2.15 Provisions
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
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.
The expense relating to a provision is presented in the
statement of profit and loss.
These estimates are reviewed at each reporting date
and adjusted to reflect the current best estimates.
Provision in respect of loss contingencies relating to
claims litigation, assessment, fines, penalties etc. are
recognised when it is probable that a liability has been
incurred, and the amount can be estimated reliably.
2.16 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company or a
present obligation that is not recognised because it is not
probable that an outflow of resources will be required to
settle the obligation, A contingent liability also arises in
extremely rare cases where there is a liability that cannot
be recognised because it cannot be measured reliably.
The Company does not recognise a contingent liability
but discloses its existence in the standalone financial
statements.
A contingent asset is not recognised unless it becomes
virtually certain that an inflow of economic benefits will
arise. When an inflow of economic benefits is probable,
contingent assets are disclosed in the standalone
financial statements.
Contingent liabilities and contingent assets are
reviewed at each balance sheet date.
2.17 Employee benefit expenses
Employee benefits consist of contribution to provident
fund, gratuity fund and compensated absences.
Post-employment benefit plans
Defined Contribution plans
Payments to defined contribution retirement benefit
scheme for eligible employees in the form of provident
fund are charged as an expense as they fall due. Such
benefits are classified as Defined Contribution Schemes
as the Company does not carry any further obligations,
apart from the contributions made.
Defined benefit plans
The Company operates defined benefit plans - gratuity
fund.
The liability recognised in the balance sheet in respect
of its defined benefit plans is the present value of the
defined benefit obligation at the end of the reporting
period less the fair value of plan assets. The defined
benefit obligation is calculated annually by actuaries
using the projected unit credit method.
The present value of the said obligation is determined
by discounting the estimated future cash outflows,
using market yields of government bonds that have
tenure approximating the tenures of the related liability.
The interest income / (expense) are calculated by
applying the discount rate to the net defined benefit
liability or asset. The net interest income / (expense) on
the net defined benefit liability or asset is recognised in
the Standalone Statement of Profit and loss.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They are
included in retained earnings in the Standalone Statement
of Changes in Equity and in the Standalone Balance Sheet.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit or
loss as past service cost.
Short-term employee benefit
All employee benefits payable wholly within twelve
months of rendering the service are classified as short¬
term employee benefits. Short term employee benefits
are recognised as an expense at the undiscounted
amount in the statement of profit and loss of the year in
which the related service is rendered.
Provision for compensation absence is determined on
the basis of leave credit balance of individual employee
as at year end and last drawn salary and is charged to
statement of profit and loss for the year.
2.18 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 initial measurement
Financial assets are classified, at initial recognition,
as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI), and
fair value through profit or loss. The classification of
financial assets at initial recognition depends on the
financial asset’s contractual cash flow characteristics
and the Company’s business model for managing
them. The Company initially measures a financial asset
at its fair value plus transaction cost, in the case of a
financial asset not at fair value through profit or loss.
Classification and subsequent measurement
For purposes of subsequent measurement, financial
assets are classified in four categories:
- Debt instruments at amortised cost
- Debt instruments at fair value through other
comprehensive income (FVTOCI)
- Debt instruments, derivatives and equity
instruments at fair value through profit or loss
(FVTPL)
- Equity instruments
Debt instruments at amortised cost
A 'debt instrument’ is measured at the amortised cost if
both the following conditions are met:
a) The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows, and
b) 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 amortised cost using the
effective interest rate (EIR) method. Amortised 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 amortisation is included
in finance income in the statement of profit and loss.
The losses arising from impairment are recognised in
the statement of profit and loss.
Debt instrument at FVTOCI
A 'debt instrument’ is classified as at the FVTOCI if both
of the following criteria are met:
a) The objective of the business model is achieved
both by collecting contractual cash flows and
selling the financial assets, and
b) The asset’s contractual cash flows represent solely
payments of principle & interest ( SPPI ).
Debt instruments included within the FVTOCI category
are measured initially as well as at each reporting date
at fair value. Fair value movements are recognised in
the other comprehensive income (OCI). However, the
Company recognises interest income, impairment
losses & reversals and foreign exchange gain or loss in
the statement of profit and loss. On derecognition of the
asset, cumulative gain or loss previously recognised in
OCI is reclassified from equity to the statement of profit
and loss. Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using the EIR
method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorisation as at amortised cost or as FVTOCI, is
classified as at FVTPL.
In addition, the Company may elect to designate a debt
instrument, which otherwise meets amortised 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’). The Company has not
designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category
are measured at fair value with all changes recognised
in the statement of profit and loss.
Equity investments
Investments in subsidiaries and associates are carried
at cost. All other equity investments in scope of Ind
AS 109 are measured at fair value. Equity instruments
which are held for trading and contingent consideration
recognised by an acquirer in a business combination to
which Ind AS103 applies are classified as at FVTPL. For
all other equity instruments, the Company may make an
irrevocable election to present in other comprehensive
income subsequent changes in the fair value. The
Company makes such election on an instrument-by¬
instrument basis. The classification is made on initial
recognition and is irrevocable.
If the Company decides to classify an equity instrument
as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in the
OCI. There is no recycling of amounts from OCI to the
statement of profit and loss, even on sale of investment.
However, the Company may transfer the cumulative
gain or loss within equity.
Equity instruments included within the FVTPL category
are measured at fair value with all changes recognised
in the statement of profit and loss.
Derecognition
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the
Company’s balance sheet) when:
- The rights to receive cash flows from the asset
have expired, or
- The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
'pass-through’ arrangement and either
(a) the Company has transferred substantially
all the risks and rewards of the asset, or
(b) the Company has neither transferred nor
retained substantially all the risks and
rewards of the asset but has transferred
control of the asset.
When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained
substantially all the risks and rewards of the asset, nor
transferred control of the asset, the Company continues
to recognise the transferred asset to the extent of the
Company’s continuing involvement. In that case, the
Company also recognises an associated liability.
The transferred asset and the associated liability
are measured on a basis that reflects the rights and
obligations that the Company has retained.
Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.
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:
a) Financial assets that are debt instruments, and
are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank
balance
b) Financial assets that are debt instruments and are
measured as at FVTOCI
c) Trade receivables or any contractual right to
receive cash or another financial asset that
result from transactions that are within the
scope of Ind AS 115 (referred to as 'contractual
revenue receivables’ in these standalone financial
statements)
The Company follows 'simplified approach’ for
recognition of impairment loss allowance on:
- Trade receivables and
- Other receivables
The application of simplified approach does not
require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance
based on lifetime ECLs at each reporting date,
right from its initial recognition.
For recognition of impairment loss on other
financial assets and risk exposure, the Company
determines that whether there has been a
significant increase in the credit risk since initial
recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then
the entity reverts to recognising impairment loss
allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument. The
12-month ECL is a portion of the lifetime ECL
which results from default events that are possible
within 12 months after the reporting date.
ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that the
entity expects to receive (i.e., all cash shortfalls),
discounted at the original EIR. When estimating
the cash flows, an entity is required to consider:
- All contractual terms of the financial
instrument (including prepayment, extension,
call and similar options) over the expected life
of the financial instrument. However, in rare
cases when the expected life of the financial
instrument cannot be estimated reliably, then
the entity is required to use the remaining
contractual term of the financial instrument.
- Cash flows from the sale of collateral held or
other credit enhancements that are integral
to the contractual terms.
- Financial assets measured as at amortised
cost and contractual revenue receivables:
ECL is presented as an allowance, i.e., as an
integral part of the measurement of those
assets in the balance sheet. The allowance
reduces the net carrying amount. Until the
asset meets write-off criteria, the Company
does not reduce impairment allowance from
the gross carrying amount.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective
hedge, as appropriate.
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Company’s financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on
their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for
the purpose of repurchasing in the near term. This
category also includes derivative financial instruments
entered into by the Company that are not designated as
hedging instruments in hedge relationships as defined
by Ind AS 109. Separated embedded derivatives are
also classified as held for trading unless they are
designated as effective hedging instruments.
Gains or losses on liabilities held for trading are
recognised in the statement of profit and loss.
Loans and borrowings
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation
process.
Amortised 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 amortisation
is included as finance costs in the statement of profit
and loss.
Derecognition
A financial liability is derecognised 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 in the
respective carrying amounts is recognised in the
statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and
the net amount is reported in the standalone balance
sheet if there is a currently enforceable legal right to
offset the recognised amounts and there is an intention
to settle on a net basis, to realise the assets and settle
the liabilities simultaneously.
2.19 Cash and cash equivalents
The Company considers all highly liquid financial
instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant
risk of change in value and having original maturities of
three months or less from the date of purchase, to be
cash equivalents. Cash and cash equivalents consist
of balances with banks which are unrestricted for
withdrawal and usage.
For the purpose of the statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of the
Company’s cash management.
2.20 Dividend to Equity shareholders
The Company recognises a liability to make cash
distributions to equity holders when the distribution
is authorised, and the distribution is no longer at the
discretion of the Company.
2.21 Earnings per share
Basic earnings per share is calculated by dividing the
net profit or loss for the period attributable to equity
shareholders by the weighted average number of
equity shares outstanding during the year. Earnings
considered in ascertaining the Company’s earnings per
share are the net profit for the year attributable to equity
shareholders.
For the purpose of calculating diluted earnings per share,
the net profit or loss after tax for the period attributable to
equity shareholders and the weighted average number of
equity shares outstanding during the year is adjusted for
the effects of all dilutive potential equity shares, except
where the results would be anti-dilutive.
2.22 Segment reporting
Based on "Management Approach" as defined in Ind AS
108 -Operating Segments, the Chief Operating Decision
Maker evaluates the Company’s performance and
allocates the resources based on an analysis of various
performance indicators by business segments. Inter
segment sales and transfers are reflected at market
prices.
Segment revenue, segment expenses, segment assets
and segment liabilities have been identified to segments
based on their relationship to the operating activities of
the segment. Inter segment revenue is accounted based
on transactions which are primarily determined based
on market / fair value factors. Revenue, expenses, assets
and liabilities which relate to the Company as a whole
and are not allocable to segments on a reasonable
basis have been included under "unallocated revenue /
expenses / assets / liabilities".
2A. Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the standalone financial statements
in conformity with the Ind AS requires management to
make judgements, estimates and assumptions that affect
the application of accounting policies and the reported
amounts of assets, liabilities and disclosures as at date
of the standalone financial statements and the reported
amounts of the revenues and expenses for the years
presented. The estimates and associated assumptions
are based on historical experience and other factors
that are relevant. Actual results may differ from these
estimates under different assumptions and conditions.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised if the revision affects only that
period, or in the period of the revision and future periods
if the revision affects both current and future periods.
(i) Critical Judgements
In the process of applying the Company’s
accounting policies, management has made
the following judgements, which have the most
significant effect on the amounts recognised in
Contingences and commitments
In the normal course of business, contingent
liabilities may arise from litigations and other
claims against the Company. Where the potential
liabilities have a low probability of crystallising
or are very difficult to quantify reliably, these are
considered as contingent liabilities. Such liabilities
are disclosed in the notes but are not provided for
in the standalone financial statements. Although
there can be no assurance regarding the final
outcome of the legal proceedings, these are not
expected to have a materially adverse impact on
our financial position or profitability.
(ii) Key sources of estimation uncertainty
The key assumptions concerning the future and
other key sources of estimation uncertainty at
the reporting date, that have a significant risk of
causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year, are described below.
Taxes
There are many transactions and calculations
undertaken during the ordinary course of business
for which the ultimate tax determination is
uncertain. Where the final tax outcome of these
matters is different from the amounts initially
recorded, such differences will impact the current
and deferred tax provisions in the period in which
the tax determination is made. The assessment of
probability involves estimation of several factors
including future taxable income.
Defined benefit plans (gratuity benefits)
A liability in respect of defined benefit plans is
recognised in the balance sheet and is measured
as the present value of the defined benefit
obligation at the reporting date less the fair value
of the plan’s assets. The present value of the
defined benefit obligation is based on expected
future payments at the reporting date, calculated
annually by independent actuaries. Consideration
is given to expected future salary levels, experience
of employee departures and periods of service.
Impairment of financial assets
The Company assesses impairment based on
expected credit losses (ECL) model on trade
receivables. The Company uses a provision matrix
to determine impairment loss allowance on the
portfolio of trade and other receivables. The
provision matrix is based on its historically observed
default rates over the expected life of the trade and
other receivable and is adjusted for forward looking
estimates. At every reporting date, the historical
observed default rates are updated and changes in
the forward-looking estimates are analysed.
Impairment of non- financial assets
The Company assesses at each reporting date
whether there is an indication that an asset may
be impaired. If any indication exists, or when
annual impairment testing for an asset is required,
the Company estimates the asset’s recoverable
amount. An asset’s recoverable amount is the
higher of an asset’s fair value less costs of disposal
and its value in use. It is determined for an individual
asset, unless the asset does not generate cash
inflows that are largely independent of those from
other assets or group of assets. Where the carrying
amount of an asset exceeds its recoverable
amount, the asset is considered impaired and
is written down to its recoverable amount. In
assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessment of the time value of money and the risk
specific to the asset. In determining fair value less
cost of disposal, recent market transactions are
taken into account. If no such transactions can be
identified, an appropriate valuation model is used.
Provision against obsolete and slow-moving
inventories
The Company reviews the condition of its inventories
and makes provision against obsolete and slow-
moving inventory items which are identified as no
longer suitable for sale or use. Company estimates
the net realisable value for such inventories based
primarily on the latest invoice prices and current
market conditions. The Company carries out an
inventory review at each balance sheet date and
makes provision against obsolete and slow-moving
items. The Company reassesses the estimation on
each balance sheet date.
Useful lives of property, plant and equipment
The Company reviews the useful life of property,
plant and equipment at the end of each reporting
period. This reassessment may result in change in
depreciation expense in future periods.
Liability for sales return
In making judgment for liability for sales return,
the management considered the detailed criteria
for the recognition of revenue from the sale of
goods set out in Ind AS 115 and in particular,
whether the Company had transferred to the buyer
the significant risk and rewards of ownership of
the goods. Following the detailed quantification
of the Company’s liability towards sales return,
the management is satisfied that significant
risk and rewards have been transferred and that
recognition of the revenue in the current year is
appropriate, in conjunction with the recognition of
an appropriate liability for sales return.
Accruals for estimated product returns, which
are based on historical experience of actual sales
returns and adjustment on account of current
market scenario is considered by Company to be
reliable estimate of future sales returns.
(iii) Recent accounting pronouncement
Ý Standards issued but not yet effective
The Company has applied all Indian
Accounting Standards (Ind AS) and
amendments effective for the financial year
ended 31 March, 2025, as notified by the
Ministry of Corporate Affairs (MCA). The
following amendments, effective for annual
reporting periods beginning on or after 01
April, 2024, were assessed and determined
to have no material impact on the Company’s
financial statements due to the nature of its
operations:
Amendments to Ind AS 116 (Leases) related
to sale and leaseback transactions.
Amendments to Ind AS 107 (Financial
Instruments: Disclosures) related to supplier
finance arrangements.
Amendments to Ind AS 1 (Presentation of
Financial Statements) related to classification
of liabilities as current or non-current.
As of the date of authorisation of these
financial statements, no new standards or
amendments have been issued by the MCA
that are not yet effective for the financial year
ended 31 March, 2025. The Company will
continue to monitor developments in Ind AS
and assess their impact on future financial
statements.
There are no specific MCA notifications or
ICAI announcements that indicate new Ind
AS standards or amendments issued with
an effective date beyond 01 April, 2025, that
would apply to 2025-26 or later.
Capital Reserve -
The Company recognises profit or loss on purchase, sale, issue or cancellation of the Company’s own equity instruments to
capital reserve.
Securities Premium -
Where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the
premium received on those shares shall be transferred to "Securities Premium". The Company may issue fully paid-up bonus
shares to its members out of the securities premium and the Company can use this for buy-back of shares.
General Reserve -
General Reserve is created out of the profits earned by the Company by way of transfer from surplus in the statement of profit
and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up and not paid-up bonus shares.
Retained earnings -
The amount represent profits that can be distributed by the Company as dividends to its equity shareholders.
iii) In February 2019, the Supreme Court of India in its judgement clarified the applicability of allowances that should be
considered to measure obligations under Employees Provident Fund Act, 1952. The Company is opined that there are
interpretative challenges on the application of judgement retrospectively and as such does not consider there is any
probable obligations for past periods. The Company has complied with the Employees Provident Fund Act, 1952 from the
date of the Supreme Court order.
32. | SEGMENT INFORMATION
The consolidated financial statements of the Company contains segment information as per IND AS 108 - Operating Segments
accordingly separate information is not included in the Standalone financial statement.
33. | REVENUE FROM CONTRACTS WITH CUSTOMER (IND AS 115)
The Company is primarily in the business of export of agrochemicals (technical grade and formulations) and non-agro products
such as conveyor belts, rubber belts / sheets, dyes and dye intermediates to various countries across the world. The revenue
is recognised upon satisfaction of the performance obligations which is typically upon dispatch / delivery. The Company has a
credit evaluation policy based on which the credit limits for the trade receivables are established, the Company does not give
significant credit period resulting in no significant financing component. The Company, however, has a policy for replacement
of the damaged goods.
Terms and conditions of transactions with related parties
The sales to and purchases of goods and services from related parties are made on terms equivalent to those that
prevail in arm’s length transactions and are in compliance with the provisions of Companies Act and SEBI Regulations.
Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been
no guarantees provided or received for any related party receivables or payables. This assessment is undertaken each
financial year through examining the financial position of the related party and the market in which the related party
operates.
35. | HEDGING ACTIVITIES AND DERIVATIVES
Derivatives not designated as hedging instruments
The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange
forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency
exposure of the underlying transactions.
The Company enters into foreign exchange forward contracts with the intention to reduce the foreign exchange risk of expected
sales and purchases, these contracts are not designated in hedge relationships and are measured at fair value through profit
or loss.
The management assessed that cash and cash equivalents, trade receivables, trade payables, other financial liabilities and
other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices and/ or NAV. This includes listed
equity instruments, traded bonds and mutual funds that have quoted price and/ or NAV declared by the funds. 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 which maximise the use of observable market data and rely as
little as possible on entity-specific estimates. 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, contingent consideration and indemnification asset included in level 3.
Valuation Technique used to determine Fair Value:-
The following table shows the valuation techniques used in measuring Level 2 fair values for financial instruments at fair value
in the balance sheet:
37. | FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial risk factors
The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s focus is
to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance.
The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to
mitigate foreign exchange related risk exposures. The Company’s exposure to credit risk is influenced mainly by the individual
characteristic of each customer.
Market risk
The Company operates internationally and a major portion of its business is transacted in United States Dollars and Euros and
purchases from overseas suppliers mainly in US Dollars. The Company holds derivative financial instruments such as foreign
exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate
between the Indian Rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in
the future. Consequently, the results of the Company’s operations are adversely affected as the rupee appreciates / depreciates
against these currencies.
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’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s
operating activities (when revenue or expense is denominated in a foreign currency) and the Company’s net investments in
foreign subsidiaries.
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange
contracts (refer note 35).
The carrying amounts of the Company’s foreign currency dominated monetary assets and monetary liabilities at the end of the
reporting period are as follows:
Liquidity Risk
The 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 of managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damages to the Company’s reputation. The Company
monitors the level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade
payables & other financial liabilities.
The Company’s principal sources of liquidity are cash and cash equivalents and the cash flows that are generated from
operations. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no
liquidity risk is perceived.
As of 31 March, 2025, the Company had a working capital of ' 1,44,315.43 Lakhs including cash and cash equivalents of
' 6,447.24 Lakhs and current investments of ' 29,432.73 Lakhs. As of 31 March, 2024, the Company had a working capital of
' 1,24,798.44 Lakhs including cash and cash equivalents of ' 3,282.17 Lakhs and current investments of ' 15,889.87 Lakhs.
38. | CAPITAL MANAGEMENT
The Company’s objective for capital management is to maximise shareholder value, safeguard business continuity and support
the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term
and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated.
The capital structure of the Company consists of net asset and total equity of the Company.
The Company is not subject to any externally imposed capital requirements.
The Company monitors capital using debt-equity ratio, which is total debt divided by total equity.
45. | DISCLOSURE FOR ULTIMATE BENEFICIARIES
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities("lntermediaries") with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on
behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with
the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by
or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
46. | OTHER MATTERS
i) The Company does not have any Benami property, where any proceeding has been initiated or is pending against the
Company, for holding any Benami property.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) The Company does not have any charges or satisfaction, which is yet to be registered with Registrar of Companies beyond
the statutory period.
iv) The Company is in compliance with the number of layers prescribed under clause (87) of Section 2 of The Companies Act
read with the Companies ( Restriction on number of layers) Rules, 2017.
v) 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
vi) As on 31 March, 2025 there is no unutilised amounts of any issue of securities and long term borrowings from banks and
financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.
vii) The Company has not been declared as Wilful defaulter by any Banks, Financial institution or Other lenders.
viii) The Company does not have any transactions with companies struck off.
For B S R & Co. LLP For and on behalf of the Board of Directors of
Chartered Accountants Sharda Cropchem Limited
Firm Registration No. 101248W/W-100022
Burjis Pardiwala Ramprakash V. Bubna Manish R. Bubna
Partner Chairman & Managing Director Whole-time Director
Membership No.: 103595 DIN 00136568 DIN 00137394
Shailesh A. Mehendale Jetkin Gudhka
Chief Financial Officer Company Secretary
Membership No.: A26487
Place: Mumbai Place: Mumbai Place: Mumbai
Date : 14 May, 2025 Date : 14 May, 2025 Date : 14 May, 2025
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