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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Meghmani Organics Ltd.

Mar 31, 2025

(i) Capital Work-In-Progress as at 31^st March, 2025 comprises expenditure for the Property, Plant and Equipments in the course of construction of manufacturing facilities spread over all units.

(ii) Intangible Assets under Development as at 31^st March, 2025 comprises expenditure for the development and registration of technical product licenses, considering which there are no stipulated timelines for completion of activities

(iii) The amount of borrowing costs added to cost of capital work-in-progress during the year ended 31^st March, 2025 is ''Nil (31^st March, 2024: ''Nil).

(iv) Refer Note 46 for Right of use Assets details.

(v) For Property Plant & Equipment and Intangible assets existing as on 1^st April, 2015 i.e. the date of transition to Ind AS,

the Company has used Indian GAAP carrying value as deemed cost as permitted by Ind AS 101 "First Time Adoption of

Indian Accounting Standard". Accordingly, the net WDV as per Indian GAAP as on 1^st April, 2015 has been considered as Gross block under Ind AS. The accumulated depreciation is netted off as on 1^st April, 2015.

(vi) Refer Note 19 and 24 for details of charge created against the above mentioned assets.

(vii) Refer Note 42 for details of contractual Commitments for the acquisition of Property, Plant and Equipments.

(viii) Details of Capitalisation of Expenditure

The Company has capitalised following expenses of revenue nature to the cost of Property, plant and equipment / Capital work-in-progress. Consequently, expenses disclosed under the respective notes are net of amounts capitalised.

(i) Capital Work-In-Progress as at 31^st March 2024 comprises expenditure for the Property, Plant and Equipments in the course of construction of manufacturing facilities spread over all units.

(ii) Intangible Assets under Development as at 31^st March 2024 comprises expenditure for the development and registration of technical product licenses, considering which there are no stipulated timelines for completion of activities.

(iii) The amount of borrowing costs added to cost of capital work-in-progress during the year ended 31^st March 2024 is '' Nil (31^st March 2023: '' 596.38 Lakhs). The rate used to determine the amount of borrowing costs eligible for capitalisation ranges between 2.05% to 5.44% for 31^st March 2023 which is the effective interest rate of the specific borrowings taken for above mentioned Projects.

(iv) Refer Note 46 for Right of use Assets details.

(v) For Property Plant & Equipment and Intangible assets existing as on 1^st April 2015 i.e. the date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed cost as permitted by Ind AS 101 "First Time Adoption of Indian Accounting Standard". Accordingly, the net WDV as per Indian GAAP as on 1^st April 2015 has been considered as Gross block under Ind AS. The accumulated depreciation is netted off as on 1^st April 2015.

(vi) Refer Note 19 and 24 for details of charge created against the above mentioned assets.

(vii) Refer Note 42 for details of contractual Commitments for the acquisition of Property, Plant and Equipments.

(viii) Details of Capitalisation of Expenditure

(a) Other expenses and Power and Fuel are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

(b) Costs of employee benefits (as defined in Ind AS 19 "Employee Benefits") of project associated departments are arising directly from the construction or acquisition of the item of property, plant and equipment.

(i) Agro V Multi-purpose plant (MPP) Project was started in FY 21-22 with expected planned commissioned by Q4 FY 22-23 with an estimated overall budget of '' 450 crores. Phase I and Phase II of the project was capitalised in Q4 FY 22-23 and Q2 FY 24-25 respectively completely and capitalisation of Phase II was slow down considering the current market scenario. The same is expected to be completed in FY 2025-26 and there is no management plan / intention to terminate / suspend the project.

(ii) There are no projects for the period ended on 31^st March, 2025 and 31^st March, 2024 which are temporarily suspended and hence no disclosure is applicable there of for Capital Work in Progress.

Valuation technique and Key inputs

The best evidence of fair value is current prices in active market for similar lands. Valuation is performed by a registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The fair valuation is based on current prices in the active market for similar lands. Fair valuation is based on level 3 hierarchy.

Contractual Obligations

The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

Leasing Arrangements

Freehold land is leased to Subsidiary Company for a period of 30 years. As per the agreement there is an escalation rate of 10% every 5 years. Refer Note - 44. Disclosure on future rent receivable is included in Note 46.

Note i- The Subsidiary has received approval from regulatory authorities of Indonesia to formally close down the Entity and the entity has been closed on 21^st June, 2024. The investment has been accordingly written off during the year.

Note ii - Investment in perpetual securities

The Company''s board of directors in their meeting dated 23^rd December 2021 approved investment in unsecured Perpetual Securities of Kilburn Chemicals Limited ("KCL") (wholly owned subsidiary) of '' 11,961.00 lakhs. The securities are redeemable at the option of Kilburn Chemicals Limited and carry non-cumulative coupon rate of 8%. The issuer has classified this instrument as equity under Ind AS 32 "Financial Instruments". Accordingly, the Company has classified this investment as Equity instrument and has accounted at cost as per Ind AS 27 "Separate Financial Statements". Further, during the year, the Company''s board of directors in their meeting dated 11^th May 2024 and 8th February 2025 approved further investment in unsecured perpetual securities collectively amounting to '' 17,500.00 lakhs basis which additional investment of '' 11,421.63 lakhs has been made.

Impairment assessment of investment in KCL:

Kilburn Chemicals Limited ("KCL") has capitalised its plant in September 2024. KCL is in process of stabilising the plant and getting the desired quality of production and output. Over the period company has tried to better the quality of output and enhance the production. Considering the above facts, KCL continues to incur losses during the year including cash losses. Accordingly, the Company has tested its investment in KCL for impairment as per requirements of Ind AS 36 "Impairment of Assets"

The Company has determined KCL as a single CGU. The recoverable amount of the CGU has been determined based on a value in use calculation using cash flow projections from financial budgets approved by senior management covering a five-year period. The pre-tax discount rate applied to the cash flow projections for impairment testing during the current year is 15.57% which is considered reasonable by the management. The growth rate used to extrapolate the cash flows of the unit beyond the five-year period is 3.00 %. This growth is the same as the long-term average growth rate for industry. Key assumptions used for the purpose of valuation are: Plant utilisation, Sales rate, Gross margins, Growth rates used to extrapolate cash flows beyond the forecast period, Weighted Average Cost of Capital (WACC).

On a careful evaluation of the aforesaid assumptions, the management of the Company has concluded that there is no impairment of its investment in KCL. However, if the foresaid assumptions were to change in future, there could be corresponding impact on the recoverable amount.

Note iii - Investment in Redeemable Preference Shares (RPS )

The Company''s board of directors in their meeting dated 29^th April 2023 approved investment in RPS issued by Meghmani Crop Nutrition Limited (MCNL) (wholly owned subsidiary) of '' 5,000 lakhs. The Shares carry a coupon rate (Cumulative) of 9.75% p.a. and are redeemable after 20 years from the date of allotment at face value. The issuer carries a right to exercise the option of early redemption. Further, during the year, the Company made investment in RPS amounting to ''1220.00 lakhs.

Investments at fair value through OCI (fully paid) reflect investment in unquoted equity securities and unquoted debt securities. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company. Thus, disclosing their fair value fluctuation in profit or loss will not reflect the purpose of holding. Refer note 45 for determination of their fair values.

Note - Redeemable Preference Shares (RPS) of Epigral Limited (Formerly known as Meghmani Finechem Ltd)

Pursuant to the Composite Scheme of arrangement approved by NCLT Ahmedabad branch, the Company had invested in RPS issued by Epigral Ltd The shares carry a coupon rate (Cumulative) of 8.00% p.a. and are redeemable at face value after 20 years from the date of allotment at face value. The issuer carries a right to exercise the option of early redemption accordingly. The RPS have been fully redeemed during the year.

* - Investment in Meghmani Foundation of '' 1.50 Lakhs has been Written off during the year.

(i) The loans to employees are interest free and are generally for a tenure of 6 to 12 months.

(ii) Since all the above loans given by the company are unsecured and considered good, the bifurcation of loan in other categories as required by Schedule III of Companies Act 2013 viz: a) secured, b) loans which have significant increase in credit risk and c) credit impaired is not applicable.

(iii) There are no Loans and advances due by directors or other officers of the company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any director is a partner or a director or a member.

Terms / Rights attached to Equity shares

The Company has only one class of Equity Shares having par value of Re 1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves :

Securities premium

In cases where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares has been transferred to "Securities Premium". The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Capital Reserve

The Capital Reserve represents difference between consideration paid and net assets acquired under common control business combination transaction. The Company can utilise the reserve in accordance with the provisions of the Companies Act, 2013.

General reserve

General Reserve is created out of the profits earned by the Company by way of transfer from surplus in the Statement of Profit and Loss. The Company can use this reserve for payment of dividend and issue of fully paid-up bonus shares.

Capital Redemption Reserve

Capital Redemption Reserve was created for buy-back of shares in earlier years and can be utilised in accordance with the provisions of the Companies Act, 2013.

Retained Earnings

Retained Earnings are the profits/(loss) that the Company has earned till date, less any transfer to General Reserve, Dividend paid to Shareholders. It also includes Re-measurement gain/(loss) on defined benefit plans that will not be Re-classified to the Statement of Profit and loss.

Refer Note No - 45 for Interest rate Risk and Liquidity Risk.

Details of Security and Repayment Terms :

i The Company has Rupee Term Loan facility of '' 9,200.00 Lakhs (31^st March 2024: '' 9,200.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable Property, Plant and Equipments of the Company (b) Assignment of Lease Hold Land used for Windmill (c) First Pari Passu charge by way of mortgage on immovable Property, Plant and Equipments of the Company (excluding the assets charged specifically to other lenders).

During the year 2019-2020, outstanding Indian Rupee loan of '' 6,899.23 lakhs was converted into foreign currency loan of Euro 87.41 lakhs. The borrowing carries interest at 6 month Euribor 1.75% p.a. payable at monthly rest. The effective interest rate is 5.66% p.a. (31^st March, 2024: interest rate varies from 5.57% p.a.to 5.66% p.a.). Outstanding balance for this borrowing is Euro Nil equivalent to '' Nil (as at 31^st March 2024: Euro 9.71 Lakhs equivalent to '' 872.85 lakhs). As per the terms, the foreign currency loan is repayable in 9 half yearly instalments of Euro 9.71 Lakhs starting from financial year 2020-21 The loan has been repaid during the year.

ii The Company has availed External Commercial Borrowing of Euro 123.30 Lakhs ('' 10,997.25 Lakhs) (31^st March 2024: Euro 123.30 Lakhs). The Facility is secured by First Pari Passu charge by way of Hypothecation on the movable Property, Plant and Equipments of the Company. The borrowing carries interest at 6 month Euribor 1.20% p.a. payable at 6 monthly rest. The effective interest rate varies from 4.60% p.a. to 5.08% p.a.(31^st March, 2024 : 4.37% to 5.14%). Outstanding balance for this borrowing is Euro 13.70 lakhs equivalent to '' 1,256.62 lakhs (31^st March 2024: Euro 41.10 Lakhs equivalent to '' 3,675.92 Lakhs). As per the original terms, the loan is repayable in 9 half yearly instalments of Euro 13.70 Lakhs starting from financial year 2021-22.

iii The Company has availed Rupee Term Loan facility of '' 15,000.00 Lakhs (31^st March 2024: ''15,000.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable Property, Plant and Equipments of the Company situated at Ankleshwar, Panoli and Vatva (b) First Pari Passu charge by way of mortgage on immovable Property, Plant and Equipments of the Company situated at Ankleshwar, Panoli and Vatva (c) Second Pari Passu charge by way of mortgage on immovable Property, Plant and Equipments of the Company situated at as Dahej and Dahej SEZ. The borrowing carries interest at 6.40% p.a. payable at monthly rest. Outstanding balance for this borrowing is '' 6,722.96 lakhs. (31^st March, 2024: '' 9,709.98 Lakhs). As per the terms, the loan is repayable in 20 quarterly instalments starting from financial year 2022-23. The Company has entered into a cross currency swap ("CCS") transaction on the said Rupee Term loan facility whereby outstanding Rupee Term loan has been swapped with notional principal of USD 201.48 lakhs and paysd interest at 2.05% p.a.. As per the terms of CCS agreement, the company receives interest at 6.40% p.a. on notional principal of '' 15,000 lakhs and pays interest at 2.05% p.a. on notional principal of USD 201.48 lakhs at monthly rest. As per the notional principal settlement terms of CCS agreement, the Company will receive '' 750 lakhs and pay USD 10.07 lakhs in 20 equal quarterly instalments starting from financial year 2022-23.

iv The Company has availed Rupee Term Loan facility of '' 15,000.00 Lakhs (31^st March 2024: '' 15,000.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable Property, Plant and Equipments of the Company situated at Vatva, Ankleshwar and Panoli (b) First Pari Passu charge by way of mortgage to be created on immovable Property, Plant and Equipments of the Company situated at as Ankleshwar, Panoli and Vatva (c) Second Pari Passu charge by way of mortgage on immovable Property, Plant and Equipments of the Company situated at as Dahej and Dahej SEZ. The borrowing carries interest at 7.25% p.a. payable at monthly rest. Outstanding balance for this borrowing is '' 8,093.69 lakhs. (31^st March, 2024''11,690.68 Lakhs). As per the terms, the loan is repayable in 20 quarterly instalments (First four instalments of '' 150 Lakhs each and Sixteen instalments of '' 900 Lakhs each) starting from financial year 2022-23.

The Company has entered into a cross currency swap ("CCS") transaction on the said Rupee Term loan facility whereby outstanding Rupee Term loan has been swapped with notional principal of USD 116.41 lakhs and EUR 73.43 Lakhs. As per the terms of CCS agreement, the Company receives interest at 7.25% p.a. on notional principal of '' 15,000 lakhs and pays interest at 3.25% p.a. on notional principal of USD 51.74 lakhs at monthly rest, at ON SOFR 0.87% p.a. on notional principal of USD 64.67 lakhs and at ON ESTER 0.60% p.a. on notional principal of EUR 73.43 lakhs payable at monthly rest. As per the notional principal settlement terms of CCS agreement, the Company will receive '' 150 lakhs and pay USD 1.17 lakhs and EUR 0.73 Lakhs (in four quarterly instalments) and receive '' 900 lakhs and pay USD 6.98 lakhs and EUR 4.41 Lakhs (in sixteen quarterly instalments) starting from financial year 2022-23.

v The Company had availed unsecured Foreign Currency Term Loan of Euro 56.73 Lakhs ('' 5,000.00 Lakhs). The borrowing carried interest at 3 month Euribor 1.60% p.a. payable at monthly rest. The effective interest rate varies from 5.29% p.a. to 5.48% p.a. (31^st March, 2024: 4.59% to 5.58%) . Outstanding balance for this borrowing is Euro Nil equivalent to '' Nil (31^st March 2024: Euro 16.21 Lakhs equivalent to '' 1,456.90 lakhs). As per the original terms, the loan is repayable in seven equal quarterly instalments starting from financial year 2022-23 The loan has been repaid during the year.

vi The Company has availed unsecured Foreign Currency Term Loan of Euro 55.77 Lakhs ('' 5,000.00 Lakhs). The borrowing carries interest at ON ESTER 3.04% p.a. payable at monthly rest. The effective interest rate varies from 5.46% p.a. to 5.70% p.a. (31^st March, 2024: 4.75% to 5.46%) during current financial year. Outstanding balance for this borrowing is Euro 19.79 lakhs equivalent to '' 1,821.11 lakhs (31^st March 2024: Euro 48.82 Lakhs equivalent to '' 4,387.69). As per the original terms, the loan is repayable in eight equal quarterly instalments of EURO equivalent to '' 625 Lakhs each starting from financial year 2023-24.

vii During Current Financial Year the Company has availed unsecured Foreign Currency Term Loan of Euro 23.88 Lakhs ('' 2,117.00 Lakhs).The borrowing carries interest at EURIBOR 3M 2.45% p.a. payable at monthly rest. As per Interest Rate Swap agreement Company Pays interest at EUR 4.88% pa. payable at monthly rest .Outstanding balance for this borrowing is Euro 23.88 equivalent to '' 2,199.15 As per the original terms, the loan is repayable in twelve equal quarterly instalments starting from financial year 2025-26.

viii Bank loans availed by the Company are subject to certain covenants relating to current ratio, total outside liabilities to total net worth, Property, Plant and Equipments coverage ratio, ratio of total term liabilities to net worth have been complied with as per the terms of loan agreements. All Covenants other than debt service coverage ratio have been complied as per the terms of loan agreements as at and for the year ended 31^st March,, 2025. The Company has obtained waiver from respective banks for covenants not complied with and for continuing the repayment as per the original sanctioned terms. Further company has obtained confirmation from bank that they do not intend to demand back the loan balance on account of deviation of covenant for the Financial Year 2024-25. Accordingly outstanding balances has been disclosed as per original repayment schedule.

viii The Company has not defaulted for any repayment of Borrowings and Interest during the year.

Note - The Finance (No. 2) Act, 2024 withdrew the indexation benefit on long-term capital gains on securities which were purchased prior to 1^st April, 2023 and the tax rate with respect to long-term capital gains for the said asset class was changed from 20% plus surcharge and cess (with indexation) to 12.5% plus surcharge and cess (without indexation). Due to such withdrawal of the indexation benefit and change in tax rate, the Deferred Tax liability on fair value gain on RPS (redeemable preference shares) amounting to '' 275.36 lakhs has been consequently adjusted while determining deferred tax liability as at 31^st March, 2025.

Note: As at the year ended 31^st March, 2024, the Company had deferred tax assets comprising of deductible temporary differences on unabsorbed depreciation under tax laws and as the company has reasonable certainty towards its realization of Deferred Tax Assets (DTA) , DTA has been recognised for the same. During the year ended 31^st March 2025, considering the profits earned for the year, carry forward unabsorbed depreciation has been utilised.

i The Company has sanctioned facilities of Cash credit, packing credit and working capital demand loans of '' 70,000 lakhs (31^st March 2024: '' 40,000 lakhs) (Including Non Fund based facility) from State Bank of India, HDFC Bank Limited, ICICI Bank Limited, DBS Bank India Limited and Axis Bank Limited (Collectively known as Consortium Bankers). The present consortium is lead by State Bank of India. These loans are secured by first pari passu charge by way of hypothecation of the entire Stock of Raw Materials, Work in Process, Finished Goods, Stores and Spares and Receivables and second pari passu charge on immovable Property, Plant & Equipments of the Company (Except Chharodi) as a collateral security. Interest rate on these loans are as follows:

(a) Interest rates on cash credit loans vary within the range of 9.30% to 9.85% (31^st March 2024: 8.55% to 9.30%) payable at monthly rest.

(b) I nterest rates on packing credit loans vary within the range of Euribor 1.65% to 5.90% (31^st March 2024: Euribor 1.35% to 5.90%) payable at monthly rest.

(c) Interest rates on working capital demand loans and overdraft facility vary within the range of 7.00% to 8.50% (31^st March 2024: 7.48% to 9.70%) payable at monthly rest.

(d) The Company has not defaulted for any repayment of Borrowings and Interest during the year.

(e) The company submits quarterly statements of assets mortgaged and the same are in agreement with the books.

Terms and Conditions of the above Outstanding Dues :

Trade payables are non-interest bearing and are normally settled on 30-360 days terms. For amounts due to related parties and terms and conditions with Related Parties, Refer Note 44. Refer Note 45 for Company''s credit risk management processes. Trade Payable includes Acceptances amounting to '' 6,898.22 Lakhs (31^st March 2024''8,109.52 Lakhs).

30.4 Performance obligation

Information about the Company''s performance obligations are summarised below:

All sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/ delivery. The Company does not have any remaining performance obligation for sale of goods or services which remains unsatisfied as at 31^st March, 2025 or 31^st March, 2024. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognised corresponds directly with the value to the customer of the entity''s performance completed to date.

30.5 Information about major customers

For Information about major customers Refer Note 43.

40 The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26^th August, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ''Micro, Small and Medium Enterprises Development Act, 2006'' (''the MSMED Act'').

Accordingly, the disclosure in respect of the amounts payable to such Enterprises as at 31^st March, 2025 has been made in the Financial Statements based on information received and available with the Company. The Company has not received any claim for interest from any Supplier as at the Balance Sheet date.

41 EMPLOYEE BENEFITS

(a) Defined Benefit Plan

The Company has defined gratuity plan which is governed by the Payment of Gratuity Act, 1972. Under the Gratuity act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. The following tables summaries the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

(c) Defined Contribution Plan

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of payroll costs to fund the benefits. The Company has recognised provident fund contribution of '' 264.73 lakhs (31^st March, 2024''295.16 lakhs) and contribution to ESIC and Other Labour Fund amounting to '' 16.24 lakhs (31^st March, 2024''17.41 lakhs) as expense, Refer Note 34 under the head ''Contributions to Provident and Other Funds''.

42 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
A Claims against the company not acknowledged as debts		('' in Lakhs)
Particulars	31^st March, 2025	31^st March, 2024
Disputed Income-Tax Liability*	1,781.46	1,781.46
Disputed Excise Duty Liability**	2,201.25	2,201.25
Disputed Service Tax Liability***	151.53	151.53
Disputed Goods and Service Tax Liability****	2,225.95	50.74
Disputed Liabilities towards labour and workers compensation	314.95	79.96
(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, the outflow of economic resources will be required)
In respect of Guarantee
- Corporate Guarantee Given#	58,100.00	58,100.00

The future outflow of the above claims would be determinable only on completion of respective assessments.

* Income tax demand comprise of demand from the Indian Income tax authorities for payment of additional tax of '' 1,781.46 (31^st March 2024: '' 1,781.46), upon completion of their tax review for the assessment year 2003-04, 2009-10, 201011, 2013-14 to 2018-19 and 2020-21.The tax demands are mainly on account of Transfer pricing Adjustments, Section 14 A disallowances, Bad Debt disallowances, Disallowance for loan written off, etc. The matter is pending before various authorities. ** Excise duty demand comprise demand from Central excise authorities for payment of additional tax of '' 2,201.25 lakhs (31^st March 2024: '' 2,201.25 lakhs), upon completion of their tax review for the financial year 2003-04 to 2008-09 and 201112 to 2016-17. The tax demands are on account of denial of Cenvat credit on manufacturing ,Short payment of duty on DTA clearance from EOU, Education cess on DTA Sales etc. The matter is pending before various authorities.

*** Service tax demand comprise demand from Service Tax Authorities on account of denial of Service tax credit '' 151.53 lakhs (31^st March 2024: '' 151.53 lakhs), upon completion of their tax review for the financial year 2006-07 to 2017-18. The tax demands are on account of service tax on sales commission. The matter is pending before various authorities.

**** Goods and Service Tax Demand Comprise demand from GST Authorities on account of ITC Refund of SEZ, GSTR 2A mismatch and violation of certain pre-import conditions of '' 2,225.95 Lakhs (31^st March, 2024 ''50.74 Lakhs) upon completion of their tax review for financial year 2017-18, 2018-19 and 2022-23 the matter is pending before various authorities.

The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be in favour of the Company in the appellate process and no expense has been accrued in the financial statements for the demands raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

# The Company has given Corporate Guarantee on behalf of its wholly owned Subsidiaries viz: Kilburn Chemicals Limited (KCL) amounting to '' 32,500 Lakhs (31^st March, 2024''32,500 Lakhs) and Meghmani Crop Nutrition limited (MCNL) amounting to '' 25,600 lakhs (31^st March, 2024''25,600 Lakhs) for the purpose of Working Capital and Term Loan

(1) Based on "management approach" defined under Ind AS 108 - Operating Segments, the Chief Operating Decision Maker evaluates the company''s performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly information has been presented along these segments.

(2) The Company''s operations are divided into two segments. These segments are the basis for management control and hence form the basis for reporting. The business of each segment comprises of :

a) Agro Chemicals - The Company''s operation includes manufacture and marketing of technical, intermediates and formulation of Crop Protection Chemicals.

b) Pigment Business - The Company''s operation includes manufacture and marketing of Phthalocynine Green 7, Copper Phthalocynine Blue (CPC), Alpha Blue and Beta Blue.

(3) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

Terms and Conditions of transactions with related parties

(1) Sales to related parties and concerned balances For terms of transaction

Sales are made to related parties on the same terms as applicable to third parties in an arm''s length transaction and in the ordinary course of business. The Company mutually negotiates and agrees sales price, discount and payment terms with the related parties by benchmarking the same to transactions with non-related parties, who purchase goods and services of the Company in similar quantities. Such sales generally include payment terms requiring related party to make payment within 10 to 180 days from the date of invoice.

For terms of balance

Trade receivables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other security has been received against these receivables. The amounts are recoverable within 10 to 180 days from the reporting date (31^st March 2024: 10 to 180 days from the reporting date). For the year ended 31^st March 2025, the Company has not recorded any impairment on receivables due from related parties (31^st March 2024: Nil).

(2) Purchases of goods and related balances For terms of transaction

Purchases are made from related parties on the same terms as applicable to third parties in an arm''s length transaction and in the ordinary course of business. The Company mutually negotiates and agrees purchase price and payment terms with the related parties by benchmarking the same to sale transactions with non-related parties entered into by the counter-party and similar purchase transactions entered into by the Company with the other non-related parties. Such purchases generally include payment terms requiring the Company to make payment within 60 to 180 days from the date of invoice.

For terms of balance

Trade payables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other security has been given against these payables. The amounts are payable within 60 to 180 days from the reporting date (31^stMarch 2024: 60 to 180 days from the reporting date).

(3) Services rendered to related parties

The Company has entered into contract with related party for rendering of Job work services related to marketable packing on the same terms as applicable to third parties in an arm''s length transaction and in the ordinary course of business. The Company mutually negotiates and agrees the price and payment terms with the related parties by benchmarking the same to the services rendered to non-related parties entered into by the counter-party and similar services rendered by the Company to other non-related parties.

(4) Services received from related parties

The company has obtained renting services of its office premises over which one of the directors exercises significant influence. The amount billed for this service was '' 199.06 lakhs (2023-24: '' 231.93 lakhs) and it was agreed based on mutual negotiation between parties. The service agreement included payment terms requiring the company to make upfront payment at the time of receipt of invoice.

(5) Items of Property, Plant and Equipment (PPE) purchased from the related party

During the year 2024-25, the company purchased items of PPE from Kilburn Chemicals Limited. The purchase was made on the same terms as applicable to third parties in an arm''s length transaction and in the ordinary course of business. The Company mutually negotiated and agreed purchase price and payment terms with Kilburn Chemicals Limited by benchmarking the same to sale transactions with non-related parties entered into by the counter-party and similar purchase transactions entered into by the Company with the other non-related parties. Such purchases generally include payment terms requiring the Company to make payment within 90 days from the date of invoice. The amount was fully repaid at the reporting date.

(6) Loans given to related parties

(a) Loan to Meghmani Crop Nutrition Limited (Subsidiary)

The loan granted to Meghmani Crop Nutrition Limited (MCNL) was given during the current year to finance the working capital requirements of the company. The loan has been utilized by the subsidiary for the purpose it was obtained. The loan is unsecured. The loan carries interest at 9.75% p.a. and had a tenure of 11 months and same has been paid during the year. For the year ended 31^st March 2025, the Company has not recorded any impairment on loans due from MCNL (31^st March 2024: Nil).

(7) Investment made in subsidiaries

(a) Investment made in Kilburn Chemicals Limited (âKCLâ)

The Company has invested in perpetual securities of KCL to finance the acquisition of new machines for manufacturing of Titanium Dioxide plant and funding working capital requirements. The investment has been utilized by the subsidiary for the purpose for it was obtained. The securities are redeemable at the option of Kilburn Chemicals Limited and carry non-cumulative coupon rate of 8%. Refer note 4 regarding details of perpetual securities of the KCL held by the Company.

(b) Investment made in Meghmani Crop Nutrition Limited (âMCNLâ)

The Company has invested in Redeemable Preference Shares of MCNL to finance the acquisition of new machines for manufacturing of Nano Urea plant and funding working capital requirements. The investment has been utilized by the subsidiary for the purpose for it was obtained. The Shares carry a coupon rate (Cumulative) of 9.75% p.a. and are redeemable after 20 years from the date of allotment at face value. The issuer carries a right to exercise the option of early redemption.

(8) Leasing Arrangements

The Company has given it''s Commercial Land on lease to MCNL, subsidiary of the company, for a period of 30 years. The lease entitles the Company to receive fixed lease rental on a monthly basis. It include a clause to enable upward revision of the rental charge. During the financial year 2024-25, the Group received '' 38.97 lakhs in rental payments from MCNL (year ended 31^st March 2024: Rental amounting to '' 38.97 lakhs). For the year ended 31^st March 2025, the Company has not recorded any impairment on lease payments due from the related party (31^st March 2024: Nil). Refer note 46 regarding the detailed disclosures for lease.

(9) Compensation to KMP of the Company

The amounts disclosed in the table are the amounts recognised as an expense during the financial year related to KMP. The amounts do not include expense, if any, recognised toward post-employment benefits and other long-term benefits of key managerial personnel. Such expenses are measured based on an actuarial valuation done for Company as a whole. Hence, amounts attributable to KMPs are not separately determinable.

(10) The Company''s transactions with related parties are at arm''s length. Management believes that the company''s Domestic and International transactions with related parties post March 31,2025 continue to be at arm''s length and that the transfer pricing legislation will not have any impact on the financial statements particularly on the amount of the tax expense for the year and the amount of the provision for taxation at the period end. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. Transaction with related parties disclosed are excluding applicable taxes.

investment in Subsidiaries are accounted at cost, hence not included in above disclosure. The fair value of investments is equal to the book value as per independent valuation report obtained from third party.

The management assessed that carrying value of cash and cash equivalents, trade payables, trade receivables, current investments and other financial assets and liabilities as at 31^st March, 2025 and 31^st March, 2024 are reasonable approximations of their fair values largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale.

B. Measurement of Fair values and Sensitivity analysis Fair value hierarchy:

The fair value of the Financial Assets and Liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company uses the following hierarchy for determining and/or disclosing the fair value of Financial Instruments by valuation techniques:

(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.

(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Assets or Liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

(iii) Level 3: inputs for the Assets or Liabilities that are not based on observable market data (unobservable inputs).

I n determining fair value measurement, the impact of potential climate related matters which may affect this fair value measurement of assets and liabilities in the finicial statements have been considered.

The cost of unquoted investments included in Level 2 and Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

Financial Risk Management Framework

The Company''s Board of Directors have overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company manages market risk through treasury operations, which evaluates and exercises independent control over the entire process of market risk management. The finance team recommends risk management objectives and policies. The activities of this operations include management of cash resources, hedging of foreign currency exposure, credit control and ensuring compliance with market risk limits and policies.

The Company''s principal Financial Liabilities, other than Derivatives, comprises of Long Term and Short Term Borrowings, Trade and Other Payables, and Financial Liabilities. The main purpose of these Financial Liabilities is to finance the Company''s operations. The Company''s principal Financial Assets include Loans, Trade and Other Receivables, Cash and Cash Equivalents, Other Bank Balances and other Financial Assets that derive directly from its operations.

The Company has an effective risk management framework to monitor the risks controls in key business processes. In order to minimise any adverse effects on the bottom line, the Company takes various mitigation measures such as credit control, foreign exchange forward contracts to hedge foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company has exposure to the following risks arising from financial instruments

- Credit risk ;

- Liquidity risk ; and

- Market risk

i. Credit Risk

Credit risk is the risk that counter party will not meet its obligation leading to a financial loss. The Company is exposed to credit risk arising from its operating activities primarily from trade receivables and from financing activities primarily relating to parking of surplus funds as Deposits with Banks. The Company considers probability of default upon initial recognition of assets and whether there has been a significant increase in credit risk on an ongoing basis throughout the reporting period.

The carrying amount of following Financial Assets represents the maximum credit exposure:

Financial instruments and cash deposit

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits placed with banks and financial institutions and other financial instruments.

Trade Receivables

Trade receivables consist of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined. The exposure in credit risk arising out of major customers is generally backed either by bank guarantee, letter of credit or security deposits. The Company''s exposure and wherever appropriate the credit ratings of its counterparties are continuously monitored and spread amongst various counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management of the Company. The Company does not have higher concentration of credit risks. Total trade receivable as on 31^st March, 2025 is '' 52,751.75 Lakhs (31^st March, 2024 - '' 43,339.91 Lakhs).,

Refer Note 11 for ageing of trade receivables.

The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.

Expected credit loss assessment

For trade receivables, as a practical expedient, the Company compute credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated. Accordingly, loss allowances on trade receivables are measured using provision matrix at an amount equal to life time expected losses i.e. expected cash shortfall.

Credit Impaired

For expected credit loss as at each reporting date the Company assesses position for the assets for which credit risk has not significantly increased from initial recognition, assets for which credit risk has increased significantly but are not credit impaired and for assets for which credit risk has increased significantly and are credit impaired. The Company assesses detrimental impacts on the estimated future cash flows of the financial asset including loans, receivables and other assets. Based on the assessment of the observable data relating to significant financial difficulty and creditworthiness of the counterparties, the management believes that there are no financial assets which are credit impaired except as disclosed in the notes to the financial statements.

ii. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk, and other price risk such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI, FVTPL and amortised cost investments and derivative financial instruments.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12-month period for hedges of actual sales and purchases and 12-month period for foreign currency loans. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a Financial Instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s Long-term and Short term Debt Obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Exposure to Interest Rate Risk

Company''s Interest Rate Risk arises from Borrowings Obligations. Borrowings issued 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.

iii. Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Exposure to Liquidity Risk

The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of the financial assets and liabilities. The table below summarises the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments.

The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that have simultaneous gross cash settlement

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry

I n order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the company to manage risk concentrations at both the relationship and industry levels

46 Leases

Company as a lessee

The Company has lease contracts for Office premise. Leases of Office premise is having lease terms of 9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. The Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain premises in good state. The lease contract include extension and termination options as mention below.

The Company also has certain premises and assets with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for this lease.

Company as a lessor

The Company has entered into operating leases on its investment property portfolio consisting of commercial land (see Note 3.4) with its subsidiary company i.e. Meghmani Crop Nutrition Limited (Refer note 44). This lease has a term of 30 years. It include a clause to enable upward revision of the rental charge. Rental income recognised by the Company during the year is '' 38.97 lakhs (2024: '' 38.97 lakhs).

48 Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company includes within net debt, interest bearing borrowings, lease liabilities, less cash and cash equivalents. There were no changes in the objectives, policies or processes during the year ended 31^st March, 2025 and 31^st March, 2024.

49 Loan to Subsidiary

During the year ended 31^st March 2025 the company had given unsecured loan amounting to '' 172.89 lakhs to Meghmani Crop

Nutrition Limited for the purpose of working capital as per the agreement dated 21^st January, 2023. As per the terms of agreement,

the loan carried an interest rate of 9.75% p.a. and had a tenure of 11 months and same has been paid during the year.

50 Other Disclosures for the year ended 31^st March, 2025 and 31^st March, 2024

(i) The Company does not have any Benami property, where any procee

Mar 31, 2024

(i) Capital Work-In-Progress for Tangible Assets as at 31st March 2024 comprises expenditure for the Plant & Machineries and Buildings in the course of construction.

(ii) Intangible Assets under Development as at 31st March 2024 comprises expenditure for the development and registration of product licenses, considering which there are no stipulated timelines for completion of activities.

(iii) The amount of borrowing costs added to cost of capital work-in-progress during the year ended 31st March 2024 is HNil (31st March 2023: H596.38 Lakhs). The rate used to determine the amount of borrowing costs eligible for capitalisation ranges between 2.05% to 5.44% for 31st March 2023 which is the effective interest rate of the specific borrowings taken for above mentioned Projects.

(iv) Refer Note 46 for Right of use Assets details.

(v) For Property Plant & Equipment and Intangible assets existing as on 1 April 2015 i.e. the date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed cost as permitted by Ind AS 101 âFirst Time Adoption of Indian Accounting Standardâ. Accordingly, the net WDV as per Indian GAAP as on 1 April 2015 has been considered as Gross block under Ind AS. The accumulated depreciation is netted off as on 1 April 2015.

(i) Capital Work-In-Progress for Tangible Assets as at 31st March 2023 comprises expenditure for the Plant & Machineries and Buildings in the course of construction.

(ii) Intangible Assets under Development as at 31st March 2023 comprises expenditure for the development and registration of product licenses, considering which there are no stipulated timelines for completion of activities

(iii) The amount of borrowing costs added to cost of capital work-in-progress during the year ended 31st March 2023 is H596.38 Lakhs (31st March 2022: H225.66 Lakhs). The rate used to determine the amount of borrowing costs eligible for capitalisation ranges between 2.05% to 5.44%, which is the effective interest rate of the specific borrowings taken for above mentioned Projects.

(iv) Refer Note 46 for Right of use Assets details.

The investment properties consist of one commercial land in India.

As at 31 March 2024, the fair values of the properties are H 1,771.20 lakhs. Valuation is performed by a registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The fair valuation is based on current prices in the active market for similar lands. Fair valuation is based on level 3 hierarchy.

Leasehold land is leased to Subsidiary Company as per the agreement. Refer Note - 44

Note (i) - The Subsidiary has discontinued business operations and the management is awaiting approval from regulatory authorities of Indonesia to formally close down the Entity

Note ii - Investment in perpetual securities

The Company has invested in unsecured non convertible non cumulative perpetual securities issued by Kilburn Chemical Limited its subsidiary company. These securities are redeemable at the issuer''s option and carry non-cumulative interest coupon at the rate of 8%. The interest can be deferred if the issuer does not pay any dividend on its ordinary shares for the financial year. The issuer has classified this instrument as equity under Ind AS - 32 âFinancial Instruments Presentationâ. Accordingly, the Company has classified this investment as Equity Instrument and has accounted at cost as per Ind AS - 27 âSeparate Financial Statementsâ.

Note iii - Investment in Redeemable Preference Shares (RPS )

The Company has invested in RPS issued by Meghmani Crop Nutrition Limited (MCNL) (wholly owned subsidiary). The Shares carry a coupon rate (Cumulative) of 9.75% p.a. and are redemable after 20 years from the date of allotement at face value. The issuer carries a right to exercise the option of early redemption.

i) Aggregate and Fair value of Quoted investment is H Nil

ii) Aggregate value of impairment of Investment is H Nil

Note - Redeemable Preference Shares (RPS) of Epigral Limited (Formerly known as Meghmani Finechem Ltd)

Pursuant to the Composite Scheme of arrangement approved by NCLT Ahmedabad branch, the Company has invested in RPS issued by Epigral Ltd The shares carry a coupon rate (Cumulative) of 8.00% p.a. and are redemable af face value after 20 years from the date of allotement at face value. The issuer carries a right to exercise the option of early redemption.

The loans to employees are interest free and are generally for a tenure of 6 to 12 months.

Refer Note 49 for disclosure of details as required by Section 186 (4) of the Companies Act, 2013.

Refer Note 44 for details for amount due from Related Party.

Since all the above loans given by the company are unsecured and considered good, the bifurcation of loan in other categories as required by Schedule III of Companies Act 2013 viz: a) secured, b) loans which have significant increase in credit risk and c) credit impaired is not applicable.

There are no Loans and advances due by directors or other officers of the company or any of them either severally or jointly with any other person or amounts due by firms or private companies respectively in which any director is a partner or a director or a member.

Terms / Rights attached to Equity shares

The Company has only one class of Equity Shares having par value of Re 1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves:

Securities premium

In cases where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares has been transferred to âSecurities Premiumâ. The Company may issue fully paid-up bonus shares to its members out of the securities premium and to buy-back of shares.

Capital Reserve

The Capital Reserve represents difference between consideration paid and net assets acquired under common control business combination transaction.

General reserve

Capital Redemption Reserve

Capital Redemption Reserve was created for buy-back of shares in earlier years.

Retained Earnings

Details of Security and Repayment Terms:

i The Company has Rupee Term Loan facility of H 9,200.00 Lakhs (31 March 2023: H 9,200.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company (b) Assignment of Lease Hold Land used for Windmill (c) First Pari Passu charge by way of mortgage on immovable fixed assets of the Company (excluding the assets charged specifically to other lenders).

During the year 2019-2020, outstanding Indian Rupee loan of H 6,899.23 lakhs had been converted into foreign currency loan of Euro 87.41 lakhs. The borrowing carries interest at 6 month Euribor 1.75% p.a. payable at monthly rest. The effective interest rate varies from 5.57% p.a. to 5.66% p.a. (31st March 2023: 1.75%). Outstanding balance for this borrowing is Euro 9.71 lakhs equivalent to H 872.85 lakhs (as at 31 March 2023: H 2,596.33 lakhs). As per the terms, the foreign currency loan is repayable in 9 half yearly instalments starting from financial year 2020-21 Repayment of loan is as follows:

1 - Nine half yearly instalment of Euro 9.71 lakhs

ii The Company has availed External Commercial Borrowing of Euro 123.30 Lakhs (H 10,997.25 Lakhs) (31 March 2023: Euro 123.30 Lakhs). The Facility is secured by First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company. The borrowing carries interest at 6 month Euribor 1.20% p.a. payable at 6 monthly rest. The effective interest rate varies from 4.37% p.a. to 5.14% p.a.(31st March 2023 : 1.20% to 4.37%). Outstanding balance for this borrowing is Euro 41.10 lakhs equivalent to H 3,675.92 lakhs (31 March 2023: H 6,097.22 Lakhs). As per the original terms, the loan is repayable in 9 half yearly instalments starting from financial year 2021-22.

Repayment of loan is as follows:

1 - Nine half yearly instalments of Euro 13.70 lakhs

iii The Company has availed Rupee Term Loan facility of H 15,000.00 Lakhs (31 March 2023: H15,000.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company situated at Chharodi, Ankleshwar, Panoli and Vatva (b) First Pari Passu charge by way of mortgage on immovable fixed assets of the Company situated at Chharodi, Ankleshwar, Panoli and Vatva (c) Second Pari Passu charge by way of mortgage on immovable fixed assets of the Company situated at as Dahej and Dahej SEZ. The borrowing carries interest at 6.40% p.a. payable at monthly rest. Outstanding balance for this borrowing is H 9,709.98 lakhs. (31st March 2023: H 12,696.05 Lakhs). As per the terms, the loan is repayable in 20 quarterly instalments starting from financial year 2022-23.

The Company has entered into a cross currency swap (âCCSâ) transaction on the said Rupee Term loan facility whereby outstanding Rupee Term loan has been swapped with notional principal of USD 201.48 lakhs. As per the terms of CCS agreement, the company receives interest at 6.40% p.a. on notional principal of H 15,000 lakhs and pays interest at 2.05% p.a. on notional principal of USD 201.48 lakhs at monthly rest. As per the notional principal settlement terms of CCS agreement, the Company will receive H 750 lakhs and pay USD 10.07 lakhs in 20 equal quarterly instalments starting from financial year 2022-23 Repayment of loan is as follows:

1 - Twenty quarterly instalments of H 750 lakhs

iv The Company has availed Rupee Term Loan facility of H 15,000.00 Lakhs (31 March 2023: H 15,000.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company situated at Chharodi, Vatva, Ankleshwar and Panoli (b) First Pari Passu charge by way of mortgage to be created on immovable fixed assets of the Company situated at as Chharodi, Ankleshwar, Panoli and Vatva (c) Second Pari Passu charge by way of mortgage on immovable fixed assets of the Company situated at as Dahej and Dahej SEZ. The borrowing carries interest at 7.00% p.a. payable at monthly rest. Outstanding balance for this borrowing is H 11,690.68 lakhs. (31st March 2023 H 14,535.46 Lakhs). As per the terms, the loan is repayable in 20 quarterly instalments (First four instalments of H 150 Lakhs each and Sixteen instalments of H 900 Lakhs each) starting from financial year 2022-23.

The Company has entered into a cross currency swap (âCCSâ) transaction on the said Rupee Term loan facility whereby outstanding Rupee Term loan has been swapped with notional principal of USD 116.41 lakhs and EUR 73.43 Lakhs. As per the terms of CCS agreement, the Company receives interest at 7.00% p.a. on notional principal of INR 15,000 lakhs and pays interest at 3.25% p.a. on notional principal of USD 51.74 lakhs at monthly rest, at ON SOFR 0.87% p.a. on notional principal of USD 64.67 lakhs and at ON ESTER 0.60% p.a. on notional principal of EUR 73.43 lakhs payable at monthly rest. As per the notional principal settlement terms of CCS agreement, the Company will receive INR 150 lakhs and pay USD 1.17 lakhs and EUR 0.73 Lakhs (in four quarterly instalments) and receive INR 900 lakhs and pay USD 6.98 lakhs and EUR 4.41 Lakhs (in sixteen quarterly instalments) starting from financial year 2022-23.

v The Company has availed unsecured Foreign Currency Term Loan of Euro 56.73 Lakhs (H 5,000.00 Lakhs). The borrowing carries interest at 3 month Euribor 1.60% p.a. payable at monthly rest. The effective interest rate varies from 4.59% p.a. to 5.58% p.a. (31st March 2023: 3.47%). Outstanding balance for this borrowing is Euro 16.21 lakhs equivalent to H 1,456.90 lakhs (31 March 2023: H 4,349.78 lakhs). As per the original terms, the loan is repayable in seven equal quarterly instalments starting from financial year 2022-23.

vi During Current Financial Year, The Company has availed unsecured Foreign Currency Term Loan of Euro 55.77 Lakhs (H 5,000.00 Lakhs). The borrowing carries interest at ON ESTER 1.55% p.a. payable at monthly rest. The effective interest rate varies from 4.75% p.a. to 5.46% p.a. during current financial year. Outstanding balance for this borrowing is Euro 48.82 lakhs equivalent to H 4,387.69 lakhs (31 March 2023: H Nil). As per the original terms, the loan is repayable in eight equal quarterly instalments of EURO equivalent to INR 625 Lakhs each starting from financial year 2023-24.

vii Bank loans availed by the Company are subject to certain covenants relating to current ratio, total outside liabilities to total net worth, fixed assets coverage ratio, ratio of total term liabilities to net worth have been complied with as per the terms of loan agreements. Covenants such as long term debt to EBIDTA, interest service coverage ratio, debt service coverage ratio and operating profit ratio have not been complied as per the terms of loan agreements as at and for the year ended 31st March, 2024. The Company has obtained waiver from respective banks considering the non-compliance with above stated covenants and for continuing the repayment as per the original saction terms. Accordingly outstanding balances has been disclosed as per original repayment schedule.

i The Company has availed Cash credit, packing credit and working capital demand loans of H 40,000 lakhs (31 March 2023: H 40,000 lakhs) as sanctioned limit (Including Non Fund based facility) from State Bank of India, HDFC Bank Limited, ICICI Bank Limited, DBS Bank India Limited and Axis Bank Limited (Collectively known as Consortium Bankers). The present consortium is lead by State Bank of India. These loans are secured by first pari passu charge by way of hypothecation of the entire Stock of Raw Materials, Work in Process, Finished Goods, Stores and Spares and Receivables and first pari passu charge on immovable Fixed Assets of the Company as a collateral security. Interest rate on these loans are as follows:

(a) Interest rates on cash credit loans vary within the range of 8.55% to 9.30% (31 March 2023: 4.90% to 8.55%).

(b) Interest rates on packing credit loans vary within the range of Euribor 1.35% to 5.90% (31 March 2023: USD libor/ SOFR 0.75% to 1.00% and Euribor 0.20% to 4.70%).

(c) Interest rates on working capital demand loans and overdraft facility vary within the range of 7.48% to 9.70% (31 March 2023: 4.68% to 7.90%).

Terms and Conditions of the above Outstanding Dues :

Trade payables are non-interest bearing and are normally settled on 30-360 days terms. For amounts due to related parties and terms and conditions with Related Parties, Refer Note 44. Refer Note 45 for Companyâs credit risk management processes. Trade Payable includes Acceptances amounting to H 8109.52 Lakhs (31 March 2023 H 4540.48 Lakhs).

37 EXCEPTIONAL ITEMS

On October 22, 2022 and April 16, 2023 there was fire in the warehouse at manufacturing units of the Company at Dahej and Panoli location respectively, majorly leading to loss of inventories. The company is adequately insured for the above-mentioned loss of assets and hence does not expect any material net-losses. The company has filed its claims for the loss suffered which is currently under assessment. Further, the claims are not disputed by the insurance company. The company has currently estimated and recognised an initial net loss of H 48.99 crores on account of loss of assets and corresponding insurance claims receivable in respective years considering its assessment, opinion on admissibility of claims as per the policy, adequacy of coverage and nature of loss. The aforementioned losses and corresponding credit has been presented on a net basis under exceptional items in the financial statement for these respective periods.

39 EARNINGS PER SHARE

Basic and Diluted EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity shareholders by the weighted average number of Equity shares outstanding during the year.

40 The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the âMicro, Small and Medium Enterprises Development Act, 2006â (âthe MSMED Act'').

Accordingly, the disclosure in respect of the amounts payable to such Enterprises as at March 31, 2024 has been made in the Financial Statements based on information received and available with the Company. The Company has not received any claim for interest from any Supplier as at the Balance Sheet date.

On basis of information and records available with the Company, the above disclosures are made in respect of amount due to the micro, small and medium enterprises, which have been registered with the relevant competent authorities. This has been relied upon by the auditors.

41 GRATUITY AND OTHER EMPOYMENT BENEFIT PLANS

(a) Retirement Benefits

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. The following tables summaries the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

(b) Defined Contribution Plans

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of payroll costs to fund the benefits. The Company has recognised provident fund contribution of H 295.16 lakhs (March 31, 2023 H 333.19 lakhs) and contribution to ESIC and Other Labour Fund amounting to H 17.41 lakhs (March 31,2023 H 21.71 lakhs) as expense, Refer Note 34 under the head âContributions to Provident and Other Fundsâ.

42 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS A Claims against the company not acknowledged as debts (Excluding interest and penalty)		(H In Lakhs)
Particulars	31st March 2024	31st March 2023
Disputed Income-Tax Liability*	1,781.46	1,781.46
Disputed Excise Duty Liability¹	1,701.25	1,701.25
Disputed Service Tax Liability²	151.53	151.53
Disputed Goods and Service Tax Liability³	50.74	-
Disputed Liabilities towards labour and workers compensation	79.96	72.66
(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, the outflow of economic resources will be required)
In respect of Letter of Credit	212.83	91.46
In respect of Guarantee
- Corporate Guarantee Given	58,100.00	42,500.00
B Capital Commitments		(H In Lakhs)
Particulars	31st March 2024	31st March 2023
Estimated amount of contracts pending execution on capital accounts and not provided for (net of advances)	1,067.72	7,050.33

The outflow of the above claims would be determinable only on completion of respective assessments.

* Income tax demand comprise of demand from the Indian Income tax authorities for payment of additional tax of H 1,781.46 (31 March 2023: 1,781.46), upon completion of their tax review for the assessment year 2003-04, 2009-10, 2010-11,2013-14 to 2018-19 and 2020-21.The tax demands are mainly on account of Transfer pricing Adjustments, Section 14 A disallowances, Bad Debt disallowances, Disallowance for loan written off, etc. The matter is pending before various authorities.

**** Goods and Service Tax Demand Comprise demand from GST Authorities on account of ITC Refund of SEZ and GSTR 2A mismatch of H 50.74 Lakhs (31st March 2023 H Nil) upon completion of their tax review for financial year 2017-18, 2018-19 and 2022-23 the matter is pending before commissioner appeals.

The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be in favour of the Company in the appellate process and no tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

The Company has one customer (31 March 2024 - One Customer) based outside India which has accounted for more than 10% of the Company''s revenue. Total amount of revenue from this customer is H 16,954.02 Lakhs for the year ended March 31, 2024 and revenue of H 25,759.85 Lakhs for the year ended March 31,2023.

Notes

(1) Based on âmanagement approachâ defined under Ind AS 108 - Operating Segments, the Chief Operating Decision Maker evaluates the companyâs performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly information has been presented along these segments.

(2) The Company''s operations are divided into two segments. These segments are the basis for management control and hence form the basis for reporting. The business of each segment comprises of:

a) Agro Chemicals - The Companyâs operation includes manufacture and marketing of technical, intermediates and formulation of Crop Protection Chemicals.

b) Pigment Business - The Companyâs operation includes manufacture and marketing of Phthalocynine Green 7, Copper Phthalocynine Blue (CPC), Alpha Blue and Beta Blue.

(3) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

B. Measurement of Fair values and Sensitivity analysis Fair value hierarchy:

(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.

(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Assets or Liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

(iii) Level 3: inputs for the Assets or Liabilities that are not based on observable market data (unobservable inputs).

In determining fair value measurement, the impact of potential climate related matters which may affect this fair value measurement of assets and liabilities in the finicial statements have been considered.

The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range

Financial instrument measured at amortised cost

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

The significant unobservable inputs used in the fair value measurement categorised within Level 2 of the fair value hierarchy is based on the Fair value as ascertained and provided by the banks.

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2024 and 31 March 2023 are as shown below:

Financial Risk Management Framework

The Companyâs Board of Directors have overall responsibility for the establishment and oversight of the Companyâs risk management framework. The Company manages market risk through treasury operations, which evaluates and exercises independent control over the entire process of market risk management. The finance team recommends risk management objectives and policies. The activities of this operations include management of cash resources, hedging of foreign currency exposure, credit control and ensuring compliance with market risk limits and policies.

The Companyâs principal Financial Liabilities, other than Derivatives, comprises of Long Term and Short Term Borrowings, Trade and Other Payables, and Financial Liabilities. The main purpose of these Financial Liabilities is to finance the Companyâs operations. The Companyâs principal Financial Assets include Loans, Trade and Other Receivables, Cash and Cash Equivalents, Other Bank Balances and other Financial Assets that derive directly from its operations.

Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company has exposure to the following risks arising from financial instruments

- Credit risk ;

- Liquidity risk ; and

- Market riskâ

i. Credit Risk

The carrying amount of following Financial Assets represents the maximum credit exposure:

Financial instruments and cash deposit

Credit risk from balances with Banks is managed by the Companyâs treasury department. Investments of surplus funds are made only with approved counter parties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.

Trade Receivables

The Sales Department has established a Credit Policy under which each new customer is analysed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed periodically. Any sales exceeding those limits require approval from the Director(s).

Trade Receivables of the Company are typically unsecured, except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customersâ financial condition and monitors the creditworthiness of its Customers to which it grants credit terms in the normal course of business. The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts Receivables. The Company evaluates the concentration of risk with respect to trade receivables as low, as its Customers are located in several jurisdictions and industries and operate in largely independent markets.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.

Management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer Credit Risk, including underlying customersâ credit ratings if they are available.

Management estimates that the amount of provision of H1014.00 lakhs (31st March, 2023: H 972.70 lakhs) is appropriate

ii. Market Risk

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency).

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars, Euro and CNY at March 31 would have affected the measurement of financial instruments denominated in US dollars, Euro and CNY 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.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a Financial Instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs Long-term and Short term Debt Obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

iii. Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Exposure to Liquidity Risk

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Companyâs performance to developments affecting a particular industry

In order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the company to manage risk concentrations at both the relationship and industry levels

46 :Leases

The Company has lease contracts for HO premise. Leases of HO premise is having lease terms of 9 years. The Companyâs obligations under its leases are secured by the lessorâs title to the leased assets. The Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain premises in good state. The lease contract include extension and termination options as mention below.

The Company also has certain premises and assets with lease terms of 12 months or less. The Company applies the âshort-term leaseâ recognition exemptions for this lease.

Terms of Cancellation and Escalation and Extention

The Leases are cancellable by giving three month notice by either parties and these carries an escalation of 15% after every 3 years Lease term can be extended mutually by lessor and lessee as per the terms of the agreement.

48 - Capital Management

Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended March 31, 2024 and March 31, 2023.

The Company monitors capital using a ratio of âAdjusted Net Debtâ to âAdjusted Equityâ. For this purpose, adjusted net debt is defined as total Liabilities, comprising Interest-bearing Loans and Borrowings less Cash and Cash Equivalents. Adjusted Equity Comprises all components of Equity.

49 Loan to Subsidiary

During the year ended 31 March 2023 the company had given unsecured loan amounting to H 582.80 lakhs to Meghmani Crop Nutrition Limited (formerly known as Meghmani Synthesis Limited) for the purpose of setting up of Nano Urea (Liquid) Fertiliser plant as per the agreement dated January 21, 2023. As per the terms of agreement, the loan carried an interest rate of 9.75% p.a. and had a tenure of 11 months.The Loan has been repaid in full during the year ended 31st March 2024.

50 Other Disclosures

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company do not have any transactions with companies struck off. under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group 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

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

(viii) The Company uses an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting software, except that audit trail feature is not enabled for certain changes made using privileged access rights to the SAP application and the underlying HANA database. Further, no instance of audit trail feature being tampered with was noted in respect of the accounting software. Presently, the log has been activated at the application and the privileged access to HANA database continues to be restricted to limited set of users who necessarily require this access for maintenance and administration of the database.

51 Composite Scheme of Arrangement.

a) Pursuant to the Composite Scheme of Arrangement (""the Scheme"") approved by NCLT Ahmedabad Bench vide its order dated 03 May 2021 (the ""Order"") the Agrochemicals and Pigments Division of Meghmani Organics Limited (MOL) along with its investment in Optionally Convertible Redeemable Preference Shares (âOCRPSâ) of Meghmani Finechem Limited (MFL) got demerged into the Company. Pursuant to the Scheme, the Company filed Information Memorandum with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) and further filed the same with SEBI for the approval. The company received final approval from SEBI on July 30, 2021 pursuant to which it was listed with NSE and BSE on August 18,2021.

(b) Pursuant to the Scheme and on receipt of certificate of incorporation for change of name from the registrar of companies, Ahmedabad, Gujarat, the name of the Company has been changed from ""Meghmani Organochem Limited"" to ""Meghmani Organics Limited"" with effect from August 3, 2021.

52 Events occurred after the Balance Sheet date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of financial statement to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of 10th May 2024 there were no material subsequent events to be recognized or reported.

53 Previous period figures have been regrouped / reclassified wherever necessary to make them comparable with those of the current year.

Excise duty demand comprise demand from Central excise authorities for payment of additional tax of H 1701.25 lakhs (31 March 2023: H 1701.25 lakhs), upon completion of their tax review for the financial year 2003-04 to 2008-09 and 2011-12 to 2016-17. The tax demands are on account of denial of Cenvat credit on manufacturing ,Short payment of duty on DTA clearance from EOU, Education cess on DTA Sales etc. The matter is pending before various authorities.

Service tax demand comprise demand from Service Tax Authorities on account of denial of Service tax credit H 151.53 lakhs (31 March 2023: H 151.53 lakhs), upon completion of their tax review for the financial year 2006-07 to 2017-18. The tax demands are on account of service tax on sales

commission. The matter is pending before various authorities.

Mar 31, 2023

Note (i) - The Subsidiary has discontinued business operations and the management is awaiting approval from regulatory authorities of Indonesia to formally close down the Entity

Note ii - Investment in perpetual securities

The Company has invested in unsecured non convertible non cumulative perpetual securities issued by Kilburn Chemical Limited its subsidiary company. These securities are redeemable at the issuerâs option and carry non-cumulative interest coupon at the rate of 8%. The interest can be deferred if the issuer does not pay any dividend on its ordinary shares for the financial year. The issuer has classified this instrument as equity under Ind AS - 32 âFinancial Instruments Presentationâ. Accordingly, the Company has classified this investment as Equity Instrument and has accounted at cost as per Ind AS - 27 âSeparate Financial Statementsâ.(Also Refer Note 50)

Terms / Rights attached to Equity shares

The Company has one class of Equity Shares having par value of Re 1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves :

Securities premium

In cases where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares has been transferred to âSecurities Premiumâ. The Company may issue fully paid-up bonus shares to its members out of the securities premium and to buy-back of shares.

Capital Reserve

The Capital Reserve represents difference between consideration paid and net assets acquired under common control business combination transaction.

18 Other Equity

General reserve

Details of Security and Repayment Terms :

i The Company has Rupee Term Loan facility of H 9,200.00 Lakhs (31 March 2022: H 9,200.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company (b) Assignment of Lease Hold Land used for Windmill (c) First Pari Passu charge by way of mortgage on immovable fixed assets of the Company (excluding the assets charged specifically to other lenders).

During the year 2019-2020, outstanding Indian Rupee loan of H 6,899.23 Lakhs had been converted into foreign currency loan of Euro 87.41 Lakhs. The borrowing carries interest at 6 month Euribor 1.75% p.a. payable at monthly rest. The effective interest rate is 1.75% p.a. Outstanding balance for this borrowing is Euro 29.14 Lakhs equivalent to H 2,596.33 Lakhs (as at 31 March 2022: H 4,089.79 Lakhs). As per the terms, the foreign currency loan is repayable in 9 half yearly instalments starting from financial year 2020-21

Repayment of loan is as follows :

1 - Nine half yearly instalment of Euro 9.71 Lakhs

ii The Company has availed External Commercial Borrowing of Euro 123.30 Lakhs (H 10,997.25 Lakhs) (31 March 2022: Euro 123.30 Lakhs). The Facility is secured by First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company. The borrowing carries interest at 6 month Euribor 1.20% p.a. payable at 6 monthly rest. The effective interest rate varies from 1.20% to 4.37% for the year. Outstanding balance for this borrowing is Euro 68.50 Lakhs equivalent to H 6,097.22 Lakhs (31 March 2022: H 8,076.70 Lakhs). As per the original terms, the loan is repayable in 9 half yearly instalments starting from financial year 2021-22.

Repayment of loan is as follows :

1 - Nine half yearly instalments of Euro 13.70 Lakhs

iii The Company has availed Rupee Term Loan facility of H 15,000.00 Lakhs (31 March 2022: H 15,000.00 Lakhs). The Facility is secured by (a) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company situated at Chharodi, Ankleshwar, Panoli and Vatva (b) First Pari Passu charge by way of mortgage on immovable fixed assets of the Company situated at as Chharodi, Ankleshwar, Panoli and Vatva (c) Second Pari Passu charge by way of mortgage on immovable fixed assets of the Company situated at as Dahej and Dahej SEZ. The borrowing carries interest at 6.40% p.a. payable at monthly rest. Outstanding balance for this borrowing is H 12,696.95 Lakhs. As per the terms, the loan is repayable in 20 quarterly instalments starting from financial year 2022-23.

Repayment of loan is as follows :

1 - Twenty quarterly instalments of H 750 Lakhs

iv The Company has availed Rupee Term Loan facility of H 15,000.00 Lakhs (31 March 2022: NIL). The Facility is secured by

(a) First Pari Passu charge by way of Hypothecation on the movable fixed assets of the Company situated at Chharodi, Vatva, Ankleshwar and Panoli (b) First Pari Passu charge by way of mortgage to be created on immovable fixed assets of the Company situated at as Chharodi, Ankleshwar, Panoli and Vatva (c) Second Pari Passu charge by way of mortgage on immovable fixed assets of the Company situated at as Dahej and Dahej SEZ. The borrowing carries interest at 6.75% p.a. payable at monthly rest. Outstanding balance for this borrowing is H 14,535.46 Lakhs. As per the terms, the loan is repayable in 20 quarterly instalments (First four installments of H 150 Lakhs each and Sixteen installments of H 900 Lakhs each) starting from financial year 2022-23.

During current financial year, the Company has entered into a cross currency swap (âCCSâ) transaction on the said Rupee Term loan facility whereby outstanding Rupee Term loan has been swapped with notional principal of USD 116.41 Lakhs and EUR 73.43 Lakhs. As per the terms of CCS agreement, the Company receives interest at 6.75% p.a. on notional principal of H 15,000 Lakhs and pays interest at 3.25% p.a. on notional principal of USD 51.74 Lakhs at monthly rest, at ON SOFR 0.87% p.a. on notional principal of USD 64.67 Lakhs and at ON ESTR 0.60% p.a. on notional principal of EUR 73.43 Lakhs payable at monthly rest. As per the notional principal settlement terms of CCS agreement, the Company will receive H 150 Lakhs and pay USD 1.17 Lakhs and EUR 0.73 Lakhs (in four quarterly instalments) and receive H 900 Lakhs and pay USD 6.98 Lakhs and EUR 4.41 Lakhs (in sixteen quarterly instalments) starting from financial year 2022-23.

v The Company has availed unsecured Foreign Currency Term Loan of Euro 56.73 Lakhs (H 5000.00 Lakhs). The borrowing carries interest at 3 month Euribor 1.60% p.a. payable at monthly rest. The effective interest rate is 3.74% for the year. Outstanding balance for this borrowing is Euro 48.63 Lakhs equivalent to H 4,349.78 Lakhs (31 March 2022: NIL). As per the original terms, the loan is repayable in seven equal quarterly instalments starting from financial year 2022-23.

vi Bank loans availed by the Company are subject to certain covenants relating to interest service coverage ratio, current ratio, debt service coverage ratio, total outside liabilities to total net worth, fixed assets coverage ratio, ratio of total term liabilities to net worth. The Company has complied with the covenants as per the terms of loan agreements.

i The Company has availed Cash credit, packing credit and working capital demand loans of H 40,000 Lakhs (31 March 2022: H 40,000 Lakhs) as sanctioned limit from State Bank of India, HDFC Bank Limited, ICICI Bank Limited, DBS Bank India Limited and Axis Bank Limited (Collectively known as Consortium Bankers). The present consortium is lead by State Bank of India. These loans are secured by first pari passu charge by way of hypothecation of the entire Stock of Raw Materials, Work in Process, Finished Goods, Stores and Spares and Receivables and first pari passu charge on immovable Fixed Assets of the Company as a collateral security. Interest rate on these loans are as follows:

(a) Interest rates on cash credit loans vary within the range of 4.90% to 8.55% (31 March 2022: 7.10% to 7.40%).

(b) Interest rates on packing credit loans vary within the range of USD libor/ SOFR 0.75% to 1.00% and Euribor 0.20% to 4.70% Fixed(31 March 2022: USD libor/ SOFR 0.84% to 1.09% and Euribor 0.20% to 0.95%).

(c) Interest rates on working capital demand loans and overdraft facility vary within the range of 4.68% to 7.90% (31 March 2022: 4.83% to 8.00%).

Reconciliation of quarterly returns submitted to banks where borrowings have been availed based on security of current assets

Note -Reason for differences:

â¢ The differences in inventories and trade receivables are majorly on account of goods in transit where the goods have been physically dispatched from the Company location however, the same has not been considered as revenue from the purpose of revenue recognition principles and hence reversed from books of accounts for respective quarter ends. Similarly, goods in transit for goods which have not reached respective Company locations are not considered however, considered as purchases as per accounting principles. This has lead to offsetting differences between Inventory, trade receivables and trade payable balances.

â¢ The management, basis their understanding with banks, submits stock statement of physical stock as available at respective locations at the period end. Accordingly adjustment for goods in transit (inward and outward) is not considered for the purpose of filing returns with banks.

â¢ There are other differences on account of regrouping and reclassification of trade receivable and trade payable balances including adjustment of advances received / given from / to customers / vendors.

Terms and Conditions of the above Outstanding Dues :

Trade payables are non-interest bearing and are normally settled on 30-360 days terms. For amounts due to related parties and terms and conditions with Related Parties, Refer Note 44. Refer Note 45 for Companyâs credit risk management processes. Trade Payable includes Acceptances amounting to H 4540.48 Lakhs (31 March 2022 H Nil).

30.4 Performance obligation

Information about the Companyâs performance obligations are summarised below:

The performance obligation is satisfied upon dispatch of goods from the companyâs premises / delivery of goods to the customer in accordance with the terms of contract with customer.

30.5 Information about major customers

For Information about major customers Refer Note 43.

On October 22, 2022, there was a fire at warehouse of one of the manufacturing units of the Company at Dahej location majorly leading to loss of inventories. The company is adequately insured for the above-mentioned loss of assets and hence does not expect any material net-losses. The company has filed a claim for the loss suffered which is currently under assessment. Further, the claim is not disputed by the insurance company. The company has currently estimated and recognised an initial net loss of H 39.85 crores on account of loss of assets for year ended March 31,2023 and corresponding insurance claim receivable considering its assessment, opinion on admissibility of claim as per the policy, adequacy of coverage and nature of loss. The aforementioned losses and corresponding credit has been presented on a net basis under exceptional items in the financial statements.

During the year ended March 31, 2019, there was fire at one of the manufacturing units of Company at Dahej location for which the final claim of H 611.14 Lakhs was received during the year ended March 31, 2022. The same has been disclosed as exceptional items.

Accordingly, the disclosure in respect of the amounts payable to such Enterprises as at March 31,2023 has been made in the Financial Statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any Supplier as at the Balance- Sheet date.

41 GRATUITY AND OTHER EMPOYMENT BENEFIT PLANS

(a) Retirement Benefits

(b) Defined Contribution Plans

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of payroll costs to fund the benefits. The Company has recognised provident fund contribution of H 333.19 Lakhs (March 31,2022 H 307.31 Lakhs) and contribution to ESIC and Other Labour Fund amounting to H 21.71 Lakhs (March 31, 2022 H 24.12 Lakhs) as expense, Refer Note 34 under the head âContributions to Provident and Other Fundsâ.

42 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS A Claims against the company not acknowledged as debts (Excluding interest and penalty) For the year Particulars ended 31st March 2023		H In Lakhs For the year ended 31st March 2022
Disputed Income-Tax Liability*	1,238.32	1,193.84
Disputed Excise Duty Liability**	1,701.25 151.53 72.66 91.46 42,500.00 7,050.33	1,701.25
Disputed Service Tax Liability***		160.44
Disputed Liabilities towards labour and workers compensation		52.98
(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, the outflow of economic resources will be required)
In respect of Letter of Credit		1,097.65
In respect of Guarantee
- Corporate Guarantee Given		-
B Capital Commitments
Estimated amount of contracts pending execution on capital accounts and not provided for (net of advances)		18,838.76

*Income tax demand comprise of demand from the Indian Income tax authorities for payment of additional tax of H 1,238.32 (31 March 2022: 1,193.84), upon completion of their tax review for the assessment year 2003-04, 2009-10 to 2010-11,2013-14 to 2018-19 and 2020-21.The tax demands are mainly on account of Transfer pricing Adjustments, 14 A disallowances, Bad Debt disallowances, Disallowance for loan written off etc. The matter is pending before various authorities. **Excise duty demand comprise demand from Central excise authorities for payment of additional tax of H 1701.25 Lakhs (31 March 2022: H 1701.25 Lakhs), upon completion of their tax review for the financial year 2003-04 to 2008-09 and 2011-12 to 2016-17. The tax demands are on account of denial of Cenvat credit on manufacturing ,Short payment of duty on DTA clearance from EOU, Education cess on DTA Sales etc. The matter is pending before various authorities. ***Service tax demand comprise demand from Service Tax Authorities on account of denial of Service tax credit H 151.53 Lakhs (31 March 2022: H 160.44 Lakhs), upon completion of their tax review for the financial year 2006-07 to 2017-18. The tax demands are on account of service tax on sales commission. The matter is pending before various authorities.

The outflow of the above claims would be determinable only on completion of respective assessments.

The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be in favour of the Company in the appellate process and no tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

The Company has one customer (31 March 2022 - One Customer) based outside India which has accounted for more than 10% of the Company''s revenue. Total amount of revenue from this customer is H 25,759.85 Lakhs for the year ended March 31,2023 and revenue of H 34,810.62 Lakhs for the year ended March 31,2022.

Notes

(2) The Company''s operations are divided into two segments. These segments are the basis for management control and hence form the basis for reporting. The business of each segment comprises of :

a) Agro Chemicals - The Companyâs operation includes manufacture and marketing of technical, intermediates and formulation of Crop Protection Chemicals.

b) Pigment Business - The Companyâs operation includes manufacture and marketing of Phthalocynine Green 7, Copper Phthalocynine Blue (CPC), Alpha Blue and Beta Blue.

(3) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

B. Measurement of Fair values and Sensitivity analysis Fair value hierarchy:

(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.

(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Assets or Liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

(iii) Level 3: inputs for the Assets or Liabilities that are not based on observable market data (unobservable inputs).

Financial Risk Management Framework

The Company has exposure to the following risks arising from financial instruments

â¢ Credit risk ;

â¢ Liquidity risk ; and

â¢ Market risk

The carrying amount of following Financial Assets represents the maximum credit exposure:

Financial instruments and cash deposit

Credit risk from balances with Banks and Financial Institutions is managed by the Companyâs treasury department. Investments of surplus funds are made only with approved counter parties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.

Trade Receivables

Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customersâ financial condition and monitors the creditworthiness of its Customers to which it grants credit terms in the normal course of business. The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts Receivables. The Company evaluates the concentration of risk with respect to trade receivables as low, as its Customers are located in several jurisdictions and industries and operate in largely independent markets.

Management estimates that the amount of provision of H 972.70 Lakhs (31st March, 2022: H 942.33 Lakhs) is appropriate

ii. Market Risk

Foreign Currency Risk

iii. Liquidity Risk

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Companyâs performance to developments affecting a particular industry

In order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the company to manage risk concentrations at both the relationship and industry levels

46 : Leases

The Company also has Depots with lease terms of 12 months or less. The Company applies the âshort-term leaseâ recognition exemptions for this lease.

Terms of Cancellation and Escalation

The Leases are cancellable by giving one month notice by either parties and these does not carries any escalation.

48 - Capital Management

49 - Loan to Subsidiary

The company has given unsecured loan amounting to H 582.80 Lakhs to Meghmani Crop Nutrition Limited (formerly known as Meghmani Synthesis Limited) as per the agreement dated January 21,2023 As per the terms of agreement, the loan carries an interest rate of 9.75% p.a. and has a tenure of 11 months.

50 - Acquisition of Kilburn Chemicals Limited

Kilburn Chemicals Limited (KCL) was admitted under Corporate Insolvency Resolution Process in terms of Insolvency and Bankruptcy Code, 2016 of India, whereby the Company was one of the bidders for its acquisition. The National Company Law Tribunal (NCLT), Kolkata Bench, vide its order dated December 16, 2021 approved the resolution plan of the Company for acquiring 100% stake in KCL for total consideration of H 13,176.00 Lakhs. Pursuant to the approved resolution plan, the existing issued, subscribed and paid up share capital of KCL stands cancelled fully and KCL has become a wholly owned subsidiary of the Company.

51 -Composite Scheme of arrangement

(a) Pursuant to the Composite Scheme of Arrangement (âthe Schemeâ) approved by NCLT Ahmedabad Bench vide its order dated 03 May 2021 (the âOrderâ) the Agrochemicals and Pigments Division of Meghmani Organics Limited (MOL) along with its investment in Optionally Convertible Redeemable Preference Shares (âOCRPSâ) of Meghmani Finechem Limited (MFL) got demerged into the Company. Pursuant to the Scheme, the Company filed Information Memorandum with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) and further filed the same with SEBI for the approval. The company received final approval from SEBI on July 30, 2021 pursuant to which it was listed with NSE and BSE on August 18,2021. Further, pursuant to the final order, excess provision of stamp duty amounting to H 1,486.55 Lakhs has been reversed and accounted as other income for the year ended March 31,2022.

(b) Pursuant to the Scheme and on receipt of certificate of incorporation for change of name from the registrar of companies, Ahmedabad, Gujarat, the name of the Company has been changed from âMeghmani Organochem Limitedâ to âMeghmani Organics Limitedâ with effect from August 3, 2021.

As per the Scheme, Optionally Convertible Redeemable Preference Shares (OCRPS) issued by Meghmani Finechem Limited (MFL) was transferred to the Company. The investment in OCRPS of MFL was transferred from MOL at cost of H 10,986.54. Subsequent to transfer of OCRPS, the Company had fair valued investment in OCRPS as per the requirements of Ind AS 109 and had opted for recognising the fair value difference through Statement of Profit and Loss. Fair value gain of H 1,124.00 Lakhs was accounted in other income for the year ending March 31,2021. Further, as per the Scheme, OCRPS issued by MFL were converted into Redeemable Preference Share (RPS) with same terms and conditions and tenure. The Company has fair valued the conversion of OCRPS to RPS as per the requirements of Ind AS 109 and the fair value gain of H 946.04 Lakhs has been accounted as other income for the year ended March 31,2022.

52 -Other Disclosures