(a) Provisions
Provisions are recognized 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 recognized as interest expense.
(b) 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.
(c) 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.
(a) Short-term obligations
Liabilities for wages and salaries, including non¬
monetary 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 post¬
employment schemes:
a. defined benefit plans such as gratuity,
pension and provident fund contributions
made to a trust in case of certain employees
b. defined contribution plans such as provident
fund and superannuation fund.
Pension and gratuity obligations
The liability or asset recognized in the balance
sheet in respect of defined benefit pension and
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. Gratuity contributions are made to a
trust ('National Peroxide Limited Employees'
Gratuity Fund') administered by the Company.
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.
Provident fund contributions made to a trust
administered by the Company
I n respect of certain employees, provident fund
contributions are made to a trust ('National
Peroxide Limited Employees' Provident Fund')
administered by the Company. The interest rate
payable to the members of the trust shall not be
lower than the statutory rate of interest declared
by the Central Government under the Employees
Provident Funds and Miscellaneous Provisions
Act, 1952 and shortfall, if any, shall be made good
by the Company. The liability in respect of the
shortfall of the interest earnings of the fund is
determined based on actuarial valuation.
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.
(xx) Earnings per share:
Basic Earnings per share
Basic earnings per share is calculated by dividing:
- the net profit for the period attributable to
the owners of the Company
- by the weighted average number of equity
shares outstanding during the financial year.
Diluted Earnings per share
Diluted Earnings per share adjust the figures used
in the determination of basic earnings per share
to take into account;
- t he after-income tax effect of interest and
other financing cost associated with dilutive
potential equity shares and
- the weighted average number of additional
equity shares that would have been
outstanding assuming the conversion of all
dilutive potential equity shares.
(xxi) 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.
(xxii) 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.
2) 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 useful life
Useful lives of property, plant and equipment are based
on the management's estimation. The useful lives as
estimated are same as prescribed in Schedule II of the
Companies Act, 2013.
The useful lives of Company's assets are determined
by management at the time the asset is acquired/
capitalised and reviewed annually for appropriateness.
The lives are based on historical experience with similar
assets as well as anticipation of future events, which
may impact their life such as changes in technology.
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.
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. Refer
note 39 to the financial statements.
Inventory obsolescence
The Company writes down inventories to net realisable
value based on an estimate of the realisability of
inventories. Write downs on inventories are recorded
where events or changes in circumstances indicate
that the balances may not realised. The identification
of write-downs requires the use of estimates of net
selling prices of the down-graded inventories. Where
the expectation is different from the original estimate,
such difference will impact the carrying value of
inventories and write-downs of inventories in the
periods in which such estimate has been changed.
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 utilised. 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.
I) Term of repayment
The sanctioned amount of Rupee term loan from bank is C 1,500 lakhs (March 31, 2024: C 1,500 lakhs). This facility
carries floating interest rate of 9.25% to 10.50%. The loan is repayable in 17 equal quarterly instalments commencing
from the end of 12th month from date of first drawdown (i.e. January 07, 2022).
II) Nature of security
The above loan are secured by a pari passu charge on entire movable fixed assets including plant and machinery
of the Company located in Kalyan, Maharashtra. As this loan was transferred to the company pursuant to the
composite scheme of arrangement, the process of transfer of charges from the Demerged Entity to the Company is
in progress.
(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.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. While
calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method
(present value of the defined benefit obligation calculated with the projected unit credit method at the end of the
reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to
the prior period.
(iv) The above defined benefit gratuity plan was administrated 100% by a trust as at March 31, 2025.
(v) Defined benefit liability and employer contributions
The Company will pay demand raised by the trust towards gratuity liability on time to time basis to eliminate the
deficit in defined benefit plan.
The weighted average duration of the defined benefit obligation is 6.33 years (Previous Year: 4.77 years)
(vi) Risk exposure
Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: Investment
risk, interest rate risk and salary risk.
Provident Fund
In respect of certain employees, provident fund contributions are made to a trust administered by the
Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate
of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous
Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The liability in respect
of the shortfall of interest earnings of the Fund is determined on the basis of an actuarial valuation.
Financial Instrument not measured using Fair Value i.e. measured using amortized cost
The carrying value of Other financial assets / liabilities represent reasonable estimate of its fair value.
Note:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
There are no transfers between any levels during the year.
The Company does not have financial instrument at level 3 with unobservable input and hence no sensitivity analysis
performed.
The carrying amounts of cash and cash equivalents, other bank balances, trade receivables, investment in
mutual funds, inter corporate deposits, other financial assets, current financial liabilities- borrowings including
accrued interest, lease liabilities, trade payables and other current financial liabilities are considered to be the
same as their fair values due to their short term nature.
40 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 minimise any adverse effects on the financial performance of the Company, derivative
financial instruments, such as cross currency interest rate swap are entered to hedge certain foreign currency risk
exposures and interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading or
speculative instruments.
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 identification,
mitigation and optimization of such risks.
Hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged
item. The effective portion of the change in the fair value of the hedging instrument is deferred into the cash flow
hedge reserve through OCI and will be recognised in profit or loss when the hedged item affects profit or loss. This
will effectively result in recognising interest expense at a fixed interest rate for the hedged loans and foreign currency
borrowing at the fixed foreign currency rate.
(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
The Company's credit risk arises from accounts receivable balances. The Company has a credit risk policy in
place to ensure that sales are made to customers only after an appropriate credit risk assessment and credit
line allocation process. Procedures are standardised within a customer credit risk policy and supported by the
information technology system by limiting the credit exposure to each customer and allowing an average credit
period of 30-90 days. The Company has adopted a policy of only dealing with creditworthy counterparties.
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 and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when due.
In respect of its operations, the Company funds its activities primarily through cash generated in operations and
working capital borrowings.
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 funds.
Based on recent trends observed, profitability, cash generation, cash surpluses held by the Company and the borrowing
lines available, the Company does not envisage any material liquidity risks.
(i) Maturities of financial liabilities
The amounts disclosed below are the non derivative contractual undiscounted cash flows of financial liabilities.
Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(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. Market risk can be further segregated as: a) Foreign currency risk, b)
Interest rates risk and c) Other price risk.
(i) Foreign currency risk
Foreign 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. Foreign exchange risks arise from recognised assets and liabilities,
when they are denominated in a currency other than functional currency of the Company. The Company imports
certain raw materials and spare parts used in manufacturing and exports finished goods. Therefore it is exposed
to foreign exchange risks arising from various currency exposures, primarily with respect to the US-dollar ("USD”).
Company's exposure to foreign currency risk due to operation is very limited and it always ensures that the such
exposure is within the approved limit for which the Company does not require to hedge through derivatives.
(iii) Other price risks
The Company is exposed to price risks arising from mutual funds. Further, mutual funds are subject to changes
in the market price of securities.
Sensitivity
If mutual fund prices had been 10% higher / lower, profit before tax for the year ended March 31, 2025 would
increase / (decrease) by C 366.31 lakhs and (366.31) lakhs (March 31, 2024: C351.02 lakhs and (351.02) lakhs) as
a result of the changes in fair value of mutual funds measured at FVTPL.
41 Capital Management
(a) Risk Management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may
adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to
reduce debt.
42 Micro, small and medium enterprise
Disclosure in respect to Micro and Small Enterprises as per Micro, Small and Medium Enterprises Development Act,
2006 ('MSMED') Act, 2006 is as follows:
The information as required under Micro, Small and Medium Enterprises Development Act, 2006, has been determined
to the extent such parties have been identified on the basis of information available with the Company and relied
upon by the auditors. The principal amounts / interest payable amounts for delayed payments to such vendors as at
Balance Sheet date during the current year and previous year mentioned below.
43 Contingent liability
(i) Contingent liability relating to determination of provident fund liability, based on judgement of the Hon'ble
Supreme Court, is not determinable at present for the period prior to March 2019, due to uncertainty on the
impact of the judgement in the absence of further clarification relating to applicability. The Company has paid
provident fund to employees as applicable with effect from March 2019. The Company will continue to assess
any further developments in this matter for their implications on Ind AS financial statements, if any.
(ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where
provisions are required and disclosed as Contingent liability, where applicable, in its financial statements. The
Company's management does not reasonably expect that these legal notices, when ultimately concluded and
determined, will have material and adverse effect on Company's result of operations or financial conditions.
44 Capital and other commitments
Capital commitments
(i) Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances)
for C 57.96 lakhs (March 31, 2024: C 18.58 lakhs).
(ii) Other commitment:
The Company has entered into a long term agreement with GAIL (India) Limited ("GAIL”) for purchase of Natural
Gas. The agreement is valid till December 31, 2025. As per the said agreement, the Company under 'Take or Pay
obligation' clause has to make payment for a fixed quantity of gas on an annual basis, whether used or not. GAIL
has the discretion to waive off the Take or Pay charges.
45 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 borrowings from a bank on the basis of security of current assets. The quarterly returns or
statements filed by the Company with such a bank are in agreement with the books of account and the difference, if
any, is on account of valuation, provisions, entries passed after submitting the quarterly returns to the bank etc., which
are explainable items and not material in nature.
(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) 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
(vii) 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.
(viii) 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.
(ix) 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. The Company does not have investment property.
48 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.
49 The Company has made an investment for 26% equity shares of Clean Max Bryce Private Limited, a Special Purpose
Vehicle (SPV) formed jointly with Clean Max Enviro Energy Solutions Private Limited, for making supply of 6.6 MVA of
wind energy and 3.30 MWp DC 2.20 MW AC solar energy to the Company's plant at Ambivali, Kalyan, Maharashtra.
However, as per the Shareholders' Agreement, the Company does not have any significant influence over the SPV.
Consequently, SPV has not been considered as an associate, and accordingly, the consolidation of the financial
results of SPV is not applicable to the Company in terms of the respective regulations of Indian Accounting Standards
(Ind-AS).
50 The Ind AS financial statements are authorised by the Board of Directors of the Company at their meeting held on May
06, 2025.
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