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Notes to Accounts of Bhagiradha Chemicals & Industries Ltd.
Mar 31, 2025
21.3 RIGHTS ATTACHED TO EQUITY SHARES
The Company has only one class of equity shares having a par value of '' 1/- per share. Each holder of equity shares is entitled to one vote per share at the general meetings of the Company. In the event of liquidation, the equity shareholders are eligible to receive the residual assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
21.6: During the year 2023-2024, the Company has issued 25,61,425 share warrants @ '' 1332/- (Face value '' 10/-) each. The Company
has received upfront 25% of the total issue amounting to '' 8529.55 Lakhs. During the current year, the Company has received the balance amount of '' 25588.64 Lakhs which is equivalent to remaining 75% of the Warrant. During the current financial year, the Company has converted total share warrants by alloting 2,56,14,250 equity shares @ '' 133.20 having face value of '' 1/- each with a premium of '' 132.20 each in two tranches, i.e dated 09.05.2024 & 24.01.2025.
21.7 The Company has not allotted any equity shares as fully paid up without receiving cash or as bonus shares or bought back any equity shares in immediately preceeding five years ended 31st March, 2025.
21.8 Dividend
Dividend paid during the year ended March 31, 2025 an amount of '' 0.10 per equity share face value of '' 1/- each towards final dividend for the year ended March 31, 2024.
The Board of Directors at their meeting held on May 28, 2025, recommended a final dividend of '' 0.15 @ 15% per equity shares of Re. 1/- each amounting to '' 0.15 for the financial year ended March 31, 2025. Final dividend is subject to the approval of the shareholders.
22.1 Nature and purpose of reserves
a) Securities premium reserve - Securities premium is used to record the premium on issue of shares. This will be utilised in accordance with the provisions of the Act.
b) General reserve - The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes. This reserve is utilised in accordance with the provisions of the Act.
c) Retained earnings is the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders. Positive balance of retained earnings represents net earnings till date.
23.3 Term loan - 2 : By Axis Bank Limited is secured by exclusive charge by way of equitable mortgage of the office space in Unit 1011A, at Prestige Skytech, Nanakramguda, Hyderabad.
23.4 Term loan - 3 : By Axis Bank Limited is secured by exclusive first charge on fixed assets (4MW solar power plant) created out of the term loan extended by the term lender and also by pari passu first charge on the movable fixed assets (Except vehicles) and immovable fixed assets of the Company including EM of the Company land and buildings along with other lenders.
23.5 Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/ FD dated 10-042002 had sanctioned sales tax deferment for an amount of '' 918.54 lakhs and '' 514.51 lakhs respectively for a period of 14 years to the Company in respect of Chlorpyriphos plant. The sanction of '' 918.54 lakhs under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of '' 514.51 lakhs under letter No.30/1/2002/0300/0300/FD dated 10-042002 has expired its utilisation on 14th February, 2016. The Company has availed an aggregate deferment loan of '' 563.17 lakhs under the above sanctions. The repayment has commenced and an amount of '' 331.16 lakhs has been paid till 31.03.2025. Additionally, the deferment amount payable for the years 2019-20, 2020-21 & 2021-22 aggregating to '' 62.20 lakhs was placed in the form of fixed deposits with banks as per orders of the Honourable High Court of AP. Thus the liability under sales tax deferment reflected is inclusive of the above deposits which have to be paid to the government as per the final orders to be received.
23.6. a. The Company has been sanctioned new term loans of '' 1500 lakhs & '' 900 lakhs during the financial year 2024-25 however, during the financial year 2024-25, the Company has drawn '' 2199 lakhs only out of the sanctioned amount.
28.2 Working Capital Facilities :
Working capital facilities extended by State Bank of India, Axis Bank Limited, RBL Bank Limited & ICICI Bank Limited are secured as mentioned below.
i) Primary Security:
Pari Passu first charge on current assets of the Company (Present and Future) for Limits sanctioned by SBI, Axis, ICICI & RBL Banks.
ii) Collateral Security :
Pari-passu first charge on movable fixed assets of the Company (both present and future) except vehicles and assets created out of
term loans from Axis Bank Limited and equitable mortgage of the company''s factory land and buildings in an extent of 71.68 acres situated at Cheruvukommupalem, Ongole.
28.3 The Company has obtained working capital loan from following Bank/ Financial Institution:
a. During the financial year 2024-25, the Company has not availed any additional working capital facilities.
b. During the financial year 2023-24, the Company has taken additional working capital facilities of '' 20 Crores.
30.3 The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of Micro and Small Enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2024 has been made in the financial statements based on information received and available with the Company.
30.4 Terms and conditions of the above financial liabilities:
Trade payables are non-interest bearing and are normally settled on 30-180 days terms.
47.2 Defined Benefit Plans
47.2A Gratuity
The Company has a defined benefit gratuity plan governed by Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure, at 15 days salary for each completed year of service. The scheme is funded through a policy with Life Insurance Corporation of India.
The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31 March 2025. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method. Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation and the plan assets as at balance sheet date:
* Pertains to income tax demand/matters on account of deductions / re-opening for earlier years, pending appeals filed consequent to order passed by Honourable Income Tax Tribunal to restore the issue to the file of Commissioner of Income Tax (Appeals) with a direction to adjudicate the issue of validity of reassessment proceedings as well as claim of deductions.
** The Andhra Pradesh Electricity Regulatory Commission (APERC) has issued True up/ Tariff Order and press release regarding the Fuel and Power Purchase Cost Adjustment (FPPCA) under OP Nos. 57 to 68 of 2024 for the year 2022-23 and OP Nos. 69, 70 and 71 of 2024 for the year 2023-24. As per this order, the DISCOM is required to recover the FPPCA amounts for the years 2022-23 and 2023-24 from consumers, at rates determined by the Commission, spread over 15 and 24 monthly instalments respectively.
DISCOM has already started billing these amounts from November 2024 onwards, and as of 31st March 2025, a total of '' 80.21 lakhs- 45.75 lakhs for the year
2022-23 and '' 34.46 lakhs for the year 2023-24) has been recovered, which is debited as revenue expenditure. The estimated total liability as on 31st March, 2025 is '' 149.02 lakhs relating to the year 2022-23 and '' 133.89 lakhs for the year 2023-24.
The Company has challenged this recovery before the Hon''ble Appellate Tribunal for Electricity (APTEL) and has obtained a legal opinion, which suggests that the Company has a strong case against the recovery. Based on the facts and legal advice, the Company has not made any provision for the remaining amounts to be paid in future instalments. However, as a matter of prudence, the amounts paid are charged to P&L account. If the Hon''ble Court orders a refund, the Company will reverse the amount accordingly.
(In respect of the above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments pending at various forums / authorities. The Company has assessed that it is only possible but not probable that the outflow of economic resources will be required)
49 During the year 2018-19, Company paid '' 26.21 lakhs and '' 13.71 lakhs on account of CVD and SAD towards shortfall quantity of their export obligation in respect of two advance authorization licences granted to it. The Company has filed for a refund of the CVD & SAD as per the provisions of Sec. 142(3) of CGST Act. Refund application of the Company has been rejected by the Asst. Commissioner of Central Taxes, CGST Division vide its order dated 14.05.2020. Later, the Company made an Appeal with the Commissioner of Appeals, which was also rejected, vide order dated 30.10.2020. On 28.01.2021, the Company preferred further appeal with The Customs, Excise and Service Tax Appellate Tribunal Regional Bench, Hyderabad which is admitted by the Appellate Tribunal vide letter dated 21-06-2021. Hence, no provision is made in the books of the Company.
a. Basis of Segmentation
The company operates only in one business segment viz. ''manufacturing and sale of crop care chemicals'' and hence no separate information for primary segment wise disclosure is required.
b. Geographic Information:
The geographic information analyses the Company''s revenues and non-current assets by the Company''s country of domicile and other continents In presenting geographic information, segment revenue has been based on the selling location in relation to sales to customers and segment assets are based on geographical location of assets.
59 The title in respect of self-constructed buildings and title deeds of all other immovable properties, disclosed in the financial statements included under Property,Plant and Equipment are held in the name of the Company as at the balance sheet date.
60 The Company has not extended any loans or advances in the nature of loans to its promoters, directors, key managerial personnel and its related parties, as defined under the Act, during the years ended 31 March 2025 and 31 March 2024.
61 The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
The Company has not defaulted in servicing the debt availed from banks, financial Institutions or any other lender and is therefore not a defaulter or wilful defaulter as defined by RBI Circular.
63 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
64 Registration of charges or satisfaction with Registrar of Companies :
The Company does not have any pending charges to be created or satisfaction charge to be filed with ROC beyond the statutory period.
65 Compliance with number of layers of companies :
The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
66 Complaince with approved schemes
The Company has not entered into a scheme of arrangement during the year and previous year.
The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the current year as well as in the previous 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.
68 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
69 Utilisation of Borrowed funds and share premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) out of its borrowed funds or share premium or any other source 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
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
70 Fair values of financial assets and financial liabilities
The fair value of other current financial assets, cash and cash equivalents, trade receivables investments trade payables, short-term borrowings and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
The amortized cost using effective interest rate (EIR) of non-current financial assets consisting of security and term deposits are not significantly different from the carrying amount.
Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
Non-current borrowing comprises term loan from the banks. The impact of fair value on such portion is not material and therefore not considered for above disclosure.
Non-current borrowings comprises of Inter corporate borrowing has been valued at amortised cost using Effective Interest Rate (EIR). FINANCIAL INSTRUMENTS - FAIR VALUES
When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
- Level 1 - Quoted price (unadjusted) in active markets for identical assets or liabilities
- Level 2 - Inputs other than quoted price included in Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
- Level 3 - Inputs for the asset or liability that is not based on observable market data (unobservable inputs)
The carrying amounts and fair values of financial instruments by category are as follows:
Financial Risk Management objectives & Policies
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity exposes it to market risk, commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, the Company evaluates various options and may enter into derivative financial instruments like foreign exchange forward contracts, foreign currency option contracts in order to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives, if entered into, are used exclusively for hedging purposes and not as trading or speculative instruments.
The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company. Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rate, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
71.1 Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
a) Trade and other receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgment. Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
b) Cash and Cash Equivalents
The Company held cash and cash equivalents of '' 16,12,27,995/- at March 31, 2025 (March 31, 2024: '' 6,72,33,633/-). This includes the cash and cash equivalents held with the bank and the cash on hand with the Company.
71.2 Liquidity Risk
Liquidity risk is the risk in terms of 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 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 damage to the Company''s reputation.
The Company has obtained fund and non-fund based working capital loans from bank. The borrowed funds are generally applied for Company''s own operational activities.
Exposure to liquidity risk:
a) The following are the remaining contractual maturities of financial liabilities at the reporting date.
b) Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. The company''s exposure to the risk of changes in the market interest rate relates primarily to the company''s long term debt obligations with floating interest rates. The company''s interest rate exposure is mainly related to variable interest rates debt obligations. The Company manages the liquidity and fund requirements for its day to day operations like working capital, suppliers/buyers credit.
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
The risk estimates provided assume a change of 25 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarised above. This calculation assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date assuming that all other variables, in particular foreign currency exchange rates, remain constant. The period end balances are not necessarily representative of the average debt outstanding during the period.
71.3 a) Market Risk
Market risk is the possibility of losses that may be incurred by the company due to factors that affect the overall performance of the company - such as foreign exchange rates, interest rates, recessions etc. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily due to the fluctuations in the rate of interest for borrowings from banks, recession in the market, foreign exchange rate fluctuation etc.
71.3 b) Currency Risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses natural hedge technique of adjusting foreign currency receivables against currency payables. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exposure to all other foreign currencies other than US Dollar is not material.
71.4 D) 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. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.
73 Events after the reporting period
Subsequent to the end of the reporting period, but before the approval of the financial statements, the Company has converted the loan amounting to '' 36753 lakhs given to its subsidiary, Bheema Fine Chemicals Private Limited, into equity share capital. The Company got allotment of 4,08,36,237 Equity shares of face value of '' 10/- each at an issue price of '' 90/- each (including a premium of '' 80/- each). This event does not impact the financial position as at the reporting date but represents a non-adjusting event as per Ind AS 10 - Events after the Reporting Period. Accordingly, no adjustment has been made in the books of accounts for the year ended 31st March, 2025.
74 The Code on Social Security 2020
The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.
The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
75 Figures of the Previous year are regrouped / reclassified wherever considered necessary and rounded off to the nearest lakh.
Mar 31, 2024
2.18 Provisions and Contingencies
a) A provision is recognised, if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
b) A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but will probably not, require an outflow of resources. When there is a possible obligation of a present obligation in respect of which the likelihood of outflow of resources is remote, no provision is made but disclosed in the notes.
Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable.
2.19 Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
2.20 Earnings per Shares
Basic EPS is calculated by dividing the net profit or loss before OCI for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted EPS, the net profit or loss for the year attributable to equity shareholders
and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
2.21 Operating Cycles
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Based on the nature of products/ activities of the Company, the management has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
2.22 Contributed equity
Equity shares are classified as equity share capital.
Incremental costs directly attributable to the issue of new shares or options are shown in other equity as a deduction, net of tax, from the proceeds.
2.23 Dividend
Final dividend on shares is recorded as a liability on the date of approval by the shareholders and Interim dividends are recorded as a liability on the date of declaration by the Company''s board of directors.
The Company declares and pays dividends in Indian rupees. Companies are required to pay/distribute dividend after deducting applicable taxes
2.24 Events after reporting date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.
2.25 Financial Instruments
a) Financial Assets
i) Recognition and initial measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets other than trade receivables are initially recognised at fair value through profit and loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the statement of profit and loss. However , Trade receivables that do not contain a significant financing component are measured at transaction price.
ii) Subsequent measurement
For the purpose of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are
recognised in the statement of profit and loss. Any gain or loss on derecognition is recognised in the statement of profit and loss.
Financial assets at fair value through other comprehensive income (FVTOCI)
These assets are subsequently measured at fair value. Interest income under the effective interest method, foreign exchange gains and losses and impairment are recognised in the statement of profit and loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to the statement of profit and loss.
Financial assets at fair value through profit Oor loss (FVTPL)
Assets that do not meet the criteria for amortized cost or FVTOCI are measured at fair value through profit or loss. Net gains and losses, including any interest or dividend income, are recognised in the statement of profit and loss.
Financial instruments measured at fair value through other comprehensive income (FVTOCI)
These assets are subsequently measured at fair value. Dividends are recognised as income in the statement of profit and loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to the statement of profit and loss.
iii) Derecognition
The Company derecognises 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 does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
iv) 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, debt securities, deposits, and bank balance.
- Trade 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.
b) Financial Liabilities
i) Recognition and initial measurement
All financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument. A financial liability is initially measured at fair value, in case of financial liability which is recognised at fair value through profit and loss (FVTPL), its transaction cost is recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to the issue of a financial liability.
ii) Subsequent measurement
Financial liabilities are classified and measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL, if it is classified as held- for- trading, or as a derivative or if designated as such on initial recognition. Financial liabilities ''at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in the statement ''of profit and loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. ''Interest expense and foreign exchange gains and losses are recognised in the statement of profit and loss. Any gain or loss ''on derecognition is also recognised in the statement of profit and loss.
iii) Derecognition
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability is extinguished and the new financial liability with modified terms is recognised in the statement of profit and loss.
iv) Setting off 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 asset and settle the liability simultaneously.
c) Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts to hedge its interest rate risk. Such derivative financial instruments are initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently re-measured at fair value at each reporting period. Any changes therein are generally recognised in the profit and loss account.
2.26 Investments
Investments in Subsidiary
Investment in subsidiary are measured at cost less impairment loss, if any.
Investments in Debt Mutual Funds
Fair value of investments in debt mutual funds is determined on the basis of quoted market price at the reporting date.
2.27 Significant accounting judgments, estimates and assumptions
The preparation of financial statements requires management to make judgments, 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 years.
a) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end 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. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
b) Taxes
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
c) Defined benefit plans (gratuity benefits and Compensated Absences)
The cost of the defined benefit plans such as gratuity and Compensated Absences are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each year end.
The principal assumptions are the discount and salary growth rate. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis.
d) Impairment of non-financial assets
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.
2.28 Segment reporting
The Company operates only in one business segment viz. ''manufacturing and sales of crop protection chemicals'' and hence no separate information for primary segment wise disclosure as per Ind AS 108 is required.
The Company prepares the segment information as per geogriphic location and prepare the Company''s revenues and non-current assets as per country of domicile and other continents. In presenting geographic information, segment revenue has been based on the selling location in relation to sales to customers and segment assets are based on geographical location of assets.
2.29 Standards that became effective during the year
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 March 31 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the company.
2.30 Rounding off amounts
All amounts disclosed in financial statements and notes have been rounded off to the nearest lakhs as per requirement of Schedule III of the Act, unless otherwise stated.
20.5 During the previous year, the Company completed the Rights Issue to eligible equity shareholders - 19,55,083 shares and to eligible employees -1,40,700 shares aggregating to 20,95,783 Equity Shares of Face Value of H 10/- each at a price of H 400/- per equity share (including a premium of H 390/- per share which has been credited to securities premium).
Amount utilized towards Rights Issue expenses of H 138.35 lakhs was charged to Securities Premium.
20.6 The Company has not allotted any equity shares as fully paid up without receiving cash or as bonus shares or bought back any equity shares.
20.7 Dividend
Dividends paid during the year ended March 31, 2024 include an amount of H 3.00 per equity share towards final dividend for the year ended March 31, 2023. Dividends paid during the year ended March 31, 2023 include an amount of H 2.00 per equity share towards final dividend for the year ended March 31, 2022 and an amount of H 1.00 per equity share towards interim dividends for the year ended March 31, 2023.
The Board of Directors at their meeting held on May 24, 2024, recommended a final dividend of ''0.10 @ 10% per equity shares of ''1/-each amounting to ''0.10 for the financial year ended March 31, 2024. Final dividend is subject to the approval of the shareholders.
21.1 Nature and purpose of reserves
a) Securities premium reserve - Securities premium is used to record the premium on issue of shares. This will be utilised in accordance with the provisions of the Act."
b) Equity Component of Financial Instruments (subscription against equity share warrants) : During the year, the Company has issued 25,61,425 share warrants @ H 1332/- (Face value H 10/-) each. The Company has received H 333/- per share warrant upfront i.e. 25% of the total issue price amounting to H 8529.55 Lakhs. As per the terms of issue, the balance amount of H 999/- (Rupees Nine Hundred and Ninety- Nine only) per warrant will be called within 18 months which is equivalent to remaining 75% (Seventy- five per cent) of the Warrant Issue Price. The Warrant Holders shall be entitled to exercise their option to convert each warrant into one Equity Shares of H 10/- each(10 shares of H1/- each post share split), upon payment of balance amount.
c) General reserve - : The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes. This reserve is utilised in accordance with the provisions of the Act.
d) Retained earnings is the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders. Positive balance of retained earnings represents net earnings till date.
22.2 Term loan by Axis Bank Limited is secured by exclusive first charge on fixed assets created out of the term loan extended by the term lender and also by pari passu first charge on the movable fixed assets (Except vehicles) and immovable fixed assets of the Company (including EM of the Company land and buildings but excluding agricultural lands lying in the name of the Company not charged to any bank) along with other lenders.
22.3 Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/ FD dated 10-042002 had sanctioned sales tax deferment for an amount of H 918.54 lakhs and H 514.50 lakhs respectively for a period of 14 years to the Company in respect of Chlorpyriphos plant. The sanction of H 9,18,54,000/- under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of H 514.50 lakhs under letter No.30/1/2002/0300/0300/FD dated 10-042002 has expired its utilisation on 14th February, 2016. The Company has availed an aggregate deferment loan of H 563.17 lakhs under the above sanctions. The repayment has commenced and an amount of H 328.26 lakhs has been paid till 31.03.2024. Additionally, the deferment amount payable for the years 2019-20, 2020-21 & 2021-22 aggregating to H 62.20 lakhs was placed in the form of fixed deposits with banks as per orders of the Honourable High Court of AP. Thus the liability under sales tax deferment reflected is inclusive of the above deposits which have to be paid to the government as per the final orders to be received.
25.2 Working Capital Facilities :
Working capital facilities extended by State Bank of India, Axis Bank Limited, RBL Bank Limited & ICICI Bank Limited are secured as mentioned below.
i) Primary Security:
Pari Passu first charge on current assets of the Company (Present and Future) for Limits sanctioned by SBI, Axis, ICICI & RBL Banks.
Pari Passu Second charge is available to SBI, RBL Bank Limited & ICICI Bank Limited by way of hypothecation on the movable fixed assets of the Company financed by Axis Bank Limited by way of term loan.
ii) Collateral Security :
Pari-passu first charge on movable fixed assets of the Company (both present and future) except vehicles and assets created out of term loans from Axis Bank Limited and equitable mortgage of the company''s factory land and buildings in an extent of 71.68 acres situated at Cheruvukommupalem, Ongole.
25.3 The Company has obtained working capital loan from following Bank/ Financial Institution:
a. During the financial year 2023-24, the Company has taken additional working capital facilities of H 20 Crores.
b. During the financial year 2022-23, the Company has not availed any additional working capital facilities.
42 EARNINGS PER SHARES
42.1 Earnings per share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings /(loss) per share amounts are calculated by dividing the profit/loss attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the potentially dilutive equity shares into equity shares.
43 EMPLOYEE BENEFITS
43.1 Gratuity
Defined Benefit Plans
The Company has a defined benefit gratuity plan governed by Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure, at 15 days salary for each completed year of service. The scheme is funded through a policy with Life Insurance Corporation of India. The following tables summarize net benefit expenses recognised in the statement of profit and loss, the status of funding and the amount recognised in the Balance sheet for the gratuity plan:
45 During the year 2018-19, Company paid H 26,20,646/- and H 13,71,404/- on account of CVD and SAD towards shortfall quantity of their export obligation in respect of two advance authorization licences granted to it. The Company has filed for a refund of the CVD & SAD as per the provisions of Sec. 142(3) of CGST Act. Refund application of the Company has been rejected by the Asst. Commissioner of Central Taxes, CGST Division vide its order dated 14.05.2020. Later, the Company made an Appeal with the Commissioner of Appeals, which was also rejected, vide order dated 30.10.2020. On 28.01.2021, the Company preferred further appeal with The Customs, Excise and Service Tax Appellate Tribunal Regional Bench, Hyderabad which is admitted by the Appellate Tribunal vide letter dated 21-06-2021. Hence, no provision is made in the books of the Company.
46 SEGMENT REPORTING :
a. Basis of Segmentation
The company operates only in one business segment viz. ''manufacturing and sales of crop care chemicals'' and hence no separate information for primary segment wise disclosure is required.
b. Geographic Information:
The geographic information analyses the Company''s revenues and non-current assets by the Company''s country of domicile and other continents In presenting geographic information, segment revenue has been based on the selling location in relation to sales to customers and segment assets are based on geographical location of assets.
54 The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
55 Wilful Defaulter
The Company has not defaulted in servicing the debt availed from banks, financial Institutions or any other lender and is therefore not a defaulter or wilful defaulter as defined by RBI Circular.
56 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
57 Registration of charges or satisfaction with Registrar of Companies :
The Company does not have any pending charges to be created or satisfaction charge to be filed with ROC beyond the statutory period.
58 Compliance with number of layers of companies :
The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
59 Undisclosed income
The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the current year as well as in the previous 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.
60 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
61 Utilisation of Borrowed funds and share premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) out of its borrowed funds or share premium or any other source 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
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
62 Fair values of financial assets and financial liabilities
The fair value of other current financial assets, cash and cash equivalents, trade receivables investments trade payables, short-term borrowings and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
The amortized cost using effective interest rate (EIR) of non-current financial assets consisting of security and term deposits are not significantly different from the carrying amount.
Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
Non-current borrowing comprises term loan from the banks. The impact of fair value on such portion is not material and therefore not considered for above disclosure.
Non-current borrowings comprises of Inter corporate borrowing has been valued at amortised cost using Effective Interest Rate (EIR).
63 Risk Management
Financial Risk Management objectives & Policies
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity exposes it to market risk, commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, the Company evaluates various options and may enter into derivative financial instruments like foreign exchange forward contracts, foreign currency option contracts in order to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives, if entered into, are used exclusively for hedging purposes and not as trading or speculative instruments.
The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company. Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rate, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
63.1 Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
a) Trade and other receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
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b) Cash and Cash Equivalents
The Company held cash and cash equivalents of '' 672.34 lakhs at March 31, 2024 (March 31, 2023: H 216.67 lakhs). This includes the cash and cash equivalents held with the bank and the cash on hand with the Company.
63.2 Liquidity Risk
Liquidity risk is the risk in terms of 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 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 damage to the Company''s reputation.
The Company has obtained fund and non-fund based working capital loans from bank. The borrowed funds are generally applied for Company''s own operational activities.
b) Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. The company''s exposure to the risk of changes in the market interest rate relates primarily to the company''s long term debt obligations with floating interest rates. The company''s interest rate exposure is mainly related to variable interest rates debt obligations. The Company manages the liquidity and fund requirements for its day to day operations like working capital, suppliers/buyers credit.
Exposure to interest rate risk
Company''s interest rate risk arises from borrowings. Borrowings issued at fixed rates exposes to fair value interest rate risk. The interest rate profile of the Company''s interest-bearing financial instruments as reported to the management of the Company is as follows.
63 Risk management (Contd.)
63.3 a) Market Risk
Market risk is the possibility of losses that may be incurred by the company due to factors that affect the overall performance of the company - such as foreign exchange rates, interest rates, recessions etc. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily due to the fluctuations in the rate of interest for borrowings from banks, recession in the market, foreign exchange rate fluctuation etc.
b) Currency Risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses natural hedge technique of adjusting foreign currency receivables against currency payables. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exposure to all other foreign currencies other than US Dollar is not material.
D) 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. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
64 Capital risk management
For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.
65 The Code on Social Security 2020
The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
66 Figures of the Previous year are regrouped / reclassified wherever considered necessary and rounded off to the nearest lakh.
As per our report of even date For and on behalf of the Board of Directors
For R Kankaria & Uttam Singhi Bhagiradha Chemicals & Industries Limited
Chartered Accountants Firm Registration No.: 000442S
Uttam Kumar Singhi K S Raju S Chandra Sekhar
Partner Chairman Managing Director
Membership No.: 027481/ICAI DIN NO. 00008177 DIN NO. 00159543
Place : Hyderabad A Arvind Kumar B Krishna Mohan Rao M Sharanya
Date : 24.05.2024 Chief Executive Officer Chief Financial Officer Company Secretary
Mar 31, 2023
2.18 Provisions and Contingencies
a) A provision is recognised, if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
b) A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but will probably not, require an outflow of resources. When there is a possible obligation of a present obligation in respect of which the likelihood of outflow of resources is remote, no provision is made but disclosed in the notes.
Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable.
2.19 Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
2.20 Earnings per Shares
Basic EPS is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted EPS, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
2.21 Operating Cycles
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Based on the nature of products/ activities of
the Company, the management has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
2.22 Contributed equity
Equity shares are classified as equity share capital.
Incremental costs directly attributable to the issue of new shares or options are shown in other equity as a deduction, net of tax, from the proceeds.
2.23 Dividend
Final dividend on shares is recorded as a liability on the date of approval by the shareholders and Interim dividends are recorded as a liability on the date of declaration by the Company''s board of directors.
2.24 Events after reporting date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.
2.25 Financial Instruments
a) Financial Assets
i) Recognition and initial measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets other than trade receivables are initially recognised at fair value through profit and loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the statement of profit and loss.
ii) Subsequent measurement
For the purpose of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in the statement of profit and loss. Any gain or loss on derecognition is recognised in the statement of profit and loss.
Financial assets at fair value through other comprehensive income (FVTOCI)
These assets are subsequently measured at fair value. Interest income under the effective interest method, foreign exchange gains and losses and
impairment are recognised in the statement of profit and loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to the statement of profit and loss.
Financial assets at fair value through profit (FVTPL)
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in the statement of profit and loss.
Financial instruments measured at fair value through other comprehensive income (FVTOCI)
These assets are subsequently measured at fair value. Dividends are recognised as income in the statement of profit and loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to the statement of profit and loss.
iii) Derecognition
The Company derecognises 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 does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
iv) 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, debt securities, deposits, and bank balance.
- Trade 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.
b) Financial Liabilities
i) Recognition and initial measurement
AH financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument. A financial liability is initially measured at fair value, in case of financial liability which is recognised at fair value through profit and loss (FVTPL), its transaction cost is recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to the issue of a financial liability.
ii) Subsequent measurement
Financial liabilities are classified and measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL, if it is classified as held-for- trading, or as a derivative or if designated as such on initial recognition. Financial liabilities ''at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in the statement ''of profit and loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. ''Interest expense and foreign exchange gains and losses are recognised in the statement of profit and loss. Any gain or loss ''on derecognition is also recognised in the statement of profit and loss.
iii) Derecognition
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability is extinguished and the new financial liability with modified terms is recognised in the statement of profit and loss.
iv) Setting off 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 asset and settle the liability simultaneously.
c) Derivative Financial Instruments
The Company uses derivative financial instruments,
such as forward currency contracts to hedge its interest
rate risk. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at each reporting period. Any changes therein are generally recognised in the profit and loss account.
2.26 Investments in subsidiary
Investment in subsidiary are measured at cost less impairment loss, if any.
Where an indication of impairment exists, the carrying amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
2.27 Significant accounting judgments, estimates and assumptions
The preparation of financial statements requires management to make judgments, 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 years.
a) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end 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. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
b) Taxes
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
The Company neither has any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Company has determined that it cannot recognize deferred tax assets on the tax losses carried forward except for the unabsorbed depreciation.
c) Defined benefit plans (gratuity benefits and Compensated Absences)
The cost of the defined benefit plans such as gratuity and Compensated Absences are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each year end.
The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account inflation, seniority, promotion and other relevant factors on long term basis.
d) Impairment of non-financial assets and goodwill
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.
2.28 Segment reporting
Based on âManagement Approachâ 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. Unallocable items include general corporate income and expense items which are not allocated to any business segment.
Segment Policies:
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole. Common allocable costs are allocated to each segment on an appropriate basis.
2.29 Standards (including amendments) issued but not yet effective
Recent accounting pronouncements:
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of âaccounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.
2.30 Standards that became effective during the year
There are no new Standards that became effective during the year.
2.31 Rounding off amounts
All amounts disclosed in financial statements and notes have been rounded off to the nearest lakhs as per requirement of Schedule III of the Act, unless otherwise stated.
18.5 During the year, the Company completed the Rights Issue to eligible equity shareholders - 19,55,083 shares and to eligible employees -1,40,700 shares aggregating to 20,95,783 Equity Shares of Face Value of H 10/- each at a price of H 400/- per equity share (including a premium of H 390/- per share which has been credited to securities premium).
Amounts utilized towards Rights Issue expenses of H 138.35 lakhs was charged to Securities Premium.
18.6 The Company has not allotted any equity shares as fully paid up without receiving cash or as bonus shares or bought back any equity shares.
18.7 Board of directors, in its meeting held on 28-01-2006 has extinguished 49,100 partly paid equity shares, amount originally paid up H 2.46 lakhs, which was forfeited in the year 2005-06. Accordingly, amount received on the said shares has been added to securities premium and the said extinguishment has also been recorded by depository participants (DP).
18.8 Dividend
The Board of Directors proposed payment of H 3/- @ 30% per equity share as Final Dividend for the financial year ended March 31, 2023 (March 31, 2022 H 2/- per share). An interim dividend of H 1/- per share aggregating to H 104.05 Lakhs was paid during the financial year.
Also, for the year ended 31st March, 2022, the Company had proposed final dividend of H 2/- @ 20% per equity share aggregating for H 208.11 lakhs as final dividend. The same was approved and paid during the year ended 31st March, 2023. An interim dividend of H1/- per share aggregating to H 83.09 Lakhs was paid during the previous financial year.
19.1 Nature and purpose of reserves
a) Securities premium - Securities premium is used to record the premium on issue of shares. This will be utilised in accordance with the provisions of the Act.
b) General reserve - : The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes. This reserve is utilised in accordance with the provisions of the Act.
c) Retained earnings is the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders. Positive balance of retained earnings represents net earnings till date.
20.2 Term loan(new) by Axis Bank Limited is secured by exclusive first charge on fixed assets created out of the term loan extended by the term lender and also by pari passu first charge on the movable fixed assets (Except vehicles) and immovable fixed assets of the Company (including EM of the Company land and buildings but excluding agricultural lands lying in the name of the Company not charged to any bank) along with other lenders.
Term loans II & III sanctioned by Axis Bank Limited, which were closed during the financial year were earlier secured by exclusive first charge on fixed assets created out of the term loans extended by the term lender and also by pari-passu first charge on the movable fixed assets (Except vehicles) and immovable fixed assets of the Company (including EM of the Company land and buildings but excluding agricultural lands lying in the name of the Company not charged to any bank) along with other lenders and personal guarantee of Sri S Chandra Sekhar, Managing Director of the Company & Smt. S Lalitha Sree, Director of the Company.
20.3 Term Loans sanctioned under GECL 2.0 of H 290 lakhs & H 179 lakhs by State Bank of India & Axis Bank Limited, respectively, which were closed during the financial year were earlier secured by extension of charge / security interest (both primary & collateral) on a second ranking basis, on the securities available to the banks for the credit facilities enjoyed by the Company then.
20.4 Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/ FD dated 10-042002 had sanctioned sales tax deferment for an amount of H 918.54 lakhs and H 514.51 lakhs respectively for a period of 14 years to the Company in respect of Chlorpyriphos plant. The sanction of H 918.54 lakhs under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of H 514.51 lakhs under letter No.30/1/2002/0300/0300/FD dated 10-04-2002 has expired its utilisation on 14th February, 2016. The Company has availed an aggregate deferment loan of H 563.17 lakhs under the above sanctions. The repayment has commenced and an amount of H 311.84 lakhs has been paid till 31.03.2023. Additionally, the deferment amount payable for the years 2019-20, 2020-21 & 2021-22 aggregating to H 62.20 lakhs was placed in the form of fixed deposits with banks as per orders of the Honourable High Courts of AP & TG. Thus the liability under sales tax deferment reflected is inclusive of the above deposits which have to be paid to the government as per the final orders to be received.
24.2 Working Capital Facilities :
Working capital facilities extended by State Bank of India, Axis Bank Limited, RBL Bank Limited & ICICI Bank Limited are secured as mentioned below.
1. For Limits sanctioned by SBI, Axis, ICICI & RBL Banks
i) Primary Security:
Pari Passu first charge on current assets of the Company (Present and Future).
Pari Passu Second charge is available to SBI, RBL Bank Limited & ICICI Bank Limited by way of hypothecation on the movable fixed assets of the Company financed by Axis Bank Limited by way of term loan.
ii) Collateral Security :
Pari-passu first charge on movable fixed assets of the Company (both present and future) except vehicles and assets created out of term loans from Axis Bank Limited and equitable mortgage of the company''s factory land and buildings in an extent of 71.68 acres situated at Cheruvukommupalem, Ongole.
53 The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
54 Wilful Defaulter
The Company has not defaulted in servicing the debt availed from banks, financial Institutions or any other lender and is therefore not a defaulter or wilful defaulter as defined by RBI Circular.
55 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
56 Registration of charges or satisfaction with Registrar of Companies :
The Company does not have any pending charges to be created or satisfaction charge to be filed with ROC beyond the statutory period.
57 Compliance with number of layers of companies :
The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
58 Undisclosed income
The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the current year as well as in the previous 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.
59 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
60 Utilisation of Borrowed funds and share premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) out of its borrowed funds or share premium or any other source 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
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
61 Fair values of financial assets and financial liabilities
The fair value of other current financial assets, cash and cash equivalents, trade receivables, investments, trade payables, shortterm borrowings and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
The amortized cost using effective interest rate (EIR) of non-current financial assets consisting of security and term deposits is not significantly different from the carrying amount.
Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
Non-current borrowing comprise term loan from the banks. The impact of fair value on such portion is not material and therefore not considered for above disclosure.
Non-current borrowings comprises of Inter corporate borrowing have been valued at amortised cost using Effective Interest Rate (EIR).
62 Risk management
Financial Risk Management objectives & Policies
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity exposes it to market risk, commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, the Company evaluates various options and may enter into derivative financial instruments like foreign exchange forward contracts, foreign currency option contracts in order to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives, if entered into, are used exclusively for hedging purposes and not as trading or speculative instruments.
The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company. Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rate, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
62.1 Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
a) Trade and other receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also have an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgment. Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
b) Cash and Cash Equivalents
The Company held cash and cash equivalents of H 216.67 lakhs - at March 31, 2023 (March 31, 2022: H 218.17 lakhs). This includes the cash and cash equivalents held with the bank and the cash on hand with the Company.
62.2 Liquidity Risk
Liquidity risk is the risk in terms of 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 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 damage to the Company''s reputation.
The Company has obtained fund and non-fund based working capital loans from bank. The borrowed funds are generally applied for Company''s own operational activities.
62.3 a) Market Risk
Market risk is the possibility of losses that may be incurred by the company due to factors that affect the overall performance of the company - such as foreign exchange rates, interest rates, recessions etc. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily due to the fluctuations in the rate of interest for borrowings from banks, recession in the market, foreign exchange rate fluctuation etc.
b) Currency Risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses natural hedge technique of adjusting foreign currency receivables against currency payables. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exposure to all other foreign currencies other than US Dollar is not material.
65 The Code on Social Security 2020
The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
66 Figures of the Previous year are regrouped / reclassified wherever considered necessary and rounded off to the nearest lakh.
As per our report of even date For and on behalf of the Board of Directors
For R Kankaria & Uttam Singhi Bhagiradha Chemicals & Industries Limited
Chartered Accountants (CIN: 24219TG1993PLC015963)
Firm Registration No: 000442S
Rajendra Kankaria K S Raju S Chandra Sekhar
Partner Chairman Managing Director
Membership No.: 022051/ICAI DIN NO. 00008177 DIN NO. 00159543
Place : Hyderabad A Arvind Kumar B Krishna Mohan Rao R Sharanya
Date : 13.05.2023 Chief Executive Officer Chief Financial Officer Company Secretary
Mar 31, 2022
20.2 Term loans II & III sanctioned by Axis Bank Ltd are secured by exclusive first charge on fixed assets created out of the term loans extended by the term lender and paripassu first charge on the movable fixed assets (Except vehicles) and immovable fixed assets of the Company (including EM of the Company land and buildings but excluding agricultural lands lying in the name of the Company not charged to any bank) along with other lenders and personal guarantee of Sri S Chandra Sekhar, Managing Director of the Company & Smt. S Lalitha Sree, Director of the Company.
20.3 Term Loans sanctioned under GECL 2.0 of H 290 Lakhs & H 179 Lakhs by State Bank of India & Axis Bank Ltd, respectively are secured by extension of charge / security interest (both primary & collateral ) currently secured to the banks for their existing credit facilities on a second ranking basis.
20.4 Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/ FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of H 918.54 Lakhs and H 514.51 Lakhs respectively for a period of 14 years to the Company in respect of Chlorpyriphos plant. The sanction of H 918.54 Lakhs under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of H 514.51 Lakhs under letter No.30/1/2002/0300/0300/FD dated 10-04-2002 has expired its utilisation on 14th February, 2016. The Company has availed an aggregate deferment loan of H 563.17 Lakhs under the above sanctions. The repayment has commenced and an amount of H 266.70 Lakhs has been paid. However, the deferment amount payable for the years 19-20, 2020-21 & 2021-22 aggregating to H 62.20 Lakhs was placed in the form of fixed deposits with banks as per orders of the Honourable High Courts of AP & TG. Thus the liability under sales tax deferment reflected is inclusive of the above deposits.
20.5 Loans availed from Intercorporates have been taken with the repayment period of two years from the date of availing such loan. The Interest is paid at the rate of 8.5% per annum on the principal outstanding.
20.6 Loans availed from Directors have been taken with the repayment period of two years from the date of availing such loan. The Interest is paid at the rate of 8.5% per annum on the principal outstanding.
20.7 The company has not been declared a wilful defaulter (as defined by RBI Circular) by any bank or financial Institution or other lender.
20.8 The Company does not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period.
20.9. a. The Company has not obtained term loan from any Bank/ Financial Institution during the financial year 2021-22.
20.9. b. The Company has obtained term loan from following Bank/ Financial Institution during the financial year 2020-21.
24 FINANCIAL LIABILITIES - BORROWINGS (Contd..)
1. For Limits sanctioned by SBI, Axis & RBL Banks
i) Primary Security for working captial loans:
Pari Passu first charge on current assets of the Company.
ii) Collateral Security :
Paripassu firtst charge on movable fixed assets of the Company (both present and future) except vehicles and assets created out of term loans from Axis Bank Ltd and equitable mortagage of the company''s factory land and buildings in an extent of 71.68 acres situated at Cheruvukommupalem, Ongole.
Pari Passu Second charge is available to SBI, ICICI Bank Ltd & RBL Bank Ltd by way of hypothecation on the movable fixed assets of the Company financed by Axis Bank Ltd.
iii) Primary security for Term Loans sanctioned by Axis Bank Limited- Exclusive charge by way of hypothecation on the assets created out of term loans sanctioned by Axis Bank Limited.
iv) Personal Guarantee of Sri. S Chandra Sekhar, Managing Director and Smt. S Lalitha Sree Director of the Company.
2. For Limits sanctioned by ICICI Bank Ltd, the following securities are stipulated- Cash Credit and LC limits
i. Primary Security:
First Paripassu charge on current assets of the company, both present and future along with other working capital member banks.
ii. Collateral securities:
First paripassu charge on entire fixed assets (Movable and Immovable) (except vehicles and assets financed exclusively by other banks and assets financed by Axis bank by way of term loans)both present and future along with other working capital member banks on Factory land and building property in Cheruvukommupalem, Prakasam district, Andhra Pradesh
iii) Second Paripassu charge on movable fixed assets of the company created out of term loans from Axis bank.
3. For Limits sanctioned by ICICI Bank Ltd, the following securities are stipulated- Over Draft Limit
i) Primary Security:
First Paripassu charge on current assets of the company, both present and future along with other working capital member banks.
ii) Collateral securities:
First paripassu charge on entire fixed assets (Movable and Immovable) (except vehicles and assets financed exclusively by other banks and assets financed by Axis bank by way of term loans)both present and future along with other working capital member banks on Factory land and building property in Cheruvukommupalem, Prakasam district, Andhra Pradesh
iii) Second Paripassu charge on movable fixed assets of the company created out of term loans from Axis bank.
iv) Exclusive collateral in the name of Bheema Fine Chemicals Pvt Ltd, situated at village Kadechur,Hobli,585102, Yadgir dist, Karnataka of leasehold industrial land in 33.90 acres.
v) The facilities are secured by personal guarantees of Mr S Chandra Sekhar and Smt. S. Lalitha Sree, Directors.
25.2 The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of Micro and Small Enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2022 has been made in the financial statements based on information received and available with the Company.
38 Exceptional Item - Insurance Claim :
An amount of H 105 Lakhs was received during the financial year 2020-21 as full & final settlement under the reinstatement policy for damage to Civil structures, Plant and Electrical Equipment which was disclosed as Income from Insurance claim as exceptional Item.
39 Other Comprehensive Income (OCI)
The disaggregation of changes to OCI by each type of reserve in equity is shown below:
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Nature of CSR activities - For promotion of Healthcare, Environmental Sustainability & Education.
As Per section 135 of the Companies Act, 2013, amount required to be spent by the Company during the year ended March 31, 2022 was H 46.89 Lakhs Computed at 2% of its average net profits for the immediately preceding three financial years, on Corporate Social Responsibility (CSR). The Company spent an amount of H 46.89 Lakhs against this obligation for promotion of Healthcare, Environmental Sustainability & Education.
42.1 Earnings per share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings /(loss) per share amounts are calculated by dividing the profit/loss attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
|
44 COMMITMENTS & CONTINGENCIES |
||
|
Particulars |
Year ended March 31, 2022 |
Year ended March 31, 2021 |
|
a. Commitments: |
||
|
Estimated amount of contracts remaining to be executed on capital account & not provided for (net of advances) |
93.91 |
36.30 |
|
Total |
93.91 |
36.30 |
|
b. Contingent Liabilities: |
||
|
i) Outstanding bank guarantees |
10.00 |
10.00 |
|
ii) Letters of Credit |
749.89 |
248.83 |
|
iii) Indirect Taxes - GST |
65.69 |
- |
|
iv) Indirect Taxes - Entry Tax |
9.10 |
- |
|
v) Indirect Taxes - CVD & SAD ( Refer Note 45) |
39.92 |
39.92 |
|
Total |
874.60 |
298.75 |
45 During the year 2018-19, Company paid H 26.21 Lakhs and H 13.71 Lakhs on account of CVD and SAD towards shortfall quantity of their export obligation in respect of two advance authorization licences granted to it. The Company has filed for a refund of the CVD & SAD as per the provisions of Sec. 142(3) of CGST Act. Refund application of the Company has been rejected by the Asst. Commissioner of Central Taxes, CGST Division vide its order dated 14.05.2020. Later, the Company made an Appeal with the Commissioner of Appeals, which was also rejected, vide
order dated 30.10.2020. On 28.01.2021, the Company preferred further appeal with The Customs, Excise and Service Tax Appellate Tribunal Regional Bench, Hyderabad which is admitted by the Appellate Tribunal vide letter dated 2106-2021. Hence, no provision is made in the books of the Company.
a. BASIS OF SEGMENTATION
The company operates only in one business segment viz. âmanufacturing and sales of agro chemicals'' and hence no separate information for primary segment wise disclosure is required.
53 FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The fair value of other current financial assets, cash and cash equivalents, trade receivables investments trade payables, short-term borrowings and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
The amortized cost using effective interest rate (EIR) of non-current financial assets consisting of security and term deposits are not significantly different from the carrying amount.
Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
Non-current borrowing comprises term loan from the banks. The impact of fair value on such portion is not material and therefore not considered for above disclosure.
Non-current borrowings comprises of Inter corporate borrowing has been valued at amortised cost using Effective Interest Rate (EIR).
Financial Risk Management objectives & Policies
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity exposes it to market risk, commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, the Company evaluates various options and may enter into derivative financial instruments like foreign exchange forward contracts, foreign currency option contracts in order to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives, if entered into, are used exclusively for hedging purposes and not as trading or speculative instruments.
The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company. Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rate, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
54.1 Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
a) Trade and other receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgment. Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
b) Cash and Cash Equivalents
The Company held cash and cash equivalents of H 219.83 Lakhs at March 31, 2022 (March 31, 2021: H 31.87 Lakhs). This includes the cash and cash equivalents held with the bank and the cash on hand with the Company.
54.2 Liquidity Risk
Liquidity risk is the risk in terms of 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 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 damage to the Company''s reputation.
The Company has obtained fund and non-fund based working capital loan from bank. The borrowed funds are generally applied for Company''s own operational activities.
b) Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. The company''s exposure to the risk of changes in the market interest rate relates primarily to the company''s long term debt obligations with floating interest rates. The company''s interest rate exposure is mainly related to variable interest rates debt obligations. The Company manages the liquidity and fund requirements for its day to day operations like working capital, suppliers/buyers credit.
Exposure to interest rate risk
Company''s interest rate risk arises from borrowings. Borrowings issued at fixed rates exposes to fair value interest rate risk. The interest rate profile of the Company''s interest-bearing financial instruments as reported to the management of the Company is as follows.
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
The risk estimates provided assume a change of 25 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarised above. This calculation assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date assuming that all other variables, in particular foreign currency exchange rates, remain constant. The period end balances are not necessarily representative of the average debt outstanding during the period.
54.3 a) Market Risk
Market risk is the possibility of losses that may be incurred by the company due to factors that affect the overall performance of the company - such as foreign exchange rates, interest rates, recessions etc. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily due to the fluctuations in the rate of interest for borrowings from banks, recession in the market, foreign exchange rate fluctuation etc.
b) Currency Risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses natural hedge technique of adjusting foreign currency receivables against currency payables. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exposure to all other foreign currencies other than US Dollar is not material.
D) 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. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.
56 The Code on Social Security 2020
The Code on Social Security 2020 (âthe Code'') relating to employee benefits, during the employment and postemployment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.
The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published."
57 Figures of the Previous year are regrouped / reclassified wherever considered necessary and rounded off to the nearest lakh.
Mar 31, 2018
NOTES :1.TAXES
(a) Income tax expense:
The major components of income tax expenses for the year ended March 31, 2018 and for the year ended March 31, 2017 are:
This information also complies with the terms of the recognition granted upto 31 March 2020 to the Company''s In- House Research and Development Activities by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India, vide their letter No. TU/IV-RD/2515/2017 dated 29th May 2017 NOTES : 37 Government Grant (Ind AS 20)
Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of Rs, 9,18,54,000/- and Rs, 5,14,50,510/- respectively for a period of 14 years to the company in respect of chlorpyriphos plant. Using prevailing market interest rate of 10% p.a. for an equivalent loan as on 01-04-2016 (date of transition to Ind AS) 2,32,95,304/-. The difference amount of Rs, 2,43,95,450/between the closing value as on 01-04-2016 of Rs, 4,76,90,754/- and 2,32,95,450/- ( fair value of loan as on 01-04-2016) is classified as Government Grant which will be recognized in the statement of profit and loss over the remaining period of loan. Accordingly, an amount of Rs, 15,24,716/- is recognized in the Statement of Profit and Loss.
NOTES : 38 Related party disclosures
Names of related parties and description of relationship
Name of the related party_Relationship_
Enterprises under the significant influence of persons having significant influence over this company
Nagarjuna Agrichem Limited Enterprises under the control of persons having significant influence over this company
Greenpath Energy Private Limited
Key Management Personnel
S Chandra Sekhar Managing Director
D Ranga Raju Chairman
K S Raju Director
Sudhakar Kudva Independent Director
D Sada Sivudu Independent Director
B Lalitha Sree Director
B Murali Chief Financial Officer
A Arvind Kumar Chief Operating Officer
B N Suvarchala Company Secretary Note: Related party relationships have been identified by the management and relied upon by the auditors.
NOTES : 2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial Risk Management Framework
The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.
A Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per 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.
The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:
The company''s interest rate exposure is mainly related to variable interest rates debt obligations. The company manages the liquidity and fund requirements for its day to day operations like working capital, suppliers/buyers credit.
Exposure to interest rate risk
Company''s interest rate risk arises from borrowings. Borrowings issued at fixed rates exposes to fair value interest rate risk. The interest rate profile of the Company''s interest-bearing financial instruments as reported to the management of the Company is as follows. ''
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
The risk estimates provided assume a change of 25 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarized above. This calculation assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date assuming that all other variables, in particular foreign currency exchange rates, remain constant.. The period end balances are not necessarily representative of the average debt outstanding during the period.
C Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes.
Currency risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses natural hedge technique of adjusting foreign currency receivables against currency payable. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exposure to all other foreign currencies other than US Dollar is not material.
Exposure to currency risk
The currency profile of financial assets and financial liabilities as at March 31, 2018, March 31, 2017 and April 1, 2016 are in Indian Rupees.
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars and Pounds at March 31 would have affected the measurement of financial instruments denominated in US dollars and Pounds and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. ''
D. 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. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. Trade and other receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgment.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
The impairment loss at March 31, 2018 related to customers that have defaulted on their payments to the Company and are not expected to be able to pay their outstanding balances, is mainly due to economic circumstances.
Cash and cash equivalents
The Company held cash and cash equivalents of INR 3,44,27,200 at March 31, 2018 (March 31, 2017: INR 68,55,611, April 1, 2016 : INR 72,48,371.). The cash and cash equivalents are held with bank.
NOTES : 3. CAPITAL MANAGEMENT
For the purpose of the Company''s capital management, capital includes issued equity capital, compulsorily convertible preference shares, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value.
The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company intends to keep the gearing ratio between 0.5 to 1.5. The Company includes within net debt, borrowings including interest accrued on borrowings less cash and short-term deposits. ^
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately recall loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the period ended March 31, 2018.
NOTES : 4 FIRST TIME ADOPTION OF IND AS
These are the Company''s first set of financial statements which have been prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2018, the Company had prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 01, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
(a) The Company has elected to regard carrying values for all of property, plant and equipment as deemed cost at the date of the transition.
(b) Estimates
The estimates as at April 01, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation. The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 01, 2016 (transition date), March 31, 2017 and March 31, 2018.
Notes to reconciliation of equity as at April 01, 2016 and March 31, 2017 and statement of profit or loss for the year ended March 31, 2018:
i) MAT Credit entitlement
MAT credit entitlement is to be presented under loans and advance in accordance with Guidance Note on "Accounting for Credit available in respect of MAT under the Income Tax Act, 1961" issued by ICAI. However, as per Ind AS, MAT credit entitlement is generally recognized as a deferred tax asset with a corresponding deferred tax benefit in the statement of profit and loss. Accordingly, the Company has reclassified the MAT credit entitlement from loans and advances to deferred tax assets as at March 31, 2017 Rs, 2,50,11,819 (April 01, 2016: Rs, 2,50,11,819).
ii) Deferred Tax Assets
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires accounting for deferred taxes using the Balance sheet approach, which focuses on temporary difference between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences and the Company has accounted for such differences. Deferred tax adjustment are recognized in correlation to the underlying transaction either in retained earnings or a separate component in equity. Accordingly, the Company has recognized deferred tax assets/(liabilities) as at March 31, 2017 for Rs, 4,05,52,200 (April 01, 2016: Rs, 5,53,12,638).
iii) Borrowings - Sales Deferement Loan
The company has measured deferred sales tax loan at fair value in accordance with Ind AS. Accordingly the company has recognized government grant. Notional interest on such deferred sales tax loan has been charged to statement of profit and loss and government grant is amortized to statement of profit and loss over the remaining period of the loan.
iv) Excise duty on sale of goods
As per Indian GAAP, excise duty should be included in the turnover and should be shown as reduction from the gross turnover on the face of the statement of profit and loss. However, Ind AS 18 does not specifically prescribe any guidance for inclusive presentation of excise duty. Accordingly the Company has presented revenue gross of excise duty.
v) Other comprehensive income
Under Indian GAAP, the Company has not presented other comprehensive income separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.
vi) Remeasure of actuarial gains/ (losses):
Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.
vii) Statement of cash flows
The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.
NOTES : 5
The previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s presentation.
Mar 31, 2016
1 The Term Loan is secured by Exclusive charge on fixed assets created out of term loan and second charge on the fixed assets of the Company (both present and future) by way of hypothecation of movable fixed assets and equitable mortgage of immovable fixed assets of the company and personal guarantee of Mr.S.Chandra Sekhar, Managing Director of the company, Smt.S.Lalitha Sree, Director and Smt.S.Ratna Kumari.
2. Deferred payment Liabilities :
Government of Andhra Pradesh vide letterNo.20/2/6/1369/ID dated 08-10-1996 and letterNo.30/1/2002/0300/0300/ FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of Rs, 9,18,54,000/- and Rs, 5,14,50,510/respectively for a period of 14 years to the company in respect of chlorpyriphos plant. The sanction of Rs, 9,18,54,000/- under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of Rs, 5,14,50,510/- under letter No.30/1/2002/0300/0300/FD dated 10-04-2002 has expired its utilization on 14th February, 2016. The company has commenced the repayment and has paid Rs, 86,25,980/utilized till 2000-01. Sales tax amounting to Rs, 31,85,266/- for the year ended 31-03-2016 (Previous Year Rs, 68,24,451/-) deferred during the year.
3. The working capital facilities are secured by hypothecation of the current assets of the company and further secured by a first charge on the fixed assets of the company (excluding fixed assets created out of term loan sanctioned by Bank of India), second charge on fixed assets created out of term loan sanctioned by Bank of India and are personally guaranteed by Mr.S.Chandra Sekhar, Managing Director, Smt.S.Lalitha, Director and Smt.S.Ratna Kumari.
4. Sundry creditors as at 31st March 2016 includes an amount of Rs, 52.12 lakhs (Previous year Rs, 47.83 lakhs) outstanding (but not over due) to micro and small enterprises. The above disclosure is based on the information available with the company regarding the status of suppliers as defined under the Micro, Small and Medium Enterprises Development Act 2006.
5. Balances in Sundry Creditors are subject to confirmation and reconciliation if any, however in the opinion of the management there would not be any material impact on the financial statements.
6. Balances are subject to confirmation and reconciliation if any, however in the opinion of the management there would not be any material impact on the financial statements.
7. Government of Andhra Pradesh vide letterNo.20/2/6/1369/ID dated 08-10-1996 and letterNo.30/1/2002/0300/0300/ FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of Rs, 9,18,54,000/- and Rs, 5,14,50,510/respectively for a period of 14 years to the company in respect of chlorpyriphos plant. The sanction of Rs, 9,18,54,000/under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of Rs, 5,14,50,510/- under letter No.30/1/2002/0300/0300/FD dated 10-04-2002 has expired its utilization on 14th February, 2016. The company has commenced the repayment and has to pay Rs, 82,96,558/- previous year Rs, 3,604,670/- during the year 2016-17.
8. Balance in Unpaid Dividends is not due to be credited to investor education & protection fund.
Disclosure of Accounting Policies and Notes on Accounts Forming part of Financial Statements
Notes annexed to and forming part of the Balance Sheet as at March 31, 2016 and the Statement of Profit & Loss for the year ended on that date:
Mar 31, 2014
1. CONTINGENT LIABILITIES Rs in lakhs
As at As at
Particulars 31.03.2014 31.03.2015
a. Estimated amount of Contracts remaining
to be executed on Capital account and not
provided for, net of advances 50.08 356.68
b. Contingent Liabilities not provided for:
- Letters of Credit 1,669.07 6.64
- Bank Guarantees 23.00 11.00
2. In the opinion of the Management and to the best of their knowledge
and belief the value of the realization of Current Assets, loans and
advances in the ordinary course of business would not be less than the
amount of which they are stated in the Balance Sheet. The provision for
depreciation and for all the known liabilities is adequate and not in
excess of what is required.
3. Segment Reporting
There are no separate reportable segments as per Accounting Standard
17, as the entire operations of the company relate to one segment, viz.
Agrochemicals.
4. Related Party Transactions
Disclosure in respect of related parties as defined in Accounting
Standard 18 with whom transactions have taken place during the year are
given below:
a) List of Related Parties:
(i) Key Management Personnel
Shri S. Chandra Sekhar, Managing Director
Shri D. Sadasivudu, Executive Director (upto 31.08.2012)
(ii) Related party:
Nagarjuna Agrichem Limited
5. Employee benefits
a. Defined benefit plans
The following table sets forth the status of the Gratuity Plan and
Leave encashment of the Company and the amounts recognised in the
Balance Sheet and Statement of Profit and Loss.
b. Defined contribution plans
In respect of defined contribution plans, an amount of Rs.30.28 lakhs (Rs.
27.08 lakhs) towards gratuity has been recognised as an expense in the
Statement of Profit and Loss during the year.
6. Earnings Per Share
Earning per share is calculated by dividing the profit attributable to
the equity share holders by the weighted average number of equity
shares outstanding during the year. The basic and diluted EPS per
equity share is given hereunder:
7. The company has provided deferred tax liability/ (income) of Rs.
(4,781,410/-) for the current year (Previous year net deferred tax
liability Rs. 7,574,916/-) as per the Accounting Standard 22. Break up of
deferred tax liabilities and reconciliation of current year deferred
tax charge / income are given below:
8. a) The Company uses Forward Exchange Contracts to hedge its risks
associated with foreign currency fluctuations relating to certain firm
commitments and forecasted transactions. The Company does not enter
into any such instruments for trading or speculative purpose.
Mar 31, 2013
1. Contingent Liabilities Rs. in lakhs
Particulars As at As at
31.03.2013 31.03.2012
a. Estimated amount of Contracts
remaining to be executed on
Capital account and not provided
for, net of advances 356.68 36.97
b. Contingent Liabilities not
provided for:
- Letters of Credit 6.64 887.91
- Bank Guarantees 11.00 10.60
2. In the opinion of the Management and to the best of their knowledge
and belief the value of the realization of Current Assets, loans and
advances in the ordinary course of business would not be less than the
amount of which they are stated in the Balance Sheet. The provision for
depreciation and for all the known liabilities is adequate and not in
excess of what is required.
3. Segment Reporting
There are no separate reportable segments as per Accounting Standard
17, as the entire operations of the company relate to one segment, viz.
Agrochemicals.
4. Related Party Transactions
Disclosure in respect of related parties as defined in Accounting
Standard 18 with whom transactions have taken place during the year are
given below:
a) List of Related Parties:
(i) Key Management Personnel
Sri S. Chandra Sekhar, Managing Director (from 01.06.2012) Sri D.
Sadasivudu, Executive Director (upto 31.08.2012)
(ii) Associates
Nagarjuna Agrichem Limited
5. Figures of the previous year have been regrouped/rearranged
wherever considered necessary to confirm to the current year
presentation or classification.
Mar 31, 2012
1. CONTINGENT LIABILITIES Rs. in lakhs
As at As at
Particulars 31.03.2012 31.03.2011
a. Estimated amount of Contracts
remaining to be executed on Capital
account and not provided for,
net of advances 36.97 114.70
b. Contingent Liabilities not
provided for:
Letters of Credit 887.91 389.61
Bank Guarantees 10.60 54.30
2. In the opinion of the Management and to the best of their knowledge
and belief the value of the realization of Current Assets, loans and
advances in the ordinary course of business would not be less than the
amount of which they are stated in the Balance Sheet. The provision for
depreciation and for all the known liabilities is adequate and not in
excess of what is required.
3. During the year entire manufacturing activities of the company were
temporarily shut down due to major fire broke out in Block-III of the
company for 50 Days from 10th August, 2011 and operation in Block à I &
II has been restarted from 29.09.2011.
4. Due to major fire in Block à III, (which has manufacturing facility
of Clodinafop, Cloquintocet Mexyl, Thiamathoxam) Factory Building,
Plant & Equipment, Electricals & Stock in Process was damaged. The
company is adequately insured under cost of Reinstatement policy of
Assets. During the year company has received final claim of Rs. 540.01
Lakhs on account of damage. The company has made the
provisions/adjustments in books of account under the head Extra
Ordinary Items towards insurance claim (Net)
5. The Company was Manufacturing Triclopyr, Fluroxypr, Clodinafop and
Cloquintocet Mexyl under the 100% EOU Scheme. The company has got
approval to exit from the 100% EOU Scheme from the "office of the
Assistant commissioner of Customs & Central Excise". Now total plant is
operating under DTA.
6. Segment Reporting
There are no separate reportable segments as per Accounting Standard
17, as the entire operations of the company relate to one segment,
viz., Agrochemicals.
7. Related Party Transactions
Disclosure in respect of related parties as defined in Accounting
Standard 18 with whom transactions have taken place during the year are
given below:
8. a) The Company uses Forward Exchange Contracts to hedge its risks
associated with foreign currency fluctuations relating to certain firm
commitments and forecasted transactions. The Company does not enter
into any such instruments for trading or speculative purpose.
9. During the year ended 31st March, 2012 the revised Schedule VI
notified under the Companies act, 1956 has become applicable to the
company, for preparation and presentation of its financial statements.
The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of financial
statements. However, it has impact on presentation and disclosures made
in the financial statements. The Company has also reclassified the
previous years figures in accordance with the requirements applicable
in the current year.
Mar 31, 2010
1. Contingent Liabilities not provided for:
Rs. in lakhs
Particulars As at As at
31.03.2010 31.03.2009
i) Letters of Credit 271.18 136.68
ii) Export Bills Discounting - 110.19
iii) Bank Guarantees 28.86 23.86
2. SECURED LOANS
The working capital facilities are secured by hypothecation of the
current assets of the company and further secured by a first charge on
the fixed assets of the company and are personally guaranteed by the
Managing Director and Executive Director of the company.
3. SALES TAX DEFERMENT
Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated
08-10-1996 and letter No.30/1/2002/0300/0300/FD dated 10-04-2002 had
sanctioned sales tax deferment for an amount of Rs.91,854,000/- and Rs.
51,450,510/- respectively for a period of 14 years to the company in
respect of chlorpyriphos plant. The sanction of Rs.91,854,000/- under
letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization
on 28th February, 2010. The company has commenced the repayment as per
the utilization and has paid Rs.140,800/- utilized in 1995-96.
Based on the sales tax returns the sales tax deferred till 31-03-2010
amounts to Rs. 38,919,538/-.
4. Micro small and medium enterprises
Sundry creditors as at 31st March 2010 includes an amount of Rs. 11.68
lakhs (Previous year Rs. 22.37 lakhs) outstanding for more than 45 days
(but not overdue) to micro and small enterprises. The above disclosure
is based on the information available with the company regarding the
status of suppliers as defined under the Micro, Small and Medium
Enterprises Development Act 2006.
5. Segment Reporting
There are no separate reportable segments as per Accounting Standard
17, as the entire operations of the company relate to one segment, viz.
Agrochemicals.
6. EOU Unit
The company has commenced the manufacture of an additional product
Cloquintocet Mexyl from June 30, 2009.
7. Related Party Transactions
Disclosure in respect of related parties as defined in Accounting
Standard 18 with whom transactions have taken place during the year are
given below:
a) List of Related Parties:
Key Management Personnel
- Sri S. Koteswara Rao, Managing Director
- Sri D. Sadasivudu, Executive Director
8. As per the directions of the Andhra Pradesh Pollution Control Board
vide their order no. 204/PCB/TF-VJA/2000 dated 27-03-2010, the company
is required to dispose off the Chlorpyriphos residue stored in drums to
TDSF before 31-12-2010. The company has made provision for Rs. 250
lakhs in its Profit and Loss Account in respect of the same.
9. Figures of the previous year have been regrouped/rearranged
wherever considered necessary to confirm to the current year
presentation or classification.
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