Notes to Accounts of Gujarat Alkalies & Chemicals Ltd.

Mar 31, 2025

2.12. Provisions, Contingent Liabilities and Contingent
Assets

Provisions are recognised when the Company
has a present obligation (legal or constructive) as
a result of a past event, it is probable that an
outflow of resources embodying economic benefits
will be required to settle the obligation, and a
reliable estimate can be made of the amount of
the obligation.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation. When a provision is
measured using the cash flows estimated to settle
the present obligation, its carrying amount is the
present value of those cash flows (when the effect
of the time value of money is material. If the
time value of money is material, Provisions are
discounted using pre-tax discount rate and when
discounting is used, increase in the provision with
the passage of time is recognised as a finance
cost in the statement of Profit and Loss account.

A contingent liability is (a) a possible obligation
that arises from past events and whose existence
will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events
not wholly within the control of the entity or (b) a
present obligation that arises from past events but
is not recognised because (i) it is not probable
that an outflow of resources embodying economic
benefits will be required to settle the obligation
or (ii) the amount of the obligation can not be
measured with sufficient reliability.

Contingent liabilities are disclosed in the Financial

Statements by way of notes to accounts, unless
possibility of an outflow of resources embodying
economic benefit is remote.

A contingent asset is a possible asset that arises
from the past events and whose existence will be
confirmed only by the occurrence or non- occurrence
of one or more of uncertain future events not
wholly within the control of the entity.

Contingent assets are disclosed in the Financial
Statements by way of notes to accounts when an
inflow of economic benefits is probable.

2.13. Financial Instruments

The Company determines the classification of its
financial assets and liabilities at initial recognition.
The classification depends on the Company''s
business model for managing the financial assets
and the contractual terms of the cash flows.

Initial Recognition and Measurement:

The Company recognizes financial assets and
financial liabilities when it becomes a party to the
contractual provisions of the instrument. All financial
assets and liabilities are recognized at fair value
on initial recognition, except for trade receivables
which are initially measured at transaction price.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities that are not at fair value through profit
or loss, are added to or deducted from the fair
value on initial recognition. Regular way purchase
and sale of financial assets are accounted for at
trade date.

Effective interest method

The effective interest method is a method of
calculating the amortised cost of a financial instrument
and of allocating interest income or expense over
the relevant period. The effective interest rate is the
rate that exactly discounts future cash receipts or
payments through the expected life of the financial
instrument, or where appropriate, a shorter period.

Subsequent Measurement

2.13. a. Non-derivative financial instruments

2.13. a.1. Cash and Cash equivalents:

The Company considers all highly liquid financial
instruments, which are readily convertible into
known amounts of cash that are subject to an
insignificant risk of change in value and having
original maturities of three months or less from the
date of purchase, to be cash equivalents. Cash and

cash equivalents consist of balances with banks
which are unrestricted for withdrawal and usage.

2.13. a.2. Financial assets carried at amortised cost:

A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset in order to
collect contractual cash flows and the contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding.

2.13. a.3. Financial assets at fair value through Other

Comprehensive Income (FVTOCI) :

A financial asset is subsequently measured at fair
value through Other Comprehensive Income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms
of the financial asset give rise on specified dates
to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
The Company has made an irrevocable election
for its investments which are classified as equity
instruments to present the subsequent changes in
fair value in Other Comprehensive Income based
on its business model.

On derecognition of such Financial assets,
cumulative gain or loss previously recognised in
Other Comprehensive Income is not reclassified
from the equity to statement of Profit and Loss.

2.13. a.4. Financial assets at fair value through profit

or loss (FVTPL) :

A financial asset which is not classified in any of
the above categories are subsequently measured
at fair value through profit or loss.

2.13. a.5. Investment in Joint Venture:

A joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement.
Joint control is the contractually agreed sharing
of control of an arrangement, which exists only
when decisions about the relevant activities require
unanimous consent of the parties sharing control.

The Company accounts for its investment in joint
venture at cost.

Financial liability is recognized at fair value with
a corresponding debit to deemed investment,
where the Company is a sponsor in respect of
Compulsory Convertible Debentures issued by joint

ventures and is mandatorily required to purchase
such debentures. Financial liability is subsequently
measured at amortized cost. The deemed investment
is added to the carrying amount of investment in
joint ventures and carried at cost.

2.13. a.6. Financial liabilities:

Financial liabilities are subsequently carried at
amortized cost using the effective interest method.
For trade and other payables maturing within one
year from the Balance Sheet date, the carrying
amounts approximate fair value due to the short
maturity of these instruments. Interest bearing issued
debt are initially measured at fair value and are
subsequently measured at amortised cost using
the effective interest rate method.

2.13. a.7. Derecognition of financial instruments:

The Company derecognizes a financial asset when
the contractual rights to the cash flows from the
financial asset expire or it transfers the financial
asset and the transfer qualifies for derecognition
under Ind AS 109. On derecognition of Financial
assets (except as mentioned in 2.17.a.3), the
difference between the carrying amount and the
consideration received is recognised in the statement
of Profit and Loss account. A financial liability (or
a part of a financial liability) is derecognized from
the Company''s Balance Sheet when the obligation
specified in the contract is discharged or cancelled
or expires.

2.13. a.8. Offsetting Financial Instruments

Financial assets and liabilities are offset and the
net amount is presented in the Balance Sheet
when there is a legally enforceable right to offset
the recognised amounts and there is an intention
to settle on a net basis or realise the asset and
settle the liability simultaneously.

2.14. Share capital
Ordinary Shares :

Ordinary shares are classified as equity. Incremental
costs directly attributable to the issuance of new
ordinary shares are recognized as a deduction
from equity, net of any tax effects.

2.15. Fair Value Measurement

Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants at
the measurement date. The fair value measurement
is based on the presumption that the transaction
to sell the asset or transfer the liability takes place
either:

• In the principal market for the asset or liability,
or

• In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market
must be accessible by the Company.

The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming
that market participants act in their best economic
interest.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized within the fair value hierarchy,
described as follows, which gives highest priority
to quoted prices in active markets and the lowest
priority to unobservable inputs.

Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.
Level 2 — Valuation techniques for inputs other
than quoted prices included within Level 1 that are
observable for the asset or Liability either directly
or indirectly.

Level 3 — Valuation techniques for inputs that are
unobservable for the asset or liability.

For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of
the fair value hierarchy as explained above.

2.16. Impairment of Financial Assets

The Company recognizes loss allowances using
the Expected Credit Loss (ECL) model for the
financial assets which are not measured at fair
value through profit or loss. Loss allowance for trade
receivables with no significant financing component
is measured at an amount equal to lifetime ECL.
For all other financial assets, expected credit losses
are measured at an amount equal to the 12-month
ECL, unless there has been a significant increase
in credit risk from initial recognition in which case
those are measured at lifetime ECL. The amount of
expected credit losses (or reversal) that is required
to adjust the loss allowance at the reporting date
to the amount that is required to be recognised
as an impairment gain or loss in the statement of
profit and loss.

ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that the
entity expects to receive, discounted at the effective
interest rate.

ECL are measured taking into account the time
value of money and other reasonable information
available as a result of past events, current conditions
and forecasts of future economic conditions.

For Trade receivables, the Company uses a
provision matrix to measure lifetime ECL on its
portion of trade receivables. The provision matrix
is prepared based on historically observed default
rates over the expected life of trade receivables
and is adjusted for forward looking estimates.

2.17. Earnings per share

Basic earnings per share is computed by dividing
the profit or loss attributable to equity shareholders
of the Company by the weighted average number
of equity shares outstanding during the period.

Diluted earnings per share is computed by dividing
the profit after tax by the weighted average number
of equity shares considered for deriving the basic
earnings per share and the weighted average
number of equity shares that could have been
issued upon conversion of all dilutive potential
equity shares.

2.18. Operating Segments

Operating segments are identified and reported
taking into account the different risks and returns,
the organization structure and the internal reporting
systems. The Company operates in one reportable
business segments i.e. “Chemicals”.

2.19. Statement of cash flows

Cash flows are reported using the indirect method,
whereby profit before tax is adjusted for the
effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating
cash receipts or payments and item of income
or expenses associated with investing or financing
cash flows. The cash flows are segregated into
operating, investing and financing activities.

2.20. Government Grant

Government grants are recognised when there is
reasonable assurance that the grant will be received,
and the company will comply with conditions attached
to the grant.

Government grants relating to income are recognised

in profit or loss on a systematic basis over the
periods in which the Company recognises as
expenses, the related costs for which the grants
are intended to compensate. Grant relating to
assets are netted off against the acquisition cost
of the asset.

2.21. Critical accounting judgements, assumptions
and Key sources of estimation uncertainty:

The preparation of the Company''s financial
statements requires management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities at the
date of the financial statements. Estimates and
assumptions are continuously evaluated and are
based on management''s experience and other
factors, including expectations of future events
that are believed to be reasonable under the
circumstances. Uncertainty about these assumptions
and estimates could result in outcomes that require
a material adjustment to the carrying amount of
assets or liabilities affected in future periods.

Key source of judgments, assumptions and estimates
in the preparation of the Financial Statements
which may cause a material adjustment to the
carrying amounts of assets and liabilities within
the next financial year, are in respect of useful
lives of Property, Plant and Equipment, impairment,
employee benefit obligations, provisions, provision
for income tax, measurement of deferred tax assets
and contingent assets & liabilities., Stores & Spares
Written off.

2.21. a. Critical judgments in applying accounting

policies

The following are the critical judgements, apart
from those involving estimations (Refer note 2.21.b),
that the Management have made in the process
of applying the Company''s accounting policies and
that have the significant effect on the amounts
recognized in the Financial Statements.

2.21. a.1. Determining whether an arrangement contain

leases and classification of leases

Ind AS 116 requires lessees to determine the
lease term as the non-cancellable period of a lease
adjusted with any option to extend or terminate
the lease, if the use of such option is reasonably
certain. The company makes an assessment on
the expected lease term on a lease-by-lease basis
and thereby assesses whether it is reasonably
certain that any options to extend or terminate the

contract will be exercised. In evaluating the lease
term, the Company considers factors such as any
significant leasehold improvements undertaken over
the lease term, costs relating to the termination of
the lease and the importance of the underlying asset
to operations taking into account the location of
the underlying asset and the availability of suitable
alternatives. The lease term in future periods is
reassessed to ensure that the lease term reflects
the current economic circumstances.

2.21. b. Key sources of estimates and assumptions

Information about estimates and assumptions that
have the significant effect on recognition and
measurement of assets, liabilities, income and
expenses is provided below. Actual results may
differ from these estimates.

2.21. b.1. Defined benefit obligation (DBO) :

The cost of the defined benefit gratuity plan and
the present value of the gratuity obligation are
determined using actuarial valuations being carried
out at reporting date. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include
the determination of the discount rate, Salary
escalation rate, expected rate of return on asset
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 in currencies consistent with the
currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available
mortality tables for the specific countries. 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 for the respective
countries.

2.21. b.2. Contingent Liabilities and Assets:

Contingent liabilities may arise from the ordinary
course of business in relation to claims against the
Company, including legal, contractor, land access
and other claims. By their nature, contingencies will
be resolved only when one or more uncertain future
events occur or fail to occur. The assessment of the
existence, and potential quantum, of contingencies
inherently involves the exercise of significant judgment
and the use of estimates regarding the outcome
of future events.

2.21. b.3. Allowance for impairment of trade receivables:

The expected credit loss is mainly based on the
ageing of the receivable balances and historical
experience. The receivables are assessed on an
individual basis assessed for impairment collectively,
depending on their significance. Moreover, trade
receivables are written off on a case-to-case basis
if deemed not to be collectible on the assessment
of the underlying facts and circumstances.

2.21. b.4. Impairment of non-financial assets:

Evaluation for impairment requires use of judgment,
estimates and assumptions.

The evaluation of applicability of indicators of
impairment of assets requires assessment of external
factors (significant decline in asset''s value, significant
changes in the technological, market, economic or
legal environment, market interest rates etc.) and
internal factors (obsolescence or physical damage
of an asset, poor economic performance of the
asset etc.) which could result in significant change
in recoverable amount of the Property, Plant and
Equipment.

The Company assesses at each reporting date
whether there is an indication that an asset may
be impaired. If any indication exists, or when
annual impairment testing for an asset is required,
the Company estimates the asset''s recoverable
amount. An asset''s recoverable amount is the
higher of an asset''s or CGU''s fair value less costs
of disposal and its value in use. It is determined
for an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down to its
recoverable amount.

In assessing value in use, the estimated future cash
flows are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions
are taken into account. If no such transactions
can be identified, an appropriate valuation model
is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly
traded subsidiaries or other available fair value
indicators.

2.21. b.5. Income taxes:

Significant judgements are involved in determining
the provision for income taxes, including amount

expected to be paid / recovered for uncertain tax
positions.

2.21. b.6. Recognition of Deferred tax assets:

Deferred Tax Assets (DTA) are recognized for the
unused tax losses/ credits to the extent that it is
probable that taxable profit will be available against
which the losses will be utilized. Management
judgement is required to determine the amount of
deferred tax assets that can be recognized, based
upon the likely timing and the level of future taxable
profits together with future tax planning strategies.

2.21. b.7. Useful lives and residual value of property,

plant and equipment:

The Company reviews the useful life and residual
value of property, plant and equipment at the end
of each reporting period. This reassessment may
result in change in depreciation expense in future
periods.

2.21. b.8. Dismantling cost of property, plant and

equipment:

The company estimates assets retirement obligation
on estimate basis for property, plant and equipment.

Estimation is done by the management considering
size of the asset and its useful life in line with
industry practices.

2.21. b.9. Stores and spares inventories:

The Company''s manufacturing process is continuous
and highly mechanic with wide range of different
types of plant and machineries. The Company
keeps stores and spares as standby to continue
the operations without any disruption. Considering
wide range of stores and spares and long lead
time for procurement of it and based on criticality
of spares, the Company believes that net realizable
value would be more than cost.

2.21. b.10. Fair value of investments:

The Company has invested in the equity instruments
of various companies. The valuation exercise of
unquoted equity instruments carried out by the
Company with the help of an independent valuer,
etc. has estimated fair value at each reporting
period based on available historical annual reports
and other information in the public domain.

10.1 Capital Advances includes advance payment made for leasehold lands allotted pending execution of lease deeds of
Rs. 923.08 lakhs (FY 2022-23 Rs. 923.08 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48
sq. mtrs.

10.2 In the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities
for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under
Non-Current Provisions (Note no. 19). The Company has contested the demand and has paid under protest
Rs.924.23 lakhs and Rs.333.32 lakhs (Total Rs.1,257.55 lakhs) during 2012-13 and 2013-14 respectively. As
the matter is pending with Honourable High Court, the amount paid has been shown under Balance with Govt.
Department under Other Non-Current Assets.

10.3 Other than mentioned in Note No. 10.2 above, Balance with Govt. Departement includes amount paid under
protest relatining to matters pending with respect to Sales Tax & Service Tax.

16 OTHER EQUITY (Contd.)

a. General Reserve

The General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purpose.
As General Reserve is created by a transfer from one component of Equity to another and is not an item of other
comprehensive income, items included in the General Reserve will not be reclassified subsequently to profit or loss.

b. Securities Premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with
the provisions of the Companies Act, 2013.

c. Capital Reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares
out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is
transferred to capital redemption reserve. The reserve is utilised in accordance with the provisions of section 69
of the Companies Act, 2013.

d. Reserve for equity instruments through other comprehensive income

The reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured
at fair value through other comprehensive income.

e. Retained Earnings

This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.

36 EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

An amount of Rs.1,159.06 Lakhs (FY 2023-24 Rs.1,120.03 Lakhs) contributed to Provident Fund and amount of
Rs.831.03 lakhs (FY 2023-24 Rs.833.64 lakhs) contributed to Employees Superannuation Trust is recognised
as an expense and included in “Employee Benefits Expenses” (Note 28) of Statement of Profit & Loss.

Defined Benefit Plans

The Company offers the following employee benefit schemes to its employees :

i. Gratuity (included as part of b (iii) in Note 28 Employees benefit expense)

ii. Leave encashment (included as part of a in Note 28 Employee benefit expense)

The following table sets out the funded status of the defined benefits scheme and the amount recognised in
financial statement :

As per Actuarial Valuation as on March 31, 2024

37.3 Financial Risk Management Objectives

The Company''s Corporate Treasury Function provides services to the business, co-ordinates access to domestic
and international financial markets, monitors and manages the financial risks relating to the operations of the
Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks
include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate
Treasury does not enter into any trade financial instruments, including derivative financial instruments and
relies on natural hedge.

The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a
periodical basis.

37.4 Market Risk

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange
rates and interest rates. The Company currently has not hedged any External Commercial Borrowings
(ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by
comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis
the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the
banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency
(EEFC) account and discharges its obligations in case of foreign currency loans out of the said account.
The Company''s investments in listed and non-listed equity securities are susceptible to price risk arising from
uncertainties about future value of the investment securities. The Company''s non-current investment in equity
shares are strategic investments and hence are considered as Fair Value through Other Comprehensive
Income. The Company''s Board of Directors reviews and approves all equity investment decisions.

37.5 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company
parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its
obligations in case of foreign currency loans and towards import obligations out of the said account.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities
are restated at the end of each quarter. The same at the end of the reporting period are as follows :

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company''s sensitivity to a 5% increase and decrease in the Rupee against
the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the
key management personnel and represents management''s assessment of the reasonably possible changes in
the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates.
A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against
the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a
comparable impact on the profit or equity, and the balances below would be negative.

37.6 Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates.
The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking
the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign
currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done
by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis¬
a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided
by the banks.

Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments
at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount
of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher / lower and all other variables were held constant,
the Company''s profit before tax for the year ended would be impacted to the extent of Rs.223.81 Lakhs
(Rs.285.27 lakhs for the year 2023-24).

37.7 Credit Risk Management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial
loss to the Company. The Company is operating through network of dealers based at different locations.
In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for
every dealer based on his past turnover, track record, etc. The same is overseen and approved by the
Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers.
Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are
exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to
the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are
supplied only against advance receipts. For the export made by the Company, the sales are backed by letters
of credit or advance receipts. The internal risk management committee of the Company meets regularly to
discuss the dealers and credit risks, measures taken to address them and the status and level of risk after
the measures taken.

Domestic & Export trade receivables are secured to the extent of interest free security deposits and bank
guarantees / letter of credit received from the customers amounting to Rs.1,851.88 Lakhs and Rs.481.13
Lakhs as at 31^st March, 2025 and 31^st March, 2024 respectively. (Refer Note No. 12 for Trade Receivables
outstanding).

37.8 Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established
an appropriate liquidity risk management framework for the management of the Company''s short-term,
medium-term and long-term funding and liquidity management requirements. The Company manages its funds
mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking
facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of
financial assets and liabilities.

Liquidity and interest risk tables

The following tables detail the Company''s remaining contractual maturity for its non derivative financial liabilities
with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Company can be required to pay.

48 OTHER STATUTORY INFORMATION

48.1 The Company does not have any Immovable Property whose title deeds are not held in the name of the
Company.

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

48.3 The Company has utilised funds raised from issue of securities or borrowings from banks and financial institutions
for the specific purposes for which they were issued/taken.

48.4 Quarterly return/statement of current assets filed by the company with bank are in agreement with the books
of accounts.

48.5 The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company

as a wilful defaulter at any time during the financial year or after the end of reporting period but before the

date when financial statements are approved.

48.6 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:

48.6 (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

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

48.7 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:

48.7 (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

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

48.8 On the basis of information available, the Company does not have any transactions with struck-off
companies.

48.9 The Company does not have any transaction which is not recorded in the books of accounts but 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).

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

48.11 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the

Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

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

49 Approval of Financial Statements

The financial statements are approved for issue by the Board of Directors on 16^th May, 2025.

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

For Prakash Chandra Jain & Co. Avantika Singh, IAS Dr. Hasmukh Adhia, IAS (Retd.)

Chartered Accountants Managing Director Chairman

Firm Reg. No. : 002438C DIN No. : 07549438 DIN No. : 00093974

Pratibha Sharma S. G. Damani S. S. Bhatt

Partner General Manager (Finance) & Company Secretary &

Membership No. 400755 Chief Financial Officer Chief General Manager

(Legal, CC & CSR)

Place : Blacksburg, USA Place : Gandhinagar

Date : 16^th May, 2025

---

Mar 31, 2024

2.11. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material. If the time value of money is material, Provisions are discounted using pre-tax discount rate and when discounting is used, increase in the provision with the passage of time is recognised as a finance cost in the statement of Profit and Loss account. A contingent liability is (a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the entity or (b) a present obligation that arises from past events but is not recognised because (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or (ii) the amount of the obligation can not be measured with sufficient reliability.

Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.

A contingent asset is a possible asset that arises from the past events and whose existence will be confirmed only by the occurrence or non- occurrence of one or more of uncertain future events not wholly within the control of the entity.

Contingent assets are disclosed in the Financial

Statements by way of notes to accounts when an inflow of economic benefits is probable.

2.12. Financial Instruments

The Company determines the classification of its financial assets and liabilities at initial recognition. The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

Initial Recognitionand Measurement:

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss, are added to or deducted from the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

Subsequent Measurement

2.12. a. Non-derivative financial instruments

2.12. a.1. Cash and Cash equivalents:

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.

2.12. a.2. Financial assets carried at amortised cost:

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

2.12. a.3. Financial assets at fair value through Other

Comprehensive Income(FVTOCI):

A financial asset is subsequently measured at fair value through Other Comprehensive Income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in Other Comprehensive Income based on its business model.

On derecognition of such Financial assets, cumulative gain or loss previously recognised in Other Comprehensive Income is not reclassified from the equity to statement of Profit and Loss.

2.12. a.4. Financial assets at fair value through profit

or loss(FVTPL):

A financial asset which is not classified in any of the above categories are subsequently measured at fair value through profit or loss.

2.12. a.5. Investment in Joint Venture:

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The Company accounts for its investment in joint venture at cost.

2.12. a.6. Financial liabilities:

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments. Interest bearing issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method.

2.12. a.7. Derecognition of financial instruments:

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. On derecognition of Financial assets (except as mentioned in 2.17.a.3), the difference between the carrying amount and the

consideration received is recognised in the statement of Profit and Loss account. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

2.12. a.8. Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is presented in the Balance Sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

2.13. Share capital Ordinary Shares :

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are recognized as a deduction from equity, net of any tax effects.

2.14. Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, which gives highest priority to quoted prices in active markets and the lowest priority to unobservable inputs.

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for inputs other than quoted prices included within Level 1 that are observable for the asset or Liability either directly or indirectly.

Level 3 — Valuation techniques for inputs that are unobservable for the asset or liability.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

2.15. Impairment of Financial Assets

The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not measured at fair value through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised as an impairment gain or loss in the statement of profit and loss.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive, discounted at the effective interest rate.

ECL are measured taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

For Trade receivables, the Company uses a provision matrix to measure lifetime ECL on its portion of trade receivables. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward looking estimates.

2.16. Earnings per share

Basic earnings per share is computed by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving the basic

earnings per share and the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

2.17. Operating Segments

Operating segments are identified and reported taking into account the different risks and returns, the organization structure and the internal reporting systems. The Company operates in one reportable business segments i.e. “Chemicals”.

2.18. Statement of cash flows

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activities.

2.19. Current/non current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current if it satisfies any of the following conditions:

- Expected to be realised or intended to be sold or consumed in normal operating cycle

- Held primarily for the purpose of trading

- Expected to be realised within twelve months after the reporting period

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current if it satisfies any of the following conditions:

- Expected to be settled in normal operating cycle

- Held primarily for the purpose of trading

- is due to be settled within twelve months after the reporting period

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The company classifies all other liabilities as noncurrent.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash Equivalents. The Company has identified twelve months as its operating cycle.

2.20. Government Grant

Government grants are recognised when there is reasonable assurance that the grant will be received, and the company will comply with conditions attached to the grant.

Government grants relating to income are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses, the related costs for which the grants are intended to compensate. Grant relating to assets are netted off against the acquisition cost of the asset.

2.21. Critical accounting judgements, assumptions and Key sources of estimation uncertainty:

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continuously evaluated and are based on management''s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Key source ofjudgments, assumptions and estimates in the preparation of the Financial Statements which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in respect of useful lives of Property, Plant and Equipment, impairment, employee benefit obligations, provisions, provision for income tax, measurement of deferred tax assets and contingent assets & liabilities., Stores & Spares Written off.

2.21. a. Critical judgments in applying accounting policies

The following are the critical judgements, apart from those involving estimations (Refer note 2.25.b), that the Management have made in the process of applying the Company''s accounting policies and that have the significant effect on the amounts recognized in the Financial Statements.

2.21. a.1. Determining whether an arrangement contain

leases and classification of leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease

adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances.

2.21. b. Key sources of estimates and assumptions

Information about estimates and assumptions that have the significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates.

2.21. b.1. Defined benefit obligation (DBO):

The cost ofthe defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations being carried out at reporting date. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, Salary escalation rate, expected rate of return on asset 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 in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. 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 for the respective countries.

2.21. b.2. Contingent Liabilities and Assets:

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access

and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.

2.21. b.3. Allowance for impairment of trade receivables:

The expected credit loss is mainly based on the ageing of the receivable balances and historical experience. The receivables are assessed on an individual basis assessed for impairment collectively, depending on their significance. Moreover, trade receivables are written off on a case-to-case basis if deemed not to be collectible on the assessment of the underlying facts and circumstances.

2.21. b.4. Impairment of non-financial assets:

Evaluation for impairment requires use of judgment, estimates and assumptions.

The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in asset’s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment.

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset’s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model

is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

2.21. b.5. Income taxes:

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

2.21. b.6. Recognition of Deferred tax assets:

Deferred Tax Assets (DTA) are recognized for the unused tax losses/ credits to the extent that it is probable that taxable profit will be available against which the losses will be utilized. Management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

2.21. b.7. Useful lives and residual value of property,

plant and equipment:

The Company reviews the useful life and residual value of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

2.21. b.8. Dismantling cost of property, plant and

equipment:

The company estimates assets retirement obligation on estimate basis for property, plant and equipment. Estimation is done by the management considering size of the asset and its useful life in line with industry practices.

2.21. b.9. Stores and spares inventories:

The Company''s manufacturing process is continuous and highly mechanic with wide range of different types of plant and machineries. The Company keeps stores and spares as standby to continue the operations without any disruption. Considering wide range of stores and spares and long lead time for procurement of it and based on criticality of spares, the Company believes that net realizable value would be more than cost.

2.21. b.10. Fair value of investments:

The Company has invested in the equity instruments of various companies. The valuation exercise of unquoted equity instruments carried out by the Company with the help of an independent valuer, etc. has estimated fair value at each reporting period based on available historical annual reports and other information in the public domain.

a. General Reserve

The General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purpose. As General Reserve is created by a transfer from one component of Equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to profit or loss.

b. Securities Premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

c. Capital Reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. The reserve is utilised in accordance with the provisions of section 69 of the Companies Act, 2013.

d. Retained Earnings

This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.

e. Reserve for equity instruments through other comprehensive income

The reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income.

17.3 Represents repayment falling due in next twelve months :

(i) Rs. 1,104.37 lakhs to ICICI Bank towards ECB loan secured against Hypothecation charge on plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of Term SOFR plus 2.07% p.a.

(ii) Rs. 11,460.26 lakhs to State Bank of India towards ECB loan secured against Hypothecation charge on plant and machinery of Chloromethanes plant at Plot no D-II/9 P.O. Dahej Taluka Vagra Dist Bharuch, Gujarat carrying interest rate of Term SOFR plus 1.70% p.a.

37 FINANCIAL INSTRUMENTS

37.1 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 Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBDITA ratio of 3 times (consolidated) for one bank and Interest Coverage ratio of 2.75 times for another bank, a Debt Service Coverage ratio of 1.3 times for one bank and 1.5 times for another bank, Total Debt to Tangible Net Worth ratio of 1 : 1 for one bank.

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. The Total Debt to EBDITA ratio at the end of the reporting period was as follows :

37.3 Financial Risk Management Objectives

The Company’s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge.

The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

37.4 Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account. The Company’s investments in listed and non-listed equity securities are susceptible to price risk arising from uncertainties about future value of the investment securities. The Company’s non-current investment in equity shares are strategic investments and hence are considered as Fair Value through Other Comprehensive Income. The Company’s Board of Directors reviews and approves all equity investment decisions.

37.5 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans and towards import obligations out of the said account.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities are restated at the end of each quarter. The same at the end of the reporting period are as follows :

37.5 Foreign Currency Risk Management (Contd.)

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company''s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the key management personnel and represents management''s assessment of the reasonably possible changes in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

37.6 Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past visa-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit before tax for the year ended would be impacted to the extent of Rs.285.27 Lakhs (Rs.156.00 lakhs for the year 2022-23).

37.7 Credit Risk Management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is operating through network of dealers based at different locations. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit or advance receipts. The internal risk management committee of the Company meets regularly to discuss the dealers and credit risks, measures taken to address them and the status and level of risk after the measures taken.

Domestic & Export trade receivables are secured to the extent of interest free security deposits and bank guarantees / letter of credit received from the customers amounting to Rs.481.13 Lakhs and Rs.2,182.90 Lakhs as at 31^st March, 2024 and 31^st March, 2023 respectively. (Refer Note No. 12 for Trade Receivables outstanding).

37.8 Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

47 OTHER STATUTORY INFORMATION

47.1 The Company does not have any Immovable Property whose title deeds are not held in the name of the Company.

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

47.3 The Company has utilised funds raised from issue of securities or borrowings from banks and financial institutions for the specific purposes for which they were issued/taken.

47.4 Quarterly return/statement of current assets filed by the company with bank are in agreement with the books of accounts.

47.5 The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when financial statements are approved.

47.6 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:

47.6 (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

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

47.7 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:

47.7 (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

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

47.8 On the basis of information available, the Company does not have any transactions with struck-off companies.

47.9 The Company does not have any transaction which is not recorded in the books of accounts but 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).

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

47.11 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the

Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

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

48 Approval of Financial Statements

The financial statements are approved for issue by the Board of Directors on 30^th May, 2024.

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

For K C Mehta & Co LLP Swaroop P. IAS Dr. Hashmukh Adhia, IAS (Retd.)

Chartered Accountants Managing Director Chairman

Firm Reg. No. : 106237W/W100829 DIN No. : 08103838 DIN No. : 00093974

Shripal Shah Ram P. Gianani S. S. Bhatt

Partner Addl. General Manager (Finance) & Company Secretary &

Membership No. 114988 Chief Financial Officer Chief General Manager

(Legal, CC & CSR)

Place : Gandhinagar Date : 30^th May, 2024

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Mar 31, 2023

The Company had invested an amount of Rs.7,122.00 Lakhs in equity shares of Bhavnagar Energy Company Limited (BECL). The Gujarat Government vide notification dated 27th August, 2018 in terms of Gujarat Electricity Industry (Reorganisation and Regulation) Act, 2003, formulated the Gujarat Electricity Reform (Transfer of Generation Undertakings) Scheme, 2018 (the scheme), whereby BECL merged with effect from 1st April, 2018 into Gujarat State Electricity Corporation Ltd. (GSECL). In terms of the said notification, the Company received one equity share of Rs. 10/- of Gujarat State Electricity Corporation Ltd. for its investment in BECL. Accordingly, during 2018-19, the Company has impaired its investment in BECL by debit to Other Comprehensive Income.

During the year, the company has transferred 1 share of Gujarat State Electricity Corporation limited to Gujarat Urja Vikas Nigam Limited and received consideration of Rs. 37/-. Consequently on transfer of shares, the company has reclassified impairment loss on Investment from Other Comprehensive Income to Retained earnings.

Capital Advances includes advance payment made for leasehold lands allotted pending execution of lease deeds :

(i) Rs. 923.08 lakhs (FY 2021-22 Rs. 923.08 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

In the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Non-Current Provisions (Note no. 19). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.32 lakhs (Total Rs.1,257.55 lakhs) during 2012-13 and 2013-14 respectively. As the matter is pending with Honourable High Court, the amount paid has been shown under Balance with Govt. Department under Other Non-Current Assets.

Other than mentioned in Note No. 10.2 above, Balance with Govt. Departement includes amount paid under protest relatining to matters pending with respect to Sales Tax & Service Tax.

12.1 Refer Note No. 38 for related party receivable.

12.2 Trade Receivables include overdue outstanding from various parties aggregating to Rs. 1,610.42 lakhs, (Previous Year Rs.1,322.42 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of Rs. 1,610.42 lakhs (Previous Year Rs.1,322.42 lakhs) exists for such doubtful debts as on 31.03.2023.

The average credit period on sale of goods is 23 days. However, no interest is charged on Trade Receivables for delay in payment beyond 31 days from the date of the Invoice.

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

The Company has used a practical expedient by computing the expected credit loss allowance for Trade Receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates are given in the provision matrix. The provision matrix at the end of the Reporting Period is as follows. :

(ii) Rights, preferences and restrictions attached to equity shares :

The Company has one class of equity shares having a par value of Rs.10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(v) Dividend :

For current financial year 2022-23, The Company has proposed dividend of Rs. 23.55 per equity share (Previous year Rs. 10.00 per share declared). Proposed dividends on equity share are subject to approval at the Annual General Meeting and are not recognised as a liability as at Balance Sheet date.

a. General Reserve

The General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purpose. As General Reserve is created by a transfer from one component of Equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to profit or loss.

b. Securities Premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

c. Reserve for equity instruments through other comprehensive income

The reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income.

17.3 The Company has working capital facilities with various Banks carrying interest rate ranging from 8.25% p.a. to 8.85% p.a. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

17.4 Represents repayment falling due in next twelve months :

(i) Rs. 2,191.20 lakhs to ICICI Bank towards ECB loan secured against Hypothecation charge on plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

(ii) Rs. 11,503.80 lakhs to State Bank of India towards ECB loan secured against Hypothecation charge on plant and machinery of Chloromethanes plant at Plot no D-II/9 P.O. Dahej Taluka Vagra Dist Bharuch, Gujarat carrying interest rate of LIBOR plus 1.28% p.a.

36 EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

An amount of Rs.1,081.41 Lakhs (FY 2021-22 Rs.1,087.90 Lakhs) contributed to Provident Fund and amount of Rs.833.13 lakhs (FY 2021-22 Rs.692.52 lakhs) contributed to Employees Superannuation Trust is recognised as an expense and included in “Employee Benefits Expenses” (Note 28) of Statement of Profit & Loss.

Defined Benefit Plans

The Company offers the following employee benefit schemes to its employees :

i. Gratuity (included as part of b (iii) in Note 28 Employees benefit expense)

ii. Leave encashment (included as part of a in Note 28 Employee benefit expense)

The following table sets out the funded status of the defined benefits scheme and the amount recognised in financial statement :

As per Actuarial Valuation as on March 31, 2023

37 FINANCIAL INSTRUMENTS

37.1 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 Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBDITA ratio of 3 times (consolidated) for one bank and Interest Coverage ratio of 2.75 times for another bank, a Debt Service Coverage ratio of 1.3 times for one bank and 1.5 times for another bank, Total Debt to Tangible Net Worth ratio of 1 : 1 for one bank.

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.

37.3 Financial Risk Management Objectives

The Company’s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge. The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

37.4 Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account. The Company’s investments in listed and non-listed equity securities are susceptible to price risk arising from uncertainties about future value of the investment securities. The Company’s non-current investment in equity shares are strategic investments and hence are considered as Fair Value through Other Comprehensive Income. The Company’s Board of Directors reviews and approves all equity investment decisions.

37.5 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans and towards import obligations out of the said account.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities are restated at the end of each quarter. The same at the end of the reporting period are as follows :

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company’s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the key management personnel and represents management’s assessment of the reasonably possible changes in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

37.6 Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past visa-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit before tax for the year ended would be impacted to the extent of Rs.156.00 Lakhs (Rs.56.28 lakhs for the year 2021-22).

37.7 Credit Risk Management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is operating through network of dealers based at different locations. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit or advance receipts. The internal risk management committee of the Company meets regularly to discuss the dealers and credit risks, measures taken to address them and the status and level of risk after the measures taken.

Domestic & Export trade receivables are secured to the extent of interest free security deposits and bank guarantees / letter of credit received from the customers amounting to Rs.2,182.90 Lakhs and Rs.5,275.36 Lakhs as at 31st March, 2023 and 31st March, 2022 respectively. (Refer Note No. 12 for Trade Receivables outstanding).

37.8 Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

43 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)		[Rs. in Lakhs]
Particulars	Year ended	Year ended
	31.03.2023	31.03.2022
(i) Contingent Liabilities (a) Claims against the Company not acknowledged as debt	18,674.68	19,978.46
(b) Various pending cases before Labour court and Industrial Tribunal	Not ascertainable	Not ascertainable
(c) Disputed Sales Tax liability [Including Purchase Tax Liability (2000-01 to 2005-06)]	21,085.14	21,085.14
(d) Disputed Excise Duty liability	3,191.55	3,190.02
(e) Disputed Service Tax liability	602.82	706.29
(f) Disputed Income Tax liability (excluding interest) : (i) Pending Before Appellate Authorities in respect of which the Company is in appeal	949.38	1,098.91
(ii) Decided in Company’s favour by Appellate Authorities and Department is in further appeal	15,306.88	13,086.28
	59,810.45	59,145.10
In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at various forums / authorities. (g) Guarantees given by the Company’s Bankers for various purposes are	18,508.70	12,316.45
Total (i)	78,319.15	71,461.55
(ii) Commitments (a) Estimated amount of contracts remaining to be executed on capital account and not provided for	11,541.78	39,502.67
Total (ii)	11,541.78	39,502.67
Total	89,860.93	110,964.22

The Company’s operations fall under single segment namely “Chemicals” hence no separate disclosure of segment reporting is required to be made as required under Ind AS 108 ‘Operating Segments’.

All non Current assets are located in the company’s country of domicile.

One customer (PY: One Customer) individually contribute more than 10% of entity’s revenues. The total revenue from such entity is Rs. 76,154 Lakhs (P.Y. Rs. 53,415 Lakhs)

47 OTHER STATUTORY INFORMATION

47.1 The Company does not have any Immovable Property whose title deeds are not held in the name of the Company.

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

47.3 The Company has utilised funds raised from issue of securities or borrowings from banks and financial institutions for the specific purposes for which they were issued/taken.

47.4 Quarterly return/statement of current assets filed by the company with bank are in agreement with the books of accounts.

47.5 The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when financial statements are approved.

47.6 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:

47.6(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

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

47.7 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:

47.7(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

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

47.8 On the basis of information available, the Company does not have any transactions with struck-off companies.

47.9 The Company does not have any transaction which is not recorded in the books of accounts but 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).

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

47.11 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

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

48 Previous Year’s figures have been regrouped / rearranged wherever necessary to correspond with current year’s presentation.

49 Approval of Financial Statements

The financial statements are approved for issue by the Board of Directors on 22nd May, 2023.

---

Mar 31, 2022

10.1 Capital Advances includes advance payment made for leasehold lands alloted pending execution of lease deeds :

(i) Rs. Nil (FY 2020-21 Rs. 1,732.59 lakhs) towards plot No. D-IM/3 in exchange of Plot No. 42/1 at Dahej admeasuring 5,16,548 sq. mtrs.

(ii) Rs. 923.08 lakhs (FY 2020-21 Rs. 923.08 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

10.2 In the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Non-Current Provisions (Note no. 19). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.32 lakhs (Total Rs.1,257.55 lakhs) during 2012-13 and 2013-14 repsectively. As the matter is pending with Honourable High Court, the amount paid has been shown under Balance with Excise and customs’ under Other Non-Current Assets.

12.1 Trade Receivables include overdue outstanding from various parties aggregating to Rs.1,322.42 lakhs, (Previous Year Rs.1,335.42 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cummulative provision of Rs. 1,322.42 lakhs (Previous Year Rs.1,335.42 lakhs) exists for such doubtful debts as on 31.03.2022.

The average credit period on sale of goods is 31 days. However, no interest is charged on Trade Receivables for delay in payment beyond 31 days from the date of the Invoice.

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

The Company has used a practical expedient by computing the expected credit loss allowance for Trade Receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates are given in the provision matrix. The provision matrix at the end of the Reporting Period is as follows. :

Rights, preferences and restrictions attached to equity shares :

The Company has one class of equity shares having a par value of Rs.10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(v) Dividend :

For current financial year 2021-22, The Company has proposed dividend of Rs. 10.00 per equity share (Previous year Rs. 8.00 per share declared). Proposed dividends on equity share are subject to approval at the Annual General Meeting and are not recognised as a liability as at Balance Sheet date.

a. General Reserve

The General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purpose. As General Reserve is created by a transfer from one component of Equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to profit or loss.

b. Securities Premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

c. Reserve for equity instruments through other comprehensive income

The reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income.

The terms of repayment of borrowings are stated below:

17.1 The Loan is secured by plant and machinery of 14.7 MW Wind Farm Project at Dist. Porbandar, Gujarat, 915 nos. Cell Elements at Ranoli Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 15 equal half yearly installments from 10.09.2017 and carries interest rate of LIBOR plus 1.64% p.a.

17.2 The Loan is secured by plant and machinery of 31 MW Wind Farm Project at Dist. Rajkot & Kachchh, Gujarat and Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat. It has to be repaid in 10 equal half yearly installments from 07.01.2018 and carries interest rate of LIBOR plus 1.80% p.a.

17.3 The loan is secured by plant and machinery of Chloromethanes Plant at Plot No. D-II/9 P. O. Dahej, Tal. Vagra. Dist Bharuch, Gujarat. It has to repaid in 10 equal half yearly installments from 17.09.2023 and carries interest rate of LIBOR plus 1.28% p.a.

17.4 The Company has working capital facilities with various Banks carrying interest rate ranging from 7.10% p.a. to 7.30% p.a. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

17.5 Represents repayment falling due in next twelve months :

(i) Rs. 2,266.06 lakhs to HSBC Bank towards ECB loan secured against 0.75 times of the facility amount at all times over all the movable assets relating to 31 MW Windmills phase - VIII & IX located at Rajkot and Kutch districts, Gujarat and 0.50 times of facility amount at all times over all the movable assets relating to existing Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat including future expansion carrying interest rate of LIBOR plus 1.80% p.a.

(ii) Rs. 2,021.13 lakhs to ICICI Bank towards ECB loan secured against plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

An amount of Rs.1,087.90 Lakhs (FY 2020-21 Rs.3,342.89 Lakhs) contributed to Provident Fund and amount of Rs.692.52 lakhs (FY 2020-21 Rs.706.12 Lakhs) contributed to Employees Superannuation Trust is recognised as an expense and included in “Employee Benefits Expenses” (Note 28) of Statement of Profit & Loss.

Defined Benefit Plans

The Company offers the following employee benefit schemes to its employees :

i. Gratuity (included as part of b (iii) in Note 28 Employees benefit expense)

ii. Leave encashment (included as part of a in Note 28 Employee benefit expense)

The following table sets out the funded status of the defined benefits scheme and the amount recognised in financial statement :

FINANCIAL INSTRUMENTS

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 Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBIDTA ratio of 2.75 times (standalone) for one bank and 3 times (consolidated) for another bank, a Debt Service Coverage ratio of 2 times for one bank and 1.30 times for another bank and a Total Debt to Tangible Net Worth ratio of 1 : 1.

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. The Total Debt to EBIDTA ratio at the end of the reporting period was as follows :

The Company’s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge. The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account. The Company’s investments in listed and non-listed equity securities are susceptible to price risk arising from uncertainties about future value of the investment securities. The Company’s non-current investment in equity shares are strategic investments and hence are considered as Fair Value through Other Comprehensive Income. The Company’s Board of Directors reviews and approves all equity investment decisions.

Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans and towards import obligations out of the said account.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities are restated at the end of each quarter. The same at the end of the reporting period are as follows :

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company’s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the key management personnel and represents management’s assessment of the reasonably possible changes in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past visa-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit before tax for the year ended would be impacted to the extent of Rs.56.28 Lakhs (Rs.87.41 lakhs for the year 2020-21).

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is operating through network of dealers based at different locations. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit or advance receipts. The internal risk management committee of the Company meets regularly to discuss the dealers and credit risks, measures taken to address them and the status and level of risk after the measures taken.

Domestic & Export trade receivables are secured to the extent of interest free security deposits and bank guarantees / letter of credit received from the customers amounting to Rs.5,275.36 Lakhs and Rs.4,792.44 Lakhs as at 31^st March, 2022 and 31^st March, 2021 respectively. (Refer Note No. 12 for Trade Receivables outstanding).

i Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

43 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)		[Rs. in Lakhs]
Particulars	Year ended	Year ended
	31.03.2022	31.03.2021
(i) Contingent Liabilities (a) Claims against the Company not acknowledged as debt	19,978.46	22,472.11
(b) Various pending cases before Labour court and Industrial Tribunal	Not ascertainable	Not ascertainable
(c) Disputed Sales Tax liability [Including Purchase Tax Liability (2000-01 to 2005-06)]	21,085.14	21,085.14
(d) Disputed Excise Duty liability	3,190.02	3,175.50
(e) Disputed Service Tax liability	706.29	706.50
(f) Disputed Income Tax liability (excluding interest) : (i) Pending Before Appellate Authorities in respect of which the Company is in appeal	1,098.91	1,313.88
(ii) Decided in Company’s favour by Appellate Authorities and Department is in further appeal	13,086.28	13,086.28
	59,145.10	61,839.41
In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at various forums / authorities. (g) Guarantees given by the Company’s Bankers for various purposes are	12,316.45	13,375.87
Total (i)	71,461.55	75,215.28
(ii) Commitments (a) Estimated amount of contracts remaining to be executed on capital account and not provided for	39,502.67	92,622.96
Total (ii)	39,502.67	92,622.96
Total	1,10,964.22	1,67,838.24

OTHER STATUTORY INFORMATION

The Company does not have any Immovable Property whose title deeds are not held in the name of the Company.

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

The Company has utilised funds raised from issue of securities or borrowings from banks and financial institutions for the specific purposes for which they were issued/taken.

The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when financial statements are approved.

47.5 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:

47.5(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

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

47.6 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:

47.6(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

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

47.7 On the basis of information available, the Company does not have any transactions with struck-off companies.

47.8 The Company does not have any transaction which is not recorded in the books of accounts but 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).

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

47.10 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the

Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

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

48 Previous Year’s figures have been regrouped / reclassified wherever necessary to correspond with current year’s classification / disclosure.

49 Approval of Financial Statements

The financial statements are approved for issue by the Board of Directors on 24^th May, 2022

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Mar 31, 2018

(1) Fair value of Financial Instruments

I n determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include available quoted market prices, valuation reports from independent valuers etc. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

(2) Impairment of Financial Assets

The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.

(3) Earnings per share

Basic earnings per share are computed by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The Company did not have any potentially dilutive securities in any of the period presented.

4) Recent Accounting Pronouncements

(i) Standards issued but not yet effective:

I n March, 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendment to Ind AS 115 - ‘Revenue from Contracts with Customers’. This accounting standard is applicable to the Company from April 1, 2018.

This will replace Ind AS 18 which covers contracts for goods and services. Entities will have a choice of full retrospective application, or modified retrospective application with additional disclosures. The new standard is based on the principle that revenue is recognized when control of goods and service transfers to a customer and essentially replaces the existing notion of risk and rewards. The management is evaluating the requirements of the new standard and effect on the financial statements.

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) (Amendment) Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The company is in the process of evaluating the impact.

(20) Critical judgments in applying accounting policies

The following are the critical judgments, apart from those involving estimations that the management have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements. Actual results may differ from these estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Useful lives and residual value of property, plant and equipment:

The Company reviews the useful life and residual value of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

Allowance for expected credit losses:

Note -12 describes the use of practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The expected credit allowance is based on the aging of the days receivables which are past due and the rates derived based on past history of defaults in the provision matrix.

Dismantling cost of property, plant and equipment:

Note-3 describes assets retirement obligation on estimate basis for property, plant and equipment. The management estimates dismantling cost considering size of the asset and its useful life in line with industry practices.

Stores and spares inventories:

The Company’s manufacturing process is continuous and highly mechanic with wide range of different types of plant and machineries. The Company keeps stores and spares as standby to continue the operations without any disruption. Considering wide range of stores and spares and long lead time for procurement of it and based on criticality of spares, the Company believes that net realizable value would be more than cost.

Fair value of investments:

The Company has invested in the equity instruments of various companies. However, the percentage of shareholding of the Company in such investee companies is very low and hence, it has not been provided with future projections including projected profit and loss account by those investee companies. Hence, the valuation exercise carried out by the Company with the help of an independent valuer, etc. has estimated fair value at each reporting period based on available historical annual reports and other information in the public domain.

Income taxes:

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

Contingent liability judgment:

Note - 42 describes claims against the Company not acknowledged as debt. It includes certain penalties and charges payable to Government agencies although as per the contracts, the Management, based on past experience, believes that the penalties and charges are negotiable and not certain and accordingly it is not considered as an obligation as at balance-sheet date and disclosed as contingent liabilities.

* Lease hold land amortized during Financial Year 2017-18 of Rs. 61.40 lakhs (Ref. Sr. No. 10 of Note No. 2).

The lease deed in respect of Plot No. 3 for the partial land admeasuring 44,032 sq. mtrs acquired at Dahej Complex having value of Rs. 15.86 lakhs is pending for execution.

** The Company’s contribution or expenditure towards Power, Water and Services not owned by the Company has been capitalized and is amortized over a period of eighteen years starting from 15.08.1998 being the date of start of operations.

Borrowing Cost capitalized during the year Rs. 0.43 Lakhs (Previous Year: Rs. 267.41 Lakhs) for acquisition of Long Term Assets.

* Capital Advances includes advance payment made for lease hold lands alloted pending execution of lease deeds :

(i) Rs. 1,732.59 lakhs (FY 2016-17 Rs. 1,732.59 lakhs) towards plot No. D-III/3 in exchange of Plot No. 42/1 at Dahej admeasuring 5,16,548 sq. mtrs.

(ii) Rs. 923.08 lakhs (FY 2016-17 Rs. 923.08 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

** I n the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Noncurrent Provisions (Note no. 18). The Company has contested the demand and has paid under protest Rs. 924.23 lakhs and Rs. 333.32 lakhs (Total Rs. 1,257.55 lakhs) during 2012-13 and 2013-14 repsectively. As the matter is pending with Honourable Hight Court, the amount paid has been shown under balance with excise and custom under Other Non-Current Assets.

* The Trade Receivables include overdue outstanding from various parties aggregating to Rs. 1,163.41 lakhs, (Previous Year Rs. 1,206.92 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of Rs. 1,163.41 lakhs (Previous Year Rs. 1,206.92 lakhs) exists for such doubtful debts as on 31.03.2018.

The average credit period on sale of goods is 54 days. However, no interest is charged on Trade Receivables for delay in payment beyond 54 days from the date of the Invoice.

5- TRADE RECEIVABLES (Contd.)

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

The Concentration of Credit Risk is limited due to the fact that the customer base is large and unrelated.

(ii) Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The terms of repayment of borrowings are stated below:

* The Loan is secured by plant and machinery of 14.7 MW Wind Farm Project at Kuchhdi, Dist. Porbandar, Gujarat, 915 nos. Cell Elements at Ranoli Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 15 equal half yearly installments from 10.09.2017 and carries interest rate of LIBOR plus 1.64% p.a.

** The Loan is secured by plant and machinery of 31 MW Wind Farm Project at in Dist. Rajkot & Kachchh, Gujarat and Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat. It has to be repaid in 10 equal half yearly installments from 07.01.2018 and carries interest rate of LIBOR plus 1.80% p.a.

* The Company has working capital facilities with various Banks carrying interest rate ranging from 9.45% to 14.75%. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

* I n the earlier Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon.

The Average Credit Period on Purchases of Goods and Services is 44 days for current year (previous year 38 days). However, no interest is charged on the outstanding balance in case of delay in payment beyond the credit period. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

* Represents repayment falling due in next twelve months :

(i) Rs. 3,910.50 lakhs to HSBC Bank towards ECB loan secured against 0.75 times of the facility amount at all times over all the movable assets relating to 31 MW Windmills phase - VIII & IX located at Rajkot and Kutch districts, Gujarat and

0.50 times of facility amount at all times over all the movable assets relating to existing Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat including future expansion carrying interest rate of LIBOR plus 1.80% p.a.

(ii) Rs. 1,738.00 lakhs to ICICI Bank towards ECB loan secured against plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

6 - EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

An amount of Rs. 793.65 lakhs (FY 2016-17 Rs.648.84 lakhs) contributed to Provident Fund Trust and amount of Rs. 580.95 lakhs (FY 2016-17 Rs. 564.66 lakhs) contributed to Employees Superannuation Trust is recognized as an expense and included in “Employee Benefits Expenses” (Note 27) of Statement of Profit & Loss.

The Company’s Provident Fund is exempted under Section 17 of Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trust vis-a-vis Statutory rate.

Defined Benefit Plans

The Company offers the following employee benefit schemes to its employees :

i. Gratuity (included as part of (b) (iii) in Note 27 Employees benefit expnese) ii Leave encashment (included as part of (a) in Note 27 Employee benefit expense)

The following table sets out the funded status of the defined benefits scheme and the amount recognized in financial statement :

7- FINANCIAL INSTRUMENTS 36.1 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 is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBDITA ratio of 2.75 times, a Debt Service Coverage ratio of 2 times and a Total Debt to Tangible Net Worth ratio of 1 time.

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.

8 Financial Risk Management Objectives

The Company’s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge.

The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

9 Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account.

The Company’s investments in listed and non-listed equity securities are susceptible to price risk arising from uncertainties about future value of the investment securities. The Company’s non-current investment in equity shares are strategic investments and hence are considered as Fair Value through Other Comprehensive Income. The company’s Board of Directors reviews and approves all equity investment decisions.

10- FINANCIAL INSTRUMENTS (Contd.)

36.5 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans and towards import obligations out of the said account.

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company’s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the key management personnel and represents management’s assessment of the reasonably possible changes in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

11 Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

I f the interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit before tax for the year ended would be impacted to the extent of Rs. 182 Lakhs (Rs. 169 lakhs for the year 2016-17).

12 Credit Risk Management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is operating through network of dealers based at different locations. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit or advance receipts. The internal risk management committee of the Company meets regularly to discuss the dealers and credit risks, measures taken to address them and the status and level of risk after the measures taken.

Domestic trade receivables are secured to the extent of interest free security deposits and bank guarantees received from the customers amounting to Rs. 5,454.02 lakhs and Rs. 4,520.08 lakhs as at 31^st March, 2018 and 31^st March,

2017 respectively. (Refer Note No. 12 for Trade Receivables outstanding).

13 Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

14 - The Company’s operations fall under single segment namely “Chemicals” hence no separate disclosure of segment

reporting is required to be made as required under Ind AS 108 ‘Operating Segments’.

15 - Previous Year’s figures have been regrouped / reclassified wherever necessary to correspond with current year’s

classification / disclosure.

16 - Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on 24^th May, 2018.

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Mar 31, 2017

* Lease hold land amortized during Financial Year 2016-17 of Rs.15.62 lakhs (Ref. Sr. No. 10 of Note No. 2).

The lease deed in respect of Plot No. 3 for the partial land admeasuring 44,032 sq. mtrs acquired at Dahej Complex having value of Rs.15.86 lakhs is pending for execution.

** The Company''s contribution or expenditure towards Power, Water and Services not owned by the Company has been capitalized and is amortized over a period of eighteen years starting from 15.08.1998 being the date of start of operations. *** The Gross value and depreciation / amortization amounting to Rs.1,283.00 lakhs of Recoating / Remembraning is eliminated from Gross Block and Depreciation / amortization for those assets which are fully written off till 31.03.2016. Recoating and Remembraning expenditure are amortized over a useful life of 8 years and 4 years respectively as decided by management.

Borrowing Cost capitalized during the year Rs.267.41 Lakhs (Previous Year: Rs.424.15 Lakhs) for acquisition of Long Term Assets.

* Capital Advances includes advance payment made for lease hold lands alloted pending execution of lease deeds :

(i) Rs.1,732.59 lakhs (F.Y. 2015-16 Rs.1,591.36 lakhs, F.Y. 2014-15 Rs.1,555.87 lakhs) towards plot No. D-III/3 in exchange of Plot No. 42/1 at Dahej measuring 5,16,548 sq. mtrs.

(ii) Rs. Nil lakhs (F.Y. 2015-16 Rs.4,411.70 lakhs, FY. 2014-15 Rs.4,304.18 lakhs) towards Plot No. D-II/9 at Dahej admeasuring 7,68,709.48 sq. mtrs.

(iii) Rs.923.08 lakhs (F.Y. 2015-16 Rs.923.08 lakhs, F.Y. 2014-15 Rs.924.02 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

** In the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Non-Current Provisions (Note No. 18). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.32 lakhs (Total Rs.1,257.55 lakhs) during 2012-13 and 2013-14 respectively. As the matter is pending with Honourable Hight Court, the amount paid has been shown under balance with excise and custom under Other Noncurrent Assets.

* The Trade Receivables include overdue outstanding from various parties aggregating to Rs. 1,206.92 lakhs, (Previous Year Rs.1,301.67 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of Rs. 1,206.92 lakhs (Previous Year Rs.1,230.30 lakhs) exists for such doubtful debts as on 31.03.2017.

The average credit period on sale of goods is 51 days. However, no interest is charged on Trade Receivables for delay in payment beyond 51 days from the date of the Invoice.

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

(ii) Rights, preferences and restrictions attached to equity shares :

The Company has one class of equity shares having a par value of Rs.10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The terms of repayment of borrowings are stated below:

* The Loan is secured by plant and machinery of 14.7 MW Wind Farm Project at Kuchhdi, Dist. Porbandar, Gujarat, 915 nos. Cell Elements at Ranoli Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 15 equal half yearly installments from 10.09.2017 and carries interest rate of LIBOR plus 1.64% p.a.

** The Loan is secured by plant and machinery of 20,000 MTA Sodium Chlorate Project at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 10 equal half yearly installments from 14.08.2013 and carries interest rate of LIBOR plus 3.50% p.a.

*** The Loan is secured by plant and machinery of 31 MW Wind Farm Project at in Dist. Rajkot & Kachchh, Gujarat and Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat. It has to be repaid in 10 equal half yearly installments from 07.01.2018 and carries interest rate of LIBOR plus 1.80% p.a.

* The Company has working capital facilities with various Banks carrying interest rate ranging from 9.65% to 14.75%. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

The Average Credit Period on Purchases of Goods and Services is 38 days for current year (previous year 41 days). However, no interest is charged on the outstanding balance in case of delay in payment beyond the credit period. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

* Represents repayment falling due in next twelve months :

(i) Rs. 2,543.89 lakhs to HDFC Bank towards ECB loan secured against plant and machinery of 20,000 MTA Sodium Chlorate Project at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 3.50% p.a.

(ii) Rs. 1,945.50 lakhs to HSBC Bank towards ECB loan secured against 0.75 times of the facility amount at all times over all the movable assets relating to 31 MW Windmills phase - VIII & IX located at Rajkot and Kutch districts, Gujarat and 0.50 times of facility amount at all times over all the movable assets relating to Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat including future expansion carrying interest rate of LIBOR plus 1.80% p.a.

(iii) Rs. 1,729.34 lakhs to ICICI Bank towards ECB loan secured against plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vaodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

1. - Tax Expense

During the Current Year, the Tax Liability under normal Provisions of the Income Tax Act, 1961 comes to Rs. 2,992.34 Lakhs (Previous Year Rs. 278.17 Lakhs) and Tax Liability under MAT Provisions of Income Tax Act, 1961 is Rs. 8,140.07 Lakhs ( Previous Year Rs. 5,424.75 Lakhs). Hence, the Company is required to pay the tax under MAT Provisions of Income Tax Act, 1961. Accordingly, MAT credit Entitlement reflects the difference between the normal tax and tax under MAT Provisions.

The tax rate used for the F.Y. 2016-17 in reconciliation above is the corporate tax rate of 34.608% payable by corporate entities in India on taxable profits under the Indian tax law.

The Company''s Provident Fund is exempted under Section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trust vis-a-vis Statutory rate.

2.- Financial Instruments 36.1 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 is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBDITA ratio of 2.75 times, a Debt Service Coverage ratio of 2 times and a Total Debt to Tangible Net Worth ratio of 1 time.

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.

3. Financial Risk Management objectives

The Company''s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge.

The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

4. Market Risk

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unheeded conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account.

5. Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unheeded conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s profit before tax for the year ended would be impacted to the extent of Rs.169 Lakhs (Rs. 127 lakhs for the year 2015-16).

6. Credit Risk Management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is operating through network of dealers based at different locations. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the existing ERP of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit or advance receipts. The internal risk management committee of the Company meets regularly to discuss the dealers and credit risks, measures taken to address them and the status and level of risk after the measures taken.

Domestic trade receivables are secured to the extent of interest free security deposits and bank guarantees received from the customers amounting to Rs.4,520.08 lakhs, Rs.4,159.64 lakhs and Rs.4,064.64 lakhs as at 31^st March, 2017, 31^st March, 2016 and 1^st April, 2015 respectively. Export sales are fully secured through letters of credit or against advance receipts. (refer Note No. 12 for Trade Receivables outstanding).

7. Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Note 1: The Company has invested in the equity instruments of various companies. However, the percentage of shareholding of the Company in such investee companies is very low and hence, it has not been provided with future projections including projected profit and loss account by those investee companies. Hence, the independent valuer appointed by the Company has estimated fair value based on available historical Annual Reports of such companies and other information as available in the public domain. Since the future projections are not available, discounted cash flow approach for fair value determination has not been followed.

Note 2: In case of some companies, there are no comparable companies valuations available and some are recent startup companies. In light of no information available for future projections, capacity utilisation, commencement of operations, etc., the valuation is based on cost approach.

8. - The Company''s operations fall under single segment namely "Chemicals” hence no separate disclosure of segment reporting is required to be made as required under Ind AS 108 ''Operating Segments''.

9. - Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

10. - Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on 26^th May, 2017.

11. - First Time Ind AS adoption reconciliations

All amounts are in Rs. Lakhs unless otherwise stated

12. Effect of Ind AS adoption on the balance sheet as at March 31, 2016 and April 1, 2015.

Notes to the reconciliations :

a. Under previous GAAP current investments were measured at lower of cost or Fair Value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition. The fair value changes are recognized in the Statement of Profit and Loss.

Under previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, these financial assets have been classified as FVTOCI. On the date of transition to Ind AS, these financial assets have been measured at their fair value and the restatement gain / (loss) has been taken to Other Comprehensive Income (OCI).

b. Under previous GAAP, dividends on Equity shares recommended by the Board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under Ind AS, such dividends together with dividend distribution tax are recognized when approved by the members in the General Meeting.

c. Under Ind AS, the initial estimates of the costs of dismantling and of removing the item of Property, Plant and Equipment and restoring the site on which it is located is required to be included in the cost of the respective item of property, plant and equipment. Under previous GAAP there was no such requirement and cost incurred as and when was charged to Statement of profit and loss.

Further adjustments include recognition of spare parts in accordance with Ind AS 16 when they meet the definition of property, plant and equipment. Under previous GAAP these items were carried as inventory. The adjustment is on account of depreciation on classifying the same as property, plant and equipment from the date they are available for use. It also include impact on account of effective interest on borrowings and certain pre-operative expenses viz. liquidated damages / penalty, etc. capitalized under previous GAAP taken to the Statement of profit and loss under Ind AS.

d. Under Ind AS, expected life time credit provision is made on trade receivables. Under previous GAAP the provision for doubtful debts was made using ageing analysis and an individual assessment of recoverability.

e. Under Ind AS, re-measurements, i.e. actuarial gains and losses included in the net gratuity expense on the net defined liability are recognized in other comprehensive income instead of profit or loss.

f. Deferred tax adjustments are on account of above Ind AS adjustments.

g. Under Ind AS, other comprehensive income adjustments are on account of fair valuation of non-current investments and actuarial gain / loss on defined benefit plan - gratuity, net of tax effect.

13.There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

---

Mar 31, 2016

1 - Tax Expense :

During the current year the tax liability under normal provisions of the Income Tax Act,1961 comes out to Rs.278.17 lakhs (Previous Year Rs.Nil) and tax liability under MAT provisions of Income Tax Act,1961 is Rs.5,424.75 lakhs (Previous Year Rs.4,333.19 lakhs), hence the Company is required to pay the tax under MAT provisions of Income Tax Act,1961. Accordingly, MAT credit entitlement reflects the difference between the normal tax and the tax under MAT provisions.

2 - In the earlier Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Long Term Provision (Note no. 6). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.31 lakhs (Total Rs.1,257.54 lakhs) during 2012-13 and 2013-14 respectively. The amount paid has been shown under balance with excise and custom under Long term Loans & Advances (Note no. 12).

3 - The Company''s operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting

is required to be made as required under Accounting Standard -17 of Institute of Chartered Accountants of India.

4 - Employee Benefits [Accounting Standard -15 (Revised)] :

(i) Defined Contribution Plans :

An amount of Rs.623.19 lakhs (Previous Year Rs.603.09 lakhs) contributed to Provident Fund Trust and amount of Rs.543.08 lakhs (Previous Year Rs.574.31 lakhs) contributed to Employees Superannuation Trust is recognized as an expense and included in "Employee Benefits Expenses" (Note 23) of Statement of Profit & Loss.

(ii) Defined Benefit Plans : - As per Actuarial Valuation as on March 31, 2016 :-

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The expected rate of return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company''s policy for the Plan Assets management.

(vi) The Company''s Provident Fund is exempted under Section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trust vis-a-vis Statutory rate.

5 - Interest in subsidiary :

The Company and National Aluminium Company Ltd. (NALCO), a Government of India Enterprise (A Navratna Company) have jointly incorporated a new Company viz. GACL-NALCO Alkalies & Chemicals Pvt. Ltd. (JV Company) on 4^th December, 2015 for setting up of 800 TPD Caustic Soda Plant and 100 MW Coal based Power Plant at Dahej, Gujarat.

The Company considers the subsidiary to be not material in terms of its investment (Rs.6.00 lakhs only in Equity Shares) as well as non-commencement of operations during the year ended 31^st March, 2016 and therefore consolidated financial statements are not prepared.

The proportionate share of assets, liabilities, income, expenditure and contingent liabilities of subsidiary- GACL-NALCO Alkalies & Chemicals Pvt. Ltd is given below :-

6 - Borrowing cost capitalized during the year is Rs.424.15 lakhs (Previous Year Rs.NIL) for acquisition of long term assets.

7 - (a) Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

(b) Balances shown under Long-term borrowings, Long term provisions, Short term provisions, Trade payables, Other current liabilities, Long term loans and advances, inventories, Trade Receivables, Short term loans and advances and other current assets, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year''s financial statements.

---

Mar 31, 2015

Note 1

Tax Expense :

(i) Deferred Tax of Rs.1,195.46 lakhs includes reversal of timing difference pertaining to claim u/s 80 IA of Income Tax Act,1961 for wind mills commissioned in earlier years.

(ii) During the current year there is no tax liability under normal provisions of the Income Tax Act,1961 and hence the Company is required to pay the tax under MAT provisions of Income Tax Act,1961. Accordingly, the total amount paid under MAT is reflected as MAT credit entitlement.

Note 2

In the earlier Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty,interest and penalty thereon. The same has been shown as provision for other liabilities under Long Term Provision (note no. 6). The Company has contested the demand and has paid under protest Rs. 924.23 lakhs and Rs. 333.31 lakhs (Total Rs.1,257.54 lakhs) during 2012-13 and 2013-14 repsectively. The amount paid has been shown under balance with excise and custom under Other Non- Current Assets

Note 3 [ Rs. in Lakhs ]

Contingent Liabilities and As At As At Commitments (to the extent not provided for) 31.03.2015 31.03.2014

(i) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debt 13,041.07 7,051.11

(b) Various pending cases before Labour court and Industrial Not Not Tribunal ascertainable ascertainable

(c) Disputed Purchase Tax liability (1998-99 to 2005-06) 20,431.56 20,884.60

(d) Disputed Income Tax liability (excluding interest) :

(i) Pending Before Appellate Authorities in respect of which the Company is in appeal 12,670.00 13,165.00

(ii) Decided in Company's favour by Appellate Authorities and Department is in further appeal 8,503.00 9,165.00

54,645.63 50,265.71

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at various forums / authorities.

(e) Guarantees :

(i) Total loans outstanding under corporate guarantees aggregating to Rs. 424.65 lakhs (Previous Year Rs. 424.65 lakhs) to Housing Development Finance Corporation Limited (HDFC) for housing loans extended to employees. 7.94 25.59

(ii) Guarantees given by the Company's Bankers for various purposes are 5,738.33 4,164.29

(f) Sponsor Support Agreement executed with Bhavnagar Energy Not Not Co. Ltd. and their lenders. ascertainable ascertainable

Total (i) 60,391.90 54,455.59

(ii) Commitments :

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for 17,373.31 7,963.41

(b) Other commitments - liability to GIDC for leasehold land at Dahej (including pending execution of lease deeds) Not ascertainable Not ascertainable

Total (ii) 17,373.31 7,963.41

Total : 77,765.21 62,419.00

Note 4

The Company's operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting

is required to be made as required under Accounting Standard -17 of Institute of Chartered Accountants of India.

Note 5

Employee Benefits [Accounting Standard -15 (Revised)] :

(i) Defined Contribution Plans :

An amount of Rs. 603.09 lakhs (Previous Year Rs.555.05 lakhs) contributed to Provident Fund Trust and amount of Rs. 574.31 lakhs (Previous Year Rs. 575.00 lakhs) contributed to Employees Superannuation Trust is recognised as an expense and included in "Employee Benefits Expenses" (Note 25) of Statement of Profit & Loss.

Note 6

Related Party Information :

(1) List of Related Parties :

Key Management Personnel : Shri Atanu Chakraborty, IAS, Managing Director (up to 28th August,2014)

Shri A M Tiwari, IAS, Managing Director (From 29th August, 2014)

Dr. H B Patel, Executive Director (Finance) & Chief Financial Officer (From 14th May, 2014)

Shri S S Bhatt, Company Secretary & Additional General Manager (Legal, HR & CC) (From 14th May, 2014)

Note 7

Borrowing cost capitalised during the year is Rs.NIL (Previous Year Rs.457.39 lakhs) for acquisition of long term assets.

Note 8

(a) Previous Year's figures have been regrouped / reclassified wherever necessary to correspond with current year's

classification / disclosure.

(b) Balances shown under Long-term borrowings, Short-term borrowings, Long term provisions, Short term provisions, Trade payables, Other current liabilities, Long term loans and advances, other non-current assets, inventories, Trade Receivables, Short term loans and advances and other current assets etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year's financial statements.

---

Mar 31, 2013

1 - During the current year, other exceptional item amounting to Rs.1,719.67 lakhs represents provision made towards demand of Excise Duty and delay payment charges paid under protest and interest payable for earlier years.

2 - Tax expense includes Rs.971.96 lakhs being reversal of excess provision for Income Tax in respect of earlier years (Previous Year Rs. Nil).

3 - The Company''s operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting is required to be made as required under AS-17 of ICAI.

4 - Employee Benefits AS -15 (Revised) :

(i) Defined Contribution Plans :

An amount of Rs.481.40 lakhs (Previous Year Rs.480.00 lakhs) contributed to employees superannuation trust is recognised as an expense and included in "Employee Benefits Expenses" (Note 26) of Statement of Profit & Loss.

(ii) Defined Benefit Plans : - As per Actuarial Valuation as on March 31, 2013 :

5 - Related Party Information :

(1) List of Related Parties :

(a) Key Management Personnel : Dr. Guruprasad Mohapatra, IAS, Managing Director

(up to 18th July, 2011)

Shri M S Dagur, IAS, Managing Director (from 19th July, 2011)

(2) Transactions with related parties :

Details related to parties referred to in (1) (a) above.

6 - Borrowing cost capitalised during the year is Rs.471.26 lakhs (Previous Year Rs.56.56 lakhs) for acquisition of long term assets.

7 - (a) Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

(b) Balances shown under Secured/Unsecured Loan, Advances, Deposits, Debtors, Creditors, Loans and Materials with others, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year''s financial statements.

---

Mar 31, 2012

NOTES :

* Lease hold land amortised during Financial Year 2011-12 for the expired period of the lease of Rs.27.43 lakhs (Ref. Sr. No. 3 (c) of Note No. 1) and shown as deduction in Gross Block.

** The lease deed in respect of Plot No. 3, land admeasuring 44,032 sq. mtrs. acquired at Dahej Complex having value of Rs.15.86 lakhs is pending for execution. The refund of amount as per GIDC Rs.132.86 lakhs is yet to be received and rectification deed is yet to be executed, in respect of land admeasuring 61,700 sq. mtrs of Plot No. CH-17, surrendered to GIDC. The actual amounts payable / receivable in both the cases will be as per policy of GIDC.

*** Depreciation and amortization for the year includes Net Debit of Rs.25.94 lakhs for prior period adjustment (Previous Year Net Debit of Rs.2.32 lakhs)

# The Company's contribution or expenditure towards Power, Water and Services not owned by the Company is capitalized under the general head "Capital Expenditure" and written off to revenue over a period of eighteen years starting from 15.08.1998 i.e. date of start of operations.

* Advances for capital goods includes payment and provision of (1) Rs.1,695.82 lakhs (Previous Year Rs.1,591.20 lakhs) towards lease hold land allotted at Dahej admeasuring 5,20,000 sq. mtrs and (2) Rs.4,611.70 lakhs (Previous Year Rs.4,410.19 lakhs) towards lease hold land allotted at village Dahej admeasuring 10,20,900 sq. mtrs. and (3) Rs.930.57 lakhs (Previous Year Rs.793.53 lakhs) towards plot B-37 to B-44 lease hold land admeasuring 50,714.48 sq. mtrs. allotted at village Atali for proposed Housing Colony, for which possession is yet to be taken from GIDC.

1 - Disclosure pursuant to Note No. T of Part I of Schedule VI to the Companies Act, 1956

[ Rs. in Lakhs ]

Contingent Liabilities and commitments As at As at

(to the extent not provided for) 31.03.2012 31.03.2011

(i) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debt 7,380.57 6,829.43

(b) Various pending cases before Labour Court and Industrial Tribunal Not ascertainable Not ascertainable

(c) Guarantees :

(i) The Company has given corporate guarantees aggregating to Rs. 484.25 lakhs (Previous Year Rs. 484.25 lakhs) to Housing Development Finance Corporation Limited (HDFC) for housing loans extended to employees. Total loans outstanding under the arrangement, are : 83.15 113.27

(ii) Guarantees given by the Company's bankers for various purposes are : 4,283.97 4,529.88

(d) Disputed Purchase tax liability 20,925.52 20,947.88

(e) Disputed Income Tax liability 4,114.07 -

Total (i) 36,787.28 32,420.46

(ii) Commitments :

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for 9,696.89 3,258.08

(b) Other commitments - Unascertained land liability to GIDC for leasehold land at Dahej Not ascertainable Not ascertainable

Total (ii) 9,696.89 3,258.08

Total : 46,484.17 35,678.54

The Board of Directors of the Company has recommended dividend of Rs.3.00 per share on 7,34,36,928 equity shares of Rs.10/- each, amounting to Rs.2,203.11 lakhs (excluding tax on dividend Rs.357.40 lakhs). The provision for proposed dividend is shown separately in Note -11 - Short Term Provisions.

2 - Under Clean Development Mechanism, various projects of the Company have been registered with UNFCCC. Three Wind Mill projects of Company are in the process of registration.

3 - Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006". Amount overdue as on 31st March, 2012, to Micro, Small and Medium Enterprises on account of principal amount with interest in aggregate is Rs. NIL (Previous Year Rs. Nil).

4 - The Company's operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting is required to be made as required under AS-17 of ICAI.

5 - Employee Benefits AS -15 (Revised) :

(i) Defined Contribution Plans :

An amount of Rs.480.00 lakhs (Previous Year Rs.490.12 lakhs) contributed to employees superannuation trust is recognised as an expense and included in "Employee Benefits Expenses" (Note 28) of Statement of Profit & Loss.

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Group Gratuity-cum-life Assurance cash accumulation policy offered by Life Insurance Corporation (LIC) of India. The investment return earned on the policy comprises bonuses declared by LIC having regard to LIC's investment earnings. The information on the allocation of the fund into major assets classes and expected return on each major class are not readily available. We understand that LIC's overall portfolio of assets is well diversified as such, the long term return on the policy is expected to be higher than the rate of return on Central Government Bonds. Historically too, the returns declared by LIC on such policies have been higher than Government bond yields. As such, the expected return on assets assumption is taken by adding a margin on the current market yield on the Central Government bonds (of term consistent with the terms of liabilities).

6 - Related Party Information :

(1) List of Related Parties :

(a) Where control exists : Joint Venture Parties

Gujarat Alkalies and Chemicals Ltd. (99.10%); and Dow-Europe GmbH (0.90%)

(b) Joint Venture : Dow-GACL SolVenture Ltd.

(c) Key Management Personnel : Dr. Guruprasad Mohapatra, IAS, Managing Director

(up to 18th July, 2011)

Shri M S Dagur, IAS, Managing Director (from 19th July, 2011)

(d) Relatives of key management personnel and their enterprises, where transactions have taken place : Nil

* During the year, pursuant to allotments of further 28,62,339 equity shares in JV, the percentage ownership of the Company in JV increased to 99.10%, which is held temporarily. Since Dow-GACL SolVenture Ltd. (JV) has filed an application on 16th April, 2012 for striking off the name of Dow-GACL SolVenture Ltd. from Registrar of Companies under the Fast Track Exit Scheme of MCA, Government of India pursuant to the same, the total amount of Rs.288.86 lakhs paid as subscription to equity shares in Dow-GACL SolVenture Ltd. has been written off for the diminution in equity investments and charged to Statement of Profit and Loss of the Company for the Financial Year 2011-12. Therefore, financials of JV are not being consolidated as per AS-21.

7 - (a) Pursuant to the Notification No. F.No.2/6/2008-C.L-V dated 30th March, 2011 issued by Ministry of Corporate Affairs, Government of India, the Company has prepared the financial statements as per Revised Schedule VI to the Companies Act, 1956. This has significantly impacted the disclosure and presentation made in the financial statements. Previous Year's figures have been regrouped / reclassified wherever necessary to correspond with current year's classification / disclosure.

Company is not availing the exemption granted vide Notification dated 8th February, 2011 issued by Ministry of Corporate Affairs, Government of India regarding disclosure of paragraph 3 (i) (a) and 3 (ii) (a) of Part II of erstwhile Schedule VI of the Companies Act, 1956.

(b) Balances shown under Secured/Unsecured Loan, Advances, Deposits, Debtors, Creditors, Loans and Materials with others, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year's financial statements.

8 - Borrowing cost capitalised during the year is Rs.56.56 lakhs (Previous Year NIL) for acquisition of long term assets.

9 - Other exceptional item represents provision made towards interest Rs.1,141.86 lakhs and delay payment charges of Rs.456.75 lakhs on electricity duty paid under protest for earlier years.

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Mar 31, 2010

Rs.in Lakhs 2009-2010 2008-2009

1, Contingent Liabilities. (a) The Company has given corporate guarantees aggregating to Rs.661,90 lakhs (Previous Year 7682.80 lakhs) to Housing Development Finance Corporation Limited (HDFC) for housing loans extended to employees. Total loans outstanding under the arrangement, are : 142.65 175.32 (b) (i) Estimated amount of contracts on Capital Account remaining to be executed and not provided for are : 8,857.40 4,945.74

(ii) Amount for Leasehold Land at Dahej. Not ascertainable Not ascertainable

(c) Claims from various parties disputed but not acknowledged as debt : 6,616.18 5,471.96

(d) Guarantees given by the Companys bankers for various purposes are : 4,065.31 2,657.86

(e) Disputed Purchase tax liability (Net of provision made). 21,185.69 21,316,56

2. The Sundry Debtors include overdue outstanding from various parties aggregating to Rs.1,555.94 lakhs, (Previous Year Rs.1,568.39 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of 71,076.27 lakhs (Previous Year 71,022.03 lakhs) exists for such doubtful debts.

3. Provisions were made by the Company in F.Y. 2005-06 and 2006-07 without taking into consideration the deduction allowable in respect of its 90 MW combined cycle power plant set up in its Dahej Complex for captive requirements towards tax liability under section 80-IA of the Income Tax Act, 1961. As per para 52 of the AS 29, issued by ICAI, "Provision should be reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision should be reversed". Accordingly ?6,405.69 lakhs has been written back in its tax provisions in view of the Revised / Original returns filed for the respective years and the same being allowed in tax assessment / appeal orders during the year.

4. Under Clean Development Mechanism, three projects of the Company have been registered with UNFCCC. The Company in the meantime has put up three Wind Mill projects for which the process of registration has been started. It has further identified small energy saving projects and expects to start the process of registration for these projects also. It has monetized 83783 CERs during the financial year 2009-10.

5. Derivative Transactions :

In line with the requirement of AS-30 ( Financial Instruments : Recognition and Measurement) to provide for mark-to-market (MTM) losses on open positrons in derivative contracts as on the date of the Balance Sheet, the Company has reduced the provision to Rs.1,356.71 lakhs from Rs. 1,804.17 lakhs provided till previous year for such tosses in respect of its open positions in Cross Currency Swap transactions and the same is shown separately in Schedule 11 - "Current Liabilities and Provisions" and in Schedule 13 - "Other Income".

During the year, an income of Rs.50.00 lakhs (Previous Year Rs. 100.00 lakhs) has been recognised on realisation basts towards coupon settlement of the Cross Currency Swap transaction and is shown in Schedule 13 - "Other Income".

6. In accordance with the provisions of Value Added Tax Act, 2003, the amount collected as VAT and eligible for remission benefit at Dahej Complex, during the year Rs.1,357.63 lakhs (Previous Year Rs.1,822.06 lakhs) has been treated as Other Income.

7. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006". Amount overdue as on 31st March, 2010, to Micro, Small and Medium Enterprises on account of principal amount with interest in aggregate is Rs.NIL(Previous Year Rs. Nil).

8. Borrowing cost capitalised during the year is Rs. NIL (Previous Year Rs.406.88 lakhs) for acquisition of long term assets.

9. The Companys operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting is required to be made as required under AS-17 of ICAI.

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(v) Amount recognised as an expense in respect of Compensated Leave absences is 7927.97 lakhs (Previous Year Rs.587.95 lakhs) on actuarial valuation basis as on 31,03.2010.

(vi) Basis used to determine expected rate of return on assets :

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Group Gratuity-cum-life Assurance cash accumulation policy offered by Life Insurance Corporation (LIC) of India. The investment return earned on the policy comprises bonuses declared by LIC having regard to LICs investment earnings. The information on the allocation of the fund into major assets classes and expected return on each major class are not readily available. We understand that LICs overall portfolio of assets is well diversified as such, the long term return on the poticy is expected to be higher than the rate of return on Central Government Bonds. Historically too, the returns declared by LIC on such policies have been higher than Government bond yields. As such, the expected return on assets assumption is taken by adding a margin on the current market yield on the Centra! Government bonds (of term consistent with the terms of liabilities).

10. The Company has been allotted 10,00,000 equity shares of Rs.10/- each fully paid-up on 30th March, 2009 as bonus shares in the ratio 1 : 1 on the equity investment with Gujarat State Petroleum Corporation Ltd. {GSPC). The Company has made a further investment of Rs.1,249.99 lakhs on 17th December, 2009 in 1,54,320 equity shares of Rs.10/- each of GSPC at a premium of Rs.800/- per share.

Thereafter, GSPC has splitted one equity share of the face value of 710/- each into ten equity shares of the face value of Re.1/- each on 29th December, 2009. Hence, the Companys shareholding in GSPC as at 31st Marcb,2010, stands at 2,15,43,200 fully paid-up equity shares of Re.1/- each.

The Company has paid 7 1,000 lakhs on 15th February, 2010 and further 71,000 lakhs on 5th April,2010, as Share Application Money for allotment of 40,00,000 fully paid-up equity shares of 710/- each at a premium of 740/- per share in GSPC Gas Company Ltd. Allotment is pending as at 31" March, 2010.

The Company has paid 7210 lakhs on 26th November, 2009, as advance Share Application Money to Dow-GACL Sol Venture Ltd. (DGSL). Allotment is pending as at 31st March, 2010.

11. The Company holds 1.14,90,000 fully paid-up Bquity shares of 710/- each of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL). The net worth of GCPTCL has substantially eroded and it was referred to Corporate Debt Restructuring {CDR) Cell. As per CDR scheme approved by CDR Cell on 26tn February,2010 and the resolution passed by the Shareholders of GCPTCL at the EOGM held on 15th December,2009, the paid-up value of the said equity shares has been written down from Rs.10/- per share to Re.1/- per share and accordingly, there is a permanent diminution in the value of the said investment by 71,034.10 lakhs. The said amount has been provided and charged to the Profit and Loss Account of the Company for the Financial Year 2009-10.

12. Related Party Information :

(1) List of Related Parties :

(a) Where control exists : Joint Venture Parties

Gujarat Alkalies And Chemicals Ltd.

(50%); and

Dow-Europe GmbH (50%)

(b) Joint Venture : Dow GACL SotVenture Ltd.

(c) Key Management Personnel : Shri Guruprasad Mohapatra. IAS, Managing Director

(d) Relatives of key management personnel and their enterprises, where transactions have taken place : Nil

13. (a) Corresponding figures of the previous year have been regrouped to make them comparable with this years figures, wherever necessary (b) Balances shown under Secured/Unsecured Loan, Advances, Deposits, Debtors, Creditors, Loans and Materials with others, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current years financial statements.

14. Excise Duty :

As required under Accounting Standard AS-9 on Revenue Recognition issued by The Institute of Chartered Accountants of India :

(i) Gross Sales is reduced by the excise duty charged to arrive at net sales

(ii) The difference of excise duty payable on opening and closing stock of finished goods is reflected as a separate expenditure item in the Profit and Loss Account.

(iii) The difference in excise duty recovered and paid, if any, is shown as selling expenses under the head of Administration, General and Marketing Expenses.

15. a) Capacity, Production and Stocks :

NOTES : The Licensed Capacities and Installed Capacities are as certified by the Management.

(A) The over all Caustic Soda Lye / Caustic Potash Capacity as per Liecense of both Baroda and Oahej is 4,52,600 M.T.Thus overall Installed Capacity is 4,29,050 M.T.

(B) This represents 4,01,037 M.T. of Caustic Soda Lye and 20,802 M.T. of Caustic Potash Lye.

(1) Out of 4,01,037 M.T. Actual Production of Caustic Soda Lye, 1,87,798 M.T. consumed for manufacturing of Caustic Flakes/Prills and 7,188 M.T. consumed for production of Sodium Hypochlorite.

(2) Out of 20,802 M.T. Actual Production of Caustic Potash Lye, 9,283 M.T. consumed for manufacturing of Caustic Potash Flakes and 9,242 M.T. consumed for manufacturing of Potassium Carbonate.

(C) (1) The capacity of Caustic Soda Flakes/Prills and Caustic Potash Flakes is within the capacity of Caustic Soda Lye and Caustic Potash Lye for Baroda.

(2) The capacity of Caustic Soda Prills and Caustic Soda Flakes is within the capacity of Caustic Soda (100%) at Dahej.

(D) This represents 1,87,790 M.T. of Caustic Soda Flakes/Prills and 10.315 M.T. of Caustic Potash Flakes.

(E) Out of 3,80,236 M.T. Actual Production of Chlorine Gas, 2,81,521 M.T. consumed for manufacturing of Liquid Chlorine, Hydrochloric Acid, Sodium Hypochlorite & Anhydrous Aluminium Chloride.

(E1) Quantity and value of Chlorne includes value of stock of Chlorine with Jobwork Parties (CPW & ALC),

(F) For Baroda, Production from both Caustic Soda Plant and Chloromethanes Plant is included.

(G) Out of 12,01.70,520 NM3 Actual production of Hydrogen Gas, 4,60,93,437 NM3 consumed for manufacturing of Caustic Soda Flakes & 2,77,90,695 NM3 consumed for HCL for Baroda and Dahej Complex.

(H) Aluminium Chloride & Chlorinated Parafin Wax are manufactured on job work basis.

(I) 21 MW Wind Farm has been Commissioned on 22nd March, 2010 (5 nos.) on 29lh March, 2010 (4 nos.) and on 30th March, 2010 (2 nos.).

(J) Installed Capacity based on 100% of Calcium Chloride Lye and includes Flakes and Powder.

(K) Installed Capacity based on 18% of Poly Aluminium Chloride.

(L) Benzyl Chloride are manufactured on job work basis from November,2009.