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Sumitomo Chemical India Ltd. के अकाउंट के लिये नोट
Mar 31, 2025
e) Terms/rights attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
B. Nature and purpose of each reserves1. General reserve
The general reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
This relates to the remeasurement impact of defined benefit plans and income tax effect of the same.
Revenue from major customers Domestic
The Company does not have any external customer, with whom revenue from domestic transactions is more than 10% of Company''s total domestic revenue.
Export
Revenue from two Export customers represents '' 3,257.16 Millions (31 March 2024: '' 2,124.06 Millions) of the total Export revenue.
The performance obligation is satisfied upon delivery of the goods and payment is generally due within 7 to 90 days from delivery. There are no material unsatisfied performance obligation outstanding at the year end.
The performance obligations of the Company are part of contracts that have an original expected duration of less than one year and accordingly, the Company has applied the practical expedient and opted not to disclose the information about it''s remaining performance obligations in accordance with Ind AS 115.
The Company does not have any intention to dispose of its freehold and leasehold land in foreseeable future, therefore, deferred tax asset on indexation benefit in relation to these assets has not been recognised.
Basic EPS amounts are calculated by dividing the profit for the year attributable to owners of the Company by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares. There are no dilutive impacts, therefore basic EPS and diluted EPS is same.
The Company''s policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and maximise the shareholder''s value.
The Company has adequate cash and bank balances. The Company monitors its capital by a careful scrutiny of the cash and bank balances and a regular assessment of any debt requirements.
Terms and conditions of transactions with related parties
1. All related party transactions entered during the year were in ordinary course of business and are on arm''s length basis.
2. For the year ended 31 March 2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (2023-24: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
3. The above remuneration to key management personnel compensation excludes provision for gratuity and compensated absences, since these are provided on the basis of an actuarial valuation of the Company''s liability to all its employees.
The Company has lease contracts for its office premises, vehicles and storage locations with lease term between 1 year to 9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and sub-leasing the leased assets.
The Company also has certain leases of office premises and storage locations with leased terms of 12 months or less. The Company applies the âshort term lease'' recognition exemption for these leases.
i) Abbreviations
FVTPL - Fair value through the profit and loss
FVTOCI - Fair Value through other comprehensive income
ii) The investments does not include equity investment which are carried at cost and hence are not required to be disclosed as per Ind AS 107 "Financial instruments disclosures"
iii) The management has assessed that the fair value of cash and cash equivalents, other balance with banks, loans, trade receivables, other financial assets, and other financial liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
iv) The Company uses the following hierarchy for determining and / or disclosing the fair value of financials instruments by valuation techniques.
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
v) 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.
The following methods and assumptions were used to estimate the fair values:
The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date. The Company enters into derivative financial instruments with various counterparties, principally with banks. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market
observable inputs. The model incorporates various inputs including the credit quality of counter parties, foreign exchange spot and forward rates.
Mutual Funds: The fair values of investments in mutual fund units is based on the net asset value (âNAV'') as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.
Derivative assets and liabilities: The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates of respective currencies (Level 2).
vi) There were no transfers between level 1 and 2 during the year.
41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimize the potential impact of unpredictability of the financial markets on its financial performance.
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established Compliance Committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk refers to the risk of default on its obligations by a counterparty to the Company resulting in a financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and investment securities.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected default rates over the expected life of trade receivables and is adjusted for forward looking estimates.
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. The Company has no concentration of credit risk as the customer base is widely distributed.
Expected credit loss assessment for customers as at 31 March 2025:
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
The impairment loss at 31 March 2025 related to several customers that have defaulted on their payments to the Company and are not expected to pay their outstanding balances, mainly due to economic circumstances.
The Company limits its exposure to credit risk by investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities sanctioned with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, price risk and currency rate risk. Financial instruments affected by market risk includes foreign currency receivables/payables, investments and derivative financial instruments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures and hedging exposures using derivative financial instruments like foreign exchange forward contracts. The exchange rates have been volatile in the recent years and may continue to be volatile in the future. However the operating results and financials of the Company may not be impacted due to volatility of the rupee against foreign currencies as the exposure is generally fully hedged.
A reasonably possible strengthening (weakening) of the Indian Rupee against US Dollars and EURO would have affected the measurement of financial instruments denominated in US dollars and EURO affected profit and 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 can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
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 does not have any significant exposure to interest rate risks since its investments are in fixed rate instruments.
Exposure to interest rate risk
The interest rate risk arises primarily from borrowings. Since there are no borrowings in the current year, the interest rate profile of the Company''s interest-bearing financial instruments is '' Nil.
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss
The Company''s investments in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties in the financial market. The investment in listed and unlisted equity securities are not significant.
The Group operates in only one reportable segment namely Agro-chemicals. This segment covers sale of products mainly to end consumers which are farmers. This includes agricultural pesticides. Operating Segment disclosures are consistent with the information provided to and reviewed by management.
B. Information about major customers Domestic
The Company does not have any domestic customer, with whom revenue from domestic transactions is more than 10% of Company''s total domestic revenue.
Export
Revenue from four Export customers represents '' 3,529.33 Millions (31 March 2024: '' 3020.26 Millions) of the total Export revenue.
The Company contributes to the following post-employment plans in India.
(A) Defined contribution plans:
Provident fund is a defined contribution scheme established under a state plan.
Superannuation fund is a defined contribution scheme. The scheme is funded with an insurance company in the form of a qualifying insurance policy.
Contribution to Employees State Insurance Corporation (ESIC)
Gratuity plan is classified as a defined benefit plan as the Company''s obligation is to provide agreed benefit to plan members. Actuarial and investment risks are borne by the Company.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity was carried out as at 31 March 2025. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
Gratuity of the Company is funded through investments with an insurance service provider which is managed by them.
Sensitivity analysis fails to focus on the interrelationship between underlying parameters.
Hence, the results may vary if two or more variables are changed simultaneously.
The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.
The average duration of the defined benefit plan obligation at the end of the reporting year is 10.14 years (31 March 2024: 9.84 years).
The contribution expected to be made by the Company during the financial year 2025-26 is '' 64.50 Millions.
(C) Other long-term employee benefits:
Compensated absences are payable to employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement. The charge towards compensated absences for the year ended 31 March 2025 based on actuarial valuation using the projected accrued benefit method is '' 62.66 Millions (31 March 2024: '' 68.56 Millions). In the coming financial year it is expected to remain in the similar range.
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on the financial statements. Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
48. In October 2022, the Central Government (âGovernment'') issued a Notification (âNotification'') mandating that Glyphosate, a broad spectrum weedicide and an important product for the Company, will be used only through Pest Control Operators. Industry players and associations have filed petitions (âPetitions'') before the Hon''ble Delhi High Court (âHon''ble Court'') challenging the Notification. In the course of hearings in the matter, the counsel of the Government has stated that the Notification will not be implemented till the disposal of the Petitions. The Petitions are under hearing before the Hon''ble Court.
49. On 15 December 2023, the Company had acquired 85% of the Equity Shares (on fully diluted basis) of Barrix Agro Sciences Private Limited (âBarrix''), Bengaluru based company engaged in R&D innovation, manufacturing and marketing of Integrated Pest Management (âIPM'') and (Integrated Plant Nutrition Management (âIPNM'') products especially pheromone traps and chromatic sheets for agricultural pest management, by way of acquisition of 26,061 equity
shares from the then shareholders and infusion of equity capital through subscription of 8,956 new equity shares into Barrix, for a total consideration of '' 782.01 Millions. The acquisition was in alignment of the Company''s strategy to build a more sustainable portfolio of green chemistries and offer IPM and IPNM products and solutions to farmers.
50. On 2 February 2024, the shareholders of Excel Crop Care (Africa) Limited, the Company''s Tanzania based subsidiary, had approved its voluntary winding up with effect from 31 March 2024. The Company held 99.9% of the equity shares of Excel Crop Care (Africa) Limited. The proposed winding up is subject to legal / regulatory and other processes and procedures under the laws in Tanzania. Excel Crop Care (Africa) Limited is an unlisted ânon-material'' subsidiary having no material financial liability on its balance sheet and a positive net worth. It did not have any significant business or commercial activities and was incurring losses for the past few years. The proposed winding up of Excel Crop Care (Africa) Limited is not likely to materially impact the business, commercial activities or financial position of the Company.
i) Earnings available for debt service - Profit before tax interest expenses including interest expense on lease payments depreciation and amortisation expenses
ii) Debt service - Interest expenses including interest expense on lease payments repayment of lease liabilities.
iii) Net worth includes share capital and other equity
iv) Expenses includes cost of goods sold and other expenses excluding expected credit loss allowance, CSR, donations, insurance, directors sitting fees, PPE written off, exchange differences (net) and bank charges
v) Since there is no borrowing, disclosure of Debt equity ratio has not been disclosed.
52. OTHER STATUTORY INFORMATION
(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.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does 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 persons or entities, 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 has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(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 has complied with the number of layers prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (restriction on number of layers) Rules, 2017.
53. DERIVATIVE CONTRACTS
The Company has a process whereby periodically all long-term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and there are no long-term contracts for which there are any material foreseeable losses. The Company has ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on derivative contracts has been made in the books of account.
54. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There are no significant events after the reporting period except as disclosed in note 20(f), that require adjustments or disclosures in the standalone financial statements as on the balance sheet date.
55. DISCLOSURE AS PER REGULATION 34(3) READ WITH SCHEDULE 5 OF LISTING REGULATIONS WITH THE STOCK EXCHANGES AND SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not made any investment, provided any loans or advances in the nature of loans, given any guarantee or security covered under Section 186 and accordingly, the disclosure requirements do not apply to the Company.
56. Previous year''s financial statements were audited by a firm of Chartered Accountants other than B S R & Co. LLP.
Mar 31, 2024
a) There are no outstanding trade receivables which resulted into significant increase in credit risk apart from receivables which are impaired and provided. Refer note 41 for information credit risk, market risk of trade receivables and movement of allowance for expected credit loss during the year.
b) No trade or other receivable are due from directors or other officers of the the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member. For receivables from related parties, refer note 38.
c) Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.
g) There are no unbilled receivables, hence the same is not disclosed in the ageing schedule.
h) There are no disputed receivables, hence the same is not disclosed in the ageing schedule.
a) For the purpose of the statement of cash flows, cash and cash equivalents comprises of all the above enlisted items.
b) The Company has total fund and non fund based undrawn borrowing facilities of '' 7,010 Millions (31 March 2023 : '' 7,010 Millions). Sanctioned facilities are unsecured credit arrangements of '' 7,000 Millions and secured arrangements of '' 10 Millions.
e) Terms/rights attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
B. Nature and purpose of each reserves1. General reserve
The general reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
This relates to the remeasurement impact of defined benefit plans and income tax effect of the same.
The performance obligation is satisfied upon delivery of the goods and payment is generally due within 7 to 90 days from delivery. There are no material unsatisfied performance obligation outstanding at the year end.
The performance obligations of the Company are part of contracts that have an original expected duration of less than one year and accordingly, the Company has applied the practical expedient and opted not to disclose the information about it''s remaining performance obligations in accordance with Ind AS 115.
The Company does not have any intention to dispose of its freehold and leasehold land in foreseeable future, therefore, deferred tax asset on indexation benefit in relation to these assets has not been recognised.
Basic EPS amounts are calculated by dividing the profit for the year attributable to owners of the Company by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares. There are no dilutive impacts, therefore basic EPS and diluted EPS is same.
The Company''s policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and maximise the shareholder''s value.
The Company has adequate cash and bank balances. The Company monitors its capital by a careful scrutiny of the cash and bank balances and a regular assessment of any debt requirements.
Terms and conditions of transactions with related parties
1. All related party transactions entered during the year were in ordinary course of the business and are on arm''s length basis.
2. For the year ended 31 March 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (2022-23: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
3. The above remuneration to key management personnel compensation excludes provision for gratuity and compensated absences, since these are provided on the basis of an actuarial valuation of the Company''s liability to all its employees.
The Company has lease contracts for its office premises, vehicles and storage locations with lease term between 1 year to 9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and sub-leasing the leased assets.
The Company also has certain leases of office premises and storage locations with leased terms of 12 months or less. The Company applies the âshort term lease'' recognition exemption for these leases.
c) (i) The details of carrying amount and movements during the year in right-of-use assets is disclosed in note 5.
(ii) The effective interest rate for lease liabilities is 10%. The maturity is between 2022 to 2031.
(iii) The maturity analysis of lease liabilities are disclosed in note 41b liquidity risk management.
i) Abbreviations
FVTPL - Fair value through the profit and loss
FVTOCI - Fair Value through other comprehensive income
ii) The investments does not include equity investment which are carried at cost and hence are not required to be disclosed as per Ind AS 107 "Financial instruments disclosures"
iii) The management has assessed that the fair value of cash and cash equivalents, other balance with banks, loans, trade receivables, other financial assets, lease liabilities, trade payables and other financial liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
iv) The Company uses the following hierarchy for determining and / or disclosing the fair value of financials instruments by valuation techniques.
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
v) 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.
The following methods and assumptions were used to estimate the fair values:
The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date. The Company enters into derivative financial instruments with various counterparties, principally with banks. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The model incorporates various inputs including the credit quality of counter parties, foreign exchange spot and forward rates.
vi) There were no transfers between level 1 and 2 during the year.
n FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimize the potential impact of unpredictability of the financial markets on its financial performance.
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established Compliance Committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk refers to the risk of default on its obligations by a counterparty to the Company resulting in a financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and investment securities.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected default rates over the expected life of trade receivables and is adjusted for forward looking estimates.
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. The Company has no concentration of credit risk as the customer base is widely distributed.
Expected credit loss assessment for customers as at 31 March 2024:
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
The impairment loss at 31 March 2024 related to several customers that have defaulted on their payments to the Company and are not expected to pay their outstanding balances, mainly due to economic circumstances.
The Company limits its exposure to credit risk by investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities sanctioned with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, price risk and currency rate risk. Financial instruments affected by market risk includes foreign currency receivables/payables, investments and derivative financial instruments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures and hedging exposures using derivative financial instruments like foreign exchange forward contracts. The exchange rates have been volatile in the recent years and may continue to be volatile in the future. However the operating results and financials of the Company may not be impacted due to volatility of the rupee against foreign currencies as the exposure is generally fully hedged.
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
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 does not have any significant exposure to interest rate risks since its investments are in fixed rate instruments.
Exposure to interest rate risk
The interest rate risk arises primarily from borrowings. Since there are no borrowings in the current year, the interest rate profile of the Company''s interest-bearing financial instruments is '' Nil.
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss
iii) Equity risk
The Company''s investments in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties in the financial market. The investment in listed and unlisted equity securities are not significant.
The Company does not have any reportable segment as per the limits prescribed in the Indian Accounting Standard 108 âOperating Segments''.
A Geographic information
The Company has considered the export operations as a separately identifiable geographic segment due to operations in the Japan and other countries, details of which are given below :
The Company contributes to the following post-employment plans in India.
(A) Defined contribution plans:
Provident fund is a defined contribution scheme established under a state plan.
Superannuation fund is a defined contribution scheme. The scheme is funded with an insurance company in the form of a qualifying insurance policy.
Contribution to Employees State Insurance Corporation (ESIC)
Current service cost included under the head - Contribution to provident fund and other funds in note 31 âEmployee benefits expense'':
Gratuity plan is classified as a defined benefit plan as the Company''s obligation is to provide agreed benefit to plan members. Actuarial and investment risks are borne by the Company.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity was carried out as at 31 March 2024. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
The average duration of the defined benefit plan obligation at the end of the reporting year is 9.84 years (31 March 2023: 9.88 years).
The contribution expected to be made by the Company during the financial year 2024-25 is '' 52.77 Millions.
(C) Other long-term employee benefits:
Compensated absences are payable to employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement. The charge towards compensated absences for the year ended 31 March 2024 based on actuarial valuation using the projected accrued benefit method is '' 68.56 Millions. (31 March 2023: '' 37.15 Millions) In the coming financial year it is expected to remain in the similar range.
|
44 CONTINGENT LIABILITIES AND COMMITMENTS A) Contingent liabilities |
||
|
Particulars |
As at 31 March 2024 |
As at 31 March 2023 |
|
a. In respect of tax matters Demand raised by authorities against which the Company has filed an appeal |
||
|
i) Income tax |
114.94 |
118.62 |
|
ii) Service tax |
9.05 |
9.24 |
|
iii) Customs duty |
50.25 |
28.68 |
|
iv) VAT / Sales tax |
0.50 |
0.50 |
|
v) Goods and service tax |
49.82 |
21.97 |
|
b. In respect of other matters |
||
|
i) Claims against the Company, by consumers, not acknowledged as debts Total |
155.46 |
150.77 |
|
380.02 |
329.78 |
|
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on the financial statements. Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.
I t is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
|
B) Capital commitments |
||
|
As at |
As at |
|
|
31 March 2024 |
31 March 2023 |
|
|
Estimated value of contracts in capital account remaining to be executed and not provided for (net of capital advances) |
38.24 |
151.37 |
48 In October 2022, the Central Government (âGovernment'') issued a Notification (âNotification'') mandating that Glyphosate, a broad spectrum weedicide and an important product for the Company, will be used only through Pest Control Operators. Industry players and associations have filed petitions (âPetitions'') before the Hon''ble Delhi High Court (âHon''ble Court'') challenging the Notification. In the course of hearings in the matter, the counsel of the Government has stated that the Notification will not be implemented till the disposal of the Petitions. The Petitions are under hearing before the Hon''ble Court.
49 On 15 December 2023, the Company acquired 85% of the Equity Shares (on fully diluted basis) of Barrix Agro Sciences Private Limited (âBarrix''), Bengaluru based company engaged in R&D innovation, manufacturing and marketing of Integrated Pest Management (âIPM'') and (Integrated Plant Nutrition Management (âIPNM'') products especially pheromone traps and chromatic sheets for agricultural pest management, by way of acquisition of 26,061 equity shares from the then shareholders and infusion of equity capital through subscription of 8,956 new equity shares into Barrix, for a total consideration of '' 782.01 Millions. The acquisition is in alignment of the Company''s strategy to build a more sustainable portfolio of green chemistries and offer IPM and IPNM products and solutions to farmers.
50 On 2 February 2024, the shareholders of Excel Crop Care (Africa) Limited, the Company''s Tanzania based subsidiary, have approved its voluntary winding up with effect from 31 March 2024. The Company holds 99.9% of the equity shares of Excel Crop Care (Africa) Limited. The proposed winding up is subject to legal / regulatory and other processes and procedures under the laws in Tanzania. Excel Crop Care (Africa) Limited is an unlisted ânon-material'' subsidiary having no material financial liability on its balance sheet and a positive net worth. It did not have any significant business or commercial activities and was incurring losses for the past few years. The proposed winding up of Excel Crop Care (Africa) Limited is not likely to materially impact the business, commercial activities or financial position of the Company.
51 The Company has used accounting software (SAP S4 Hana) 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 software, except that audit trail feature is not enabled for certain changes made using privileged/ administrative access rights to the application and the underlying database. Further there was no instance of audit trail feature being tampered, with respect to the accounting software where audit trail has been enabled.
Note: Reason for variance has been given for those ratios whereby variation is more than 25% ( /-)
i) Earnings available for debt service - Profit before tax interest expenses including interest expense on lease payments depreciation and amortisation expenses
ii) Debt service - Interest expenses including interest expense on lease payments repayment of lease liabilities.
iii) Net worth includes share capital and other equity
iv) Expenses includes cost of goods sold and other expenses excluding expected credit loss allowance, CSR, donations, insurance, directors sitting fees, PPE written off, exchange differences (net) and bank charges
v) Since there is no borrowing, disclosure of Debt equity ratio has not been disclosed.
53 OTHER STATUTORY INFORMATION
(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.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does 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 persons or entities, 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 has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(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 has complied with the number of layers prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (restriction on number of layers) rules, 2017.
54 STANDARDS NOTIFIED BUT NOT YET EFFECTIVE
There are no new standards that are notified, but not yet effective, upto the date of issuance of the standalone Ind AS financials statements.
55 SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
There are no significant events after the reporting period except as disclosed in note 20(f), that require adjustments or disclosures in the standalone Ind AS financial statements as on the balance sheet date.
56. The figures for the previous year have been regrouped/reclassified wherever considered necessary.
Mar 31, 2023
Terms/rights attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
B. Nature and purpose of each reserves1. General reserve
The general reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
This relates to the remeasurement impact of defined benefit plans and income tax effect of the same.
The performance obligation is satisfied upon delivery of the goods and payment is generally due within 7 to 90 days from delivery. There are no material unsatisfied performance obligation outstanding at the year end.
The performance obligations of the Company are part of contracts that have an original expected duration of less than one year and accordingly, the Company has applied the practical expedient and opted not to disclose the information about it''s remaining performance obligations in accordance with Ind AS 115.
The Company does not have any intention to dispose of its freehold and leasehold land in foreseeable future, therefore, deferred tax asset on indexation benefit in relation to these assets has not been recognised.
The Company does not have any tax losses carried forward as at 31 March 2023 and 31 March 2022.
Basic EPS amounts are calculated by dividing the profit for the year attributable to owners of the Company by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares. There are no dilutive impacts, therefore basic EPS and diluted EPS is same.
The Company''s policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.
For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and maximise the shareholder''s value. The Company has adequate cash and bank balances. The Company monitors its capital by a careful scrutiny of the cash and bank balances and a regular assessment of any debt requirements.
(*) The previous year figures includes amount related to Excel Crop Care Gratuity Trust, which got merged into Sumitomo Chemical India Gratuity Trust
(**) The previous year figures includes amount related to Sumitomo Chemical Do Brasil Representacoes Limited, which got merged with Sumitomo Chemical Brasil Industria Quimica S A
Terms and conditions of transactions with related parties
All related party transactions entered during the year were in ordinary course of the business and are on arm''s length basis. For the year ended 31 March 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (2021-22: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
The above remuneration to key management personnel compensation excludes provision for gratuity and compensated absences, since these are provided on the basis of an actuarial valuation of the Company''s liability to all its employees.
The Company has lease contracts for its office premises and storage locations with lease term between 1 year to 9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and sub-leasing the leased assets.
The Company also has certain leases of office premises and storage locations with leased terms of 12 months or less. The Company applies the ''short term lease'' recognition exemption for these leases.
i) Abbreviations
FVTPL - Fair value through the profit and loss
FVTOCI - Fair Value through other comprehensive income
ii) The investments does not include equity investment which are carried at cost and hence are not required to be disclosed as per Ind AS 107 "Financial instruments disclosures
iii) The management has assessed that the fair value of cash and cash equivalents, other balance with banks, loans, trade receivables, other financial assets, lease liabilities, trade payables and other financial liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
iv) The Company uses the following hierarchy for determining and / or disclosing the fair value of financials instruments by valuation techniques. Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable;
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
v) 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.
The following methods and assumptions were used to estimate the fair values:
The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.
The Company enters into derivative financial instruments with various counterparties, principally with banks. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The model incorporates various inputs including the credit quality of counter parties, foreign exchange spot and forward rates.
vi) There were no transfers between level 1 and 2 during the year.
41 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimise the potential impact of unpredictability of the financial markets on its financial performance.
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established Compliance Committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk refers to the risk of default on its obligations by a counterparty to the Company resulting in a financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and investment securities.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected default rates over the expected life of trade receivables and is adjusted for forward looking estimates.
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. The Company has no concentration of credit risk as the customer base is widely distributed.
Expected credit loss assessment for customers as at 31 March 2023:
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
The impairment loss at 31 March 2023 related to several customers that have defaulted on their payments to the Company and are not expected to pay their outstanding balances, mainly due to economic circumstances.
The Company limits its exposure to credit risk by investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from nonperformance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks. Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will
have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities sanctioned with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, price risk and currency rate risk. Financial instruments affected by market risk includes foreign currency receivables/ payables, investments and derivative financial instruments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.
i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures and hedging exposures using derivative financial instruments like foreign exchange forward contracts. The exchange rates have been volatile in the recent years and may continue to be volatile in the future. However the operating results and financials of the Company may not be impacted due to volatility of the rupee against foreign currencies as the exposure is generally fully hedged.
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
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 does not have any significant exposure to interest rate risks since its investments are in fixed rate instruments.
Exposure to interest rate risk
The interest rate risk arises primarily from borrowings. Since there are no borrowings in the current year, the interest rate profile of the Company''s interest-bearing financial instruments is '' Nil.
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss
iii) Equity risk
The Company''s investments in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties in the financial market. The investment in listed and unlisted equity securities are not significant.
Till 31 March 2022, the Company had two primary reportable segments namely Agro Chemicals and Others (environmental health division and animal nutrition division) and accordingly segment disclosure was made by the Company. Currently, percentage of revenue, results and combined asset of ''Other Segment'' to the total is much less than quantitative threshold limit prescribed in the Indian Accounting Standard 108 ''Operating Segments''. Further, considering expected future growth of products in ''Other Segment'' and reporting structure
of the Company, the management has decided not to consider ''Other Segment'' as reportable segment. Accordingly, there is no separate disclosure for segment
A Geographic information
Further, the Company has considered the export operations as a separately identifiable geographic segment due to operations in the Japan and other countries. The Company has identified secondary segments based on geographic locations and has reported India and outside India as geographic segments as below:
B. Information about major customers
The Company does not have any customer, with whom revenue from transactions is more than 10% of Company''s total revenue.
The Company contributes to the following post-employment plans in India.
(A) Defined contribution plans:
Provident fund is a defined contribution scheme established under a state plan.
Superannuation fund is a defined contribution scheme. The scheme is funded with an insurance company in the form of a qualifying insurance policy.
Contribution to Employees State Insurance Corporation (ESIC)
Gratuity plan is classified as a defined benefit plan as the Company''s obligation is to provide agreed benefit to plan members. Actuarial and investment risks are borne by the Company.
Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged.
Sensitivity analysis fails to focus on the interrelationship between underlying parameters.
Hence, the results may vary if two or more variables are changed simultaneously.
The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.
The average duration of the defined benefit plan obligation at the end of the reporting year is 9.88 years (31 March 2022: 12.85 years).
The contribution expected to be made by the Company during the financial year 2022-23 is '' 14.63 Millions.
(C) Other long-term employee benefits:
Compensated absences are payable to employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement. The charge towards compensated absences for the
year ended 31 March 2023 based on actuarial valuation using the projected accrued benefit method is '' 37.15 Millions. (31 March 2022: '' 30.79 Millions) In the coming financial year it is expected to remain in the similar range.
|
44 CONTINGENT LIABILITIES AND COMMITMENTS A) Contingent liabilities |
||
|
Particulars |
As at 31 March 2023 |
As at 31 March 2022 |
|
a. In respect of tax matters |
||
|
Demand raised by authorities against which the Company has filed an appeal i) Income tax |
||
|
118.62 |
67.86 |
|
|
ii) Excise duty |
- |
0.73 |
|
iii) Service tax |
9.24 |
15.67 |
|
iv) Customs duty |
28.68 |
2.30 |
|
v) VAT / Sales tax |
0.50 |
3.10 |
|
vi) Goods and service tax |
21.97 |
0.62 |
|
b. In respect of other matters |
||
|
i) Claims against the Company not acknowledged as debts |
150.77 |
171.19 |
|
Total |
329.78 |
261.47 |
The Company''s pending litigations comprise of claims against the Company primarily by the consumers and proceedings pending with tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on the financial statements. Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
The Company does not expect any reimbursements in respect of the above contingent liabilities.
|
B) Capital commitments |
||
|
As at |
As at |
|
|
31 March 2023 |
31 March 2022 |
|
|
Estimated value of contracts in capital account remaining to be executed and not provided for (net of capital advances) |
151.37 |
124.15 |
Note : Reason for variance has been given for those
ratios whereby variation is more than 25% ( /-)
i) Earnings available for debt service - Profit before tax interest expenses including interest expense on lease payments depreciation and amortisation expenses
ii) Debt service - Interest expenses including interest expense on lease payments repayment of lease liabilities.
iii) Net worth includes share capital and other equity
iv) Expenses includes cost of goods sold and other expenses excluding expected credit loss allowance, CSR, donations, insurance, directors sitting fees, PPE written off, exchange differences (net) and bank charges
v) Since there is no borrowing, disclosure of Debt equity ratio has not been disclosed.
49 OTHER STATUTORY INFORMATION
(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.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does 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 persons or entities, 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 has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(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 has complied with the number of layers prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (restriction on number of layers) rules, 2017.
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31 March 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from 01 April 2023, as below:
Ind AS 103 - Common control Business Combination:
The amendments modify the disclosure requirement for business combination under common control in the first financial statement following the business combination. It requires to disclose the date on which the transferee obtains control of the transferor is required to be disclosed.
Ind AS 1 - Disclosure of material accounting policies:
The amendments related to shifting of disclosure of erstwhile "significant accounting policies" to "material accounting policies" in the notes to the financial statements requiring companies to reframe their accounting policies to make them more "entity specific". This amendment aligns with the "material" concept already required under International Financial Reporting Standards (IFRS). The Company does not expect this amendment to have any significant impact in its financial statements.
Ind AS 8 - Definition of accounting estimates:
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a "change in accounting estimates" has been replaced with a definition of "accounting estimates." Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty." Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.
The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12. At the date of transition to Ind ASs, a firsttime adopter shall recognise a deferred tax asset to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. Similarly, a deferred tax liability for all deductible and taxable temporary differences associated with:
a) right-of-use assets and lease liabilities
b) decommissioning, restoration and similar liabilities and the corresponding amounts recognised as part of the cost of the related asset. Therefore, if a company has not yet recognised deferred tax on right-of-use assets and lease liabilities or has recognised deferred tax on net basis, the same need to recognise on gross basis based on the carrying amount of right-of-use assets and lease liabilities.
51 GOVERNMENT NOTIFICATION ON USE OF GLYPHOSATE
In October 2022, the Central Government ("Government") issued a Notification ("Notification") mandating that Glyphosate, a broad spectrum weedicide and an important product for the Company,
will be used only through Pest Control Operators. Industry players and associations filed petitions before the Hon''ble Delhi High Court ("Hon''ble Court") challenging the Notification. At the hearings of the petitions held before the Hon''ble Court, the counsels of the Government have stated that the Government will look into the difficulties being faced by the farmers, revisit the matter and take a conscious decision which will be communicated to the Hon''ble Court. The Government has also agreed not to implement the Notification for time being. The next date of hearing in the matter is fixed for 19 July 2023.
During the year, there was a fire accident in one of the multi product plant of the Company, producing two products. The plant was not operational at the time of accident and therefore the accident has no material financial impact. The Company has adequate insurance coverage for the assets on reinstatement basis including loss of profit coverage and insurance coverage is sufficient to cover the losses due to damages.
In the meantime, the Company has made alternate arrangements to ensure continued production and supply of the products. The overall impact on production and financials is not likely to be material and, in any case, the insurance policy also contains ''loss of profit'' clause for such losses.
53 EVENTS AFTER THE REPORTING PERIOD
There are no significant events after the reporting period except as disclosed in note 20(f), that require adjustments or disclosures in the standalone Ind AS financial statements as on the balance sheet date.
54 The figures for the previous year have been regrouped/ reclassified wherever considered necessary.
Mar 31, 2022
Terms/rights attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Companyâs residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
B Nature and purpose of each reserves1. General Reserve
The general reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
The Company does not have any intention to dispose of its freehold and leasehold land in foreseeable future, therefore, deferred tax asset on indexation benefit in relation to these assets has not been recognised.
The Company does not have any tax losses carried forward as at 31 March 2022 and 31 March 2021.
Note-36 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to owners of the Company by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares. There are no dilutive impacts, therefore basic EPS and diluted EPS is same.
The Companyâs policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.
For the purpose of the Companyâs capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and maximise the shareholderâs value.
The Company has adequate cash and bank balances. The Company monitors its capital by a careful scrutiny of the cash and bank balances and a regular assessment of any debt requirements.
All related party transactions entered during the year were in ordinary course of the business and are on armâs length basis.
For the year ended 31 March 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (202021: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
The above remuneration to key management personnel compensation excludes provision for gratuity and compensated absences, since these are provided on the basis of an actuarial valuation of the Companyâs liability to all its employees.
The Company has lease contracts for its office premises and storage locations with lease term between 1 year to 9 years. The Companyâs obligations under its leases are secured by the lessorâs title to the leased assets. Generally, the Company is restricted from assigning and sub-leasing the leased assets.
The Company also has certain leases of office premises and storage locations with leased terms of 12 months or less. The Company applies the âshort term leaseâ recognition exemption for these leases.
ii) The investments does not include equity investment which are carried at cost and hence are not required to be disclosed as per Ind AS 107 âFinancial instruments disclosures.
iii) The management has assessed that the fair value of cash and cash equivalents, other balance with banks, loans, trade receivables, other financial
assets, lease liabilities, trade payables and other financial liabilities approximate their carrying amounts largely due to the short term maturities of
these instruments.
iv) The Company uses the following hierarchy for determining and / or disclosing the fair value of financials instruments by valuation techniques.
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
v) 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.
The following methods and assumptions were used to estimate the fair values:
The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.
The Company enters into derivative financial instruments with various counterparties, principally with banks. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The model incorporates various inputs including the credit quality of counter parties, foreign exchange spot and forward rates.
vi) There were no transfers between level 1 and 2 during the year.
Note-41 Financial risk management objectives and policies
The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimize the potential impact of unpredictability of the financial markets on its financial performance.
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors has established Compliance Committee, which is responsible for developing and monitoring the Companyâs risk management policies. The committee reports regularly to the board of directors on its activities.
The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk refers to the risk of default on its obligations by a counterparty to the Company resulting in a financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and investment securities.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected default rates over the expected life of trade receivables and is adjusted for forward looking estimates.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. The Company has no concentration of credit risk as the customer base is widely distributed.
Expected credit loss assessment for customers as at 31 March 2022:
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
The impairment loss at 31 March 2022 related to several customers that have defaulted on their payments to the Company and are not expected to pay their outstanding balances, mainly due to economic circumstances.
The Company limits its exposure to credit risk by investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Companyâs exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities sanctioned with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, price risk and currency rate risk. Financial instruments affected by market risk includes foreign currency receivables/payables, investments and derivative financial instruments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.
i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures and hedging exposures using derivative financial instruments like foreign exchange forward contracts. The exchange rates have been volatile in the recent years and may continue to be volatile in the future. However the operating results and financials of the Company may not be impacted due to volatility of the rupee against foreign currencies as the exposure is generally fully hedged.
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
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 does not have any exposure to interest rate risks since its investments are all in fixed rate instruments.
Exposure to interest rate risk
The interest rate risk arises primarily from borrowings. Since there are no borrowings in the current year, the interest rate profile of the Companyâs interest-bearing financial instruments is '' Nil.
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
The Companyâs investments in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties in the financial market. The investment in listed and unlisted equity securities are not significant.
The Company has disclosed segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of paragraph 3 of Ind AS 108 âOperating Segmentsâ, no disclosures related to segments are presented in these standalone Ind AS financial statements.
The Company contributes to the following post-employment plans in India.
(A) Defined contribution plans:
Provident fund is a defined contribution scheme established under a state plan.
Superannuation fund is a defined contribution scheme. The scheme is funded with an insurance company in the form of a qualifying insurance policy. Contribution to Employees State Insurance Corporation (ESIC)
(C) Other long-term employee benefits:
Compensated absences are payable to employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement. The charge towards compensated absences for the year ended 31 March 2022 based on actuarial valuation using the projected accrued benefit method is '' 30.79 millions. (31 March 2021: '' 41.29 millions). In the coming financial year it is expected to remain in the similar range.
The Companyâs pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on the financial statements. Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
i) Earnings available for debt service - Profit before tax interest expenses including interest expense on lease payments depreciation and amortisation expenses
ii) Debt service - Interest expenses including interest expense on lease payments repayment of lease liabilities.
iii) Net worth includes share capital and other equity
iv) Expenses includes cost of goods sold and other expenses excluding expected credit loss allowance, CSR, donations, insurance, directors sitting fees, PPE written off, exchange differences (net) and bank charges
Note-49 Other statutory information
(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.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does 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 persons or entities, 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 has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(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 has complied with the number of layers prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (restriction on number of layers) rules, 2017.
Note-50 Events after the reporting period
There are no significant events after the reporting period except as disclosed in note 20(f), that require adjustments or disclosures in the standalone Ind AS financial statements as on the balance sheet date.
Note-51 The figures for the previous year have been regrouped/reclassified wherever considered necessary.
Mar 31, 2021
Terms/rights attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Companyâs residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
The Authorized Share Capital of '' 60 million of ECCL has been consolidated with the Authorized Share Capital of the Company and the Authorized Share Capital of the Company stands increased to '' 5,000 million. (refer note 46).
Nature and purpose of each reserves1. General Reserve
The General Reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
The amount received in excess of face value of the equity shares is recognised in Securities Premium. The Securities Premium is utilised in accordance with the provisions of the Companies Act, 2013.
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
The Companyâs policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.
For the purpose of the Companyâs capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern.
The Company has adequate cash and bank balances. The Company monitors its capital by a careful scrutiny of the cash and bank balances, and a regular assessment of any debt requirements.
At inception of contract, the Company assesses whether the Contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At inception or on reassessment of a contract that contains a lease component, the Company allocates consideration in the contract to each lease component on the basis of their relative standalone price.
i) Right-of-Use Assets
The Company recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, lease payments made at or before the commencement date less any lease incentives received and estimate of costs to dismantle. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets i.e. 2 to 5 years, as follows:
Warehouses: âPut the lifeâOn the basis of the tenure of the lease agreement Vehicles: âPut the lifeâOn the basis of the tenure of the lease agreement
The Company presents right-of-use assets that do not meet the definition of investment property in âProperty, plant and equipmentâ.
ii) Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Company generally uses its incremental borrowing rate at the lease commencement date if the discount rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount is remeasured when there is a change in future lease payments arising from a change in index or rate. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.
The Company presents lease liabilities in âFinancial Liabilitiesâ in the Balance Sheet.
iii) Short term leases and leases of low value of assets
The Company applies the short-term lease recognition exemption to its short-term leases. It also applies the lease of low-value assets recognition exemption that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.
C. Financial risk management objectives and policies
The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimize the potential impact of unpredictability of the financial markets on its financial performance.
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors has established Compliance Committee, which is responsible for developing and monitoring the Companyâs risk management policies. The committee reports regularly to the board of directors on its activities.
The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk refers to the risk of default on its obligations by a counterparty to the Company resulting in a financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and investment securities.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. The Company
has no concentration of credit risk as the customer base is widely distributed
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
The impairment loss at 31 March 2021 related to several customers that have defaulted on their payments to the Company and are not expected to be able to pay their outstanding balances, mainly due to economic circumstances.
The Company limits its exposure to credit risk by investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Companyâs exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities sanctioned with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, price risk and currency rate risk. Financial instruments affected by market risk includes borrowings, foreign currency receivables/payables, investments and derivative financial instruments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.
i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures and hedging exposures using derivative financial instruments like foreign exchange forward contracts. The exchange rates have been volatile in the recent years and may continue to be volatile in the future. However the operating results and financials of the Company may not be impacted due to volatility of the rupee against foreign currencies as the exposure is generally fully hedged.
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
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 does not have any exposure to interest rate risks since its investments are all in fixed rate instruments.
Exposure to interest rate risk
Companyâs interest rate risk arises primarily from borrowings. Since there are no borrowings in the current year, the interest rate profile of the Companyâs interest-bearing financial instruments is '' Nil.
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
The Companyâs investments in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties in the financial market. The investment in listed and unlisted equity securities are not significant.
The Company has disclosed segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 3 of Ind AS 108 âOperating Segmentsâ, no disclosures related to segments are presented in these interim standalone financial statements.
Gratuity Plan is classified as a defined benefit plan as the Companyâs obligation is to provide agreed benefit to plan members. Actuarial and investment risks are borne by the Company.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity was carried out as at 31 March 2021. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
The Companyâs pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on the financial statements. Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.
It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
Note-46 Merger of Excel Crop Care Limited (ECCL) with the Company
On 1 August 2018, the Board had approved a Scheme of Amalgamation (âSchemeâ) for amalgamation of ECCL with the Company in accordance with the provisions of Sections 230 - 232 read with other relevant provisions of the Companies Act, 2013.
The Honâble National Company Law Tribunal, Mumbai Bench (âHonâble NCLTâ) approved and sanctioned the Scheme by its Order dated 27 June 2019. Certified copy of the Order of the Honâble NCLT was filed with the Registrar of Companies, Maharashtra, on 31 August 2019 and accordingly the Scheme became effective from the said date (âEffective Dateâ).
As provided for in the Scheme, the Authorized Share Capital of '' 60 million of ECCL has been consolidated with the Authorized Share Capital of the Company and the Authorized Share Capital of the Company stands increased to '' 5,000 million.
Consequent to the Scheme becoming effective, the entire business and the undertaking of ECCL (together with all the estate, properties, assets, rights, claims, title and authorities, benefits, liabilities and interest therein and subject to existing charges thereon in favour of banks and financial institutions) stand transferred to and vested in the Company. The Appointed Date under the Scheme is 1 April 2018. Accordingly, accounting impact of the amalgamation was given in the financial statements for the year ended 31 March 2019.
Pursuant to the Scheme, 21,99,448 Shares of ECCL held by the Company (representing about 19.98% of its share capital) stand cancelled. On 7 October 2019, the Board of Directors of the Company issued and allotted to the other shareholders of ECCL, its shares in the ratio of 51 (fifty one) equity shares of '' 10 each fully paid up of the Company for every 2 (two) equity shares of '' 5 each fully paid up of ECCL based on the shareholding as on 31 August 2019 (the Record Date).
Note-47 Changes in Ind AS and related pronouncements effective at a future date
Amendment in Schedule III to Companies Act, 2013:
On 24 March 2021, the Ministry of Corporate Affairs (âMCAâ) through a notification, amended Schedule III of the Companies Act, 2013. The amendments revise Division I, II and III of Schedule III and are applicable from 1 April 2021. Key amendments relating to Division II which relate to companies whose financial statements are required to comply with the Companies (Indian Accounting Standards) Rules 2015 (as amended) are:
Balance Sheet:
⢠Lease liabilities should be separately disclosed under the head âfinancial liabilitiesâ, duly distinguished as current or non-current.
⢠Certain additional disclosures in the statement of changes in equity such as changes in equity share capital due to prior period errors and restated
balances at the beginning of the current reporting period.
⢠Specified format for disclosure of shareholding of promoters.
⢠Specified format for ageing schedule of trade receivables, trade payables, capital work-in-progress and intangible asset under development.
⢠If a company has not used funds for the specific purpose for which it was borrowed from banks and financial institutions, then disclosure of details of where it has been used.
⢠Specific disclosure under âadditional regulatory requirementâ such as compliance with approved schemes of arrangements, compliance with number
of layers of companies, title deeds of immovable property not held in name of company, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties, details of benami property held etc.
Statement of Profit and Loss:
⢠Additional disclosures relating to Corporate Social Responsibility (CSR), undisclosed income and crypto or virtual currency specified under the head âadditional informationâ in the notes forming part of the financial statements.
The amendments are extensive and the Company will evaluate the same to give effect to them as required by law.
Note-48 Events after the Reporting period
There are no significant events after the reporting period, that would require adjustments or disclosures in the Standalone Ind AS Financial Statements as on the Balance Sheet date.
Global pandemic Covid-19, which broke out in the last quarter of FY 2019-20, caused severe impact globally and in India. India announced country-wide strict lockdown in the last week of March 2020 and such measures continued to be in force in gradually relaxed form. The Companyâs operations have been classified as âessentialâ and hence not much affected by the lock-down. By the second half of the financial year 2020-21, majority of the functions including sales & distribution, procurement, supply chain, logistics and corporate functions became near-normal, duly following safety guidelines, without any material adverse impact on the operations of the Company.
Unfortunately, the financial year 2021-22 has begun with outbreak of second wave of Covid-19, which is turning out more contagious and has infected several Company employees, their family members, the Companyâs business partners and their employees. Various state governments have imposed lockdown-like restrictions which have impacted economic and commercial activities in the country. The Companyâs manufacturing operations have also been impacted, but not materially. In view of virus spread to rural and semi-rural areas and that too very close to the upcoming monsoon season, one has to watch out for its overall impact on the industry and the Company in the coming days, though at present the impact for the Company is not material.
50 The figures for the previous year have been regrouped/reclassified wherever considered necessary.
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Stock Market Crash: युद्ध के डर से बाजार में हड़कंप, सेंसेक्स 900 अंक टूटा, बढ़ी बिकवाली, निवेशक हुए सतर्क -
Stock Market Crash: जंग का असर बाजार में हाहाकार, सेंसेक्स 2500 अंक से ज्यादा लुढ़का, निफ्टी 700 अंक क्रैश -
Stock Market Outlook: होर्मुज स्ट्रेट में संकट! क्या आने वाला है भारतीय शेयर बाजार में बड़ा गिरावट का दौर? -
मिडिल ईस्ट के बढ़ते तनाव ने बिगाड़ा बाजार का मूड, सेंसेक्स 1500 अंक लुढ़का, निफ्टी भी बुरी तरह फिसला -
Stock Market Today: मिडिल ईस्ट तनाव! शेयर बाजार में कोहराम, सेंसेक्स 900+ अंक टूटा, निफ्टी 24,900 के नीचे -
Stock Market: Anthropic के दावे से बढ़ी टेंशन! Nifty-Sensex में बड़ी गिरावट, शेयर बाजार किन 5 कारणों से धड़ाम? -
Stock Markets Today: कारोबारी हफ्ते की शानदार शुरुआत, Sensex और Nifty 50 जबरदस्त बढ़त के साथ बंद -
Stock Alert: सस्ते में मिल रहे Nifty 50 के कई शेयर, यहां से होगी पैसों की बारिश? -
Stock Market Crash: बाजार में हाहाकार, सेंसेक्स 1,200 प्वाइंट से ज्यादा गिरा, निफ्टी भी 400 अंक क्रैश -
Stock Markets Today: बढ़त के साथ बंद हुआ बाजार, Sensex और Nifty की शानदार क्लोजिंग -
Stock Markets Today: Nifty वीकली एक्सपायरी के दिन बाजार में तेजी, IT और PSU इंडेक्स बढ़त के साथ बंद -
Defence Stock: Cochin Shipyard के शेयर में जबरदस्त उछाल, रक्षा मंत्रालय से बड़ा ऑर्डर -
Stock Markets Today: कारोबारी हफ्ते के पहले दिन बाजार की शानदार क्लोजिंग, Sensex और Nifty बढ़त के साथ बंद -
अमेरिका संग ट्रेड डील से SENSEX-NIFTY में दिखा जोश, इन 9 स्टॉक्स में लगा 20% का अपर सर्किट, आपके पास है कोई? -
Stock Market News: India-US ट्रेड डील का असर...शेयर बाजार में जबरदस्त रैली, निवेशकों को 20 लाख करोड़ का फायदा! -
Stock Market News: भारी गिरावट के बाद वापसी, सेंसेक्स-निफ्टी दिन के निचले स्तर से रिकवर, तेजी के पीछे का कारण?
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