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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Alkyl Amines Chemicals Ltd.

Mar 31, 2025

y. Provisions, Contingent Liabilities and Contingent Assets

The Company recognizes a provision, when there is a present legal or constructive obligation as a result of past events,
the settlement of which is likely to result in an outflow of resources and a reliable estimate can be made of the amount of
obligation.

Contingent Liabilities are disclosed by way of a note to the financial statements after careful evaluation by the Company
of the facts and legal aspects of the matters involved.

When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is
remote, no provision or disclosure is made. Provisions are reviewed at each Balance sheet date and adjusted to reflect the
current best estimate.

2. Critical Judgments, Estimates and Assumptions

The preparation of financial statements requires the Company to make estimates, assumptions and judgments that affect the
reported balances of assets and liabilities and disclosures as at the date of the financial statements and the reported amounts
of income and expenses for the period presented.

The estimates and the associated assumptions are based on historical experience and the other factors that are considered to
be relevant. Actual results may differ from the estimates under different assumptions and conditions.

Estimates and the underlying assumptions are reviewed on an ongoing basis. Impact on account of revisions to accounting
estimates are recognized in the period in which the estimates are revised and future periods are affected.

The estimates and assumptions that have significant risk of causing a material adjustment to the carrying value of assets and
liabilities within the next financial year are discussed below.

(i) Judgments:

In the process of applying the Companyâs accounting policies, the Company has made the following judgments, which
have the most significant effect on the amounts recognized in the financial statements:

a. Segment Reporting

Ind AS 108 - Operating Segments, requires the Company to determine the reportable segments for the purpose of
disclosure in financial statements, based on the internal reporting reviewed by the Board of Directors, to assess the
performance and allocate resources. The standard also requires the Company to make judgments with respect to
aggregation of certain operating segments into one or more reportable segments.

Operating segments, used to present segment information, are identified based on the internal reports used and are
reviewed to assess performance and allocate resources. The Company has determined that some of the segments exhibit
similar economic characteristics and meet other aggregation criteria and are accordingly aggregated into one primary
reportable segment i.e. âSpeciality Chemicals.

b. Stores and Spares Inventories

The Companyâs manufacturing process is continuous and highly technical, with a wide range of different types of plants
and machineries. The Company keeps stores and spares as a standby, to run the operations without any disruption.
Considering the wide range of stores and spares and long lead times for their procurement, and based on criticality
of the spares, the Company believes that their net realizable value would be more than their cost.

c. Income Taxes

The Company in making judgement for the resolution of the uncertainty over income tax treatments as per Appendix
C to Ind AS 12 âIncome Taxesâ, The Company has considered; (a) how it prepares its income tax filings and supports
tax treatments; or (b) how the entity expects the taxation authority to make its examination and resolve issues that
might arise from that examination. The Company determined, based on its tax compliance, that it is probable that its
tax treatments will be accepted by the taxation authorities. Thus, the said Appendix does not have a material impact
on the financial statements of the Company.

d. Contingent Liability Judgment

Note-35a describes claims against the Company not acknowledged as debt. It includes certain penalties and charges
payable to a Government agency, although as per the contracts, the Company, based on past experience, believes that
the penalties and charges are not certain, and, accordingly, are not considered as an obligation as at the Balance Sheet
date and are disclosed as Contingent Liabilities.

(ii) Estimates and Assumptions:

The Company based its assumptions and estimates on parameters available when the financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to market changes or
circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when
they occur.

a. Defined Benefit Plans (Gratuity Benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial

valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in
the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to
the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive
to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject
to change is the discount rate. In determining the appropriate discount rate, the management considers the interest
rates of government bonds. The mortality rate is based on Indian Assured Lives Mortality 2012-14 (Urban). Those
mortality tables tend to change only at intervals in response to demographic changes. Future salary increases and
gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in Note 37a.

b. Fair Value Measurement of Financial Instruments

When the fair values of Financial Assets and Financial Liabilities recorded in the Balance Sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques, including the
Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible; but where
this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the
reported fair value of financial instruments. Please refer note 48 for further disclosures.

c. Useful Life of Property, Plant and Equipment and Others

The Company reviews the estimated useful lives and residual values of Property, Plant and Equipment (PPE) and
Intangible Assets as at the end of each reporting year. The factors, such as changes in the expected level of usage,
technological developments, units of production and product life cycle, could significantly impact the economic useful
lives and the residual values of assets. Consequently, future depreciation and amortization charge could be revised
and thereby could have an impact on the profit of the future years.

The useful life of a Catalyst is estimated from the date of its activation, which is considered as the date of from which
it is available for use as per IND AS 16 - Property Plant and Equipment.

d. Litigations

From time to time, the Company is subjected to legal proceedings, the ultimate outcome of each being always subject
to many uncertainties inherent in litigations. A provision is made when it is considered probable that payment will be
made and the amount of the loss can be reasonably estimated. Significant judgment is made when evaluating, among
other factors, the probability of unfavourable outcome and the ability to make a reasonable estimate of the amount of
potential loss. Litigation provisions are reviewed at each accounting year and revisions made for changes in facts and
circumstances.

e. Cash Flow Hedge Reserve

The Cash Flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in
fair value of designated portion of hedging instruments entered into for cash flow hedges. It will be reclassified to
the Statement of Profit and Loss only when the hedged transaction affects the profit or loss or included as a basis
adjustment to the non-financial hedged item.

f. Provision for Expected Credit Losses (ECL) of trade receivables

The Company uses a provision matrix to calculate ECL for trade receivables. The provision matrix is based on the
Companyâs historical observed default rates which are negligible over the years. The Company calibrates the matrix
to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical
observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historically observed default rates, forecast economic conditions and ECL is
a significant estimate. The amount of ECL is sensitive to changes in circumstances and of forecast economic conditions.
The Companyâs historical credit loss experience and forecast of economic conditions may also not be representative of
customerâs actual default in the future. However, based on the information about the historical data, and the forecast
by the management, ECL on the Companyâs trade receivables is considered as Nil.

g. Government Grant

Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will
be received, and the Company will comply with all attached conditions.

In assessing the recognition of Government Grants, the Company is dependent upon the generation of future revenue
as per the condition specified in the Export Promotion Capital Goods (EPCG) license. Management considers projected
future income planning strategies in making this assessment. Based on the level of historical revenue and projections
for future revenue over the periods, in which the conditions are satisfied, the Management believes that the Company
will able to fulfil the conditions. The amount of Government Grant considered realizable could, however, be reduced
in the near term, if estimates of future export revenue during the subsequent period are reduced.

With respect to grants receivable from the government on account of capital expenditure incurred by the Company,
the Company is recognising such grants as deferred income and will be recognized as income on a systematic and
rational basis over the useful life / remaining useful life of the respective asset.

For calculation of grant pertaining to one of the plants, the company has estimated an annual increase of 5% Y-O-Y in
the revenue.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to determine fair value of an instrument are observable, the instrument is included in
Level2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

The fair value of forward foreign exchange contracts is determined using forward exchange rates received from the bank
at the Balance Sheet date.

iii) Valuation process

The finance department of the Company includes a team that performs the valuations of assets and liabilities required for
financial reporting purposes, including level 3 fair values.

iv) Fair value of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivables, deposits, loans, cash and cash equivalents, other financial assets, trade payables,
borrowings and other financial liabilities are considered to be the same as their fair values, due to their short-term nature.

48.3 Financial Risk Management
Policies and Objectives

The Company, in the course of its business, is exposed to a variety of financial risks, viz. market risk, credit risk and liquidity
risk, which can adversely impact its financial performance. It is the Companyâs endeavour to foresee the unpredictability
of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has a risk
management policy that not only covers the foreign exchange risk but also other risks such as interest rate risk and credit risk
which are associated with financial assets and liabilities. The risk management policy of the Company is approved by its board
of directors. The risk management framework focuses on actively securing the Companyâs short to medium term cash flows by
minimizing the exposure to financial markets.

Presented below is a description of our risks (market risk, credit risk and liquidity risk) together with a sensitivity analysis,
performed annually, of each of these risks, based on selected changes in market rates and prices. These analyses reflect the
managementâs view of changes which are reasonably possible to occur over a one year period. In the event of crisis caused
due to external factors, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in the
cash flow forecast to ensure that there is enough liquidity in the system through internal and external source of funds. These
forecasts and assumptions are reviewed by the board of directors.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a
change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the
interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific
market movements cannot be normally predicted with reasonable accuracy.

The objective of market Risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.

Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have a potential impact on the Statement of Profit and Loss and Equity.
This arises from transactions entered into in foreign currency and assets/liabilities which are denominated in a currency other
than the functional currency of the Company.

A majority of the Companyâs foreign currency transactions are denominated in US Dollars (USD). Other foreign currency
transactions entered into by the Company are in EURO. However, the size of these transactions is relatively small in comparison
to the US dollar transactions. Thus, the foreign currency sensitivity analysis has only been performed in relation to the US
Dollar (USD).

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Further,
in accordance with its risk management policy, the Company hedges its risks to the extent of atleast 80% by using derivative
financial instruments. The use of these instruments facilitates the management of transactional exposures to exchange rate
fluctuations because the gains or losses incurred on the derivative instruments will offset, in whole or in part, losses or gains
on the underlying foreign currency exposure.

Financial instruments that are subject to concentration of credit risk, principally consist of Trade Receivables and Loans.

A majority of the customers have been transacting with the Company over a long period of time and none of these customersâ
balances have been written off or credit impaired at the reporting date.

In respect of receivables other than Trade Receivables, the Companyâs exposure to any significant credit risk exposure to any
single counter party or any groups of counter parties having similar characteristics is considered to be negligible. The credit
risk for liquid funds and other short-term Financial Assets is considered negligible, since the counter parties are reputed banks
with high quality external credit ratings.

The derivatives contracts are entered into with reputed banks with high quality credit ratings.

The Companyâs exposure to credit risk is limited to the carrying amount of Financial Assets recognized at the Balance Sheet
date.

The Company evaluates the concentration of risk with respect to trade receivable as low, as its customer are located in several
jurisdictions and industries and operate in a largely independent market.

The maximum exposure to credit risk for trade and other receivables by geographic region is as given below:

Expected Credit Loss Assessment

Based on the industry practices and the business environment in which the entity operates, management considers that the
trade receivables and loans are in default (credit impaired) if the payments are more than 365 days past due. However as per
the history of the Company, none of the customers fell in the aforesaid category during the year ending March 31st 2025 and
year ending March 31st 2024.

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management
is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus
funds in bank fixed deposits which carry no mark to market risk.

The following tables detail the remaining contractual maturities at the end of the reporting period of the Company, which are
based on contractual and undiscounted cash flows and the earliest date the Company can be required to pay. The Company
manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company also monitors the level of expected cash inflows on trade and other receivables together with expected cash
outflows on trade and other payables.

This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
Collateral

The Company has pledged part of its trade receivables, Inventories, Cash & Bank Balance and Current Assets in order to fulfil
certain collateral requirements for the banking facilities extended to the Company. There is obligation to return the securities
to the Company once these banking facilities are surrendered (Refer note 3.2)

49 The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of the Companies Act, 1956.

50 There is no income surrendered or disclosed as income during the current or previous year in the tax assesments under the
Income Tax Act, 1961, that has been recorded in the books of accounts.

51 The Company does not have any benami property, where any proceeding has been initiated or pending against the Company
for holding any benami property.

52 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).

53 The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both
during the current or previous year.

54 The Company has not traded or invested in crypto currency or virtual currency during the current year or previous year.

55 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

56 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

57 The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly
returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the
books of accounts.

58 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority.

59 The Company has not entered into any scheme of arrangement which has an accounting impact on the current year or the
previous financial year.

60 Subsequent Event

The Company has received an eligibility certificate dated April 7, 2025 granting capital subsidy under scheme for capital
subsidy to large industries and thrust sector amounting to '' 468 Lakhs. In accordance with Ind AS 10, as the same constitutes
adjusting event occurring after the balance sheet date, the Company has given the necessary effect of the same in its Financial
Statements for the year ended March 31, 2025.

61 The Code on Social Security 2020 (âCodeâ) has been notified in the Official Gazette on September 29, 2020, it has not yet become
effective as the related rules are yet to be notified. The Company will assess the impact and its evaluation once the subject
rules are notified and will give appropriate impact in its financial statements in the period in which the Code becomes effective
and the related rules to determine the financial impact are published.

62 The Companyâs Financial Statements were approved and authorized for issue by its Board of Directors on May 9, 2025.

63 Previous yearâs figures, wherever necessary, have been regrouped/ reclassified to conform to the current yearâs presentation.
Figures in brackets, unless specified, represent previous yearâs figures.

As per our Report of even date attached For and on behalf of the Board of Directors

For N. M. RAIJI & CO. YOGESH M. KOTHARI

Chartered Accountants Chairman and Managing Director

Firm Registration No. 108296W

VINAY D. BALSE KANCHAN A. SHINDE CHINTAMANI D. THATTE KIRAT M. PATEL

Partner Chief Financial Officer General Manager (Legal) Executive Director

Membership No. 039434 and Company Secretary

Place : Mumbai Place : Mumbai

Dated : May 9, 2025 Dated : May 9, 2025

Mar 31, 2024

15.3 Rights, preferences and restrictions

i. The Company has only one class of shares, referred to as equity shares, having a par value of '' 2/- (Previous year '' 2/-).

ii. Final dividend of '' 10 per share for face value of '' 2/-each proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

iii. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

i) Cash Credits are secured by hypothecation Trade receivables, Inventories, Cash & Bank Balance and Current Assets of the Company, both present and future, as well as by the second mortgage of the specified immovable properties of the Company, as referred in note no 3.2.

ii) Packing credit are secured against hypothecation Trade receivables, Inventories, Cash & Bank Balance and Current Assets of the Company, both present and future, as well as by the second mortgage of the specified immovable properties of the Company, as referred in note no 3.2

iii) Packing credit due for payment within 180 days bears average interest of SOFR plus spread in the range of 1% -1.25% per annum

27b Disaggregation of Revenue

The operations of the Company are limited to only one segment viz. Specialty Chemicals. Revenue from contract with customers is from sale of manufactured goods. Sale of goods are made at a point in time and revenue is recognised upon satisfaction of the performance obligations which is typically upon dispatch/delivery.

The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting year, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation 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 the defined benefit obligation has been calculated using the Projected Unit Credit Method at the end of the reporting year, which is the same method as applied in calculating the defined benefit obligation as recognized in the balance sheet.

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

37B Share Based Payments

The Company has in place an Employee Stock Option Plan approved by the Shareholders of the Company in the compliance with Securities & Exchange Board of India (Share Based Employee benefits) Regulations,2014.- Alkyl Amines Employees Stock Option Plan, 2018

41 EARNINGS PER SHARE

Earning Per Share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Calculations for basic and diluted earnings per equity share are as stated below.

47 Leases

Leases as lessee

The Company enters into lease contracts primarily for the purpose of taking office spaces , storage server, Sheds and Machinery on lease to conduct its business in the ordinary course. The Company has elected not to apply the requirements of Ind AS 116 to short-term leases and certain leases for which the underlying asset is of low value.

(i) For the maturity analysis of contractual undiscounted cash flow (refer note 48.3)

48 Financial and Other Derivative Instruments

Refer note 1 (m), (n) and (o) for accounting policies on Financial Instruments.

48.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximizing the return to stakeholders through optimization of the Debt and Equity Balance.

Management monitors the return on capital as well as the level of dividends to shareholders.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratio on an annual basis and ensuring that the same is in compliance with the requirements of the financial covenants.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to determine fair value of an instrument are observable, the instrument is included in Level2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

The fair value of forward foreign exchange contracts is determined using forward exchange rates received from the bank at the Balance Sheet date.

iii) Valuation process

The finance department of the Company includes a team that performs the valuations of assets and liabilities required for financial reporting purposes, including level 3 fair values.

iv) Fair value of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivables, deposits, loans, cash and cash equivalents, other financial assets, trade payables, borrowings and other financial liabilities are considered to be the same as their fair values, due to their short-term nature.

48.3Financial Risk Management

Policies and Objectives

The Company, in the course of its business, is exposed to a variety of financial risks, viz. market risk, credit risk and liquidity risk, which can adversely impact its financial performance. Its is the Companyâs endeavour to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has a risk management policy that not only covers the foreign exchange risk but also other risks such as interest rate risk and credit risk which are associated with financial assets and liabilities. The risk management policy of the Company is approved by its board of directors. The risk management framework focuses on actively securing the Companyâs short to medium term cash flows by minimizing the exposure to financial markets.

Presented below is a description of our risks (market risk, credit risk and liquidity risk) together with a sensitivity analysis, performed annually, of each of these risks, based on selected changes in market rates and prices. These analyses reflect the managementâs view of changes which are reasonably possible to occur over a one year period. In the event of crisis caused due to external factors, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in the cash flow forecast to ensure that there is enough liquidity in the system through internal and external source of funds. These forecasts and assumptions are reviewed by the board of directors.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

The objective of market Risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have a potential impact on the Statement of Profit and Loss and Equity. This arises from transactions entered into in foreign currency and assets/liabilities which are denominated in a currency other than the functional currency of the Company.

A majority of the Companyâs foreign currency transactions are denominated in US Dollars (USD). Other foreign currency transactions entered into by the Company are in EURO. However, the size of these transactions is relatively small in comparison to the US dollar transactions. Thus, the foreign currency sensitivity analysis has only been performed in relation to the US Dollar (USD).

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Further, in accordance with its risk management policy, the Company hedges its risks to the extent of atleast 80% by using derivative financial instruments. The use of these instruments facilitates the management of transactional exposures to exchange rate fluctuations because the gains or losses incurred on the derivative instruments will offset, in whole or in part, losses or gains on the underlying foreign currency exposure.

c. The Company also designates certain hedges, usually for large transactions, as cash flow hedges under hedge accounting, with the objective of shielding the exposure from variability in cash flows. The currency, amount and tenure of such hedges are generally matched to the underlying transaction(s). Changes in the fair value of the effective portion of cash flow hedges are recognized as cash flow hedging reserve in Other Comprehensive Income. While the probability of such hedges becoming ineffective is very low, the ineffective portion, if any, is immediately recognized in the Statement of Profit and Loss. The movement in the cash flow hedging reserve in respect of designated cash flow hedges is summarized below:

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Companyâs cash flows as well as costs.

The company has borrowed through financial instruments such as ECB and working capital loans. The company is subject to variable interest rates on some of these interest bearing liabilities.

The risk estimated provided assume a parallel shift of 50 basis points interest rates across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposureâs outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the year.

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. Based on the composition of net debt, a 50 basis points increase / decrease in interest rates over the 12 month period would increase/ decrease the Companyâs net finance expense explained as below:

Credit risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

Financial instruments that are subject to concentration of credit risk, principally consist of Trade Receivables and Loans.

A majority of the customers have been transacting with the Company over a long period of time and none of these customersâ balances have been written off or credit impaired at the reporting date.

In respect of receivables other than Trade Receivables, the Companyâs exposure to any significant credit risk exposure to any single counter party or any groups of counter parties having similar characteristics is considered to be negligible. The credit risk for liquid funds and other short-term Financial Assets is considered negligible, since the counter parties are reputed banks with high quality external credit ratings.

The derivatives contracts are entered into with reputed banks with high quality credit ratings.

The Companyâs exposure to credit risk is limited to the carrying amount of Financial Assets recognized at the Balance Sheet date.

The Company evaluates the concentration of risk with respect to trade receivable as low, as its customer are located in several jurisdictions and industries and operate in a largely independent market.

The maximum exposure to credit risk for trade and other receivables by geographic region is as given below:

Expected Credit Loss Assessment

Based on the industry practices and the business environment in which the entity operates, management considers that the trade receivables and loans are in default (credit impaired) if the payments are more than 365 days past due. However as per the history of the Company, none of the customers fell in the aforesaid category during the year ending March 31st 2024 and year ending March 31st 2023.

Liquidity risk

LLiquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits which carry no mark to market risk.

The following tables detail the remaining contractual maturities at the end of the reporting period of the Company, which are based on contractual and undiscounted cash flows and the earliest date the Company can be required to pay. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables.

This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Collateral

The Company has pledged part of its trade receivables, Inventories, Cash & Bank Balance and Current Assets in order to fulfil certain collateral requirements for the banking facilities extended to the Company. There is obligation to return the securities to the Company once these banking facilities are surrendered (Refer note 3.2)

49 The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

50 There is no income surrendered or disclosed as income during the current or previous year in the tax assesments under the Income Tax Act, 1961, that has been recorded in the books of accounts.

51 The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

52 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).

53 The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

54 The Company has not traded or invested in crypto currency or virtual currency during the current year or previous year.

55 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

56 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

57 The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

58 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

59 The Company has not entered into any scheme of arrangement which has an accounting impact on the current year or the previous financial year.

60 The Code on Social Security 2020 (âCodeâ) has been notified in the Official Gazette on September 29, 2020, it has not yet become effective as the related rules are yet to be notified. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules to determine the financial impact are published.

61 The Companyâs Financial Statements were approved and authorized for issue by its Board of Directors on May 09, 2024.

62 The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, which amends certain accounting standards, and are effective 1 April 2023. Following are recent changes applicable to the Company.

1. Ind AS 1, Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.

2. Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of âaccounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its financial statements.

3. IndAS 12, Income Taxes - This amendment has narrowed the scope of the initial recognition exception, so that it does not apply to transactions that give rise to equal taxable and deductible temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its financial statements.

63 Previous yearâs figures, wherever necessary, have been regrouped/ reclassified to conform to the current yearâs presentation. Figures in brackets, unless specified, represent previous yearâs figures.

Mar 31, 2023

15.2 The final dividend on shares is 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 Companyâs Board of Directors.

The Company declares and pays dividends in Indian rupees. Companies are required to pay/distribute dividend after deducting applicable withholding income taxes. The remittance of dividend outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

15.3 Rights, preferences and restrictions

i. The Company has only one class of shares, referred to as equity shares, having a par value of '' 2/- (Previous year '' 2/-).

ii. Final dividend of '' 10 per share for face value of '' 2/-each proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

i) . Cash Credits are secured by hypothecation of stocks of raw materials, semi-finished goods, finished goods, consumable stores and

book debts of the Company, both present and future, as well as by the second mortgage of the specified immovable properties of the Company.

ii) Packing credit are secured against hypothecation of stocks of raw materials, semi-finished goods, finished goods, consumable stores and book debts of the Company, both present and future, as well as by the second mortgage of the specified immovable properties of the Company.

iii) Packing credit due for payment within 180 days bears average interest of SOFR plus spread of 1.25% per annum (Previous year Nil).

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation 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 the projected benefit obligation has been calculated using the Projected Unit Credit Method at the end of the reporting year, which is the same method as applied in calculating the projected benefit obligation as recognized in the balance sheet.

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

37B Share Based Payments

The Company has in place an Employee Stock Option Plan approved by the Shareholders of the Company in the compliance with Securities & Exchange Board of India (Share Based Employee benefits) Regulations, 2014 - Alkyl Amines Employees Stock Option Plan, 2018

41 EARNINGS PER SHARE

47 Leases

Leases as lessee

(i) For the maturity analysis of contractual undiscounted cash flow (refer note 48.3)

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratio on an annual basis and ensuring that the same is in Compliance with the requirements of the Financial Covenants.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to determine fair value of an instrument are observable, the instrument is included in Level2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

-The fair value of forward foreign exchange contracts is determined using forward exchange rates received from The bank at The Balance Sheet date.

-The fair value of receivables is considered to be the same as its carrying value due to its short term nature.

iii) Valuation process

The finance department of the Company includes a team that performs the valuations of assets and liabilities required for financial reporting purposes, including level 3 fair values.

iv) Fair value of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivables, deposits, loans, cash and cash equivalents, other financial assets, trade payables, borrowings and other financial liabilities are considered to be the same as their fair values, due to their short-term nature. The non-current borrowings are at market interest rate and are assumed to be equivalent to its fair value.

48.3 Financial Risk Management

Policies and Objectives

The Company, in the course of its business, is exposed to a variety of financial risks, viz. market risk, credit risk and liquidity risk, which can adversely impact the financial performance. The Companyâs endeavour is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has a risk management policy that not only covers the foreign exchange risk but also other risks such as interest rate risk and credit risk which are associated with financial assets and liabilities. The risk management policy of the Company is approved by its board of directors. The risk management framework focuses on actively securing the Companyâs short to medium term cash flows by minimizing the exposure to financial markets. Presented below is a description of our risks (market risk, credit risk and liquidity risk) together with a sensitivity analysis, performed annually, of each of these risks, based on selected changes in market rates and prices. These analysis reflect the managementâs view of changes which are reasonably possible to occur over a one year period. In the event of crisis caused due to external factor, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in cash flow forecast to ensure there is enough liquidity in the situations through internal and external source of funds. These forecast and assumptions are reviewed by board of directors.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have a potential impact on the Statement of Profit and Loss and Equity. This arises from transactions entered into in foreign currency and assets/liabilities which are denominated in a currency other than the functional currency of the Company.

A majority of the Companyâs foreign currency transactions are denominated in US Dollars (USD). Other foreign currency transactions entered into by the Company are in EURO and GBP. However, the size of these transactions is relatively small in comparison to the US dollar transactions. Thus, the foreign currency sensitivity analysis has only been performed in relation to the US Dollar (USD).

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Further, in accordance with its risk management policy, the Company hedges its risks atleast 80% by using derivative financial instruments. The use of these instruments facilitates the management of transactional exposures to exchange rate fluctuations because the gains or losses incurred on the derivative instruments will offset, in whole or in part, losses or gains on the underlying foreign currency exposure.

Interest rate risk

The company has borrowed through financial instruments such as ECB and working capital loans. The company is subject to variable interest rates on some of these interest bearing liabilities.

Interest rate sensitivity

Credit risk

Financial instruments that are subject to concentration of credit risk, principally consist of Trade Receivables and Loans.

The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Companyâs policy is to deal only with creditworthy counterparties. The Company management considers that all the Financial Assets are of good credit quality, including those that are past due. Majority of Customer have been transacting with the company for a quiet long period and non of these customers balance have been writtenoff or credit impaired at the reporting date.

In respect of Receivables other than Trade Receivables, the Companyâs exposure to any significant credit risk exposure to any single counter party or any groups of counter parties having similar characteristics is considered to be negligible. The credit risk for liquid funds and other short-term Financial Assets is considered negligible, since the counter parties are reputed banks with high quality external credit ratings.

The derivatives are entered with reputed banks with high quality external credit ratings.

The Companyâs exposure to credit risk is limited to the carrying amount of Financial Assets recognized at the Balance Sheet date.

The Company evaluates the concentration of risk with respect to trade receivable as low, as its customer are located in several jurisdictions and industries and operate in largely independent market.

Expected Credit Loss Assessment

Based on the industry practices and the business environment in which the entity operates, management considers that the trade receivables and loans are in default (credit impaired) if the payments are more than 365 days past due. However as per the history of the company none of the customer falls in the aforesaid category during the year ending March 31st 2023 and year ending March 31st 2022.

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits which carry no mark to market risk.

The following tables detail the remaining contractual maturities at the end of the reporting period of the Company, which are based on contractual and undiscounted cash flows and the earliest date the Company can be required to pay. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables.

This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

49 The Company has upgraded its ERP (SAP) system from ECC to HANA from November 3rd, 2022. The following items were completely migrated to the new system as on October 31st, 2022.

a) all the General ledger with their balances,

b) all the Inventories with its quantities and values,

c) all Vendorsâ and customersâ with their carrying value.

d) all components of Property plant & Equipment and Intangible Assets with respect to their acquisition cost, accumulated

depreciation/amortization and impairment.

e) Capital work in progress and Intangibles under development with respect to their acquisition cost and impairment.

All the masters with respect to company code, plant codes general ledger, vendors, customers, materials, cost center , work center , profit center and others have been newly created in HANA and are mapped with their respective masters in ECC.

50 The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

51 The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

52 The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

53 The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

54 The Company has not traded or invested in crypto currency or virtual currency during the current year or previous year.

55 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

56 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

57 The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

58 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

59 The Company has not entered into any scheme of arrangement which has an accounting impact on current year or previous financial year.

60 The Code on Social Security 2020 (âCodeâ) has been notified in the Official Gazette on September 29, 2020, it has not yet become effective and related rules are yet to be notified. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

61 The Companyâs Financial Statements were approved and authorized for issue by its Board of Directors on May 11, 2023.

62 The Ministry of Corporate Affairs has vide notification dated 23 March 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2022 which amends certain accounting standards, and are effective 1 April 2022. Following are recent changes applicable to the Company.

1. Ind AS 16, Property, Plant and Equipment - Proceeds before intended use of property, plant and equipment. The amendment clarifies that an entity shall deduct from the cost of an item of property, plant and equipment any proceeds received from selling items produced while the entity is preparing the asset for its intended use (for example, the proceeds from selling samples produced when testing a machine to see if it is functioning properly).

2. Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets - Onerous Contracts - Cost of fulfilling a contract. The amendment explains that the cost of fulfilling a contract comprises: the incremental costs of fulfilling that contract (e.g. Direct labour and materials) and an allocation of other costs that relate directly to fulfilling contracts (e.g. an allocation of the depreciation charge for an item of PPE used in fulfilling that contract). â

3. Ind AS 109, Financial Instruments - Fees included in the 10% test for derecognition of financial liabilities. The amendment clarifies which fees an entity includes when it applies the â10%â test in assessing whether to derecognize a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the otherâs behalf.â

63 Previous yearâs figures, wherever necessary, have been regrouped/ reclassified to conform to the current yearâs presentation. Figures in brackets, unless specified, represent previous yearâs figures.

Mar 31, 2022

11.2 The final dividend on shares is 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 Companyâs Board of Directors.

11.3 Rights, preferences and restrictions

i. The Company has only one class of shares, referred to as equity shares, having a par value of Rs 2/- (revised from Rs.5/-due to split of shares on May 12, 2021).

ii. Final dividend of Rs 10/- per share for face value of Rs. 2/-each proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

Term Loan from Banks:

(i) Foreign Currency Term Loans to part finance Companyâs Dahej Project are secured by creation of a pari passu charge on the Companyâs immovable properties situated at Plot No. A-7, A-7 (part) and A-25 at Patalganga, Maharashtra, Plot no. D-6/1 at Kurkumbh, Maharashtra and Plot No. D-2/CH/149/2 at Dahej, Gujarat and also a second pari passu charge by way of hypothecation of Inventories, Book Debts, Movable Machineries, both present and future, for;

Note - The Grant received during the year is in the form of exemption of Basic Custom Duty towards the import of Plant & Machinery through the Utilization of EPCG License amounting to Rs. 1.26 crores. However, since the Imported Machine is not yet capitalized in the books but lying in the Capital Work in progress, the amortization of the grant has not yet commenced.

(i) The Company has called for balance confirmations from trade payables. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

(ii) Disclosure in accordance with Section 22 of Micro, Small and Medium Enterprises Development Act, 2006:

31B Share Based Payments

The Company has in place an Employee Stock Option Plan approved by the Shareholders of the Company in the compliance with Securities & Exchange Board of India (Share Based Employee benefits) Regulations, 2014. -Alkyl Amines Employees Stock Option Plan,2018

35 EARNINGS PER SHARE

41. Financial and Other Derivative Instruments

Refer Note No. 1 (m), (n) and (o) for accounting policies on Financial Instruments.

41.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximizing the return to stakeholders through optimization of the Debt and Equity Balance.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratios on an annual basis and ensuring that the same is in Compliance with the requirements of the Financial Covenants.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to determine fair value of an instrument are observable, the instrument is included in Level2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

-The fair value of forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.

-The fair value of receivables is considered to be the same as its carrying value due to its short term nature.

-The fair value of current investment in mutual fund Units is based on Net Asset value (NAV), as per the statement provided by the issuer of these mutual fund as at the Balance Sheet date.

iii) Valuation process

The finance department of the Company includes a team that performs the valuations of assets and liabilities required for financial reporting purposes, including level 3 fair values.

iv) Fair value of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivables, security deposits, cash and cash equivalents, interest accrued on fixed deposits, trade payables and borrowings are considered to be the same as their fair values, due to their short-term nature. The noncurrent borrowings are at market interest rate and are assumed to be equivalent to its fair value.

v) Fair value of financial assets and liabilities measured at fair value through profit and loss

The carrying amount of current Investments in Mutual Fund are measured at fair value through profit and loss.

41.3 Financial Risk Management Policies and Objectives

The Company, in the course of its business, is exposed to a variety of financial risks, viz. market risk, credit risk and liquidity risk, which can adversely impact the financial performance. The Companyâs endeavour is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has a risk management policy that not only covers the foreign exchange risk but also other risks such as interest rate risk and credit risk which are associated with financial assets and liabilities. The risk management policy of the Company is approved by its board of directors. The risk management framework focuses on actively securing the Companyâs short to medium term cash flows by minimizing the exposure to financial markets. Presented below is a description of our risks (market risk, credit risk and liquidity risk) together with a sensitivity analysis, performed annually, of each of these risks, based on selected changes in market rates and prices. These analysis reflect the managementâs view of changes which are reasonably possible to occur over a one year period. In the event of crisis caused due to external factor such as caused by recent pandemic ââCOVID-19ââ, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in cash flow forecast to ensure there is enough liquidity in these situations through internal and external source of funds. These forecast and assumptions are reviewed by board of directors.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have a potential impact on the Statement of Profit and Loss and Equity. This arises from transactions entered into in foreign currency and assets/liabilities which are denominated in a currency other than the functional currency of the Company.

A majority of the Companyâs foreign currency transactions are denominated in US Dollars (USD). Other foreign currency transactions entered into by the Company are in EURO. However, the size of these transactions is relatively small in comparison 108 Website: www.alkylamines.com | Annual Report 2021-2022

to the US dollar transactions. Thus, the foreign currency sensitivity analysis has only been performed in relation to the US Dollar (USD).

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Further, in accordance with its risk management policy, the Company hedges its risks by using derivative financial instruments. The use of these instruments facilitates the management of transactional exposures to exchange rate fluctuations because the gains or losses incurred on the derivative instruments will offset, in whole or in part, losses or gains on the underlying foreign currency exposure.

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the Reference rates could have an impact on the Companyâs cash flows as well as costs.

There is no interest rate risk exposure except the interest on External Commercial Borrowings outstanding as at the March 31, 2022 for which the interest rate is fixed.

Accordingly, the information on interest rate sensitivity analysis is not provided.

Investment risk

The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

In order to manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio in accordance with the limits set by the risk management policies.

Financial instruments that are subject to concentration of credit risk, principally consist of Trade Receivables and Loans.

The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Companyâs policy is to deal only with creditworthy counterparties. The Company management considers that all the Financial Assets that are not impaired for each of the reporting dates under review, are of good credit quality, including those that are past due.

The Companyâs exposure to credit risk is limited to the carrying amount of Financial Assets recognized at the Balance Sheet date.

The Company evaluates the concentration of risk with respect to trade receivable as low, as its customer are located in several jurisdictions and industries and operate in largely independent market.

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits which carry no mark to market risk.

The following tables detail the remaining contractual maturities at the end of the reporting period of the Company, which are based on contractual and undiscounted cash flows and the earliest date the Company can be required to pay. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

Contractual cash flows

42 The Company continues to monitor the impact of COVID 19 on its business across the globe and is in a comfortable financial position to meet its commitments and will be able to meet all its debts obligations as and when they come up. Internal financial reporting and controls are adequate and operating effectively. Although there are uncertainties due to the pandemic, the Company expects that the demand for its products from the pharmaceuticals sector will continue.

43 Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below.

Ind AS 16 - Property Plant and equipment - The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2022. The Company evaluated the amendment and the impact of same is not material on its financial statements.

Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets - The amendment specifies that the âcost of fulfillingâ a contract comprises the âcosts that relate directly to the contractâ. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2022, although early adoption is permitted. The Company evaluated the amendment and the impact of same is not material on its financial statements.â

44 Previous yearâs figures, wherever necessary, have been regrouped/ reclassified to conform to the current yearâs presentation. Figures in brackets, unless specified, represent previous yearâs figures.

Mar 31, 2021

Plant, Machinery and Equipment include '' 4.61 lakhs (previous year - '' 17.16 lakhs) being value of machinery installed at third party premises of Job Contractor and Capital Work-In- Progress includes ''4.69 lakhs (previous year - NIL), being under construction at third party premises of Job Contractor, duly confirmed by them.

Other Adjustments under Intangible Assets pertains to the grant received during the current year towards the Reach Registration capitalized in the previous year 2019-20.

Capital Expenditure includes NIL (previous year - ''17.43 lakhs) and addition to Depreciation includes ''16.39 lakhs (previous year- ''16.67 lakhs) towards Research & Development activities (Refer Note 28)

On all the above items of Property, Plant and Equipment first charge is created except on Freehold Land, Leasehold Improvements, Buildings at Vashi, Worli,Plot no.D-6/2 at Kurkumbh, all Residential Quarters and Vehicles.

The Company declares and pays dividend in Indian rupees. Final dividend of '' 6/- per share for face value of '' 2/-each (revised due to split of shares dated 12 May 2021), proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

During the year ended March 31, 2021, the amount per share of final dividend pertaining to the year ended March 31, 2020, distributed to equity shareholders was '' 10/- per share for a face value of '' 5/- each. The dividend appropriation for the year ended March 31, 2021, amounts to ''2,039.64 lakhs. During the year ended March 31, 2021, the amount per share of interim dividend pertaining to the year ended March 31, 2021, distributed to equity share holders was '' 10/- per share for a face value of '' 5/- each. The interim dividend appropriation for the year ended March 31, 2021, amounts to ''2,041.27 lakhs.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Foreign Currency Term Loans to part finance Companyâs normal capital expenditure, which are secured by creation of a pari passu charge on the Companyâs immovable properties situated at Plot No. A-7, A-7 (part) and A-25 at Patalganga and Plot no. D-6/1 at Kurkumbh, Maharashtra and also a second pari passu charge by way of hypothecation of Inventories, Book Debts, Movable Machineries which was fully satisfied in December, 2020, for;

Foreign Currency Term Loans to part finance Companyâs Dahej Project are secured by creation of a pari passu charge on the Companyâs immovable properties situated at Plot No. A-7, A-7 (part) and A-25 at Patalganga, Maharashtra, Plot no. D-6/1 at Kurkumbh, Maharashtra and Plot No. D-2/CH/149/2 at Dahej, Gujarat and also a second pari passu charge by way of hypothecation of Inventories, Book Debts, Movable Machineries, both present and future, for;

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

During the Previous year, on November 18, 2019, the Company has disposed of its entire shareholding in its associate, Diamines and Chemicals Limited at a consideration of ''3,428.27 Lakhs and earned a profit of ''3,284.16 Lakhs. Consequently, with effect from November 18, 2019, Diamines and Chemicals Limited has ceased to be an Associate of the Company. The said profit on sale of investment of ''3,284.16 Lakhs has been shown as an Exceptional Item.

Financial and Other Derivative Instruments

Refer Note No. 1 (m), (n) and (o) for accounting policies on Financial Instruments.

1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximizing the return to stakeholders through optimization of the Debt and Equity Balance.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to determine fair value of an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

-The fair value of forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.

-The fair value of receivables is considered to be the same as its carrying value due to its short term nature.

-The fair value of current investment in mutual fund Units is based on Net Asset value (NAV), as per The statement provided by The issuer of these mutual fund as at the Balance Sheet date.

iii) Valuation process

The finance department of the Company includes a team that performs the valuations of assets and liabilities required for financial reporting purposes, including level 3 fair values.

iv) Fair value of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivables, security deposits, cash and cash equivalents, interest accrued on fixed deposits, trade payables and borrowings are considered to be the same as their fair values, due to their short-term nature. The non-current borrowings are at market interest rate and are assumed to be equivalent to its fair value.

v) Fair value of financial assets and liabilities measured at fair value through profit and loss

The carrying amount of current Investments in Mutual Fund are measured at fair value through profit and loss.

42.3 Financial Risk Management Policies and Objectives

risk which are associated with financial assets and liabilities. The risk management policy of the Company is approved by its board of directors. The risk management framework focuses on actively securing the Companyâs short to medium term cash flows by minimizing the exposure to financial markets.

Presented below is a description of our risks (market risk, credit risk and liquidity risk) together with a sensitivity analysis, performed annually, of each of these risks, based on selected changes in market rates and prices. These analysis reflect the managementâs view of changes which are reasonably possible to occur over a one year period. In the event of crisis caused due to external factor such as caused by recent pendemic ââCOVID-19ââ, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in cash low forecast to ensure there is enough liquidity in these situations through internal and external source of funds. These forecast and assumption are reviewed by board of directors.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have a potential impact on the Statement of Profit and Loss and Equity. This arises from transactions entered into in foreign currency and assets/liabilities which are denominated in a currency other than the functional currency of the Company.

A majority of the Companyâs foreign currency transactions are denominated in US Dollars. Other foreign currency transactions entered into by the Company are in EURO. However, the size of these transactions is relatively small in comparison to the US dollar transactions. Thus, the foreign currency sensitivity analysis has only been performed in relation to the US Dollar (USD).

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Further, in accordance with its risk management policy, the Company hedges its risks by using derivative financial instruments. The use of these instruments facilitates the management of transactional exposures to exchange rate fluctuations because the gains or losses incurred on the derivative instruments will offset, in whole or in part, losses or gains on the underlying foreign currency exposure.

Interest rate risk

The Company has borrowed through a number of financial instruments such as ECBs and working capital demand loans. The Company is subject to variable interest rates on some of these interest bearing liabilities.

The risk estimates provided assume a parallel shift of 50 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the Balance Sheet date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the year.

Interest rate sensitivity

Investment risk

The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments.

In order to manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio in accordance with the limits set by the risk management policies.

Credit risk

Financial instruments that are subject to concentration of credit risk, principally consist of Trade Receivables and Loans.

The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Companyâs policy is to deal only with creditworthy counterparties. The Company management considers that all the Financial Assets that are not impaired for each of the reporting dates under review, are of good credit quality, including those that are past due.

The Companyâs exposure to credit risk is limited to the carrying amount of Financial Assets recognized at the Balance Sheet date

The Company evaluate the concentration of risk with respect to trade receivable as low,as its customer are located in several jurisdiction and industries and operate in largely independent market.

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits which carry no mark to market risk.

The Company maintains the lines of credit. Nil (PY '' 3.87 Lakhs) Working capital loans that is secured. Interest would be payable at the rate ranging from 4.20% of 9.50%.

The following tables detail the remaining contractual maturities at the end of the reporting period of the Company, which are based on contractual and undiscounted cash flows and the earliest date the Company can be required to pay. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables

This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

43 In view of the restrictions on economic activities due to the second wave of COVID-19 pandemic across the country from midMarch, 2021 and subsequent lockdown in April, 2021, the offices and technical center are kept closed from March and those employees have been working from home, wherever possible.

The Company is in a comfortable financial position to meet its commitments and will be able to meet all its debts obligations as they come up. Internal financial reporting and control are adequate and operating effectively. Although there are uncertainties due to the pandemic, the Company expects that the demand for its products from the pharmaceuticals sector will continue.

44 Previous Yearâs figures, wherever necessary, have been regrouped/ reclassified to conform to the current yearâs presentation. Figures in brackets, unless specified, represent previous yearâs figures.

Mar 31, 2018

CORPORATE INFORMATION

Alkyl Amines Chemicals Limited (the âCompanyâ) is a public limited company domiciled in India. Its shares are listed on two stock exchanges in India, viz. the Bombay Stock Exchange (âBSEâ) and the National Stock Exchange (âNSEâ). The Company is engaged in manufacturing and selling of specialty chemicals.

1. CRITICAL JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of financial statements requires the Company to make estimates, assumptions and judgments that affect the reported balances of Assets and Liabilities and disclosures as at the date of the financial statements and the reported amounts of income and expenses for the period presented.

The estimates and the associated assumptions are based on historical experience and the other factors that are considered to be relevant. Actual results may differ from the estimates under different assumptions and conditions.

Estimates and the underlying assumptions are reviewed on an ongoing basis. Impact on account of revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected.

The estimates and assumptions that have significant risk of causing a material adjustment to the carrying value of Assets and Liabilities within the next financial year are discussed below.

(i) Judgments:

In the process of applying the Companyâs accounting policies, Company has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:

a. Arrangements in the nature of lease:

The Company has entered into sub-contracting arrangements with its service providers wherein the Company supplies all the raw materials required for the manufacture and/or processing along with specifications to manufacture the products to the service provider, thereby retaining the title to all products. The Company has also entered into a subcontracting arrangement as a service provider wherein the Company processes the goods based on all the raw materials supplied to it for the manufacture and/or processing along with specifications to manufacture the products, the title to which remains with the customer.

The Company has determined, based on the evaluation of terms and conditions of the arrangement that it qualifies as an arrangement in the nature of operating lease.

b. Segment Reporting:

Ind AS 108 Operating Segments requires the Company to determine the reportable segments for the purpose of disclosure in financial statements based on the internal reporting reviewed by the Board of Directors to assess the performance and allocate resources. The standard also requires the Company to make judgments with respect to aggregation of certain operating segments into one or more reportable segment. Operating segments used to present segment information are identified based on the internal reports used and reviewed to assess performance and allocate resources. The Company has determined that some of the segments exhibit similar economic characteristics and meet other aggregation criteria and are accordingly aggregated into one primary reportable segment i.e. âSpecialty Chemicalsâ and two geographical reportable segments i.e. domestic and exports.

c. Stores and Spares Inventories:

The Companyâs manufacturing process is continuous and highly technical with wide range of different types of plants and machineries. The Company keeps stores and spares as a standby to run the operations without any disruption. Considering the wide range of stores and spares and long lead times for their procurement, and based on criticality of spares, the Company believes that their net realizable value would be more than cost.

d. Income Taxes:

Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

e. Contingent Liability Judgment:

Note-29 describes claims against the Company not acknowledged as debt. It includes certain penalties and charges payable to a Government agency although as per the contracts, the Company, based on past experience, believes that the penalties and charges are negotiable and not certain, and accordingly, are not considered as an obligation as at the Balance Sheet date and are disclosed as Contingent Liabilities.

(ii) Estimates and Assumptions:

The key assumptions concerning the future and other key sources of estimation, uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of Assets and Liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a. Defined Benefit Plans (Gratuity Benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds. The mortality rate is based on Indian Assured Lives Mortality (2006-08). Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in Note 31.

b. Fair Value Measurement of Financial Instruments

When the fair values of Financial Assets and Financial Liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. (Refer Note 43) for further disclosures.

c. Impairment of Non-Financial Assets

The Company has assessed certain Assets that do not have a future economic benefit. Such assessment involves estimates of availability of future cash flows and other alternative uses of the respective Assets. The Company reviews its carrying value of Assets carried at amortized cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for. Based on the Managementâs assessment, these Assets have been fully impaired. The total carrying amount impaired is Rs.116.78 lakhs. (Refer note 3) for details.

d. Useful Life of Property, Plant and Equipment and Others

The Company reviews the estimated useful lives and residual values of Property, Plant and Equipment (PPE) and Intangible Assets as at the end of each reporting year. The factors such as changes in the expected level of usage, number of shifts of production, technological developments, units of production and product life cycle, could significantly impact the economic useful lives and the residual values of Assets. Consequently, the future depreciation and amortization charge could be revised and thereby could have impact on the profit of the future years.

e. Litigations

From time to time, the Company is subject to legal proceedings, the ultimate outcome of each being always subject to many uncertainties inherent in litigations. A provision is made when it is considered probable that payment will be made and the amount of the loss can be reasonably estimated. Significant judgment is made when evaluating, among other factors, the probability of unfavorable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting year and revisions made for the changes in facts and circumstances.

f. Cash Flow Hedge Reserve

The Cash Flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. It will be reclassified to the Statement of Profit and Loss only when the hedged transaction affects the profit or loss or included as a basis adjustment to the non-financial hedged item.

(i) The Company has called for balance confirmations from Trade Receivables. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

(ii) Trade Receivables are non interest bearing and are generally on terms of average 60 days.

(i) During the year, the Company has transferred Rs. 3.48 Lakhs to Investor Education & Protection Fund (for the year ended March 31, 2017 Rs 2.42 lakhs and for the year ended March 31, 2016 Rs 2.82 lakhs).

(ii) Fixed Deposits with original maturity of more than 3 months having remaining maturity of less than 12 months from Balance Sheet date are disclosed above.

2.1 Rights, preferences and restrictions

i. The Company has only one class of shares, referred to as equity shares, having par value of Rs 5. Each holder of equity shares is entitled to one vote per share.

ii. The Company declares and pays dividend in Indian rupees. Final dividend of Rs. 7 per share for face value of Rs. 5 each, proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

During the year ended March 31, 2018, the amount per share of final dividend pertainnig to year ended 31 March 2017, distributed to equity shareholders Rs 5 for face value of Rs 5 each. The dividend appropriation for the year ended March 31, 2018 amounted to Rs 1,227.47 lakhs, including corporate dividend tax of Rs 207.65 lakhs.

Term Loan from Banks:

(i) Foreign Currency Term Loans to part finance Companyâs normal capital expenditure which are secured by creation of pari passu charge on Companyâs immovable properties situated at Plot No. A-7, A-7 (part) and A-25 at Patalganga and Plot no. D-6/1 at Kurkumbh, Maharashtra and also a second pari passu charge by way of hypothecation of Raw Material Inventory, Book Debts, Movable Machinery, etc. of :

(ii) Foreign Currency Term Loans to part finance Companyâs Dahej Project are secured by creation of pari passu charge on Companyâs immovable properties situated at Plot No. A-7, A-7 (part) and A-25 at Patalganga, Maharashtra, Plot no. D-6/1 at Kurkumbh, Maharashtra and Plot No. D-2/CH/149/2 at Dahej, Gujarat and also a second pari passu charge by way of hypothecation of Raw Material Inventory, Book Debts, Movable Machinery, both present and future of :

(i) The above balances comprises of Cash Credits and Bank overdrafts

(ii) Cash Credits are secured by hypothecation of stocks of raw materials, semi-finished goods, finished goods, consumable stores and book debts of the Company, both present and future, as mentioned in the joint deed of hypothecation dated December 29, 1989 as amended from time to time, as well as by the second mortgage of the specified immovable properties of the Company.

3. The Scheme of Amalgamation of Alkyl Speciality Chemicals Limited (ASCL), the Companyâs wholly owned Subsidiary, with effect from the Appointed Day, i.e. April 1, 2016, has been approved by the National Company Law Tribunal vide its order dated September 28, 2017, and the Company has filed the said Order of the Tribunal with the Registrar of Companies on November 3, 2017. The Company has considered ASCL as its Subsidiary on transition date i.e. April 1, 2016 and merged in subsequent years. As per the terms of the Scheme, with effect from the appointed date, the following effects have been given:

i) The Company has recorded all assets and liabilities, as appearing in the books of ASCL, at their carrying amounts.

ii) The balance lying in the Profit & Loss Account and Capital Reserve appearing in ASCL has been given effect by the Company under Other Equity.

iii) Intercompany balances and transactions have been cancelled.

The sensitivity analysis 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.

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

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

4. Segment Reporting

4.1 Primary Segment:

The Company is exclusively engaged in the business of âSpecialty Chemicalsâ. This in the context of Ind AS 108 âOperating Segment â.

4.2 Secondary Segment (by Geographical Segment):

4.3 The segment revenue in Geographical Segments considered for disclosure is as follows:

i. Revenue within India includes sales to customers located within India and Other Operating Revenue earned in India.

ii. Revenue outside India includes sales to customers located outside India and Other Operating Revenue earned outside India.

5. List of Related Parties and their relationships

I. Subsidiary Company:

Alkyl Speciality Chemicals Limited (refer note 30)

II. Associate Company:

Diamines and Chemicals Limited

III. Key Management Personnel:

i. Yogesh M. Kothari - Chairman & Managing Director

ii. Kirat Patel - Executive Director

iii. Suneet Y. Kothari - Executive Director

IV. Relative of Key Management Personnel:

Hemendra M. Kothari

V. Entities over which Key Management Personnel has Control:

i. Anjyko Investments Private Limited

ii. Niyoko Trading & Consultancy LLP

iii. YMK Trading & Consultancy LLP

iv. SYK Trading & Consultancy LLP

VI. Entities over which relative of Key Management Personnel has control:

i. Kamiko Investment & Trading Private Limited

ii. DSP HMK Holdings Private Limited

iii. DSP ADIKO Holdings Private Limited

6. Related Party Disclosures

Following transactions were carried out in the ordinary course of business with the parties referred to in 8 above. There was no amount written off or written back from such parties during the year. The related parties included in the various categories above, where transactions have taken place are given below :

7. Leases

7.1 Where the Company is a Lessee:

The Company has taken residential, office and godown premises under operating lease on leave and licence agreement. These are generally cancellable and range between 11 months and five years under leave and licence, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

Lease/Rent payments are recognised in the Statement of Profit and Loss as âRentâ under âOther Expensesâ in Note 25.

Land taken on lease has been amortised over the respective lease period and Rs 15.26 lakhs (Previous Years Rs 14.99 lakh in 201617) has been amortised during the year.

8. Earnings per Share

EPS is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Numbers used for calculating basic and diluted earnings per equity share are as stated below.

9 Income Taxes

a. A reconciliation of the tax expense to the amount computed by applying the statutory income tax rate to the profit before taxes is summarized below:

b. Significant component of deferred tax assets and liabilities for the year ended March 31, 2018

c. Significant component of deferred tax assets and liabilities for the year ended March 31, 2017 is as follows:

10. Financial and Other Derivative Instruments

Refer Note 1 (m), (n) and (o) for accounting policies on Financial Instruments.

11.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximising the return to stakeholders through optimisation of the Debt and Equity Balance.

The gearing ratio at the end of the reporting period

The Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBIDTA ratio of 1.60 times, a Debt Service Coverage ratio of 4.55 times and a Total Debt to Tangible Net Worth ratio of 0.64 times.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratios on an annual basis and ensuring that the same is in Compliance with the requirements of the Financial Covenants.

i) Fair value hierarchy

The fair value of financial instruments as referred to in note above have been classified into three categories depending on the inputs used in the valuation technique. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to determine fair value of an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- The fair value of forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date

- The fair value of receivables is considered to be the same as its carrying value due to short term nature.

iii) Valuation process

The finance department of the Company includes a team that performs the valuations of assets and liabilities required for financial reporting purposes, including level 3 fair values.

iv) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade receivables, security deposits, cash and cash equivalents, interest accrued on fixed deposits, trade payables and borrowings are considered to be the same as their fair values, due to their short-term nature.The non-current borrowings are at market interest rate and are assumed to be equivalent to its fair value.

11.2 Financial Risk Management Policies and Objectives:

The Company, in the course of its business, is exposed to a variety of financial risks, viz. market risk, credit risk and liquidity risk which can adversely impact the financial performance. The Companyâs endeavour is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has a risk management policy that which not only covers the foreign exchange risk but also other risks such as interest rate risk and credit risk which are associated with financial assets and liabilities. The risk management policy of the Company is approved by its board of directors. The risk management framework focuses on actively securing the Companyâs short to medium terms cash flows by minimising the exposure to financial markets.

Presented below is a description of our risks (market risk, credit risk and liquidity risk) together with a sensitivity analysis, performed annually, of each of these risks based on selected changes in market rates and prices. These analyses reflect managementâs view of changes which are reasonably possible to occur over a one-year period.â

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have a potential impact on the standalone Statement of Profit and Loss and equity. This arises from transactions entered into in foreign currency and assets/liabilities which are denominated in a currency other than the functional currency of the Company.

A majority of the Companyâs foreign currency transactions are denominated in US Dollars. Other foreign currency transactions entered into by the Company is in EURO and GBP. However, the size of these transactions is relatively small in comparison to the US dollar transactions. Thus, the foreign currency sensitivity analysis has only been performed in relation to the US Dollar (USD).

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Further, in accordance with its risk management policy, Company hedges its risks by using derivative financial instruments. The use of these instruments facilitates the management of transactional exposures to exchange rate fluctuations because the gains or losses incurred on the derivative instruments will offset, in whole or in part, losses or gains on the underlying foreign currency exposure.

c. The Company also designate certain hedges, usually for large transactions, as a cash flow hedge under hedge accounting, with the objective of shielding the exposure from variability in cash flows. The currency, amount and tenure of such hedges are generally matched to the underlying transaction(s). Changes in the fair value of the effective portion of cash flow hedges are recognised as cash flow hedging reserve in Other Comprehensive Income. While the probability of such hedges becoming ineffective is very low, the ineffective portion, if any, is immediately recognised in the Statement of Profit and Loss. The movement in the cash flow hedging reserve in respect of designated cash flow hedges is summarised below :

Foreign Currency senstivity analysis

An appreciation / (depreciation) of 5% in USD rates with respect to INR would result in increase/(decrease) in the Companyâs net profit before tax for the year ended March 31, 2018 and comparision for the year ended March 31, 2017 is expained below:

Interest rate risk

The risk estimates provided assume a parallel shift of 50 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the year.

Interest rate sensitivity

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.Based on the composition of net debt, a 50 basis points increase / decrease in interest rates over the 12 month period would increase / decrease the Companyâs net finance expense explained as below:

Credit risk

Financial instruments that are subject to concentrations of credit risk principally consist of Trade Receivables and Loans.

The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Companyâs policy is to deal only with creditworthy counterparties. The Company management considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due.

In respect of receivables other than Trade Receivables, the Companyâs exposure to any significant credit risk exposure to any single counterparty or any groups of counterparties having similar characteristics is considered to be negligible. The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

The Companyâs exposure to credit risk is limited to the carrying amount of financial assets recognized at the Balance Sheet date

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Company has access to funds from debt markets through various debt instruments. The Company invests its surplus funds in bank fixed deposits which carry no mark to market risk.

The Company maintains the following lines of credit.

Rs 4209.41 lakhs Working capital loans that is secured. Interest would be payable at the rate ranging from 2.20% of 10.15%.

The following tables detail the remaining contractual maturities at the end of the reporting period of the Company, which are based on contractual and undiscounted cash flows and the earliest date the Company can be required to pay. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables

This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

12. Explanation of Transition to IND AS

I. Exemptions Availed by the Company

Ind AS 101 âFirst time adoption of Indian accounting standards âpermits companies adopting Ind AS for the first time to avail of certain exemptions from the full retrospective application of Ind AS in the transition periodâ. The Company, on transition to Ind AS, has availed the following key exemptions:

a. Property, Plant and Equipment, Intangible Assets and Others

Property, plant and equipment and Intangible Assets were carried in the Balance Sheet prepared in accordance with previous GAAP on 31st March 2016. Under Ind AS, the Company has elected to regard such carrying values as the deemed cost for all the items of its Property, Plant and Equipment and Intangible Assets at the date of transition i.e. as on April 1, 2016.

b. Investment in Associates

The Company has elected to take the carrying amount of all its investments in its associate / subsidiary as at April 1, 2016, as its deemed cost under Ind AS.

c. Leases

The Company has elected to carry out the assessment of leases based on conditions prevailing as at the date of transition.

d. Long Term Foreign Currency Loan

The Company has adjusted the exchange difference to the cost of Depreciable Asset upto the period ending immediately before the beginning of the first Ind AS Financial Reporting period.

II. Exceptions Applicable to Company

Ind AS 101 âFirst time adoption of Indian accounting standardsâ contains certain exceptions that prohibit full retrospective application of Ind AS in the transition period. From amongst these exceptions, the one applicable to the Company are as follows:

a. De-recognition of Financial Assets and Liabilities

The Company has elected to apply the de-recognition provisions of Ind AS 109 (Financial Instruments) prospectively from the date of transition to Ind AS.

b. Classification and Measurement of Financial Assets

The Company has classified the financial assets in accordance with Ind AS 109 (Financial Instruments) on the basis of facts and circumstances that existed as at the date of transition to Ind AS.

c. Interest Free Deferment Loan

Under Ind AS, the Company elected to take the Government Grants in the form of Interest free Sales Tax deferral loan to be carried at previous Indian GAAP amount on transition date.

Notes:

1. The Company has recognized actuarial losses of Rs 97.54 Lakhs before tax on re-measurement of post-employment defined benefits in Other Comprehensive Income.

2. The Company has recognized loss of Rs 3.05 Lakhs arising due to deferred losses on cash flow hedge in Other Comprehensive Income.

3. The Company has recognized Tax of Rs 34.83 lakhs impact on above Other Comprehensive Income.

13. Previous Yearâs figures, wherever necessary, have been regrouped/reclassified to conform to the current yearâs presentation. Figures in brackets, unless specified, represent previous yearâs figures.

Mar 31, 2017

1. Rights, preferences and restrictions

i. The Company has only one class of shares referred to as equity shares having par value of '' 5. Each holder of equity shares is entitled to one vote per share.

ii. The Company declares and pays dividend in Indian rupees. With effect from April 1, 2016, final dividend, if any, proposed by the Board of Directors is recorded as a liability on the date of the approval of the shareholders in the coming Annual General Meeting; in case of interim dividend, it is recorded as a liability on the date of declaration by the Board of Directors of the Company. Board of Directors, in their meeting held on May 18, 2017 has recommended final dividend of '' 5 per equity share of face value of '' 5 each for the year ended March 31, 2017.

During the year ended March 31, 2016, the amount of per share interim dividend recognized as distribution to equity shareholders was '' 10 for face value of Rs, 5 each. The dividend appropriation for the year ended March 31, 2016 amounted to Rs, 2,454.93 lakhs, including corporate dividend tax of Rs, 415.29 lakhs.

2. Other Adjustments under the Gross Block represent Borrowings Costs of Rs, 300.15 lakh (Previous Year Rs, 64.37 lakh) and Exchange Differences of Rs, 1.51 lakh (Previous Year Rs, 34.78 lakh) capitalized in terms of AS - 11. For related disclosures, refer Note 28 to the financial statements.

3. In the light of Accounting Standard 10 on âProperty, Plant and Eqiupmentâ becoming effective from April 1, 2016, the items of Spare Parts etc. which hitherto were being treated as Inventory either under Current or Non-current Assets are now capitalized as Property, Plant and Equipment or Capital Work-in-Progress at their carrying amounts of Rs, 99.88 lakhs and Rs, 286.97 lakhs respectively.

4. Freehold land at Kalol has been held for disposal and is shown as current assets held for sale.

5. For year ended March 31, 2016: Effective from April 1, 2015, the Company has followed Component Accounting. Accordingly, in respect of those identified parts, the carrying amount, net of residual value as on April 1, 2015 is depreciated over the revised remaining useful lives of those parts. As a result, the charge for depreciation is higher by Rs, 26.92 lakh for the year ended March 31, 2016. In cases where the remaining useful life of those parts is completed as on April 1, 2015, the carrying amount of those parts after retaining residual value amounting to Rs, 99.36 lakh and deferred tax credit of Rs, 34.39 lakh thereon has been adjusted against the opening balance of General Reserve and the other effect therof is shown as Adjustments under Depreciation and Amortization.

6. Relationships (in relation to transactions with Company):

I. Subsidiary Companies:

Alkyl Speciality Chemicals Limited

II. Associate Company:

Diamines and Chemicals Limited

III. Key Management Personnel:

i. Yogesh M. Kothari (also has a control over the Company)

ii. Kirat Patel

iii. Suneet Y. Kothari

IV. Relative of Key Management Personnel:

Hemendra M. Kothari

V. Entities over which Key Management Personnel has Control: i. YMK Trading & Consultancy LLP

iii. Anjyko Investments Private Limited

VI. Entities over which relative of Key Management Personnel has control:

i. Kamiko Investment & Trading Private Limited

ii. DSP HMK Holdings Private Limited

iii. DSP ADIKO Holdings Private Limited

7. Disclosure as per Accounting Standard 19 on âLeasesâ:

8.1 Where the Company is a Lessee:

i. The Company has taken residential, office and go down premises under operating lease on leave and licence agreement. These are generally cancellable and range between 11 months and five years under leave and licence, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

ii. Lease/Rent payments are recognized in the Statement of Profit and Loss as âRentâ under âOther Expensesâ in Note 27.

Mar 31, 2016

1. The Company has called for balance confirmations from Trade Receivables and Trade Payables. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

2. Disclosure as per Accounting Standard 17 on âSegment Reportingâ:

3. Primary Segment:

The Company is exclusively engaged in the business of âSpecialty Chemicalsâ. This in the context of AS 17 âSegment Reportingâ, notified under the Companies (Accounting Standard) Rules, 2006, constitutes one single primary segment.

4. Disclosure as per Accounting Standard 19 on âLeasesâ:

5. Where the Company is a Lessee:

i. The Company has taken residential, office and go down premises under operating lease on leave and license agreement. These are generally cancellable and range between 11 months and five years under leave and license, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

ii. Lease/Rent payments are recognized in the Statement of Profit and Loss as âRentâ under âOther Expensesâ in Note 26.

6. Previous Yearâs figures, wherever necessary, have been regrouped/reclassified to conform to the current yearâs presentation. Figures in brackets, unless specified, represent previous yearâs figures.

Mar 31, 2015

1. Rights, preferences and restrictions

i. The Company has only one class of shares referred to as equity shares having par value of Rs. 5 (Rs. 10). Each holder of equity shares is entitled to one vote per share.

ii. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. The Board of Directors, in their meeting on May 15, 2015, proposed a final dividend of Rs. 4 per equity share of face value of Rs. 5 each. The proposal is subject to the approval of shareholders at the Annual General Meeting. The total dividend appropriation for the year ended March 31, 2015 amounted to Rs. 981.98 lakh including corporate dividend tax of Rs. 166.12 lakh.

During the year ended March 31, 2014, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 8 for face value of Rs. 10 each. The dividend appropriation for the year ended March 31, 2014 amounted to Rs. 954.52 lakh including corporate dividend tax of Rs. 138.66 lakh.

iii. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

iv. With effect from September 9, 2014, one equity share of the Company from nominal value of Rs. 10 each is sub-divided (split) into two equity shares of nominal value of Rs. 5 each. All shares and per share information in the financial results reflect the effect of the sub-division (split) retrospectively for the earlier reporting periods.

2. Contingent Liabilities and Commitments

Particulars As at March 31, As at March 31, 2015 2014 Rs. In Rs. In Rs. In Rs. In Lakhs Lakhs Lakhs Lakhs

3. Contingent Liabilities :

(to the extent not provided for)

i. Claims against the 78.54 69.38 Company by Ex-employees in Labour Court not acknowledged as debts

ii. Income Tax (Amount 289.86 267.92 deposited Rs. 135.88 lakh) (Previous Year Rs. 228.07 lakh)

iii. Sales Tax (Amount 117.88 NIL deposited Rs. 1.00 lakh) (Previous year Rs. Nil lakh)

iv. Central Excise/Service 726.24 43.39 Tax (Amount deposited Rs. 21.07 lakh) (Previous Year Rs. Nil lakh)

v. By its order of February 18, 2002, the Bombay High Court, has directed that no transport fee on denatured ethyl alcohol, one of the raw materials of the Company, shall be recovered from the Company by the State Excise Authorities until the final disposal of the petition. The petition is pending disposal by the High Court and the amount estimated on this account is Rs. 887.75 lakh (Previous Year Rs. 771.15 lakh).

4. Fixed Assets:

In terms of Accounting Standard 11 on "The Effects of Changes in Foreign Exchange Rates" (AS - 11), on the basis of option available to the Company, the Company has capitalised exchange difference aggregating to Rs. 29.89 lakh (Previous Year Rs. 142.78 lakh) which arose on the settlement or restatement of foreign currency denominated long-term liabilities relating to the acquisition of Fixed Assets (to its Machinery and Machinery under installation - Capital Work-in-Progress). In terms of the clarification issued by the Ministry of Corporate Affairs by Circular No. 25/2012 of August 9, 2012, the Company has considered the entire amount of exchange differences for the purpose of capitalisation without bifurcating the same between borrowing costs in terms of Accounting Standard 16 on "Borrowing Costs" and exchange differences in terms of AS - 11.

Disclosures required for the above capitalisation of AS - 11:

5. During the year, the Company has received 49,800 Carbon Emission Reduction (CERs) duly certified by UNFCC. However, the credit for these CERs had already been recognised upto the Financial Year 2009-2010 on the reasonable estimate based on the generation of CERs from the related project. Subsequent thereto, in view of non- realisability of CERs, credit so recognised was reversed as Dimunition in Carbon Emission Reduction. Since the effect arising due to the above referred CERs had already been given in earlier years, the recognition, measurement and disclosure of CERs now certified would not arise. Even if the Company were to recognise such CERs as inventory, the net realisable price of the same is Nil. With effect from April 1, 2009, the Company has been recognising carbon credit for CERs on certification and not on generation.

6. The Company has called for balance confirmations from Trade Receivables and Trade Payables. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

7. Relationships (in relation to transactions with Company):

I. Subsidiary Companies:

i. Alkyl Speciality Chemicals Limited

ii. Alkyl Amines Europe SPRL, Belgium (ceased to be subsidiary w.e.f March 31, 2014)

II. Associate Company:

Diamines and Chemicals Limited

III. Key Management Personnel:

i. Yogesh M. Kothari (also has a control over the Company)

ii. Kirat Patel

iii. Suneet Y. Kothari

IV. Relative of Key Management Personnel:

Hemendra M. Kothari

V. Entities over which Key Management Personnel has Control:

i. Niyoko Trading & Consultancy Private Limited

ii. YMK Trading & Consultancy Private Limited

iii. Anjyko Investments Private Limited

iv. SYK Trading & Consultancy Private Limited

VI. Entities over which relative of Key Management Personnel has control:

i. Kamiko Investment & Trading Private Limited

ii. DSP HMK Holdings Private Limited

iii. DSP ADIKO Holdings Private Limited

8. Previous Year''s figures, wherever necessary, have been regrouped/reclassified to conform to the current year''s presentation. Figures in brackets, unless specified, represent previous year''s figures.

Mar 31, 2014

1.1 From the financial year 2009-10, the Company decided not to recognise Carbon Credits based on mere generation and recognise only when it is certified. Accordingly, the Carbon Credit which was already recognised upto March 31, 2009, on the basis of credits generated, though not certified, continues to be reflected after giving effect due to its realisable value of Rs. NIL (Rs. 128.90 lakhs). Accordingly, the amount of Rs. NIL (Rs. 131.98 lakhs) is charged for the year as Dimunition in Carbon Emission Reduction and at the year end, the amount of Carbon Credit was carried at Rs. NIL.

1.2 No expense is incurred and transferred to Intangible Assets under Development during the year.

2. Contingent Liabilities and Commitments

Particulars As at As at March 31. 2014 March 31, 2013

Rs. In Lakhs Rs.In Rs.In Rs.In Lakhs Lakhs Lakhs

2.1 Contingent Liabilities : (to the extent not provided for)

i. Claims against the Company by Ex-employees in Labour Court not acknowledged as debts 69.38 61.40

ii.Income Tax (Amount deposited Rs. 226.98 lakhs) (Previous Year Rs.174.59 lakhs) 267.92 272.37

iii. Inter State Sales Tax against "C" Form 736.26 462.34

iv. Central Excise/ Service Tax 43.39 48.70

v. By its order dated February 18, 2002, the Hon''ble High Court, Mumbai, has directed that no transport fee on denatured ethyl alcohol, one of the raw materials of the Company, shall be recovered from the Company by the State Excise Authorities until the final disposal of the petition. The petition is pending disposal by the High Court and the amount estimated on this account is Rs. 771.15 lakhs (Previous Year Rs. 561.99 lakhs).

3. Fixed Assets:

In terms of Accounting Standard 11 on "The Effects of Changes in Foreign Exchange Rates" (AS - 11), on the basis of option available to the Company, the Company has capitalised exchange difference aggregating to Rs. 142.78 lakhs (Previous Year Rs. 69.63 lakhs) which arose on the settlement or restatement of foreign currency denominated long-term liabilities relating to the acquisition of Fixed Assets (to its Machinery and Machinery under installation - Capital Work-in-Progress). In terms of the clarification issued by the Ministry of Corporate Affairs by Circular No. 25/2012 of August 9, 2012, the Company has considered the entire amount of exchange differences for the purpose of capitalisation without bifurcating the same between borrowing costs in terms of Accounting Standard 16 on "Borrowing Costs" and exchange differences in terms of AS - 11.

4. The Company has called for balance confirmations from Trade Receivables and Trade Payables. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

5. Disclosure as per Accounting Standard 17 on "Segment Reporting":

5.1 Primary Segmenl:

The Company is exclusively engaged in (he business of "Specialty Chemicals". This in the context of AS 17 "Segment Reporting", notified under the Companies (Accounting Standard) Rules, 2006, constitutes one single primary segment.

5.2 Relationships:

I. Subsidiary Companies:

i. Alkyl Speciality Chemicals Limited

ii. Alkyl Amines Europe SPRL, Belgium

II. Associate Company:

Diamines and Chemicals Limited

III. Key Management Personnel:

i. Yogesh M. Kothari (also has a control over the Company)

ii. Kirat Patel

iii. Suneet Y. Kothari

IV. Relative of Key Management Personnel:

Hemendra M. Kothari

V. Entities on which Key Management Personnel has Control: i. Niyoko Trading & Consultancy Private Limited

ii. YMK Trading & Consultancy Private Limited

iii. Anjyko Investments Private Limited

iv. SYK Trading & Consultancy Private Limited

VI. Entities on which relative of Key Management Personnel has control: i. Kamiko Investment & Trading Private Limited

ii. DSP HMK Holdings Private Limited iii. ADIKO Investment Private Limited

6. Disclosure as per Accounting Standard 19 on "Leases":

6.1 Where the Company is a Lessee:

i. The Company has taken residential, office and godown premises under operating lease on leave and licence agreement. These are generally cancellable and range between 11 months and five years under leave and licence, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

ii. Lease/Rent payments are recognised in the Statement of Profit and Loss as ''Rent'' under ''Other Expenses'' in Note 26.

iv. Land taken on lease have been amortised over the respective lease period and Rs. 8.96 lakhs (Previous Year Rs. 3.88 lakhs) has been amortised during the year.

6.2 Where the Company is a Lessor:

i. The Company has given office premises under operating lease on leave and licence agreement. These are generally cancellable and range between 11 months and five years under leave and licence, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

ii. Lease/Rent receipts are recognised in the Statement of Profit and Loss as ''Miscellaneous Income'' under ''Other Income'' in Note 21.

7. Previous Year''s figures, wherever necessary, have been regrouped/reclassified to conform to the current year''s presentation.

Mar 31, 2012

1.1 Rights, preferences and restrictions:

i. The Company has only one class of shares referred to as equity shares having par value of Rs 10. Each holder of equity shares is entitled to one vote per share.

ii. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. The Board of Directors, in their meeting on May 22, 2012, proposed a final dividend of Rs 4 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting. The total dividend appropriation for the year ended March 31, 2012 amounted to Rs 474.11 Lakhs including corporate dividend tax of Rs 66.18 Lakhs.

During the year ended March 31, 2011, the amount of per share dividend recognized as distribution to equity shareholders is Rs 3. The Dividend appropriation for the year ended March 31, 2011 amounted to Rs 356.76 Lakhs including corporate dividend tax of Rs 50.81 Lakhs.

iii. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.1 Due to the write off and reclassification referred to in Note 11 of "Fixed Assets', there was an aggregate reduction in the Deferred Tax Liability to the extent of Rs 90.78 lakhs in the Financial Year 2010-11.

3.1 Cash Credits including Working Capital Demand Loan and Buyers' Credit from State Bank of India, Standard Chartered Bank and Axis Bank are secured by hypothecation of stocks of raw materials, semi-finished goods, finished goods, consumable stores and book debts of the Company, both, present and future, as mentioned in the joint deed of hypothecation dated December 29,1989 as amended from time to time, as well as by the second mortgage of the specified immovable properties of the Company.

4.1. The Lease Deed from MIDC in respect of Plot Nos. D-6/2, R-l and R-2 of the value of Rs 131.13 lakhs (Rs 131.13 lakhs) is yet to be executed.

4.2. Plant, Machinery and Equipments include Rs 390.87 Lakhs (Rs 390.87 Lakhs) being value of machinery installed at third party premises of Job Contractor, duly confirmed by them for the current year and reflected in the column of 'Additions" and "Depreciation-Withdrawal for Sale/Adjustment", respectively.

4.3. Adjustments to Capital Work-in-Progress represent capitalization to Fixed Assets.

4.4. Other Adjustments represent Borrowings Costs and Exchange Differences capitalized during the year as per Para 46/46A of ASH, Refer Note 28.2 to Financial Statements.

4.5. Borrowing Costs Capitalized during the year is Rs 143.52 Lakhs (Rs 133.87 Lakhs).

4.6. As regards Adjustment due to reclassification in previous year 2010-11, Refer Note 28.1 to Financial Statements.

5.1 From the financial year 2009-10, the Company decided not to recognize Carbon Credits based on mere generation and recognize only when it is certified. Accordingly, the Carbon Credit which was already recognized up to March 31, 2009, on the basis of credits generated, though not certified, continues to be reflected after giving effect due to its realizable value of Rs 264.06 lakhs (Rs 16.31 lakhs), included as Non- current asset at Rs 128.90 lakhs (Rs 392.95 lakhs). Accordingly, the amount of Rs 288.95 Lakhs (NIL) is charged for the year as Diminution in Carbon Emission Reduction.

6. Contingent Liabilities and Commitments:

As At March As At March 31, 2012 31, 2011 Rs.in Lakhs Rs.in Lakhs

6.1 Contingent Liabilities : (to the extent not provided for)

Matters under disputes/appeals :

i. Claims against the Company by Ex- employees 53.43 46.14 in Labour Court not acknowledged as debts

ii. Income Tax (Amount deposited Rs 124.75 lakhs 178.86 85.96 (Previous Year Rs 85.96 lakhs)).

iii. Inter State Sales Tax against 'C'Form 372.97 378.04

iv. Sales Tax 0.15 0.00

v. Service Tax 41.41 39.00

vi. By its order dated February 18, 2002, the Hon'ble High Court, Mumbai, has directed that no transport fee on denatured ethyl alcohol, one of the raw materials of the Company, shall be recovered from the Company by the State Excise Authorities until the final disposal of the petition. The petition is pending disposal by the High Court and the amount estimated on this account is Rs 471.47 Lakhs (Previous Year Rs 412.00 Lakhs).

6.2 Commitments :

a. Estimated amount of contracts remaining to be 91.71 126.53 executed on capital account

Less : Advances 35.98 51.74

Net Estimated Amount 55.73 74.79

b. Other Commitments NIL NIL

7. Fixed Assets:

7.1 On reconciliation of physical verification of Fixed Assets with the records of the Company, discrepancies were noticed as to the existence, as also on account of reclassification and the same were given effect during the financial year 2010-11. As a result, Fixed Assets amounting to Rs 42.00 lakhs were written off and Fixed Assets with the Gross Block of Rs 667.72 lakhs as at April 1, 2010 (with the corresponding accumulated depreciation of Rs 190.10 lakhs thereon upto March 31, 2010) were reclassified and reflected as such under respective Fixed Assets. Due to this reclassification, excess depreciation charged in earlier years of Rs 7.98 lakhs was considered while arriving at Depreciation for the said financial year 2010-11.

7.2 In terms of Accounting Standard 11 on "The Effects of Changes in Foreign Exchange Rates" (AS - 11), with effect from April 1, 2007, exchange differences arising on settlement or restatement of foreign currency denominated liabilities relating to the acquisition of Fixed Assets were recognized in the Statement of Profit and Loss. However, during the year, on the basis of option available to the Company, the Company has decided to add or deduct exchange differences arising on Long-term Foreign Currency Monetary items at rates different from those at which they were initially recorded so far as they relate to the acquisition of a depreciable capital asset. Accordingly, the Company has capitalised exchange difference of Rs 108.06 Lakhs to its machinery and machinery under installation i.e., Capital Work-in-Progress. As legally advised, the Company has considered the entire amount of exchange differences for the purpose of capitalization without bifurcating the same between borrowing costs in terms of Accounting Standard 16 on "Borrowing Costs" and exchange differences in terms of Accounting Standard 11. Had the Company not capitalized the exchange differences on Long-term Foreign Currency Monetary item, depreciation and profit for the year would have been lower by Rs 8.08 Lakhs and Rs 99.98 Lakhs respectively, and the Net Block and the carried forward surplus as on March 31, 2012 would have been lower by Rs 99.98 Lakhs.

8. The Company has called for balance confirmations from Trade Receivables and Trade Payables. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

9. Segment Reporting:

In accordance with Accounting Standard 17, the Company's activities fall into the category of Specialty Chemicals and hence, the Company has only one reportable segment.

10.1 Relationships:

I. Subsidiary Company:

i. Alkyl Specialty Chemicals Limited

ii. Alkyl Amines Europe SPRL, Belgium

II. Associate Company:

Demines and Chemicals Limited

III. Key Managerial Personnel:

i. Yogesh M. Kothari

ii. Kirat Patel

iii. Suneet Y. Kothari

IV. Relative of Key Managerial Personnel:

Hemendra M. Kothari

V. Entities on which Key Managerial Personnel has Control:

i. Niyoko Trading & Consultancy Private Limited

ii. YMK Trading & Consultancy Private Limited

iii. Anjyko Investments Private Limited

iv. SYK Trading & Consultancy Private Limited

VI. Entities on which relatives of Key Managerial Personnel has control:

i. Kamiko Investment & Trading Private Limited

ii. DSP HMK Holdings Private Limited

iii. ADIKO Investment Private Limited

11. Disclosure on Leases as per Accounting Standard 19 on "Accounting for Leases":

11.1 Where the Company is a Lessee:

i. The Company has taken residential, office and go down premises under operating lease or leave and license agreements. These are generally cancellable and range between 11 months and five years under leave and license, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

ii. Lease/Rent payments are recognized in the Statement of Profit and Loss as 'Rent 'under 'there Expenses' in Note 26.

* Figures for the year ended March 31, 2012, includes a sum of Rs 53,511.00 towards insurance. The same was not considered for the previous year ended March 31, 2011 as it was not material.

All outstanding derivatives are marked to market on the balance sheet date and accordingly, mark to market profit of Rs 16.52 Lakhs (Previous Year profit of Rs 46.81 Lakhs) has been recognized.

Mar 31, 2011

1. Sr. Particulars As At As At No. March 31, 2011 March 31, 2010 Rs. in Lakhs Rs. in Lakhs

b. Contingent Liabilities not provided for :-

i. Claims against the Company by Ex- employees in Labour Court not acknowledged as debts 46.14 39.50

ii. Disputed liability in respect of Income-tax demand (including interest) matter under appeal (Amount deposited Rs. 85.96 Lakhs (Previous Year Rs. 114.33 Lakhs)) 85.96 114.33

iii. Inter State Sales Tax against ÃCÃ Form 378.04 226.11

iv. Disputed liability in respect of Sales Tax Matters under appeal NIL 38.98

v. Disputed Liability in respect of Service Tax 39.00 44.62

vi. By its order dated February 18, 2002, the Honble High Court, Mumbai, has directed that no transport fee on denatured ethyl alcohol, one of the raw materials of the Company, shall be recovered from the Company by the State Excise Authorities until the final disposal of the petition. The petition is pending disposal by the High Court and the amount estimated on this account is Rs. 412.00 Lakhs (Previous Year Rs. 359.00 Lakhs).

2. Fixed Assets of the Company were physically verified during the last year and the same have now been reconciled with the records of the Company. On reconciliation, certain discrepancies were noticed as to the existence as also on account of reclassification of the Fixed Assets. As a result, the Fixed Assets amounting to Rs. 42.00 Lakhs have been written off and Fixed Assets with a gross block of Rs. 667.72 Lakhs as at April 1, 2010 (with the corresponding accumulated depreciation of Rs. 190.10 Lakhs thereon upto the March 31, 2010) have been reclassified and accordingly reflected in the Schedule 5 on ÃFixed AssetsÃ under column ÃAdjustment due to reclassificationÃ. Due to this reclassification, excess depreciation charged in earlier years work out to Rs. 7.98 Lakhs and the same has been considered while arriving at ÃDepreciation for the yearÃ under column 5.

Due to the above referred to reclassification due to excess depreciation charged in earlier years, there is a reduction in the deferred tax liability to the extent of Rs. 77.15 Lakhs. Further, the Fixed Assets written off of Rs. 42.00 Lakhs has resulted in reduction in the deferred tax liability of Rs. 13.63 Lakhs.

3. The Company has called for balance confirmations from Sundry Debtors and Sundry Creditors. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

4. Disclosure in accordance with Section 22 of Micro, Small and Medium Enterprises Development Act, 2006:

This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

5. Based on the Exposure Draft of the Guidance Note on ÃAccounting for Self-Generated Certified Emission Reduction (CER)Ã issued by the Institute of Chartered Accountants of India, from the year 2009-10, the Company has decided not to recognise Carbon Credits based on mere generation and recognise only when it is certified. The carbon credit which has already been recognised upto March 31, 2009, on the basis of credits generated, though not certified, continues to be reflected after giving effect on account of exchange rate difference of Rs. 16.31 lakhs (Rs. 45.06 lakhs), as an asset at Rs. 392.95 lakhs (Rs. 376.64 lakhs).

6. Segment Reporting:

In accordance with Accounting Standard 17, the Companys activities fall into the category of Specialty Chemicals and hence, the Company has only one reportable segment.

7. Related Party Disclosures:

b. Relationships:

I. Subsidiary Company:

i. Alkyl Speciality Chemicals Limited

ii. Alkyl Amines Europe SPRL, Belgium

II. Associate Company:

i. Diamines and Chemicals Limited

III. Key Managerial Personnel:

i. Yogesh M. Kothari

ii. Kirat Patel

iii. Suneet Y. Kothari

IV. Relative of Key Managerial Personnel:

Hemendra M. Kothari

V. Entities on which Key Managerial Personnel has Control:

i. Niyoko Trading & Consultancy Private Limited

ii. YMK Trading & Consultancy Private Limited

iii. Anjyko Investments Private Limited

iv. SYK Trading & Consultancy Private Limited

VI. Entities on which relatives of Key Managerial Personnel has control:

i. Kamiko Investment & Trading Private Limited

ii. DSP HMK Holdings Private Limited

iii. ADIKO Investment Private Limited

13. Disclosure on Leases as per Accounting Standard 19 on ÃAccounting for LeasesÃ:

a. Where the Company is a Lessee:

i. The Company has taken residential, office and godown premises under operating lease or leave and licence agreements. These are generally cancellable and range between 11 months and five years under leave and licence, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

ii. Lease/Rent payments are recognised in the Profit and Loss Account under ÃRent in Schedule 17.

iv. Land taken on lease have been amortised over the respective lease period and Rs. 3.95 lakhs (Previous Year Rs. 3.68 lakhs) has been amortised during the year.

8. Financial and Other Derivative Instruments :

b. Foreign Currency exposure that are not hedged by the derivative instruments:

All outstanding derivatives are marked to market on the balance sheet date and accordingly, mark to market profit of Rs. 46.81 Lakhs (Previous Year profit of Rs. 23.38 Lakhs) has been recognised.

9. The previous years figures, wherever necessary, have been regrouped, reclassified and recast to conform to the current years classification. Figures in bracket indicate those of previous year.

Mar 31, 2010

1. Sr. As At As At No. March 31, 2010 March 31, 2009 Rs. in Lakhs Rs. in Lakhs

b. Contingent Liabilities not provided for :-

i. Bank Guarantees 27.36 30.70

ii. Claims against the Company by Ex- employees in Labour Court not acknowledged as debts 39.50 33.00

iii. Disputed liability in respect of Income Tax demand (including interest) matter under appeal ( Amount deposited Rs. 2.26 Lakhs ) 114.33 112.07

iv. Inter State Sales Tax against "C" Form 226.11 221.02

v. Disputed liability in respect of Sales Tax Matters under appeal (Amount deposited Rs. Nil) 38.98 35.08

vi Disputed Liability in respect of Service Tax 44.62 NIL

vii Export obligation against Advance licence Amount is being Amount ascertained by the is being ascertained Management by the Management

viii. By its order dated February 18, 2002, the Honble High Court, Mumbai, has directed that no transport fee on denatured ethyl alcohol, one of the raw materials of the Company, shall be recovered from the Company by the State Excise Authorities until the final disposal of the petition. The petition is pending disposal by the High Court and the amount estimated on this account is Rs. 3.59 Crore (Previous Year Rs. 2.40 Crore).

2. The Company has called for balance confirmations from Sundry Debtors and Sundry Creditors. It has received a few of the confirmations which have been reconciled with the records of the Company. The other balances have been taken as per the records of the Company.

3. Hitherto, the Company has been accounting for self-generated Certified Emission Reduction (CERs) on the basis of credits generated, though not certified. Based on the Exposure Draft of the Guidance Note on "Accounting for Self-Generated Certified Emission Reduction (CER)" issued by the Institute of Chartered Accountants of India, from the current year, the Company has decided not to recognise such Carbon Credits based on mere generation. Accordingly, Carbon Credit for 13,530 CERs for Rs. 98.51 lakhs (at the rate of 12.15 Euros per CER) has not been recognised as income for the current year. However, the carbon credit which has already been recognised upto March 31, 2009 is reflected, after giving effect on account of exchange rate difference of Rs. 45.06 lakhs, as an asset at Rs. 376.64 lakhs.

4. Segment Reporting:

In accordance with Accounting Standard 17, the Companys activities broadly fall into the category of Speciality Chemicals and hence, the Company has only one reportable segment.

b. Relationships:

I. Subsidiary Company:

i. Alkyl Speciality Chemicals Limited

ii. Alkyl Amines Europe SPRL, Belgium

II. Associate Company:

i. Diamines and Chemicals Limited

III. Key Managerial Personnel: i. Yogesh M. Kothari

ii. Kirat Patel

iii. Suneet Y. Kothari

IV. Relatives of Key Managerial Personnel: i. Hemendra M. Kothari

ii Mrs. Nini Y. Kothari

V. Entities on which Key Managerial Personnel has Control: i. Niyoko Trading & Consultancy Private Limited

ii. YMK Trading & Consultancy Private Limited iii. Anjyko Investments Private Limited

VI. Entities on which relatives of Key Managerial Personnel has control: i. Kamiko Investment & Trading Private Limited

ii. DSP HMK Holdings Private Limited

iii. ADIKO Investment Private Limited

11. Disclosure on Leases as per Accounting Standard 19 on "Accounting for Leases":

a. Where the Company is a Lessee:

i. The Company has taken residential, office and godown premises under operating lease or leave and licence agreements. These are generally cancellable and range between 11 months and five years under leave and licence, or longer for other leases and are renewable by mutual consent on mutually agreeable terms.

ii. Lease/Rent payments are recognised in the Profit and Loss Account under Rent in Schedule 17.

5. The previous years figures, wherever necessary, have been regrouped, reclassified and recast to conform to the current years classification. Figures in bracket indicate those of previous year.

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