(xiii) Provisions and Contingencies:
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as an interest expense.
Contingent liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or reliable estimate of the amount cannot be made, is termed as contingent liability.
Contingent assets
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Contingent assets are not recognized but disclosed only when an inflow of economic benefits is probable.
(xiv) Employee benefits:
(a) Short-term obligations
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(b) Post Employment obligations
The Company operates the following postemployment schemes:
- defined benefit plans such as gratuity contributions made to a trust in case of certain employees.
- defined contribution plans such as provident fund and superannuation fund.
Gratuity obligations
The liability or asset recognized in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in Other Comprehensive Income. They are included in Retained Earnings in the Statement of Changes in Equity and in the Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.
Defined contribution plans The Company pays provident fund contributions to publicly administered provident funds as per local regulations and superannuation contributions to superannuation fund. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.
(c) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in Statement of Profit or Loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
(xv) Earnings per share:
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
(xvi) Exceptional items:
Exceptional items include income or expense that are of such significance and nature that separate disclosure enables the user of the financial statements to understand the impact in a more meaningful manner. Exceptional items are identified by virtue of their size, nature and incidence.
If the management believes that losses/gain are material and is relevant to an understanding of the entity’s financial performance, it discloses the same as an exceptional item.
(xvii) Rounding of amounts:
All amounts disclosed in financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
3) Critical accounting estimates and judgements:
The preparation of financial statements requires the use of accounting estimates, which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items, which are more likely to be materially adjusted due to estimates and assumptions turning out to be different from those originally assessed.
• Estimation of defined benefit obligation
The present value of obligations under defined
benefit plan is determined using actuarial
valuations. An actuarial valuation involves making various assumptions that may differ from actual development in the future. These include the determination of the discount rate, future salary escalations, attrition rate and mortality rates etc. Due to the complexities involved in the valuation and its long-term nature, these obligations are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Refer note 32 for the details of the assumptions used in estimating the defined benefit obligation.
• Impairment of trade receivables
The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
• Fair value measurements and valuation processes
Some of the assets and liabilities are measured at fair value for financial reporting purposes. The Management determines the appropriate valuation techniques and inputs for the fair value measurements.
In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, fair values are determined on the basis of the third-party valuations. The models used to determine fair values including estimates/ judgements involved are validated and periodically reviewed by the management.
• Taxes
Deferred tax assets are recognized for temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
4 Particulars, Accounting and Disclosures of the Composite Scheme of Arrangement
A) As the Composite Scheme of Arrangement ('the Scheme’) became effective on September 11,2023, the accounting effects to the Scheme, as approved by National Company Law Tribunal vide Order dated May 04, 2023 had been given in the accounts for the financial year ended March 31, 2023, by transferring the carrying amount of assets and liabilities pertaining to the Demerged Undertaking of the Demerged Company (Naperol Investments Ltd formerly known as National Peroxide Ltd) to the Resulting Company (National Peroxide Ltd formerly known as NPL Chemicals Ltd) and amalgamation of the Transferor Company (erstwhile Naperol Investments Ltd) into the Company with effect from the Appointed Date of April 01,2022. In order to give effect to the Scheme, the Company revised the audited Ind AS financial statements for the year ended March 31,2023.
B) The assets and liabilities (including cashflow hedge reserve), other than the land listed in Schedule IA of the Scheme pertaining to the Demerged Undertakings have been transferred to and vested in the Resulting Company pursuant to the Scheme at their respective carrying values as appearing in the books of the Company as at appointed date i.e. April 01,2022.
C) All the shareholders of the Company have been allotted one fully paid-up equity share of ' 10 each in Resulting Company, for every one fully paid-up equity share of ' 10 each held by them in the Company, which shall be separately listed. Further as provided under the Scheme, the shares held by the Company in the Resulting Company stand cancelled with a corresponding debit to retained earnings and the Resulting Company has ceased to be the subsidiary of the Company from the Appointed date.
D) The difference between the carrying value of assets and liabilities (including cash flow hedge reserves) of the demerged undertaking transferred to the Resulting Company - ' 31,224.17 Lakhs, has been adjusted against retained earnings as provided under the Scheme.
E) Upon the Scheme becoming effective and with effect from the Appointed date i.e. April 01, 2022, the Company accounted for the amalgamation of the erstwhile Naperol Investments Limited ('Transferor Company’) into the Company in accordance with applicable accounting principles as prescribed under the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) as notified under Section 133 of the Companies Act 2013.
In accordance with the Composite Scheme of Arrangement, the difference between the carrying value of Investments in Naperol Investments Limited (Transferor Company) and the fair value of net assets acquired was recognised as "Gain on transfer of net assets on amalgamation of Transferor Company" amounting to ' 37,663.07 Lakhs under exceptional items.
F) Pursuant to the Scheme, the Company continued to manage the operation of Demerged undertakings in its own name during the year till the date, the requisite permissions/ licences/agreements are not transferred in the name of the Resulting Company. These transactions are not accounted for in the books of the Company but are recorded in the books of the Resulting Company, as prescribed in the Scheme. (Refer Note 20 and 31).
c) Rights, preferences and restrictions attached to equity shares:
The Company has one class of equity share having a par value of '10 per share. Every holder of equity shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend.
In the event of liquidation of the Company, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholdings.
d) Buy back of shares or shares allotted by way of bonus shares:
The Company has not made any buy-back, nor there has been an issue of shares by way of bonus share nor issue of share pursuant to contract without payment being received / paid in cash for the period of five years immediately preceding the balance sheet date.
(ii) Enterprise having significant influence over the Company (from January 07, 2023) and with whom transactions were carried out during the year
The Bombay Burmah Trading Corporation Limited Nowrosjee Wadia and Sons Limited Baymanco Investments Limited
(iii) Enterprises forming part of Promoter group and with whom transactions were carried out during the year
The Bombay Dyeing & Manufacturing company Limited
National Peroxide Limited (formerly known as NPL Chemicals Limited)
Varnilam Investments & Trading Company Limited
Macrofil Investments Limited
Ben Nevis Investments Limited
Dina Neville Wadia
Nusli Neville Wadia
Note: Pursuant to the Composite Scheme of Arrangement (Refer note 4A) the Company has reassessed the relationship and disclosed the related party transactions accordingly.
#Note: Payable to Resulting Company pursuant to Composite Scheme of Arrangement
As per the Composite Scheme of Arrangement Naperol Investments Limited (formerly known as National Peroxide Limited) ("Demerged Company") has continued to manage the operations of demerged undertaking, hence the inter-se transactions between the Demerged and Resulting Company pertaining to the operations of resulting company including interest, cost of goods sold, sale of goods, directors sitting fees, salaries, audit fees, tax to government authorities etc. have not been reported here on above. A sum of ' 301.37 lakhs is payable as at March 31,2024 (' 37.95 lakhs as at March 31,2023) to National Peroxide Limited (formerly known as NPL Chemicals Limited) on account of money held in trust by the Company for managing the operations of demerged undertaking.
(c) Post employment obligations Gratuity
The Company has a defined benefit plan, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity. Where the period of service is more than 5 years but less than 10 years, gratuity will be calculated at the rate of fifteen days basic salary for every completed years of services or part thereof in excess of six months, based on the rate of basic salary last drawn by the employee concerned. Where the period of service is more than 10 years but less than or equal to 15 years, gratuity will be calculated at the rate of two third of the one month’s salary for each completed year of service, being calculated over and above the provisions of the Gratuity Act, 1972. Where the period of service is more than 15 but less than or equal to 20 years, gratuity will be calculated at the rate of one month’s salary for each completed year of service over 15 years, being calculated over and above the provisions of the Gratuity Act, 1972. Where the period of service is more than 20 years, gratuity will be calculated at the rate of one month’s salary for each completed year of service over 20 years, being calculated over and above the provisions of the Gratuity Act, 1972. This is subject to maximum of 20 months’ salary in case of resignation and termination of service. In case of Pre-mature retirement, the maximum Ex-gratia gratuity is 30 months’ salary.
(c) Valuation techniques used to determine fair value
Fair value of all equity instruments which are traded in the stock exchanges are valued using the closing price as at the reporting date. The mutual funds are valued using closing Net Assets Value (NAV). The fair value of investment in equity shares which are unquoted are valued using cost approach method.
34. Financial risk management
The Company’s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. In order to manage these risks the Company has adopted a Risk Management Policy wherein all material risks faced by the Company are identified and assessed. The Risk Management framework defines the risk management approach of the Company and includes collective identification of risks impacting the Company’s business and documents their process of
(a) Credit risk
The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the Company. Credit risk arises from cash and cash equivalents, financial assets carried at amortised cost as well as credit exposures to trade customers including outstanding receivables.
The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
Credit risk management
Trade receivables mainly arise from lease income receivable from National Peroxide Limited ("NPL")(formerly known as NPL Chemicals Limited) in pursuant to Composite Scheme of Arrangement. Since NPL is part of the promoter group and the lease rentals are majorly received in advance, the management believes that the credit risk is minimal. The Company has adopted a policy of only dealing with creditworthy counterparties. Intercorporate deposits given are for not more than 12 months. The Company periodically assess the recoverability of intercorporate deposits.
The Company provides for life time allowance on trade receivable using simplified approach and on a case to case basis on specified customers. Specific debtors represents debtors facing bankruptcy cases, operation shutdown and other scenario as determined by the management. Such debtors are categorised as specific debtors upon intimation/ news. Such specific debtors has no nexus with the macro economy factor. The Company recognises expected credit loss on specified receivables as determined by the management.
For banks and financial institutions, only highly rated banks / institutions are accepted. Generally all policies surrounding credit risk have been managed at Company level.
(b) Liquidity risk
Liquidity risk is the risk that the Company will fail in meeting its obligations to pay its financial liabilities. The Company’s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due. In respect of its operations, the Company funds its activities primarily through cash generated in operations.
Management monitors the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. Cash which is not needed in the operating activities of the Company is invested in marketable liquid fund.
Based on recent trends observed, marketable securities held, cash generation, cash surpluses held by the Company, the Company does not envisage any material liquidity risks.
(c) Market risk
Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of volatility of prices in the financial markets. The Company is exposed to price risks arising from equity investments and mutual funds. Further, equity investments are subject to changes in the market price of securities. Equity investments are held for strategic purpose rather than for trading purposes. The Company does not actively trade in these investments. Sensitivity
If equity prices had been 10% higher / lower, other comprehensive income before tax for the year ended March 31, 2024 would increase / (decrease) by ' 10,626.43 Lakhs and (10,626.43) Lakhs (March 31,2023: ' 5,452.78 Lakhs and (5,452.78) Lakhs as a result of the changes in fair value of shares measured at FVOCI.
If NAV of Mutual funds had been 10% higher / lower, profit before tax for the year ended March 31,2024 would increase / (decrease) by ' 20.81 Lakhs and (20.81) Lakhs (March 31,2023: ' 15.36 Lakhs and (15.36) Lakhs as a result of the changes in fair value of mutual funds measured at FVTPL.
38 Capital and other commitments Capital commitments
(i) There are no estimated amount of contracts remaining to be executed on capital account and not provided as at balance sheet date (March 31,2023: Nil).
39 Compensation for right of way on the Company's property:
During the year ended March 31,2023, the Company received net compensation of ' 295.63 Lakhs , as per the terms of the out-of-court settlement agreed between the Company and Century Rayon Limited towards Right of Way for laying of 100 KV Extra High Voltage (EHV) transmission line and EHV towers on the land of the Company.
40 Additional regulatory information required by Schedule III to the Companies Act, 2013
(i) Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Borrowing secured against current assets
The Company has not been sanctioned any borrowings against current assets at any point of time during the year.
(iii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(vi) Compliance with approved Scheme(s) of arrangements
In the previous year, the effect of the Composite Scheme of Arrangement as explained in Note 4 has been accounted for in the books of accounts of the Company is 'in accordance with the Scheme’ and 'in accordance with the applicable accounting standards’. For the current year, the Company has not entered into any approved Scheme of arrangement.
(vii) Utilisation of borrowed funds and share premium
I The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
II The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries
(viii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(x) Valuation of Property, plant and equipment, intangible asset and investment property
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
44 Events Occurring after the Balance Sheet Date
No material events have occurred after the Balance Sheet date and upto the approval of the Ind AS financial statements except Registrar of Companies has approved the amendment in the main object clause of Memorandum of Association of the Company with effect from May 07, 2024. The main object clause has been amended to include business of construction and to undertake, transact, carry on and promote any business, commercial or otherwise, to act as distributors, promoters, service providers, factors, agents middleman, representatives, importers & exporters, distributors, logistics, contract man, representing and indenting agents on commission and/ or allowances as may be deemed fit in all kinds of goods, materials, commodities, services, infrastructure, logistics, merchandise, etc.
45 Ind AS Financial statements of the Company for the year ended March 31,2024 are approved by the Board of Directors on May 08, 2024.
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