(r) Provisions, Contingent Liabilities and Contingent
Assets
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result
of a past event and it is probable that an outflow of
resources, that can be reliably estimated, will be
required to settle such an obligation.
If the effect of the time value of money is material,
provisions are determined by discounting the
expected future cash flows to net present value using
an appropriate pre-tax discount rate that reflects
current market assessments of the time value of
money and, where appropriate, the risks specific to
the liability. Unwinding of the discount is recognised
in the Statement of Profit and Loss as a finance cost.
Provisions are reviewed at each reporting date and are
adjusted to reflect the current best estimate.
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 a reliable estimate of the
amount cannot be made, is disclosed as a contingent
liability. Contingent liabilities are also 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.
Claims against the Company where the possibility of
any outflow of resources in settlement is remote, are
not disclosed as contingent liabilities.
Contingent assets are not recognised in Financial
Information since this may result in the recognition
of income that may never be realised. However,
when the realisation of income is virtually certain,
then the related asset is not a contingent asset and
is recognised.
(s) Segment Reporting
The Company identifies operating segments based on
the internal reporting provided to the chief operating
decision-maker.
The chief operating decision-maker, who is responsible
for allocating resources and assessing performance of
the operating segments, has been identified as the
Board of Directors that makes strategic decisions.
The Company operates in manufacturing and trading
as a single business segment based on its products and
has one reportable segment, namely "Agrochemicals".
Accordingly, separate disclosure for business
segment is not applicable. Based on the "Management
Approach" as defined in Ind AS 108 "Operating
Segment", the Company’s Chief Operating Decision
Maker (CODM) is Board of Directors of the Company
which regularly reviews the financial performance
of the Company as whole. The CODM monitors the
operating results of its single business unit for the
purpose of making decisions about resource allocation
and performance assessment.
The analysis of geographical segments is based on the
areas in which customers of the company are located.
The company assesses the collectability of trade receivables on an on-going basis. The company has evaluated its
trade receivables and determined that there are no indicators of impairment. This assessment is based on the historical
payment behaviour of customers and forward looking information about the dues of customers.
The Company has availed a working capital facility of ?2 Crores from Equentia Financial Services Limited (NBFC). The
disbursement of this facility was made by Equentia on behalf of Ulink Agritech Private Limited. This arrangement is
backed by a tripartite agreement among Advance Agro, Equentia Financial Services Limited, and Ulink Agritech Private
Limited. As per the terms of the agreement, in the event that Ulink Agritech Private Limited fails to make the repayment
to Equentia, Advance Agro shall be liable to discharge the said obligation.
(iii) Nature/ Purpose of each reserve
Retained Earnings: Retained earnings represents the undistributed profit/ amount of accumulated earnings of
the company
Securities Premium: Securities Premium represents the amount received by the company over and above the face value
of its shares at the time of issue. The company may use this reserve for issuing bonus shares, buy-back of shares, writing
off share issue expenses, and premium on redemption of preference shares or debentures.
Notes:
(a) Nature of security and details of working capital facilities from banks:
1) Borrowing facility from Punjab National Bank
Cash credit facility sanctioned ? 700.00 million, Packing Credit facility (PC) (Sublimit of CC) ? 50.00 million, Foreign
Usage Bill Purchase facility (FOBP) (Sublimit of CC) ? 50.00 million, Adhoc limit ? 75.00 million (from 11-12-2025 to
10-04-2026) and non-fund based limit of ? 172.00 million (Sublimit of CC ?50.00 million).(March 31, 2025: Cash credit
facility sanctioned ? 700.00 million, Packing Credit facility (PC) (Sublimit of CC) ? 50.00 million, Foreign Usage Bill
Purchase facility (FOBP) (Sublimit of CC) ? 50.00 million and non-fund based limit of ? 110.00 million (Sublimit of CC
?50.00 million)). The fund-based amounts utilised are ?734.96 million (March 31, 2025 ? 637.77 million). Details of
security are as under:
a) Primary Security:
Pari passu charge by way of hypothecation of the company’s entire stock of raw materials, semi finished and finished
goods, consumable store spare including book debts, bill whether documentary or clean, export bill with shipping
documents, outstanding monies, receivables and other current assets, both present and future.
b) Collateral Security:
i) First pari-passu charge on Industrial Land & Building located at Khasra No 712/1, Dhami Khurd, Bagru RIICO
Ext., Jaipur, standing in the name of company.
ii) First pari-passu charge on Industrial Land & Building located at Plot No E-39, RIICO Industrial Area (Ext.) Main
100ft wide road, Bagru, Jaipur, standing in the name of company.
iii) First pari-passu charge on property located at Flat No 105, 1st Floor, Tower No 3, Royal Greens, Sirsi Road,
Jaipur, standing in the name of Director.
iv) First pari-passu charge on Industrial Land & Building located at G-49, RIICO Industrial Area, Bagru Extn. Village-
Bagru Kalan, The-Sanganer, Jaipur, standing in the name of company.
v) First pari-passu charge on Industrial Land & Building located at Khasra No 713/4, Dhami Khurd, Post-Dhami
Kalan, Tehsil-Sanganer, Jaipur, standing in the name of company.
II. Defined Benefit Plan
Gratuity Fund
The Company has a defined benefit gratuity plan (funded) for its employees. The gratuity plan is governed by the Payment
of Gratuity Act, 1972. Under the Payment of Gratuity Act, 1972,employee who has completed five years of service is
entitled to specific benefit. The level of benefits provided depends on the length of service and salary at retirement age.
The following tables summarise the components of net benefit expense recognised in the Financial Information of Profit
and Loss (including other comprehensive income/(loss)) and the funded/unfunded status and amounts recognised in the
Financial Information:
i) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future
salaries of members. As such, an increase in the salary of the members more than assumed level will increase
the plan’s liability.
ii) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of
the liability requiring higher provision.
iii) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Entity has to manage
pay-out based on pay as you go basis from own funds.
iv) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only,
plan does not have any longevity risk
Notes:-
i) The Company categorises fair value measurements using a fair value hierarchy that is dependent on the valuation
inputs used as follow:
a. Level 1 - Quoted prices (unadjusted) in active markets for financial instruments.
b. Level 2 - The fair value of financial instruments not actively traded is determined using valuation techniques
that prioritise observable market data and minimise reliance on entity-specific assumptions. Instruments with
significant observable inputs are classified as Level 2, including unquoted shares. For unquoted shares, cost is
considered a reasonable estimate of fair value.
c. Level 3 - If any significant input is unobservable, the instrument is classified as Level 3, relying on non-market
data for valuation.
ii) The management assessed that the fair value of cash and cash equivalent, trade receivables, trade payables, loans
& advances, lease liabilities, borrowings and other current financial assets and other current financial liabilities
approximate their carrying amounts largely due to the short term maturities of these instruments.
iii) There were no transfers between Level 1, 2 and 3 during the year ended March 31, 2026, March 31, 2025.
38. Financial Risk Management
The company has exposure to the following risks arising from financial instruments:
1. Credit Risk
2. Liquidity Risk
3. Market Risk
Risk Management Framework
The Board of directors of the companies has overall responsibility for the establishment and oversight of the Company’s
risk management framework. The Board of directors has authorised business managers to establish the processes, who
ensures that executive management controls risks through the mechanism of properly defined framework.
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 by the business managers periodically 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.
a) Credit Risk:
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to
the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of
deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits
and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining
necessary approvals for credit.
i) Trade receivables and contract assets:
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base, including
the default risk associated with the industry and country in which customers operate.
Customer credit risk is managed by the Company subject to the Company’s established policy, procedures and
control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.
To manage this, the Company periodically assesses the financial reliability of customers, taking into account the
financial condition, current economic trends, and analysis of historical bad debts and ageing of trade receivable. The
Company creates allowance for all trade receivables based on lifetime expected credit loss model (ECL).
Other financial assets:
Other financial assets includes security deposits and interest receivable which are placed with a reputable financial
institution with high credit ratings and no history of default.
b) Liquidity Risk:
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset. The Company’s approach for managing
liquidity is to ensure 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 Company’s reputation, typically
the company ensures that it has sufficient cash on demand to meet expected operational expenses, servicing of
financial obligations.
c) Market Risk:
Market Risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices,
which will affect the Company’s income or the value of its holding or financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while optimising
the return.
The sensitivity analysis in the following sections relate to the position as at March 31, 2026, March 31, 2025.
The sensitivity analysis have been prepared on the basis that the amount of net debt and the proportion of financial
instruments in foreign currencies are all constant as at March 31, 2026 , March 31, 2025.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This
is based on the financial assets and financial liabilities held as at March 31, 2026, March 31, 2025.
i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates
primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates,
with all other variables held constant. The impact on the Company’s profit before tax and pre-tax equity is due
to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency
changes for all other currencies is not material.
ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates
relates primarily to the Company’s short-term debt obligations with floating interest rates.
Exposure to interest rate risk
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of borrowings affected. With all other variables held constant, the Company’s profit before tax is
affected through the impact on floating rate borrowings, as follows:
39. Capital Management
For the purpose of the Company’s capital management, capital includes issued equity share capital, securities premium
and all other reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital
management is to maximise the value of the share and to reduce the cost of capital.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company can adjust the dividend
payment to shareholders, issue new shares, etc. The Company monitors capital using a gearing ratio, which is net debt
divided by total equity. The Company includes within net debt, interest bearing loans and borrowings, less cash and
cash equivalents.
42 Segment Reporting
i. Business Segment
The Company operates in manufacturing and trading as a single business segment based on its products and has one
reportable segment, namely "Pesticides Products”. Accordingly, separate disclosure for business segment is not
applicable. Based on the "Management Approach” as defined in Ind AS 108 "Operating Segment”, the Company’s Chief
Operating Decision Maker (CODM) is Board of Directors of the Company which regularly reviews the financial performance
of the Company as whole. The CODM monitors the operating results of its single business unit for the purpose of making
decisions about resource allocation and performance assessment. However Geographical Segments being secondary
segments are discussed below:
44 Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least
2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR)
activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture,
healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects.
The Company is spending amount for these activities, which are specified in Schedule VII of the Companies Act, 2013.
46. Statutory Information:
a. There are no proceedings initiated or are pending against the Company for holding any benami property under the
Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
b. The Company has not entered into any transactions with struck off companies during the year ended March 31, 2026,
March 31, 2025.
c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory year
d. The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,
2026, March 31, 2025
e. 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 period/year ended March 31, 2026, March 31, 2025 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).
f. The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) to or in any other person or entity, including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Further, the Company has not received any funds from any person or entity, including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
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 provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
g. The Company has complied with the number of layers prescribed under clause (87) of the Section of the Companies
Act read with the Companies (Restrictions on Number of Layers) Rule, 2017.
h. The Company is not declared willful defaulter by bank or financial institutions or any lender during the period/year
ended March 31, 2026, March 31, 2025.
i. Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in
agreement with the books of accounts for the year ended but there is discrepancy with respect to quarterly returns
or statements of current assets filed by the Company with banks or financial institutions for the year ended March 31,
2025 and period ended March 31, 2026.
j. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it
was obtained.
47. Pursuant to proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended, applicable from April 01, 2023, the
Company has used accounting softwares Focus and SAP for maintaining its books of account. The Company migrated
to SAP with effect from April 01, 2025. The softwares have a feature of recording audit trail (edit log) facility which was
enabled throughout the year for all relevant transactions recorded in the software, except the fields in which deletions
made have not been recorded by the software.
48 Events after the reporting period
No such event for the period ended March 31, 2026 however for the period ended March 31, 2025 - ROC Demand of ? 0.20
million dated May 20, 2025 and ? 0.40 million dated May 26, 2025 are being reflected at the MCA portal of the company.
The same have been paid by July 8, 2025.
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