the Company expects to
recognize these amounts in revenue.
Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining
performance obligation related disclosures for contracts where the revenue recognized corresponds directly
with the value to the customer of entity's performance completed to date.
The aggregate amount of transaction price allocated to remaining performance obligations as per the
requirements of Ind AS 115 is Rs. 10414.00 Lakhs (Previous year Rs. 7568.53 Lakhs) out of which,
approximately 100% (Previous year 100%) is expected to be recognized as revenues within one year.
42. Additional Regulatory Information:
(1) The Company has not granted any loans or Advances in the nature of Loans to Promoters, Directors, KMPs
and other related parties.
(2) The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act,
1988 and rules made there under.
(3) The Company has no transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in tax assessments under the Income Tax Act, 1961(such as search or
survey or any relevant provisions of Income Tax Act, 1961).
(4) The Company have not advanced or loaned or invested funds to any other person(s) or enti'ty(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(5) The Company have not received any fund from any person(s) or enti'ty(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.
(6) The Company is not declared as willful defaulter by any Bank or Financial Institutions or RBI or other
lenders.
(7) The Company has borrowings from Banks or Financial Institutions on the basis of security of Current Assets.
Quarterly returns or Statement of Current Assets filed by the company with Banks or Financial Institutions
are in agreement with the Books of Accounts with some insignificant variances.
(8) There are no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond the
statutory period.
(9) The company has no transactions and no relationship with companies struck off under Section 248 of the
Companies Act, 2013 or Section 560 of Companies Act, 1956.
(10) The company has no subsidiaries.
(11) There are no Schemes of Arrangements approved by the Competent Authority in terms of Sections 230 to
237 of the Companies Act, 2013.
(12) The Company has not invested or traded in Crypto currency or Virtual Currency during the Financial year
2024-25 and previous year 2023-24.
43. Audit Trail:
The Company has used 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 at the application level. However, the company has not
enabled the audit trail (edit log) feature at database level in the accounting software. Further, no instance
of audit trail feature being tampered with was noted in respect of the accounting software. Additionally,
the audit trail of prior year(s) has been preserved by the Company as per the statutory requirements for
record retention to the extent it was enabled and recorded in the respective years.
44. Figures have been rounded off to the nearest decimal of lakhs as required under Schedule III.
45. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the
current year's classification / disclosure.
As per our ^ched report of ev/en date For and on behalf of the Board of Directors of
For Brahmayya & C°., TGV SRAAC LIMITED
Chartered Accountants (cin : L24110AP198IPLC003077)
ICAI Firm's Regn No.000515 S
CA B.DAIVADHEENAM REDDY E . D. CA™NA™& ™0 E C.SRINIVASA BABU
partner Executive Director (Fin. & Comml.) & CEO Executive Director (Technical)
Membership No.026450 (DIN : 02031367) (D|N: 09266926)
UDIN: 25026450BM0YHH9646
CS V. RADHAKRISHNA MURTHY CA C. RAJESH KHANNA
Place: Hyderabad CGM & Company Secretary Sr. Vice President (Fin. & Accts) & CFO
Date : 27th May, 2025
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