Chemfab Alkalis Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2025

1.19 Provisions and contingent liabilities

A provision is recognised when the Company has a
present obligation (legal or constructive) as a result
of past events and it is probable that an outflow of
resources will be required to settle the obligation in

respect of which a reliable estimate can be made.
Provisions are determined based on the best estimate
required to settle the obligation at the balance sheet
date and measured using the present value of cash
flows estimated to settle the present obligations
(when the effect of time value of money is material).
These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.

Contingent liability is disclosed for (i) Possible
obligations which will be confirmed only by future
events not wholly within the control of the Company
or (ii) Present obligations arising from past events
where it is not probable that an outflow of resources
will be required to settle the obligation or a reliable
estimate of the amount of the obligation cannot be
made. The Company does not recognize a contingent
liability but discloses its existence in the Financial
Statements. Contingent assets are only disclosed
when it is probable that the economic benefits will
flow to the entity.

1.20 Provision for warranty

The estimated liability for product warranties is
recorded when products are sold. These estimates
are established using historical information on the
nature, frequency and average cost of warranty
claims and management estimates regarding
possible future incidence based on corrective actions
on product failures. The timing of outflows will vary as
and when warranty claim will arise - being typically
upto three years.

1.21 Insurance Claims

Insurance claims are accounted for on the basis
of claims admitted/expected to be admitted and
to the extent that the amount recoverable can be
measured reliably and it is reasonable to expect
ultimate collection.

1.22 Financial Instruments

Financial assets and financial liabilities are
recognised when the Company becomes a party to
the contractual provisions of the instruments.

Financial assets and financial liabilities are initially
measured at fair value except in respect of Trade
receivables that do not have a significant financial
component which are measured at transaction price.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit and loss) are
added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly

attributable to the acquisition of financial assets or
financial liabilities at fair value through profit and loss
are recognised immediately in profit and loss.

1.23 Financial assets

All regular way purchases or sales of financial assets
are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases
or sales of financial assets that require delivery of
assets within the time frame established by regulation
or convention in the marketplace.

All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of the
financial assets.

Classification of financial assets:

"Debt instruments that meet the following conditions
are subsequently measured at amortised cost (except
for debt instruments that are designated as at fair
value through profit or loss on initial recognition):

• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; an

• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

Debt instruments that meet the following
conditions are subsequently measured at fair
value through other comprehensive income
(except for debt instruments that are designated
as at fair value through profit or loss on initial
recognition):

• the asset is held within a business model
whose objective is achieved both by collecting
contractual cash flows and selling financial
assets; and

• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

By default, all other financial assets are measured
subsequently at fair value through profit or loss
(fvtpl).

Despite the foregoing, the Company may make
the following irrevocable election/designation at
initial recognition of a financial asset:

• the Company may irrevocably elect to present
subsequent changes in fair value of an equity
investment in other comprehensive income if
certain criteria are met (see (iii) below); and

• the Company may irrevocably designate a debt
investment that meets the amortised cost or
FVTOCI criteria as measured at FVTPL if doing so
eliminates or significantly reduces an accounting
mismatch (see (iv) below).All other financial
assets are subsequently measured at fair value."

(i) Amortised cost and effective interest method:

The effective interest method is a method of
calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant
period.

For financial assets other than purchased or
originated credit-impaired financial assets (i.e. assets
that are credit-impaired on initial recognition), the
effective interest rate is the rate that exactly discounts
estimated future cash receipts (including all fees and
points paid or received that form an integral part
of the effective interest rate, transaction costs and
other premiums or discounts) excluding expected
credit losses, through the expected life of the debt
instrument, or, where appropriate, a shorter period,
to the gross carrying amount of the debt instrument
on initial recognition. For purchased or originated
credit-impaired financial assets, a credit-adjusted
effective interest rate is calculated by discounting the
estimated future cash flows, including expected credit
losses, to the amortised cost of the debt instrument
on initial recognition.

The amortised cost of a financial asset is the amount
at which the financial asset is measured at initial
recognition minus the principal repayments, plus the
cumulative amortisation using the effective interest
method of any difference between that initial amount
and the maturity amount, adjusted for any loss
allowance. The gross carrying amount of a financial
asset is the amortised cost of a financial asset before
adjusting for any loss allowance.

Interest income is recognised using the effective
interest method for debt instruments measured
subsequently at amortised cost and at FVTOCI. For
financial assets other than purchased or originated
credit-impaired financial assets, interest income is
calculated by applying the effective interest rate to
the gross carrying amount of a financial asset, except
for financial assets that have subsequently become
credit-impaired (see below). For financial assets that
have subsequently become credit-impaired, interest
income is recognised by applying the effective interest

rate to the amortised cost of the financial asset. If, in
subsequent reporting periods, the credit risk on the
credit-impaired financial instrument improves so
that the financial asset is no longer credit-impaired,
interest income is recognised by applying the
effective interest rate to the gross carrying amount of
the financial asset.

For purchased or originated credit-impaired financial
assets, the Company recognises interest income by
applying the credit-adjusted effective interest rate to
the amortised cost of the financial asset from initial
recognition. The calculation does not revert to the
gross basis even if the credit risk of the financial asset
subsequently improves so that the financial asset is
no longer credit-impaired.

Interest income is recognised in profit or loss and is
included in the ''Other income'' line item. "

(ii) Debt instruments classified as at FVTOCI:

The debt instruments are initially measured at fair
value plus transaction costs.

Subsequently, changes in the carrying amount of
these debt instruments as a result of foreign exchange
gains and losses (see below), impairment gains or
losses (see below), and interest income calculated
using the effective interest method (see (i) above)
are recognised in profit or loss. The amounts that
are recognised in profit or loss are the same as the
amounts that would have been recognised in profit
or loss if these debt instruments had been measured
at amortised cost. All other changes in the carrying
amount of these debt instruments are recognised in
other comprehensive income and accumulated in
a separate component of equity. When these debt
instruments are derecognised, the cumulative gains or
losses previously recognised in other comprehensive
income are reclassified to profit or loss.

(iii) Equity instruments designated as at FVTOCI:

On initial recognition, the Company may make an
irrevocable election (on an instrument-by-instrument
basis) to designate investments in equity instruments
as at FVTOCI. Designation at FVTOCI is not permitted if
the equity investment is held for trading:

Investments in equity instruments at FVTOCI are
initially measured at fair value plus transaction costs.

Subsequently, they are measured at fair value with
gains and losses arising from changes in fair value
recognized in other comprehensive income and
accumulated in a separate component of equity. The
cumulative gain or loss is not reclassified to profit or

loss on disposal of the equity investments, instead, it is
transferred to retained earnings.

Dividends on these investments in equity instruments
are recognised in profit or loss in accordance with
Ind AS 109, unless the dividends clearly represent
a recovery of part of the cost of the investment.
Dividends are included in the ''Other income'' line item
in profit or loss.

The Company designates all investments in equity
instruments that are not held for trading as at FVTOCI
on initial recognition.

A financial asset is held for trading if:

• It has been acquired principally for the purpose
of selling it in the near term; or

• On initial recognition it is part of a portfolio of
identified financial instruments that the Company
manages together and has a recent actual
pattern of short-term profit-taking;

(iv) Financial assets at fair value through profit or
loss (FVTPL):

Financial assets that do not meet the criteria for being
measured at amortised cost or FVTOCI (see (i) to (iii)
above) are measured at FVTPL. Specifically:

• Investments in equity instruments are classified
as at FVTPL, unless the Company designates an
equity investment that is neither held for trading
(see (iii) above).

• Debt instruments that do not meet the amortised
cost criteria or the FVTOCI criteria (see (i) and (ii)
above) are classified as at FVTPL. In addition, debt
instruments that meet either the amortised cost
criteria or the FVTOCI criteria may be designated
as at FVTPL upon initial recognition if such
designation eliminates or significantly reduces a
measurement or recognition inconsistency (so
called ''accounting mismatch'') that would arise
from measuring assets or liabilities or recognising
the gains and losses on them on different bases.
The Company has not designated any debt
instruments as at FVTPL.

Financial assets at FVTPL are measured at fair value at
the end of each reporting period, with any fair value
gains or losses recognised in profit or loss. The net
gain or loss recognised in profit or loss includes any
dividend or interest earned on the financial asset and
is included in the ''other income'' line item.

Foreign exchange gains and losses:

The carrying amount of financial assets that are
denominated in a foreign currency is determined in
that foreign currency and translated at the spot rate
at the end of each reporting period. Specifically:

• for financial assets measured at amortised
cost that are not part of a designated hedging
relationship, exchange differences are recognised
in profit or loss in the ''other income'' line item;

• for debt instruments measured at FVTOCI that
are not part of a designated hedging relationship,
exchange differences on the amortised cost of
the debt instrument are recognised in profit or
loss in the ''other income'' line item. As the foreign
currency element recognised in profit or loss is the
same as if it was measured at amortised cost, the
residual foreign currency element based on the
translation of the carrying amount (at fair value)
is recognised in other comprehensive income in
a separate component of equity;

• for financial assets measured at FVTPL that are
not part of a designated hedging relationship,
exchange differences are recognised in profit or
loss in the ''other income'' line item as part of the
fair value gain or loss; and

• for equity instruments measured at FVTOCI,
exchange differences are recognised in other
comprehensive income in a separate component
of equity.

Impairment of financial assets:

The Company recognises a loss allowance for
expected credit losses on investments in debt
instruments that are measured at amortised cost or
at FVTOCI, lease receivables, trade receivables and
contract assets, financial guarantee contracts, and
certain other financial assets measured at amortised
cost such as deferred consideration receivable on
disposal of subsidiaries. The amount of expected
credit losses is updated at each reporting date to
reflect changes in credit risk since initial recognition of
the respective financial instrument.

Expected credit losses are the weighted average
of credit losses with the respective risks of default
occurring as the weights. Credit loss is the difference
between all contractual cash flows that are due to the
Company in accordance with the contract and all the
cash flows that the Company expects to receive (i.e.
all cash shortfalls), discounted at the original effective
interest rate (or credit-adjusted effective interest

rate for purchased or originated credit-impaired
financial assets). The Company estimates cash flows
by considering all contractual terms of the financial
instrument (for example, prepayment, extension, call
and similar options) through the expected life of that
financial instrument.

The Company measures the loss allowance for
a financial instrument at an amount equal to the
lifetime expected credit losses if the credit risk on
that financial instrument has increased significantly
since initial recognition. If the credit risk on a financial
instrument has not increased significantly since
initial recognition, the Company measures the loss
allowance for that financial instrument at an amount
equal to 12-month expected credit losses. 12-month
expected credit losses are portion of the life-time
expected credit losses and represent the lifetime
cash shortfalls that will result if default occurs within
the 12 months after the reporting date and thus, are
not cash shortfalls that are predicted over the next 12
months.

For trade receivables, the Company always measures
the loss allowance at an amount equal to lifetime
expected credit losses. Further, for the purpose of
measuring lifetime expected credit loss allowance for
trade receivables, the Company has used a practical
expedient method as permitted under Ind AS 109. This
expected credit loss allowance is computed based on
a provision matrix which takes into account historical
credit loss experience and adjusted for forward¬
looking information."

De-recognition of financial assets:

The Company derecognises a financial asset only
when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards
of ownership of the asset to another entity. If the
Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues
to control the transferred asset, the Company
recognises its retained interest in the asset and an
associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and
rewards of ownership of a transferred financial asset,
the Company continues to recognise the financial
asset and also recognises a collateralized borrowing
for the proceeds received.

On derecognition of a financial asset measured at
amortised cost, the difference between the asset''s
carrying amount and the sum of the consideration
received and receivable is recognised in profit or
loss. In addition, on derecognition of an investment

in a debt instrument classified as at FVTOCI, the
cumulative gain or loss previously accumulated in a
separate component of equity is reclassified to profit
or loss. In contrast, on derecognition of an investment
in an equity instrument which the Company has
elected on initial recognition to measure at FVTOCI,
the cumulative gain or loss previously accumulated
in a separate component of equity is not reclassified
to profit or loss, but is transferred to retained earnings.

1.24 Financial liabilities and equity
instruments

Classification as debt or equity:

Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.

Equity instruments:

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued
by the Company are recognised at the proceeds
received, net of direct issue costs. Repurchase of the
Company''s own equity instruments is recognised
and deducted directly in equity. No gain or loss is
recognised in profit or loss on the purchase, sale,
issue or cancellation of the Company''s own equity
instruments.

All financial liabilities are measured subsequently at
amortised cost using the effective interest method or
at FVTPL.

However, financial liabilities that arise when a transfer
of a financial asset does not qualify for derecognition
or when the continuing involvement approach
applies, and financial guarantee contracts issued by
the Company, are measured in accordance with the
specific accounting policies set out below.

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when
the financial liability is (i) held for trading or (ii) it is
designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been acquired principally for the purpose
of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of
identified financial instruments that the Company

manages together and has a recent actual
pattern of short-term profit-taking;

A financial liability other than a financial liability
held for trading may be designated as at FVTPL
upon initial recognition if:

• such designation eliminates or significantly
reduces a measurement or recognition
inconsistency that would otherwise arise; or

• the financial liability forms part of a group of
financial assets or financial liabilities or both, which
is managed and its performance is evaluated
on a fair value basis, in accordance with the
Company''s documented risk management or
investment strategy, and information about the
grouping is provided internally on that basis;

Financial liabilities at FVTPL are measured at fair value,
with any gains or losses arising on changes in fair
value recognised in profit or loss The net gain or loss
recognised in profit or loss incorporates any interest
paid on the financial liability and is included in the
''other income'' line item in profit or loss.

However, for financial liabilities that are designated
as at FVTPL, the amount of change in the fair value
of the financial liability that is attributable to changes
in the credit risk of that liability is recognised in other
comprehensive income, unless the recognition of the
effects of changes in the liability''s credit risk in other
comprehensive income would create or enlarge an
accounting mismatch in profit or loss. The remaining
amount of change in the fair value of liability is
recognised in profit or loss. Changes in fair value
attributable to a financial liability''s credit risk that
are recognised in other comprehensive income are
recognised in retained earnings. Gains or losses on
financial guarantee contracts issued by the Company
that are designated by the Company as at FVTPL are
recognised in profit or loss.

Financial liabilities subsequently measured at
amortised cost:

Financial liabilities that are not held-for-trading or
designated as at FVTPL, are measured subsequently
at amortised cost using the effective interest method.

The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that

exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability, or
(where appropriate) a shorter period, to the amortised
cost of a financial liability.

Foreign exchange gains and losses:

For financial liabilities that are denominated in a
foreign currency and are measured at amortised
cost at the end of each reporting period, the foreign
exchange gains and losses are determined based on
the amortised cost of the instruments. These foreign
exchange gains and losses are recognised in the
''other income'' line item in profit or loss for financial
liabilities.

The fair value of financial liabilities denominated
in a foreign currency is determined in that foreign
currency and translated at the spot rate at the end
of the reporting period. For financial liabilities that
are measured as at FVTPL, the foreign exchange
component forms part of the fair value gains or losses
and is recognised in profit or loss for financial liabilities.

Derecognition of financial liabilities:

The Company derecognises financial liabilities
when, and only when, the Company''s obligations are
discharged, cancelled or have expired. The difference
between the carrying amount of the financial liability
derecognised and the consideration paid and
payable is recognised in profit or loss.

When the Company exchanges with the existing
lender one debt instrument into another one with
the substantially different terms, such exchange is
accounted for as an extinguishment of the original
financial liability and the recognition of a new
financial liability. Similarly, the Company accounts
for substantial modification of terms of an existing
liability or part of it as an extinguishment of the original
financial liability and the recognition of a new liability.
It is assumed that the terms are substantially different
if the discounted present value of the cash flows
under the new terms, including any fees paid net of
any fees received and discounted using the original
effective rate is at least 10 per cent different from the
discounted present value of the remaining cash flows
of the original financial liability. If the modification is not
substantial, the difference between: (1) the carrying
amount of the liability before the modification; and (2)
the present value of the cash flows after modification
is recognised in profit or loss as the modification gain
or loss within ''other income''.

1.25 Impairment of Tangible and Intangible
Assets

At the end of each reporting period, the Company
reviews the carrying amounts of its tangible and
intangible assets or cash generating units to
determine whether there is any indication that those
assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the
impairment loss (if any). When it is not possible to
estimate the recoverable amount of an individual
asset, the Company estimates the recoverable
amount of the cash-generating unit to which the
asset belongs. When a reasonable and consistent
basis of allocation can be identified, corporate assets
are also allocated to individual cash-generating units,
or otherwise they are allocated to the smallest group
of cash-generating units for which a reasonable and
consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested
for impairment at least annually, or whenever there is
an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset for
which the estimates of future cash flows have not
been adjusted.

If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash¬
generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in the
statement of profit and loss, unless the relevant asset
is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that
would have been determined had no impairment loss
been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is

recognised immediately in the statement of profit and
loss, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.

1.26 Investment in subsidiary

Investment in subsidiary is measured at cost. Dividend
income from subsidiaries is recognised when its right
to receive the dividend is established.

1.27 Dividend

Final dividends on shares are recorded as a liability on
the date of approval by the shareholders and interim
dividends are recorded as a liability on the date of
declaration by the Board of Directors of the Company.
The Company declares and pays dividends in Indian
rupees and are subject to applicable taxes.

1.28 Asset held for sale

Non-current assets (and disposal groups) classified
as held for sale are measured at the lower of carrying
amount and fair value less costs to sell. Non-current
assets and disposal groups are classified as held for
sale if their carrying amount will be recovered through
a sale transaction rather than through continuing use.
This condition is regarded as met only when the sale
is highly probable and the asset (or disposal group) is
available for immediate sale in its present condition.
Management must be committed to the sale which
should be expected to qualify for recognition as a
completed sale within one year from the date of
classification.

When the Company is committed to a sale plan
involving loss of control of a subsidiary, all of the
assets and liabilities of that subsidiary are classified
as held for sale when the criteria described above are
met, regardless of whether the Company will retain a
non-controlling interest in its former subsidiary after
the sale.

1.29 Critical Accounting Judgements and
Key Sources of Estimation Uncertainty

The preparation of Financial Statements in
conformity with Ind AS requires management to
make judgements, estimates and assumptions that
affect the application of accounting policies and
the reported amounts of assets, liabilities, income
and expenses and the accompanying disclosures.
Uncertainty about the assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying value of assets or liabilities
affected in future periods.

Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which
the estimates are revised and in any future periods
affected.

Information about significant areas of estimation
uncertainty and critical judgments in applying
accounting policies that have the most significant
effect on the amounts recognised in Financial
Statements is included in the following notes:

(i) Useful lives of Property, Plant and Equipment

(ii) Carrying values of Property, Plant and Equipment

(iii) Employee Benefits

(iv) Asset held for sale

Determination of functional currency:

Currency of the primary economic environment
in which the Company operates ("the functional
currency") is Indian Rupee (INR) in which the Company
primarily generates and expends cash. Accordingly,
the Management has assessed its functional currency
to be Indian Rupee (INR).

Note:

7.1. Includes Margin Money towards bank guarantee of '' 2.40 Lakhs (PY '' 224.06 Lakhs) which represents balances
with banks that are restricted from being exchanged or used to settle a liability for more than 12 months from
the Balance Sheet date.

7.2. '' 19.92 Lakhs (PY. Nil) is placed as lein as per High court order dt 19/02/2025 with respect to writ petiton
no 2545 of 2025 vs Labour Secretary, Government of Puducherry towards revision of minimum wages for
Pondicherry plant.

1. This represents Share Application Money received
from employees under the ESOP scheme titled
"CAESOS 2020" [Chemfab Alkalis Employees
Stock Option Scheme 2020]. Also Refer Note 47

2. Capital reserve represents reserve recognised
on amalgamation being the difference between
consideration amount and net assets of the
transferor Company and profit on reissue of shares.

3. Capital redemption reserve has been created
pursuant to Section 55 of the Companies Act,
2013 on account of redemption of preference
shares out of the profits of the Company.

4. Securities premium reserve represents amount
of premium recognised on issue of shares to
shareholders at a price more than its face
value. The reserve can be utilised only for limited
purposes in accordance with the provisions of
Section 52 of the Companies Act, 2013.

5. Shares based payment reserve relates to the
share options granted by the Company to its
employees under its share option plan. Refer
Note 47 for further details.

6. Retained earnings refer to net earnings not paid
out as dividends, but retained by the Company
to be reinvested in its core business. This amount
is available for distribution of dividends to its
equity shareholders.

7. Other comprehensive income represents the
cumulative gain and losses arising on the
revaluation of equity instruments measured at
fair value through other comprehensive income,
net of taxes.

8. Dividend is paid at '' 1.25 per share for 1,42,76,602
shares held on record date 13.09.2024 (PY. At 1.25
per share for 1,41,92,702 shares held on record
date 22.08.2023).

Details in respect of Borrowings are as under:

(i) Term Loan carrying an interest rate of 8.61% p.a

average was availed from HDFC Bank Limited.

The borrowings are secured by way of Equitable

Mortgage over:

(a) leasehold land (taken under 99 years lease
by the Company) comprising of 5 acres
located in Domestic Tarrif Zone (DTZ) situated
in Irugulam Village, Satyavedu Mandal, Chittor
District, Andhra Pradesh - Exclusive Charge.

(b) fixed assets (Building, Plant and Machineries),
created out of the term loan of '' 1,800 Lakhs
out of which '' 1,596 Lakhs is outstanding -
Exclusive Charge.

(c) Fixed assets (Plant and Machineries/civil
structures), created out of the term loan of
'' 3,150 Lakhs out of which '' 2,677.50 Lakhs is
outstanding - Exclusive Charge.

(d) fixed assets (Plant and Machineries/civil
structures), created out of the term loan of
'' 3,780 Lakhs out of which '' 3,780 Lakhs is
outstanding - Exclusive Charge.

Out of the above term loans, '' 1,674 Lakhs
(PY. '' 181.50 Lakhs) have been classified

as current maturities of long-term debt
(secured) under Borrowings - Current.

(ii) Repayment Summary:

Term Loan of '' 1,596 Lakhs as at 31 March 2025:

Repayable in 65 monthly instalments of '' 24
Lakhs each and 1 monthly instalment of '' 36 Lakhs
respectively. Repayment of this tranche of term
loan began from October 2023.

Term Loan of '' 2,677.50 Lakhs as at 31 March 2025:

Repayable in 17 quarterly instalments of '' 157.50
Lakhs each. This loan was availed in part tranches
whose repayment of first availed tranche began
from Sept 2024.

Term Loan of '' 3,780 Lakhs as at 31 March 2025:

Repayable in 60 monthly instalments of '' 63 Lakhs
each. Repayment of this tranche of term loan will
begin from April 2025.

There were no delays in repayments made by the
Company towards the borrowings from banks
during the current year and previous year.

(iii) Quarterly returns or statements of current assets
filed by the Company with banks or financial
institutions are in agreement with the books of
accounts.

Details in respect of Current Borrowings are as under:

(i) Cash Credit facilities are secured by way of first charge over the entire current assets of the Company and
mortgage over land and building comprising of 9.70 acres belonging to the Company situated at East
Coast road, Gnanananda Place, Kalapet, Pondicherry. The cash credits are repayable on demand.

(ii) The Fund Based Cash Credit facilities and Non fund based facilities are sanctioned by HDFC Bank upto
'' 2,500 Lakhs (PY '' 2,500 Lakhs). by Axis Bank upto '' 2,500 Lakhs (PY '' 2,500 Lakhs), Standard Chartered Bank
upto '' Nil (PY '' 200 Lakhs) and Shinhan bank upto '' 1,000 Lakhs (py Nil).

(iii) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions
are in agreement with the books of accounts.

The sensitivity analysis presented above may not be
representative of the actual change in the defined
benefit obligations as it is unlikely that the change in
assumptions would occur in isolation of one another
as some of the assumptions may be correlated.

Furthermore in presenting the above sensitivity
analysis the present value of defined benefit obligation
has been calculated using the projected unit credit
method at the end of the reporting period which is
the same as that applied in calculating the defined
benefit obligation liability recognised in the balance
sheet.

There is no change in the methods and assumptions
used in preparing the sensitivity analysis from the
prior years.

(g) Effect of plan on Entity''s future cash flows

(i) Funding arrangements and funding policy

The Company has a gratuity fund to provide for
payment of gratuity to the employees. Every year,
the insurance Company carries out a funding
valuation based on the latest employee data
provided by the Company. The deficit in the
assets in funded by the Company

(ii) The Company expects to make a contribution of
'' Nil during the next financial year

(iii) The weighted average duration of the benefit
obligation as at 31 March 2025 is 5.1 years
(5.6 years as at 31 March 2024)

(III) Financial Risk Management Framework

The Company manages financial risk relating to the operations through internal risk reports which analyse
exposure by degree and magnitude of risk. These risks include market risk (including currency risk, interest
rate risk and other price risk), credit risk and liquidity risk. The Company does not enter into or trade financial
instruments including derivative financial instruments for speculative purpose.

(IV) Foreign Currency Risk Management:

The Company undertakes transactions denominated in foreign currencies and consequently, exposures to
exchange rate fluctuations arises. The Company has not entered into any derivate contracts during the year
ended 31 March 2024 and there are no outstanding contracts as at 31 March 2025.

(V) Foreign Currency sensitivity analysis:

The following table details the Company''s sensitivity to a 5% increase and decrease in INR against the relevant
foreign currencies. 5% is the rate used in order to determine the sensitivity analysis considering the past trends
and expectation of the management for changes in the foreign currency exchange rate. The sensitivity analysis
includes the outstanding foreign currency denominated monetary items and adjusts their translation at the
period end for a 5% change in foreign currency rates. A positive number below indicates a increase in profit/
decrease in loss and increase in equity where the INR strengthens 5% against the relevant currency. For a 5%
weakening of the INR against the relevant currency, there would be a comparable impact on the profit or loss
and equity and balance below would be negative.

(VI) Forward foreign exchange contracts:

There are no forward foreign exchange contracts outstanding as at 31 March 2025.

(VII) Liquidity Risk Management:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The Company manages
liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and
actual cash flows and by matching maturing profiles of financial assets and financial liabilities in accordance
with the approved risk management policy of the Company.

Liquidity and Interest Risk Tables:

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The tables include both interest and principal cash flows.

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.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for term loan
at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount
of the liability outstanding at the end of the reporting period was outstanding for the whole year. A change
(decrease/increase) of 100 basis points in interest rates for term loan at the reporting date would increase/
(decrease) equity and profit or loss by the amounts shown below. This analysis assumes that all other
variables remain constant.

Segment accounting policies

In addition to the significant accounting policies applicable to the business segment as set out in note 1.16, the
accounting policies in relation to segment accounting are as under:

Operating revenues and expenses related to both third party and inter-segment transactions are included in
determining the segment results of each respective segment. Inter segment sales are eliminated in consolidation.

Other income earned and finance expense incurred are not allocated to individual segment and the same has
been reflected at the Company level for segment reporting.

The total assets disclosed for each segment include all operating assets used by each segment, and primarily
include receivables, property, plant and equipment, intangibles, inventories, operating cash and bank balances,
inter-segment assets and exclude, deferred tax assets and income tax etc.

Segment liabilities comprise operating liabilities and exclude external borrowings, provision for taxes, deferred
tax liabilities etc.

50. The Board of Directors have recommended a
final dividend of 12.50% ('' 1.25 per Equity Share of '' 10
each) for the financial year 2024-25 which is subject
to the approval of the shareholders in the forthcoming
Annual General Meeting of the Company.

51. ADDITIONAL REGULATORY INFORMATION

(i) The Company has not revalued any of its
property, pla nt a nd equipment and intangible
assets during the year.

(ii) No proceedings have been initiated during the
year or are pending against the Company as at
31 March 2025 for holding any benami property
under the Benami Transactions (Prohibition)
Act,1988 (as amended in 2016) and rules made
thereunder.

(iii) The Company does not have any 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).

(iv) The Company has not defaulted in the repayment
of loans or other borrowings or in the payment of
interest thereon to any lender during the year. The
Company has not been declared wilful defaulter
by any bank or financial institution or government
or any government authority.

(v) The quarterly returns or statements comprising
(stock statements, book debt statements, credit
monitoring arrangement reports, statements on
ageing analysis of the debtors/other receivables,
and other stipulated financial information filed
by the Company with such banks or financial
institutions are in agreement with the unaudited
books of account of the Company of the
respective quarters.

(vi) The Company does not have any charges or
satisfaction which is yet to be registered with ROC
beyond the statutory period.

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

(viii) 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:

(i) 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

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

(ix) 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:

(i) 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

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

(x) The Company does not have any Scheme of
Arrangements which have been approved by the
Competent Authority in terms of sections 230 to
237 of the Act.

(xi) The Company has complied with the the number
of layers prescribed under of Section 2(87) of
the Act read with the Companies (Restriction on
number of Layers) Rules, 2017.

(xii) The Company has utilised the borrowing amount
taken from financial institutions for the purpose
as stated in the sanction letter.

(xiii) As per the requirements of rule 3(1) of the
Companies (Accounts) Rules 2014 the Company
uses only such accounting softwares for
maintaining its books of account that have a
feature of recording audit trail of each and every
transaction creating an edit log of each change
made in the books of account along with the date
when such changes were made and who made
those changes within such accounting software.
This feature of recording audit trail has operated
throughout the year and was not tampered with
during the year.

However, in respect of an payroll software and
in respect of an accounting software used for
maintaining the financial records, in the absence
of service organization control reports from the

respective vendors, the Company is unable to
assess whether the audit trail features were
enabled and operated throughout the relevant
periods for all relevent transactions recorded
in the payroll software (for the full year) and
the accounting software (for the audit period
January 01, 2025, to March 31, 2025).

The Company has established and maintained
an adequate internal control framework over its
financial reporting and based on its assessment,
has concluded that the internal controls for the
year ended March 31, 2025 were effective.

The Companies (Accounts) Fourth Amendment
Rules, 2022 dated 06 August 2022, mandates that
the backup of the books of account and other
books and papers of the Company maintained
in electronic mode including at a place located
in India on a daily basis. The Company is
maintaining daily backups for all the accounting
software in a server which is physically located
within India. However, in respect of an accounting
software used for maintaining the financial
records, the management is unable to assess
on the backup of books of accounts due to non¬
availability of the Service Organisation Control
(SOC) report covering the period from January 01,
2025, till March 31, 2025.

52. The Code on Wages, 2019 and Code of Social
Security, 2020 ("the Codes") relating to employee
compensation and post employment benefits that
received Presidential assent and the related rules
thereof for quantifying the financial impact have not
been notified. The Company will assess the impact of
the Codes when the rules are notified and will record
any related impact in the period the Codes become
effective.

53. EVENTS SUBSEQUENT TO THE BALANCE
SHEET DATE:

(i) The Board of Directors of the Company in their
meeting held on 14 May 2025 have approved
the sale of 667.49 acres of land at Salt Division
2 Chemical division which is expected to be
consummated during FY 2025-2026.

(ii) The Company Secretary has been relieved from
the duties and responsibilities of the Company
Secretary and Compliance Officer with effect
from the close of office hours on 18 April 2025,
consequent upon resignation.

54. The Board of Directors of the Company has

reviewed the realisable value of all the current assets and has confirmed that the value of such assets in
the ordinary course of business will not be less than the value at which these are recognized in the financial
statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the
financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these
standalone financial statements in its meeting held on 14 May 2025.

For and on behalf of the Board of Directors

Suresh Krishnamurthi Rao V M Srinivasan

Chairman Chief Executive Officer
DIN: 00127809 Place: Chennai

Place: Chennai

S Prasath

Chief Financial Officer

Place: Chennai
Date: 14 May 2025

---

Mar 31, 2024

1.19 Provisions and contingent liabilities

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date and measured using the present value of cash flows estimated to settle the present obligations (when the effect of time value of money is material). These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. The Company does not recognize a contingent liability but discloses its existence in the Financial Statements. Contingent assets are only disclosed when it is probable that the economic benefits will flow to the entity."

1.20 Provision for warranty

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of

outflows will vary as and when warranty claim will arise -being typically upto three years.

1.21 Insurance Claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.

1.22 Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value except in respect of Trade receivables that do not have a significant financial component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in profit and loss.

1.23 Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification of financial assets:

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other

comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

Despite the foregoing, the Company may make the following irrevocable election / designation at initial recognition of a financial asset:

• the Company may irrevocably elect to present

subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met (see (iii) below); and

• the Company may irrevocably designate a debt

investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch (see

(iv) below).All other financial assets are subsequently measured at fair value."

(i) Amortised cost and effective interest method:

The effective interest method is a method of

calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

For financial assets other than purchased or

originated credit-impaired financial assets (i.e. assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the

cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVTOCI. For financial assets other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset.

For purchased or originated credit-impaired financial assets, the Company recognises interest income by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit-impaired.

Interest income is recognised in profit or loss and is included in the ‘Other income’ line item.

(ii) Debt instruments classified as at FVTOCI:

The debt instruments are initially measured at fair value plus transaction costs.

Subsequently, changes in the carrying amount of these debt instruments as a result of foreign exchange gains and losses (see below), impairment gains or losses (see below), and interest income calculated using the effective interest method (see (i) above) are recognised in profit or loss. The amounts that are recognised in profit or loss are the same as the amounts that would have been recognised in profit or loss if these debt instruments had been measured at amortised cost. All other changes in the carrying amount of these debt instruments are recognised in other comprehensive income and accumulated in a separate component of equity. When these debt instruments are derecognised, the cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss.

(iii) Equity instruments designated as at FVTOCI:

On initial recognition, the Company may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading:

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs.

Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in a separate component of equity. The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity investments, instead, it is transferred to retained earnings.

Dividends on these investments in equity instruments are recognised in profit or loss in accordance with Ind AS 109, unless the dividends clearly represent a recovery of part of the cost of the investment. Dividends are included in the ‘Other income’ line item in profit or loss.

The Company designates all investments in equity instruments that are not held for trading as at FVTOCI on initial recognition.

A financial asset is held for trading if:

• It has been acquired principally for the purpose of selling it in the near term; or

• On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking;

(iv) Financial assets at fair value through profit or loss (FVTPL):

Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI (see (i) to (iii) above) are measured at FVTPL. Specifically:

• Investments in equity instruments are classified as at FVTPL, unless the Company designates an equity investment that is neither held for trading (see (iii) above).

• Debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria (see (i) and

(ii) above) are classified as at FVTPL. In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition

inconsistency (so called ''accounting mismatch'') that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company has not designated any debt instruments as at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and is included in the ‘other income’ line item. "

Foreign exchange gains and losses:

The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically:

• for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the ‘other income’ line item ;

• for debt instruments measured at FVTOCI that are not part of a designated hedging relationship, exchange differences on the amortised cost of the debt instrument are recognised in profit or loss in the ‘other income’ line item. As the foreign currency element recognised in profit or loss is the same as if it was measured at amortised cost, the residual foreign currency element based on the translation of the carrying amount (at fair value) is recognised in other comprehensive income in a separate component of equity;

• for financial assets measured at FVTPL that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the ‘other income’ line item as part of the fair value gain or loss; and

• for equity instruments measured at FVTOCI, exchange differences are recognised in other comprehensive income in a separate component of equity.

Impairment of financial assets:

The Company recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised cost or at FVTOCI, lease receivables, trade receivables and contract assets, financial guarantee contracts, and certain other financial assets measured at amortised cost such as deferred consideration receivable on disposal of subsidiaries. The amount of expected

credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the life-time expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months.

For trade receivables, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses. Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient method as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

De-recognition of financial assets:

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralized borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated in a separate component of equity is reclassified to profit or loss. In contrast, on derecognition of an investment in an equity instrument which the Company has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in a separate component of equity is not reclassified to profit or loss, but is transferred to retained earnings."

1.24 Financial liabilities and equity instruments Classification as debt or equity:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, and financial guarantee contracts issued by the Company, are measured in accordance with the specific accounting policies set out below.

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial liability is (i) held for trading or (ii) it is designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been acquired principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking;

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company''s documented risk management or investment strategy, and information about the grouping is provided internally on that basis;"

Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognised in profit or loss The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other income’ line item in profit or loss.

However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. The remaining amount of change in the fair value of liability is recognised in profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are recognised in other comprehensive income are recognised in retained earnings. Gains or losses on financial guarantee contracts issued by the Company that are designated by the Company as at FVTPL are recognised in profit or loss.

Financial liabilities subsequently measured at amortised cost:

Financial liabilities that are not held-for-trading or designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or

received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Foreign exchange gains and losses:

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the ‘other income’ line item in profit or loss for financial liabilities.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities.

Derecognition of financial liabilities:

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

When the Company exchanges with the existing lender one debt instrument into another one with the substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Company accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within ‘other income’.

1.25 Impairment of Tangible and Intangible Assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets or cash generating units to determine whether there is any indication that those assets have suffered an impairment

loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, or whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of profit and loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cashgenerating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of profit and loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.26 Investment in subsidiary

Investment in subsidiary is measured at cost. Dividend income from subsidiaries is recognised when its right to receive the dividend is established.

1.27 Dividend

Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Board of Directors of the Company. The Company declares and pays dividends in Indian rupees and are subject to applicable taxes.

1.28 Asset held for sale

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Company will retain a non-controlling interest in its former subsidiary after the sale.

1.29 Critical Accounting Judgements and Key Sources of Estimation Uncertainty

The preparation of Financial Statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures. Uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the carrying value of assets or liabilities affected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in Financial Statements is included in the following notes:

(i) Useful lives of Property, Plant and Equipment.

(ii) Carrying values of Property, Plant and Equipment

(iii) Employee Benefits

(iv) Employee Share Based Payments

(v) Taxation

(vi) Asset held for sale

Determination of functional currency:

Currency of the primary economic environment in which the Company operates (“the functional currency”) is Indian Rupee (INR) in which the company primarily generates and expends cash. Accordingly, the Management has assessed its functional currency to be Indian Rupee (INR).

20 Borrowings (Contd..)

(a) leasehold land (taken under 99 years lease by the Company) comprising of 5 acres located in Domestic Tarrif Zone (DTZ) situated in Irugulam Village, Satyavedu Mandal, Chittor District, Andhra Pradesh - Exclusive Charge.

(b) fixed assets (Building, Plant and Machineries, created out of the term loan of Rs. 1,800 lakhs out of which Rs. 1,770 Lakhs is outstanding - Exclusive Charge.

(c) fixed assets (Plant and Machineries / civil structures), created out of the term loan of Rs. 3,150 lakhs out of which Rs. 50 Lakhs is drawn and outstanding - Exclusive Charge.

(ii) Repayment Summary

Term Loan of Rs. 1,770 lakhs as at 31 March 2024:

Repayable in 6 monthly instalments of Rs. 5 lakhs each, 71 monthly instalments of Rs. 24 lakhs each and 1 monthly instalment of Rs. 36 lakhs respectively. Repayment of this tranche of term loan began from October 2023

Term Loan of Rs. 50 lakhs as at 31 March 2024:

Repayable in 20 quarterly instalments of Rs. 2.50 lakhs each beginning from Sept 2024

Out of the above term loans, Rs. 181.50 lakhs have been classified as current maturities of long-term debt (secured) under Borrowings - Current.

There were no delays in repayments made by the Company towards the borrowings from banks during the current year and previous year.

(iii) quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts

II Defined benefit plans

The Company operates a gratuity plan covering qualifying employees. The benefit payable is calculated as per the Payment of Gratuity Act, 1972 and the benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India and Aditya Birla Sun Life Insurance Company Limited. Gratuity has been accrued based on actuarial valuation as at the balance sheet date, carried out by an independent actuary.

44 Financial Instruments (Contd..)

(V) Foreign Currency sensitivity analysis:

The following table details the Company''s sensitivity to a 5% increase and decrease in INR against the relevant foreign currencies. 5% is the rate used in order to determine the sensitivity analysis considering the past trends and expectation of the management for changes in the foreign currency exchange rate. The sensitivity analysis includes the outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates a increase in profit / decrease in loss and increase in equity where the INR strengthens 5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there would be a comparable impact on the profit or loss and equity and balance below would be negative.

(VI) Forward foreign exchange contracts : There are no forward foreign exchange contracts outstanding as at 31 March 2024.

(VII) Liquidity Risk Management :

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The Company manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and by matching maturing profiles of financial assets and financial liabilities in accordance with the approved risk management policy of the Company.

Liquidity and Interest Risk Tables :

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables include both interest and principal cash flows.

44 Financial Instruments (Contd..)

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

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for term loan at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A change (decrease/increase) of 100 basis points in interest rates for term loan at the reporting date would increase/(decrease) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

(VIII) Credit Risk:

Credit risk refers to the risk that a customer or a counterparty will default on its contractual obligations resulting in a financial loss to the Company. The carrying amount of the financial assets recorded in these financial statements, grossed up for any allowance for losses, represents the maximum exposures to credit risk.

(IX) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

The Management considers that the carrying amount of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

(X) Offsetting of financial assets and financial liabilities

The Company has not offset financial assets and financial liabilities.

46 Segment Information

Description of segments and principal activities

The company identifies its operating segment based on the nature and class of product and services, nature of production process and assessment of differential risks and returns and financial reporting results reviewed by the Chief Operating Decision Maker (CODM) for the purposes of resource allocation and assessment of performance. Operating segments have been identified on the basis of the nature of products/ services and have been identified as per the quantitative criteria specified in the Ind AS. For financial statements presentation purposes, individual operating segments have been aggregated into a single operating segment after taking into consideration the similar nature of the products, production processes and other risk factors.

Specifically, the Company’s reportable segments under Ind AS are as follows:

1) Chemicals and related Products/Services

2) PVC-O Pipes

Geographical segments

The geographical segments considered for disclosure are based on markets, broadly as India and Others

Segment accounting policies

In addition to the significant accounting policies applicable to the business segment as set out in note 1.16, the accounting policies in relation to segment accounting are as under:

Operating revenues and expenses related to both third party and inter-segment transactions are included in determining the segment results of each respective segment. Inter segment sales are eliminated in consolidation

Other income earned and finance expense incurred are not allocated to individual segment and the same has been reflected at the Company level for segment reporting.

The total assets disclosed for each segment include all operating assets used by each segment, and primarily include receivables, property, plant and equipment, intangibles, inventories, operating cash and bank balances, inter-segment assets and exclude, deferred tax assets and income tax etc.

Segment liabilities comprise operating liabilities and exclude external borrowings, provision for taxes, deferred tax liabilities etc.

51 Additional Regulatory Information

(i) The Company has not revalued any of its property, plant and equipment and intangible assets during the year.

(ii) No proceedings have been initiated during the year or are pending against the Company as at 31 March 2024 for holding any benami property under the Benami Transactions (Prohibition) Act,1988 (as amended in 2016) and rules made thereunder

(iii) The Company does not have any 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).

(iv) The Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(v) The quarterly returns or statements comprising (stock statements, book debt statements, credit monitoring arrangement reports, statements on ageing analysis of the debtors/other receivables, and other stipulated financial information filed by the Company with such banks or financial institutions are in agreement with the unaudited books of account of the Company of the respective quarters.

(vi) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

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

(viii) 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:

(i) 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

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

(ix) 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:

(i) 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

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

(x) The Company does not have any Scheme of Arrangements which have been approved by the Competent Authority in terms of sections 230 to 237 of the Act.

(xi) The Company has complied with the the number of layers prescribed under of Section 2(87) of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(xii) The Company has utilised the borrowing amount taken from financial institutions for the purpose as stated in the sanction letter.

51 Additional Regulatory Information (Contd..)

(xiii) As per the requirements of rule 3(1) of the Companies (Accounts) Rules 2014 the Company uses only such accounting softwares for maintaining its books of account that have a feature of recording audit trail of each and every transaction creating an edit log of each change made in the books of account along with the date when such changes were made and who made those changes within such accounting software. This feature of recording audit trail has operated throughout the year and was not tampered with during the year.

However, in respect of an payroll software, in absence of service organization control report from vendor, Company is unable to assess whether audit trail feature of the said software was enabled and operated throughout the year for all relevant transactions recorded in the software.

The Company has established and maintained an adequate internal control framework over its financial reporting and based on its assessment, has concluded that the internal controls for the year ended March 31,2024 were effective.

52 The Code on Wages, 2019 and Code of Social Security, 2020 ("the Codes") relating to employee compensation and post employment benefits that received Presidential assent and the related rules thereof for quantifying the financial impact have not been notified. The Company will assess the impact of the Codes when the rules are notified and will record any related impact in the period the Codes become effective.

53 The Board of Directors of the Company has reviewed the realisable value of all the current assets and has confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognized in the financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these standalone financial statements in its meeting held on 22 May 2024.

For and on behalf of the Board of Directors

Suresh Krishnamurthi Rao V M Srinivasan

Chairman Chief Executive Officer

DIN:00127809

Place : Chennai Place : Chennai

B Vignesh Ram S Prasath

Company Secretary Chief Financial Officer

Place : Chennai Place : Chennai

Date : 22 May 2024

---

Mar 31, 2023

1.19 Provisions and contingent liabilities

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are determined based on the best estimate required to settle the obligation at the balance sheet date and measured using the present value of cash flows estimated to settle the present obligations (when the effect of time value of money is material). These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. The Company does not recognize a contingent liability but discloses its existence in the Financial Statements. Contingent assets are only disclosed when it is probable that the economic benefits will flow to the entity.

1.20 Provision for warranty

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise - being typically upto three years.

1.21 Insurance Claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.

1.22 Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value except in respect of Trade receivables that do not have a significant financial component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in profit and loss.

1.23 Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification of financial assets:

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

Despite the foregoing, the Company may make the following irrevocable election / designation at initial recognition of a financial asset:

• the Company may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met (see (iii) below); and

• the Company may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch (see (iv) below).All other financial assets are subsequently measured at fair value.

(i) Amortised cost and effective interest method:

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVTOCI. For financial assets other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset.

For purchased or originated credit-impaired financial assets, the Company recognises interest income by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit-impaired.

Interest income is recognised in profit or loss and is included in the ‘Other income’ line item.

(ii) Debt instruments classified as at FVTOCI:

The debt instruments are initially measured at fair value plus transaction costs.

Subsequently, changes in the carrying amount of these debt instruments as a result of foreign exchange gains and losses (see below), impairment gains or losses (see below), and interest income calculated using the effective interest method (see (i) above) are recognised in profit or loss. The amounts that are recognised in profit or loss are the same as the amounts that would have been recognised in profit or loss if these debt instruments had been measured at amortised cost. All other changes in the carrying amount of these debt instruments are recognised in other comprehensive income and accumulated in a separate component of equity. When these debt instruments are derecognised, the cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss.

(iii) Equity instruments designated as at FVTOCI:

On initial recognition, the Company may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading:

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs.

Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in a separate component of equity. The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity investments, instead, it is transferred to retained earnings.

Dividends on these investments in equity instruments are recognised in profit or loss in accordance with Ind AS 109, unless the dividends clearly represent a recovery of part of the cost of the investment. Dividends are included in the ‘Other income’ line item in profit or loss.

The Company designates all investments in equity instruments that are not held for trading as at FVTOCI on initial recognition.

A financial asset is held for trading if:

• It has been acquired principally for the purpose of selling it in the near term; or

• On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking;

(iv) Financial assets at fair value through profit or loss (FVTPL):

Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI (see (i) to (iii) above) are measured at FVTPL. Specifically:

• Investments in equity instruments are classified as at FVTPL, unless the Company designates an equity investment that is neither held for trading (see (iii) above).

• Debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria (see (i) and (ii) above) are classified as at FVTPL. In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency (so called ‘accounting mismatch’) that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company has not designated any debt instruments as at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and is included in the ‘other income’ line item.

Foreign exchange gains and losses:

The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically:

• for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the ‘other income’ line item ;

• for debt instruments measured at FVTOCI that are not part of a designated hedging relationship, exchange differences on the amortised cost of the debt instrument are recognised in profit or loss in the ‘other income’ line item. As the foreign currency element recognised in profit or loss is the same as if it was measured at amortised cost, the residual foreign currency element based on the translation of the carrying amount (at fair value) is recognised in other comprehensive income in a separate component of equity;

• for financial assets measured at FVTPL that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the ‘other income’ line item as part of the fair value gain or loss; and

• for equity instruments measured at FVTOCI, exchange differences are recognised in other comprehensive income in a separate component of equity.

Impairment of financial assets:

The Company recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised cost or at FVTOCI, lease receivables, trade receivables and contract assets, financial guarantee contracts, and certain other financial assets measured at amortised cost such as deferred consideration receivable on disposal of subsidiaries. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the life-time expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months.

For trade receivables, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses. Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient method as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

De-recognition of financial assets:

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralized borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated in a separate component of equity is reclassified to profit or loss. In contrast, on derecognition of an investment in an equity instrument which the Company has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in a separate component of equity is not reclassified to profit or loss, but is transferred to retained earnings.

1.24 Financial liabilities and equity instruments

Classification as debt or equity:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVTPL. However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, and financial guarantee contracts issued by the Company, are measured in accordance with the specific accounting policies set out below.

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial liability is (i) held for trading or (ii) it is designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been acquired principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking;

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis;

Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognised in profit or loss The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other income’ line item in profit or loss.

However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. The remaining amount of change in the fair value of liability is recognised in profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are recognised in other comprehensive income are recognised in retained earnings. Gains or losses on financial guarantee contracts issued by the Company that are designated by the Company as at FVTPL are recognised in profit or loss.

Financial liabilities subsequently measured at amortised cost:

Financial liabilities that are not held-for-trading or designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Foreign exchange gains and losses:

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the ‘other income’ line item in profit or loss for financial liabilities.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities.

Derecognition of financial liabilities:

The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

When the Company exchanges with the existing lender one debt instrument into another one with the substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Company accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within ‘other income’.

1.25 Impairment of Tangible and Intangible Assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets or cash generating units to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, or whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of profit and loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of profit and loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.26 Investment in subsidiary

Investment in subsidiary is measured at cost. Dividend income from subsidiaries is recognised when its right to receive the dividend is established.

1.27 Dividend

Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Board of Directors of the Company. The Company declares and pays dividends in Indian rupees and are subject to applicable taxes.

1.28 Asset held for sale

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification. When the Company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Company will retain a non-controlling interest in its former subsidiary after the sale.

1.29 Critical Accounting Judgements and Key Sources of Estimation Uncertainty

The preparation of Financial Statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures. Uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the carrying value of assets or liabilities affected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in Financial Statements is included in the following notes:

(i) Useful lives of Property, Plant and Equipment.

(ii) Carrying values of Property, Plant and Equipment

(iii) Employee Benefits

(iv) Employee Share Based Payments

(v) Taxation

(vi) Asset held for sale

Determination of functional currency:

Currency of the primary economic environment in which the Company operates (“the functional currency”) is Indian Rupee (INR) in which the company primarily generates and expends cash. Accordingly, the Management has assessed its functional currency to be Indian Rupee (INR).

Notes

1. This represents Share Application Money received from employees under the ESOP scheme titled “CAESOS 2015” [Chemfab Alkalis Employees Stock Option Scheme 2015] and “CAESOS 2020“ [Chemfab Alkalis Employees Stock Option Scheme 2020]. Also Refer Note 46

2. Capital reserve represents reserve recognised on amalgamation being the difference between consideration amount and net assets of the transferor company and profit on reissue of shares.

3. Capital redemption reserve has been created pursuant to Section 55 of the Companies Act, 2013 on account of redemption of preference shares out of the profits of the Company.

4. Securities premium reserve represents amount of premium recognised on issue of shares to shareholders at a price more than its face value. The reserve can be utilised only for limited purposes in accordance with the provisions of section 52 of the Companies Act, 2013

5. Shares based payment reserve relates to the share options granted by the company to its employees under its share option plan. Refer Note 46 for further details.

6. Retained earnings refer to net earnings not paid out as dividends, but retained by the company to be reinvested in its core business. This amount is available for distribution of dividends to its equity shareholders.

7. Other comprehensive income represents the cumulative gain and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of taxes.

The Company has applied practical expedient and has not disclosed information about remaining performance obligations in contracts where the original contract duration is one year or less or where the entity has the right to consideration that corresponds directly with the value of entity’s performance completed to date.

29.4 Information about major customers

The Company is a manufacturer of caustic soda lye, flakes, liquid chlorine, hydrogen gas, pvco pipes and other products.

Revenues arising from direct sales above includes revenues of approximately Rs. 4,117.89 lakhs which arose from sales to the company’s single large customer (Previous Year Rs. 4,512.71 Lakhs). Revenue from second largest customer which also contributed more than 10% of revenue was Rs. 3,891.21 Lakhs. (Previous Year - NA). No other single customers contributed 10% or more to the Company’s revenue during the current and previous financial year

38 Related party disclosures

a) List of Related parties and description of relationship

(i) Individuals exercising Significant influence Mr. Suresh Krishnamurthi Rao - Chairman

(ii) Relatives of above Mrs. K.M. Padma (Mother of Mr. Suresh

Krishnamurthi Rao)

(iii) Entities exercising significant influence over the Dr Rao Holdings Pte Ltd

Company

(iv) Entities in which persons listed in (i) and (ii) Titanium Equipment and Anode Manufacturing Company

above exercise significant influence Private Limited (TEAM)

(v) Wholly owned Subsidiary Chemfab Alkalis Karaikal Limited

(vi) Key Management Personnel (KMP) Mr. V.M. Srinivasan - Chief Executive Officer

Mr. S Prasath - Chief Financial Officer

Mr. Nitin Cowlagi Seshgiri - Non Executive Director

Mr. C.S.Ramesh - Non Executive Director

Mrs. Drushti Desai - Non Executive Director

Mr. Janakiraman A - Non Executive Director

Mr. Mahendran R - Non Executive Director

Mrs. Sujatha Jayarajan - Non Executive Director

Mr. T.Ramabadran - Non Executive Director

(vii) Other related party Chemfab Alkalis Limited Employee’s Group Gratuity

Trust

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore in presenting the above sensitivity analysis the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There is no change in the methods and assumptions used in preparing the sensitivity analysis from the prior years.

(g) Effect of plan on Entity’s future cash flows (i) Funding arrangements and funding policy

The Company has a gratuity fund to provide for payment of gratuity to the employees. Every year, the insurance Company carries out a funding valuation based on the latest employee data provided by the company. The deficit in the assets in funded by the company

(III) Financial Risk Management Framework

The Company manages financial risk relating to the operations through internal risk reports which analyse exposure by degree and magnitude of risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company does not enter into or trade financial instruments including derivative financial instruments for speculative purpose.

(IV) Foreign Currency Risk Management :

The Company undertakes transactions denominated in foreign currencies and consequently, exposures to exchange rate fluctuations arises. The Company has not entered into any derivate contracts during the year ended 31 March 2023 and there are no outstanding contracts as at 31 March 2023.

(V) Foreign Currency sensitivity analysis:

The following table details the Company’s sensitivity to a 5% increase and decrease in INR against the relevan foreign currencies. 5% is the rate used in order to determine the sensitivity analysis considering the past trends anc expectation of the management for changes in the foreign currency exchange rate. The sensitivity analysis includes the outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates a increase in profit / decrease in loss and increase in equity where the INR strengthens 5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there would be a comparable impact on the profit or loss and equity and balance below would be negative.

(VI) Forward foreign exchange contracts : There are no forward foreign exchange contracts outstanding as at 31 March 2023.

(VII) Liquidity Risk Management :

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The Company manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and by matching maturing profiles of financial assets and financial liabilities in accordance with the approved risk management policy of the Company.

Liquidity and Interest Risk Tables :

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables include both interest and principal cash flows.

(VIII) Credit Risk:

Credit risk refers to the risk that a customer or a counterparty will default on its contractual obligations resulting in a financial loss to the Company. The carrying amount of the financial assets recorded in these financial statements, grossed up for any allowance for losses, represents the maximum exposures to credit risk.

(IX) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

The Management considers that the carrying amount of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

(X) Offsetting of financial assets and financial liabilities

The Company has not offset financial assets and financial liabilities.

45 Segment Information

Description of segments and principal activities

The company identifies its operating segment based on the nature and class of product and services, nature of production process and assessment of differential risks and returns and financial reporting results reviewed by the Chief Operating Decision Maker (CODM) for the purposes of resource allocation and assessment of performance. Operating segments have been identified on the basis of the nature of products/ services and have been identified as per the quantitative criteria specified in the Ind AS. For financial statements presentation purposes, individual operating segments have been aggregated into a single operating segment after taking into consideration the similar nature of the products, production processes and other risk factors.

Specifically, the Company’s reportable segments under Ind AS are as follows:

1) Chemicals and related Products/Services

2) PVC-O Pipes

Geographical segments

The geographical segments considered for disclosure are based on markets, broadly as India and Others Segment accounting policies

In addition to the significant accounting policies applicable to the business segment as set out in note 1.16, the accounting policies in relation to segment accounting are as under:

Operating revenues and expenses related to both third party and inter-segment transactions are included in determining the segment results of each respective segment. Inter segment sales are eliminated in consolidation

Other income earned and finance expense incurred are not allocated to individual segment and the same has been reflected at the Company level for segment reporting.

50 The Board of Directors have recommended a final dividend of 12.50% (Rs. 1.25 per Equity Share of Rs. 10 each) for the financial year 2022-23 which is subject to the approval of the shareholders in the forthcoming Annual General Meeting of the Company.

51 Additional Regulatory Information

(i) The Company has not revalued any of its property, plant and equipment and intangible assets during the year.

(ii) No proceedings have been initiated during the year or are pending against the Company as at 31 March 2023 for holding any benami property under the Benami Transactions (Prohibition) Act,1988 (as amended in 2016) and rules made thereunder

(iii) The Company does not have any 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).

(iv) The Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(v) The quarterly returns or statements comprising (stock statements, book debt statements, credit monitoring arrangement reports, statements on ageing analysis of the debtors/other receivables, and other stipulated financial information filed by the Company with such banks or financial institutions are in agreement with the unaudited books of account of the Company of the respective quarters.

(vi) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

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

(viii) 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:

(i) 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

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

(ix) 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:

(i) 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

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

(x) The Company does not have any Scheme of Arrangements which have been approved by the Competent Authority in terms of sections 230 to 237 of the Act.

(xi) The Company has complied with the number of layers prescribed under of Section 2(87) of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(xii) The Company has utilised the borrowing amount taken from financial institutions for the purpose as stated in the sanction letter.

52 The Code on Wages, 2019 and Code of Social Security, 2020 (“the Codes”) relating to employee compensation and post employment benefits that received Presidential assent and the related rules thereof for quantifying the financial impact have not been notified. The Company will assess the impact of the Codes when the rules are notified and will record any related impact in the period the Codes become effective.

53 The Board of Directors of the Company has reviewed the realisable value of all the current assets and has confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognized in the financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these standalone financial statements in its meeting held on 18 May 2023.

For and on behalf of Board of Directors

Suresh Krishnamurthi Rao V M Srinivasan

Chairman Chief Executive Officer

DIN:00127809

Place : Chennai Place : Chennai

B Vignesh Ram S Prasath

Company Secretary Chief Financial Officer

Place : Chennai Place : Chennai

Date : 18 May 2023

---

Mar 31, 2019

1 Corporate Information

Chemfab Alkalis Limited (formerly known as Teamec Chlorates Limited) ( hereinafter referred to as " the Company" ) was incorporated on 06 May 2009 and is in the business of manufacturing of basic inorganic chemicals. The name of the Company was changed from Teamec Chlorates Limited to Chemfab Alkalis Limited on July 21, 2017, vide revised certificate of incorporation issued by the Registrar of Companies pursuant to the scheme of amalgamation (''scheme'') approved by the National Company Law Tribunal (NCLT) Chennai vide its order dated 30 March 2017. Erstwhile Chemfab Alkalis Limited a listed entity, had merged with the Company pursuant to the scheme and consequently the Company''s equity shares have been listed on the National Stock Exchange of India Limited ( NSE ) and BSE Limited (BSE) with effect from 25 April 2018.

2.1 Plant and Equipments include written down value of assets used for Research and Development purposes amounting to Rs. 49.06 Lakhs as at 31 March 2019.

2.2 The Company is currently using approximately 170 acres of land for production of salt. Further it is in the process of developing the balance 524.17 acres of salt fields. The production of salt on these lands is expected to commence post completion of the development activities.

2.3 Deletion to Freehold Land includes an amount of Rs. 19.61 lakhs being held as investment property. Also Refer Note 4.

2.4 Freehold Land includes:

2.5 The Company suspended the operations at its Qngole plant from 10 July 2018 in order to dispose excess accumulated inventory, post which the Management is evaluating various options of running the unit profitably. Pending final decision of viability of the unit, the operations at the Ongole Plant remains suspended till further notice. The Management has carried out a detailed impairment evaluation and has recognised an impairment loss (net) of Rs. 1,963.25 Lakhs pertaining to the carrying value of its property, plant and equipment, disclosed as exceptional item under Statement of Profit & Loss for the year ended 31 March 2019.

3.1 Plant and Equipment include written down value of assets used for Research and Development purposes amounting to Rs.56.84 lakhs as at 31 March 2018.

3.2 The Company is currently using approximately 170 acres of land for production of salt. Further it is in the process of developing the balance 524.17 acres of salt fields. The production of salt on these lands is expected to commence post completion of the development activities.

3.3 Freehold Land includes:

3.4 Additions to Plant and equipment for the year includes CEC plant of Rs 259.99 Lakhs (net of Impairment provision of Rs.99.02 Lakhs) and flaker plant of Rs.1,305.88 Lakhs (net of Impairment provision of Rs.254.65 Lakhs)

4.1 Secured Trade Receivables are secured by way of irrevocable Letter of Credits.

4.2 The Company has used a practical expedient by computing the expected loss allowance for trade receivables based on provision matrix. The provision matrix takes into account the historical credit loss experience and adjustments for forward looking information. Trade receivables are non-interest bearing and are generally on terms of upto 90 days.

4.3 The age of the receivables is as under:

The Company has one class of equity shares having par value of Rs. 10 per share. Each shareholder is eligible for one vote per equity share held. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of directors is subject to the approval of shareholders in the ensuing Annual General Meeting. 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 shareholding.

1 .This represents Share Application Money received from employees under the ESOP scheme titled “CAESOS 2015” [Chemfab Alkalis Employees Stock Option Scheme 2015].40,286options were exercised in previous year 2017-18 and 19,714 options were exercised in current year 2018-19. All shares were allotted in current year 2018-19. Also Refer Note 48.

2.Capital reserve represents reserve recognised on amalgamation being the difference between consideration amount and net assets of the transferor company and profit on reissue of shares

3.Capital redemption reserve has been created pursuant to Section 55 of the Companies Act, 2013 on account of redemption of preference shares out of the profits of the Company.

4,Securities premium reserve represents amount of premium recognised on issue of shares to shareholders at a price more than its face value.

5.Shares based payment reserve relates to the share options granted by the company to its employees under its share option plan. Refer Note 48 for further details.

6.Retained earnings refer to net earnings not paid out as dividends, but retained by the company to be reinvested in its core business. This amount is available for distribution of dividends to its equity shareholders.

7,Other comprehensive income represents the cumulative gain and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of taxes.

Note:

Details in respect of Borrowings are as under :-

(i) During the current year, Term Loan carrying an interest rate of 9.35% p.a was availed for PVCO plant from Axis Bank Limited. The borrowings are secured by way of Equitable Mortgage over lease hold land (taken under 99 years lease by the company) comprising of 5 acres located in Domestic Tarrif Zone (DTZ) situated in Irugulam Village, Satyavedu Mandal, Chittor District, Andhra Pradesh - Exclusive Charge. Charge over the fixed assets (Building, Plant and Machineries with estimated cost of Rs.5,000 lakhs including land, created out of the proposed term loan of Rs.3,500 lakhs (Exclusive Charge ). Further collateral common for all bank sanction facilities including equitable mortgage over land and building comprising of 9.56 acres and 19.87 acres belonging to the company situated at East Coast road, Gnanananda Place, Kalapet, Pondicherry.

(ii) Repayment Summary

Term Loan Tranche 1 of Rs.2,343.64 lakhs (net of Rs.11.36 lakhs Ind AS EIR adjustment) as at 31 March 2019:

Repayable in 12 monthly instalments of Rs.35 lakhs each, 12 monthly instalments of Rs.35 lakhs each, 12 monthly instalments of Rs.40 lakhs each, 12 monthly instalments of Rs.35 lakhs each, 12 monthly instalments of Rs.30 lakhs each, 12 monthly instalments of Rs.20 lakhs each, 1 monthly instalment of Rs.15 lakhs respectively

Term Loan Tranche 2 of Rs. 875 lakhs as at 31 March 2019:

Repayable in 12 monthly instalments of Rs.15 lakhs each, 12 monthly instalments of Rs.17 lakhs each, 12 monthly instalments of Rs.18.50 lakhs each, 12 monthly instalments of Rs.15 lakhs each, 12 monthly instalments of Rs.12.25 lakhs each, 12 monthly instalments of Rs.9.40 lakhs each, 1 monthly instalments of Rs.9.20 lakhs respectively

Out of the above Rs.600 lakhs have been classified as Current maturities of long-term debt (Secured) under Other Financial Liabilities - Current

(iii) The entire amount represents borrowings from Titanium Equipment and Anode Manufacturing Company Limited, a related party, at an interest rate of 9.50% per annum. The loan including interest thereof is repayable within 7 years from the date of the borrowing of 01 July 2015. The entire amount was repaid alongwith interest during the current year 2018-19.

Note:

Details in respect of Current Borrowings are as under

(i) Cash Credit facilities are secured by way of first charge over the entire current assets of the Company. The cash credits are repayable on demand.

(ii) The entire amount represents Trade Credit from Global Outsourcers Pte Ltd, a related party, which was converted into an Unsecured External Commercial Borrowings originally repayable by 5 September 2015. The period for repayment were subsequently extended to 3rd September 2018 vide letter received from by Global Outsourcers Pte. Ltd. dated 1 June 2015. The interest on the ECB loan was also waived vide agreement dated 27 March 2013. The entire amount was repaid during current year 2018-19.

5.1. Trade Receivables and Contract Balances

The company classifies the right to consideration in exchange for deliverables as receivable.

A receivable is a right to consideration that is unconditional upon passage of time. Revenue is recognized as and when the related goods are delivered to the customer. Trade receivable are presented net of impairment in the Balance Sheet.

Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

The Company has applied practical expedient and has not disclosed information about remaining performance obligations in contracts where the original contract duration is one year or less or where the entity has the right to consideration that corresponds directly with the value of entity’s performance completed to date.

5.2 Information about major customers

The company is a manufacturer of caustic soda lye, flakes, liquid chlorine, hydrogen gas, hydrochloric acid, sodium hypochlorite and pvco pipes. Revenues arising from direct sales above includes revenues of approximately Rs.3,203 Lakhs which arose from sales to the company’s single large customer (Previous Year 2017-18 Rs.2,130 Lakhs). No other single customers contributed 10% or more to the Company’s revenue during the finanical year 2018-19 and 2017-18.

(i) The amounts shown above represent best possible estimate carried on the basis of the available information. The uncertainties and possible reimbursement are dependent on the outcome of the various case proceedings which have been initiated by the Company or the claimants, as the case may be, and therefore cannot be predicted accurately.

(ii) Figures in bracket indicate previous year figures.

6. The National Green Tribunal, in an application filed by a party (NGO), had granted an ex parte stay, restraining the construction activities pertaining to the expansion and operation of the Company''s Plant without valid consent order. The Company has objected the averments of the complainant and filed its counter for vacating the stay, which was granted. During the year, the Company has received an order from the National Green Tribunal, vide its order dated 29.01.2019, disposing the matter in favour of the Company and also to submit a report of compliance relating to certain information within three months of the order. The Company has submitted their report on compliance vide their letter dated 16 April 2019 to Central Pollution Control Board.

II Defined benefit plans

The Company operates a gratuity plan covering qualifying employees. The benefit payable is calculated as per the Payment of Gratuity Act, 1972 and the benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting.The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India. Gratuity has been accrued based on actuarial valuation as at the balance sheet date, carried out by an independent actuary.

(i) The current service cost and interest expense for the year are included in the "Employee Benefit Expenses" in the statement of profit & loss under the line item "Contribution to Provident and Other Funds"

(ii) The remeasurement of the net defined benefit liability is included in other comprehensive income.

Significant actuarial assumptions for the determination of defined obligation are discount rate, expected salary increase rate and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant:

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore in presenting the above sensitivity analysis the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There is no change in the methods and assumptions used in preparing the sensitivity analysis from the prior years.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

7. During the year, the Company incurred an aggregate amount of Rs.49.78 lakhs (PY- Rs.53.39 lakhs) towards corporate social responsibility in compliance of Section 135 of the Companies Act 2013 read with relevant schedule and rules made thereunder. The details of the CSR spend are given below: -

Gross amount required to be spent by the Company during the year Rs.37.43 lakhs.

Amount spent by the Company during the year on:

8. Financial Instruments (I) Capital Management

The Company manages capital risk in order to maximize shareholders’ profit by maintaining sound/optimal capital structure. For the purpose of the Company’s capital management, capital includes equity share Capital and Other Equity and Debt includes Borrowings and Other Financial Liabilities net of Cash and bank balances. The Company monitors capital on the basis of the following gearing ratio. There is no change in the overall capital risk management strategy of the Company compared to last year.

(III) Financial Risk Management Framework

The Company manages financial risk relating to the operations through internal risk reports which analyse exposure by degree and magnitude of risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company does not enter into or trade financial instruments including derivative financial instruments for speculative purpose.

(IV) Foreign Currency Risk Management :

The Company undertakes transactions denominated in foreign currencies and consequently, exposures to exchange rate fluctuations arises. The Company has not entered into any derivate contracts during the year ended 31 March 2019 and there are no outstanding contracts as at 31 March 2019.

The following table details the Company''s sensitivity to a 5% increase and decrease in INR against the relevant foreign currencies. 5% is the rate used in order to determine the sensitivity analysis considering the past trends and expectation of the management for changes in the foreign currency exchange rate. The sensitivity analysis includes the outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates a increase in profit / decrease in loss and increase in equity where the INR strengthens 5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there would be a comparable impact on the profit or loss and equity and balance below would be negative.

Note :

This is mainly attributable to the exposure of receivable and payable outstanding in the above mentioned currencies to the Company at the end of the reporting period.

(VI) Forward foreign exchange contracts : NIL

(VII) Liquidity Risk Management :

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The Company manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and by matching maturing profiles of financial assets and financial liabilities in accordance with the approved risk management policy of the Company.

Liquidity and Interest Risk Tables :

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables include both interest and principal cash flows.

To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

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

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for term loan at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A change (decrease/increase) of 100 basis points in interest rates for term loan at the reporting date would increase/(decrease) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

Non-interest rate bearing financial assets disclosed above includes Trade Receivable, Cash, Balances with banks held in current accounts and Other Financial Assets.

Fixed interest rate instruments disclosed above represents balances with banks held in deposit accounts and discounted financial assets.

(VIII) Credit Risk:

Credit risk refers to the risk that a customer or a counterparty will default on its contractual obligations resulting in a financial loss to the Company. Credit control policies are included in a blue print, including prescribed work procedures and guidelines; to manage credit risk, credit checks are performed upfront for new customers. For High risk clients, credit limits are put in place based on internal and / or external ratings. Credit risk is monitored by the credit control department of company on a daily basis.

The carrying amount of the financial assets recorded in these financial statements, grossed up for any allowance for losses, represents the maximum exposures to credit risk.

(IX) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

The Management considers that the carrying amount of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

(X) Offsetting of financial assets and financial liabilities

The Company has not offset financial assets and financial liabilities.

9. Fair Value Hierarchy

This note provides information about how the Company determines fair value of various financial assets and liabilities

Description of segments and principal activities

The company identifies its operating segment based on the nature and class of product and services, nature of production process and assessment of differential risks and returns and financial reporting results reviewed by the Chief Operating Decision Maker (CODM) for the purposes of resource allocation and assessment of performance. Operating segments have been identified on the basis of the nature of products / services and have been identified as per the quantitative criteria specified in the Ind AS. For financial statements presentation purposes, individual operating segments have been aggregated into a single operating segment after taking into consideration the similar nature of the products, production processes and other risk factors.

Specifically, the Company’s reportable segments under Ind AS are as follows:

1) Chemicals and related Products / Services

2) PVC-O Pipes Geographical segments

The geographical segments considered for disclosure are based on markets, broadly as India and Others

Segment accounting policies

In addition to the significant accounting policies applicable to the business segment as set out in note 1, the accounting policies in relation to segment accounting are as under:

Operating revenues and expenses related to both third party and inter-segment transactions are included in determining the segment results of each respective segment. Inter segment sales are eliminated in consolidation

Other income earned and finance expense incurred are not allocated to individual segment and the same has been reflected at the Company level for segment reporting.

The total assets disclosed for each segment include all operating assets used by each segment, and primarily include receivables, property, plant and equipment, intangibles, inventories, operating cash and bank balances, inter-segment assets and exclude, deferred tax assets and income tax etc.

Segment liabilities comprise operating liabilities and exclude external borrowings, provision for taxes, deferred tax liabilities etc.

Note: 1) Figures in bracket indicate previous year figures

2) Also Refer Note 1.16

3) Non current assets excludes deferred tax assets and income tax assets 48 Employee Stock Option Scheme

a) The ESOP scheme titled “CAESOS 2015” [Chemfab Alkalis Employees Stock Option Scheme 2015] was approved by the erstwhile shareholders of Chemfab Alkalis Limited through postal ballot on 5 March 2016 pursuant to which 1,68,000 employee stock options were issued. Subsequent to merger, the benefit of swap ratio was extended to the options outstanding and revised shares outstanding were 2,40,000 options out of which 40,286 options were exercised during the year 2017-18 and 19,714 options were exercised during the year 2018-19. The vesting period of these options range over a period of 2 to 4 years. The options may be exercised within a period of 12 months from the date of vesting.

Vesting plan:

25% of the Options - Two years from the date of grant. 25% of the Options - Three years from the date of grant. 50% of the Options - Four years from the date of grant.

10. The Board of Directors has recommended a final dividend of 12.50% (Rs. 1.25 per Equity Share of Rs. 10 each) for the financial year 2018-19 which is subject to the approval of the shareholders in the forthcoming Annual General Meeting of the Company.

11. Approval of Financial Statements

The Board of Directors of the Company has reviewed the realisable value of all the current assets and has confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognized in the financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these financial statements in its meeting held on 07 May 2019.

---

Mar 31, 2018

51.1 Mandatory Exceptions and Optional Exemptions

(a) Equity instruments at fair value through other comprehensive income

The Company has designated investment in shares under Non Current Investment as at FVTOCI on the basis of the facts and circumstances that existed at the date of transition to Ind AS.

(b) Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on facts and circumstances that existed as of the transition date.

(c) Past business combinations

The Company has elected not to apply Ind AS 103 - Business Combinations retrospectively to past business combinations that had an effective date before the transition date of April 1, 2016. Consequently, the Company has kept the same classification for the past business combinations as in its previous GAAP financial statements.

(d) Property, Plant and Equipment

The Company has elected to continue with the carrying value of all of its plant and equipment and intangible assets recognised as at April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost on the date of transition to Ind AS.

(e) Share-based payment

The Company has elected not to apply IND AS 102 - Share based payment to equity instruments that vested before date of transition to Ind AS and to liabilities arising from share-based payment transactions that were settled before the date of transition to Ind AS.

(f) Classification and measurement of financial assets

The company has opted not to apply EIR principles retrospectively and thus opted to consider the carrying cost of financial asset as its amortised cost as at transition date

Key sources of estimation uncertainity:

The estimates at 1 April 2016 and at 31 March 2017 are consistent with those made for the same dates in accordance with previous GAAP (after adjustments to reflect any differences in accounting policies). The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2016, the date of transition to Ind AS and as of 31 March 2017.

51.2 First-time Ind AS adoption reconciliations

Effect of Ind AS adoption on the Balance Sheet as at 31 March 2017 and 01 April 2016 Amount Rs. in lakhs
		As on 1 April 2016 (Date of transition)
Particulars	Notes	Previous fJAAP	Effect of the scheme of Amalgamation on 1 April 2016	Effect of transition	Opening Ind AS balance
			(Also Refer note 51.3(a) below)	to Ind AS	sheet
A ASSETS
Non-current assets
(a) Property, Plant and Equipment	1	5,732.67	11,177.67	(224.91)	16,685.43
(b) Capital work-in-progress		95.98	1,378.89	-	1,474.87
(c) Intangible assets		-	76.26	-	76.26
(d) Financial Assets
(i) Investments	i	-	0.32	2.39	2.71
(ii) Other Financial Assets	h,P	875.03	508.77	(255.94)	1,127.86
(e) Non - Current Tax Assets (Net)		1.27	400.14	-	401.41
(f) Deferred tax assets (net)	h,j,k	-	(519.56)	6,717.02	6,197.46
(g) Other non-current assets	h	-	117.78	116.46	234.24
Total Non - Current Assets		6,704.95	13,140.27	6,355.02	26,200.24
Current assets
(a) Inventories		166.84	203.96	-	370.80
(b) Financial Assets
(i) Investments		1.91	41.31	-	43.22
(ii) Trade receivables	o	61.74	1,712.92	(44.66)	1,730.00
(iii) Cash and cash equivalents		3.38	101.73	-	105.11
(iv) Bank Balances other than (iii)		4.86	39.26		44.12
above
(v) Other Financial Assets		0.14	43.73	-	43.87
(c) Other current assets	1	56.39	202.02	(6.21)	252.20
Total Current Assets		295.26	2,344.93	(50.87)	2,589.32
Total Assets		7,000.21	15,485.20	6,304.15	28,789.56
B EQUITY AND LIABILITIES
Equity
(a) Equity Share capital	g	728.08	654.97	-	1,383.05
(b) Other Equity	51.3	(1,735.07)	13,905.75	6,496.71	18,667.39
Total Equity		(1,006.99)	14,560.72	6,496.71	20,050.44
Liabilities
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings	j,l	4,756.58	(2,386.75)	(495.72)	1,874.11
(ii) Other financial liabilities	g	367.82	75.91	-	443.73
(b) Provisions	1	-	69.54	11.14	80.68
(c) Other non-current liabilities	j	-	-	370.00	370.00
		5,124.40	(2,241.30)	(114.58)	2,768.52
Current liabilities
(a) Financial Liabilities
(i) Borrowings	j	1,600.00	1,500.00	(10.45)	3,089.55
(ii) Trade payables		448.40	1,045.26	-	1,493.66
(iii) Other financial liabilities		-	1,091.11	-	1,091.11
(b) Provisions	e	3.21	210.39	(137.98)	75.62
(c) Current Tax Liabilities (Net)		-	-	-	-
(d) Other current liabilities	j	831.19	(680.98)	70.45	220.66
		2,882.80	3,165.78	(77.98)	5,970.60
Total Liabilities		8,007.20	924.48	(192.56)	8,739.12
Total Equity and Liabilities		7,000.21	15,485.20	6,304.15	28,789.56

Amount Rs. in lakhs
	As on 31 March 2017
	(End of last period presented under previous GAAP)
Particulars	Notes (51.3)	Previous GAAP	Effect of Transition to Ind AS	Ind AS
A) ASSETS
Non-current assets
(a) Property, Plant and Equipment	1	16,371.53	-	16,371.53
(b) Capital work-in-progress		1,136.17	-	1,136.17
(c) Intangible assets		62.44	-	62.44
(d) Financial Assets
(i) Investments	i	18.48	2.72	21.20
(ii) Other Financial Assets	h,p	1,679.53	(276.10)	1,403.43
(e) Non - Current Tax Assets (Net)		-	-	-
(f) Deferred tax assets (net)	hj,k	288.32	6,093.94	6,382.26
(g) Other non-current assets	h	2.48	90.78	93.26
Total Non - Current Assets		19,558.95	5,911.34	25,470.29
Current assets
(a) Inventories		430.71	-	430.71
(b) Financial Assets
(i) Investments		7.94	-	7.94
(ii) Trade receivables	0	854.31	(8.01)	846.30
(iii) Cash and cash equivalents		36.79	-	36.79
(iv) Bank Balances other than (iii) above		148.76	-	148.76
(v) Other Financial Assets		65.06	-	65.06
(c) Other current assets		502.72	-	502.72
Total Current Assets		2,046.29	(8.01)	2,038.28
Total Assets		21,605.24	5,903.33	27,508.57
B) EQUITY AND LIABILITIES
Equity
(a) Equity Share capital	g	2,343.05	(960.00)	1,383.05
(b) Other Equity	51.3	14,133.00	5,975.95	20,108.95
Total Equity		16,476.05	5,015.95	21,492.00
Liabilities
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings	j,l	2,045.78	(442.62)	1,603.16
(ii) Other financial liabilities	g	277.17	960.00	1,237.17
(b) Provisions	1	89.22	-	89.22
(c) Other non-current liabilities	j	-	299.55	299.55
		2,412.17	816.93	3,229.10
Current liabilities
(a) Financial Liabilities
(i) Borrowings		31.96	-	31.96
(ii) Trade payables		1,289.61	-	1,289.61
(iii) Other financial liabilities		1,097.74	-	1,097.74
(b) Provisions		148.07	-	148.07
(c) Current Tax Liabilities (Net)		28.18	-	28.18
(d) Other current liabilities	j	121.46	70.45	191.91
		2,717.02	70.45	2,787.47
Total Liabilities		5,129.19	887.38	6,016.57
Total Equity and Liabilities		21,605.24	5,903.33	27,508.57

Effect of Ind AS adoption on the Statement of Profit and Loss for the Year ended 31 March 2017				Amount Rs. in lakhs
Particulars	Notes (51.3)	Previous GAAP	Effect of transition to Ind AS	Ind AS
I Revenue from Operations	c,d	14,043.31	1,610.09	15,653.40
II Other Income	hJAP	183.51	100.59	284.10
III Total Revenue (I II)		14,226.82	1,710.68	15,937.50
IV Expenses
Cost of Materials Consumed		695.52	-	695.52
Purchase of Stock in Trade		60.52	-	60.52
Changes in Inventories of Finished goods and Work-in -Progress		(67.53)	-	(67.53)
Excise Duty on sale of goods	d	-	1,631.09	1,631.09
Other Direct Manufacturing Expenses		6,702.64	-	6,702.64
Employee Benefits Expense	f,n	1,431.93	19.56	1,451.49
Finance Cost	gj	267.91	167.84	435.75
Depreciation and Amortisation Expenses		1,304.83	-	1,304.83
Other Expenses	c,h,o,p,l	2,283.51	(210.94)	2,072.57
Total Expenses (IV)		12,679.33	1,607.55	14,286.88
V Profit before tax (III - IV)		1,547.49	103.13	1,650.62
VI Tax Expenses
- Current tax		288.32	-	288.32
- Deferred tax	hj,k	-	97.88	97.88
- Minimum Alternate Tax Credit Entitlement		(288.32)	-	(288.32)
VII Profit for the Year (V - VI)		1,547.49	5.25	1,552.74
VIII Other Comprehensive Income	b
Items that will not be reclassified to the Statement of
Profit and Loss
- Equity Instruments through Other Comprehensive Income	i	-	0.33	0.33
- Remeasurements of the defined benefit plans	f	-	16.31	16.31
- Income tax relating to items that will not be reclassified to profit or loss	f	-	(5.65)	(5.65)
Total Other Comprehensive Income (VIII)		-	10.99	10.99
IX Total Comprehensive Income for the Year (VII VIII)		1,547.49	16.24	1,563.73

51.3 Reconciliation of total equitv as at 31 March 2017 and 01 April 2016 Amount Rs. in lakhs
Particulars	Notes	As at 31 March 2017	As at 01 April 2016
Total Equity under previous GAAP		16,476.05	13,553.73
Adjustment of Prior period expenses	1	-	(283.92)
Reversal of Proposed Dividend including Dividend Distribution tax	e	-	137.99
Recognition of Deferred Tax Asset on unabsorbed business losses and others	k	6,080.90	6,691.09
Fair value adjustments - Investments	i	2.72	2.39
Additional Provision for Receivables (Expected Credit Loss)	0	(8.01)	(44.65)
Recognition of borrowings at amortized cost based on EIR	j,l	72.59	107.39
Fair value adjustments - Financial Assets	h,p	(9.51)	-
Provision for Expected Credit Loss on Financial Assets	P	(175.77)	(139.51)
Deferred Tax impact on the above adjustments	hj	13.03	25.93
Reclassification of Preference Shares to Financial Liabilities	g	(960.00)	-
Total adjustment to Equity		5,015.95	6,496.71
Total equity under IND AS		21,492.00	20,050.44

* Under previous GAAP, total comprehensive income was not reported. Therefore, the above reconciliation starts with profit under previous GAAP.

Effect of Ind AS adoption on the Statement of Cash Flows for the Year ended 31 March 2017				Amount Rs. in lakhs
Particulars	Notes (Refer Note q)	Previous GAAP	Effect of transition to Ind AS	Ind AS
Net cash flow from operating activities		3,790.95	(4.51)	3,786.44
Net cash flow from investing activities		(872.16)	(0.00)	(872.16)
Net cash flow from financing activities		(3022.39)	(27.45)	(3,049.84)
Net increase/decrease in cash and cash equivalents		(103.60)	(31.96)	(135.56)
Cash and cash equivalents at the beginning of the		148.33		148.33
year
Cash and cash equivalents at the end of the year		44.73	(31.96)	12.77

Notes to Reconciliation:

a) During the FY 2016-17, erstwhile Chemfab Alkalis Limited merged with the Company with appointed date of 01.04.2014. The effect of the merger had been given in FY 16-17 under the previous GAAP, pursuant to the order of NCLT dated 30.03.2017. As the company has claimed optional exemption under IND AS 101 to adopt IND AS 103 prospectively from the transition date, the effect of the merger entries have been given in the opening Balance Sheet as at 01.04.2016, duly considering the appointed date of the merger of 01 April 2014.

The details of carrying balance of assets and liabilities acquired on the merger as on the date of appointment of 01 April 2014 under previous GAAP are as follows:

Particulars	Amounts as at 1 April 2014 (Appointed date)
	Rs. in lakhs
Assets
(a) Fixed assets
(i) Tangible Assets	7,168.46
(ii) Intangible Assets	10.15
(iii) Capital work-in-progress	5,871.43
(iv) Intangible assets under development	81.21
(b) Non-current Investments	0.32
(c) Long-term Loans and Advances	1,889.84
(d) Other Non Current Assets	-
(e) Current Investments	717.96
(f) Inventories	279.16
(g) Trade Receivables	1,059.10
(h) Cash and Bank Balances
- Cash and Cash Equivalents	67.15
- Other Bank Balances	123.16
(i) Short-term Loans and Advances	751.64
(j) Other Current Assets	20.80
Total Assets [A]	18,040.38
Liabilities
(a) Capital Reserve	40.67
(b) Deferred Tax Liabilities (Net)	1,137.81
(c) Other Long-term Liabilities	63.31
(d) Long-Term Provisions	29.58
(e) Short Term Borrowings	2,418.93
(f) Trade Payables	1,267.96
(g) Other Current Liabilities	873.91
(h) Short-Term Provisions	137.16
Total Liabilities [B]	5,969.33
Excess of Assets over Liabilities [ A - B ] = [C]	12,071.05

b) Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains or losses are required to be presented in other comprehensive income

c) Under previous GAAP, rebates and discounts on sale of goods are disclosed as other expenses. Under Ind AS, revenue is recognised at fair value, hence rebates and discounts are reduced from revenue from operations. The net effect of this is decrease in revenue from operations by Rs. 20.98 lakhs and corresponding decrease in other expenses by Rs. 20.98 lakhs for the year ended March 31, 2017. This change does not effect the net profit for the year ended March 31, 2017.

d) Under previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense is presented separately on the face of the standalone statement of profit and loss. The effect of this is increase in revenue from operations by Rs. 1631.09 lakhs for the year ended March 31, 2017 but there is no impact on profit or loss for the year ended March 31,2017.

e) Under previous GAAP upto 31 March 2016, dividends on equity shares recommended by the board of directors after

the end of reporting period but before the financial statements were approved for issue were recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised when declared by the members in annual general meeting. Effect of this change is increase in total equity by Rs. 137.99 lakhs as at April 1, 2016 (Rs. NIL as at March 31, 2017), decrease in Provisions - Current by Rs. 137.99 lakhs as at April 1,2016 (Rs. NIL as at March 31, 2017)

f) Under previous GAAP, actuarial gains and losses were recognised in profit and loss. Under Ind AS, the actuarial gains and

losses form part of remeasurement of net defined liability/asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income. The actuarial loss for the year ended March 31, 2017 was Rs. 16.31 lakhs and tax effect was Rs. 5.65 lakhs and deferred tax liabilities reduced by Rs. 5.65 lakhs as at March 31, 2017.

g) Under previous GAAP, redeemable preference shares were classified as part of total equity. Dividend paid on these preference shares were adjusted against retained earnings. HoweverunderlndAS as these preference shares do not contain any equity component and hence, have been classified as financial liability. The resultant dividends including tax thereon hitherto recogniseddirectly as areductionin equity, hasbeenrecognisedas finance costinthe statement ofprofitandloss. The net effect of this change is adecrease in total equity by Rs. 960.00 lakhs as at March31,2017 (Rs. Nil as at April 1,2016) withcorresponding increase in Other financial liabilities and decrease in profit before tax by Rs. 121.85 lakhs for the year ended March 31, 2017 (Rs. NIL as at April 1, 2016)

h) Under previous GAAP, security deposits are carried at cost. Under Ind AS, these are carried at amortized cost. The effect of this change is decrease in other financial assets by Rs. 95.31 lakhs as at March 31, 2017 ( decrease by Rs. 116.46 lakhs as at April 1, 2016) and increase in other non current assets by Rs. 90.78 lakhs as at March 31, 2017 (increase by Rs. 116.46 lakhs as at April 1, 2016) and decrease in total equity by Rs. 4.53 lakhs as at March 31, 2017. There had been increase in other income by Rs. 21.15 lakhs and other expenses by Rs.25.68 lakhs for the year ended March 31,2017 and consequently decrease in deferred tax liabilities by Rs. 1.57 lakhs as at March 31, 2017 (Rs. NIL as at April 1, 2016).

i) Under previous GAAP, investments were carried at cost. Under Ind AS, investments (other than investments in equity instruments of subsidiaries and associates) are carried at fair value through Profit or loss and Other comprehensive income. Net effect of this change is increase in non current investments and increase in Other Comprehensive income by Rs. 2.72 lakhs as at March 31, 2017 (Rs. 2.39 lakhs as at April 1, 2016)

j) Under previous GAAP, Borrowing cost and processing fees related to loans and financial liabilities were charged off to the statement of profit and loss. Under Ind AS, the Company needs to measure the borrowings at fair value using Effective interest rate (EIR) also considering the Upfront fees and Processing fees paid and any interest free loan at the time of obtaining the borrowings. The net effect of change is decrease in borrowings under non current liabilities by Rs. 442.62 lakhs as at March 31, 2017 (decrease by Rs. 537.38 lakhs as at April 1, 2016) and increase in other current liabilities by Rs. 70.45 lakhs as at 31 March 2017 (increase by Rs. 370.00 lakhs in other non current liabilities and increase by Rs. 70.45 lakhs in other current liabilities as at March 31,2016). There is an increase in borrowings under current liabilities by Rs. 10.45 lakhs as at March 31, 2017 (decrease by Rs. 10.45 lakhs as at April 1, 2016) and increase in total equity by Rs. 72.62 lakhs as at March 31, 2017 (increase by Rs. 107.38 lakhs as at April 1, 2016). There had been increase in finance cost by Rs.45.99 lakhs and increase in other income by Rs. 11.23 lakhs and decrease in deferred tax liabilities by Rs. 11.31 lakhs as at March 31, 2017 (increase by Rs. 25.93 lakhs as at April 1, 2016).

k) Under previous GAAP, Deferred tax asset for unused tax losses and unabsorbed depreciation was recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Under IND AS Deferred tax asset is recognised for carry forward unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deferred tax asset can be utilised. The Company has thus recognised Deferred Tax Asset of Rs. 6,080.91 lakhs as at March 31, 2017 (Rs. 6,691.09 lakhs as at April 1,2016) and increase in other equity by Rs. 6,691.09 lakhs as at April 1,2016

1) Under previous GAAP, Prior period items are included in determination of net profit or loss of the period in which the error pertaining to a prior period is discovered and are separately disclosed in the statement of profit and loss in a manner that the impact on current profit or loss can be perceived. Material prior period errors are corrected retrospectively by restating the comparative amounts for prior periods presented in which the error occurred or if the error occurred before the earliest period presented, by restating the opening balance sheet. Accordingly Rs. 283.92 lakhs of prior period expense identified in the previous GAAP financial statements for the year ended March 31, 2017 has been accounted as at the transition date of April 1, 2016 to Other Equity by adjusting the following balances

Particulars	Amount (Rs. in lakhs)
Property, Plant and Equipment	224.91
Other current assets	6.21
Borrowings under Non current Liabilities	41.66
Provisions under Non current Liabilities	11.14
Total	283.92

m) Under pervious GAAP Grants relating to non-depreciable assets are credited to capital reserve. Under IND AS Grants related to non-depreciable assets may also require the fulfilment of certain obligations and would then be recognised in profit or loss over the periods that bear the cost of meeting the obligations. Capital Reserve relating to government grant of Rs. 25.00 lakhs transferred to Reserves and Surplus under Other Equity as at April 1, 2016

n) Under previous GAAP, the Company accounted for equity settled stock options under the ''intrinsic value'' method and made fair value disclosures. Under IND AS the Company will account for equity settled stock options using the ''fair value'' method. Under this method, compensation cost for the employees'' stock options will be recognized based on the fair value at the date of grant in accordance with the Black Scholes model. Accordingly, share option outstanding account has increased and Reserves and surplus under other equity has decreased by an amount of Rs. 3.29 lakhs as at March 31, 2017 (Rs. 0.06 lakhs by April 1, 2016). Consequently, Employee benefit expenses has increased by Rs. 3.23 lakhs as at March 31,2017.

o) Under previous GAAP, the Company made provision for doubtful debts for Trade Receivables based on the ageing analysis and individual debtor assessment of recoverability. Under IND AS the impairment model of financial asset is based on Expected Credit Loss model. Accordingly, the Company has provided loss allowance based on Expected credit loss and as a result trade receivables has decreased by Rs. 8.01 lakhs as at March 31, 2017 (decreased by Rs. 44.65 lakhs as at April 1, 2016). Reserves and Surplus under other Equity decreased by Rs. 44.65 lakhs as at April 1 , 2016. Consequently, proviwsion for doubtful receivables under other expenses decreased by 5.01 lakhs and written back under other income by Rs. 31.62 lakhs for March 31, 2017.

p) Under previous GAAP, reimbursements receivable from government are carried at cost. Under Ind AS, these are carried at amortized cost. The effect of this change is increase in other non current financial assets by Rs. 175.77 lakhs as at March 31,2017 (Rs. 139.51 lakhs as at April 1,2016) and decrease in other equity by Rs. 175.77 Lakhs as at March 31, 2017 (Rs. 139.51 Lakhs as at April 1, 2016). There had been increase in other income by Rs. 36.59 lakhs and other expenses by Rs.77.83 lakhs for the year ended March 31, 2017 and consequently decrease in deferred tax liabilities by Rs. 1.72 lakhs as at March 31, 2017 (Rs. NIL as at April 1, 2016).

q) Under IND AS, Cash Credit from Banks which are repayable on demand and form an integral part of an entity''s cash management systems are included in cash and cash equivalents for the purpose of presentation of statement of cashflow. Whereas under previous GAAP there was no similar guidance and hence Cash Credit from Banks were considered similar to other borrowings and the movement therein were reflected in cashflow from financing activities. The effect of this is that Cash Credit from Banks of Rs. 31.96 lakhs as at 31 March 2017 and Rs. Nil as at 1 April 2016 have been considered as a part of cash and cash equivalents under IND AS for the purpose of presentation of statement of cashflows. Consequently the cash outflow from financing activities as per statement of cashflow for the year ended 31 March 2017 prepared as per IND AS is lower to the extent of the above.

r) The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

52 Details of Research & Development Expenditure Recognised as an expense (As identified by the management)

Amount Rs. In lakhs
Particulars	2017-18	2016-17
Employee Benefits expense	34.26	32.29
Professional fees	8.68	9.35
Consumption of Stores and spares	11.74	15.35
Travelling expenses	1.39	1.27
Depreciation	7.59	6.17
Total	63.66	64.43

53 The Board of Directors has recommended a final dividend of 12.50% (Rs. 1.25 per Equity Share ofRs. 107-each) for the financial year 2017-18 which is subject to the approval of the shareholders in the forthcoming Annual General Meeting of the Company.

54 Previous Year Figures

As stated in Note 1, the Company has adopted Indian Accounting Standards with effect from 1 April 2017 with date of transition to Ind AS being 1 April 2016. Accordingly, previous year figures in the financial statements have been restated to Ind AS. Further, previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

55 Approval of Financial Statements

The Board of Directors of the Company has reviewed the realisable value of all the current assets and has confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognized in the financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these financial statements in its meeting held on 10 May 2018.

For and on behalf of Board of Directors
C S Ramesh	Suresh Krishnamurthi Rao
Director	Chairman
DIN: 00019178	DIN: 00127809
V M Srinivasan	Nitin S Cowlagi
Chief Executive Officer	Chief Financial Officer
G Somasundaram
Company Secretary
Place : Chennai
Date: 10 May 2018