Notes to Accounts of Vinati Organics Ltd.

Mar 31, 2025

1 Provisions, Contingent Liabilities and Contingent
Assets:

Provisions are recognised when there is a present
legal or constructive obligation as a result of a past
event and it is probable (i.e. more likely than not)
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.

Provision for separate sales related obligations is
made for probable future claims on sales effected
and are estimated based on previous claim
experience on a scientific basis. This provision is
revised annually.

Contingent liabilities are disclosed on the basis of
judgement of management / independent experts.
These are reviewed at each balance sheet date
and are adjusted to reflect the current management
estimate.

5 Revenue Recognition and Other Income

The Company derives revenues primarily from sale
of goods comprising of speciality chemicals.
Revenue from contract with customers is
recognised upon transfer of control of promised
products or services to customers in an amount
that reflects the consideration The Company
expects to receive in exchange for those products
or services.

Revenue from the sale of goods is recognised at
the point in time when control is transferred to the
customer.

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price allocated to that performance obligation.
The transaction price of goods sold and services
rendered is net of variable consideration on
account of turnover/product/prompt payment
discounts and schemes offered by the Company
as part of the contract with the customers.When
the level of discount varies with increase in
levels of revenue transactions, the Company
recognises the liability based on its estimate of the
customer’s future purchases using expected value
method. The Company recognises changes in the
estimated amounts of obligations for discounts in
the period in which the change occurs. Revenue
also excludes taxes collected from customers.
Revenue in excess of invoicing are classified
as contract assets while invoicing in excess of
revenues are classified as contract liabilities.

Use of significant judgements in revenue
recognition:

• Judgement is required to determine
the transaction price for the contract.
The transaction price could be either a
fixed amount of consideration or variable
consideration with elements such as turnover
discounts. Any consideration payable to the
customer is adjusted to the transaction price,
unless it is a payment for a distinct product
or service from the customer. The estimated
amount of variable consideration is adjusted
in the transaction price only to the extent
that it is highly probable that a significant
reversal in the amount of cumulative revenue
recognised will not occur and is reassessed
at the end of each reporting period.

The Company exercises judgement in determining
whether the performance obligation is satisfied at a
point in time or over a period of time. The Company
considers indicators such as how customer
consumes benefits as services are rendered or who
controls the asset as it is being created or existence
of enforceable right to payment for performance to
date and alternate use of such product or service,
transfer of significant risks and rewards to the
customer, acceptance of delivery by the customer,
etc.

Export incentives are recognised as income of
the year on accrual basis. In case of utilisation for
Import purpose the same is recognised as raw
material cost in the year of import.

6 Employee Benefits

Short-term Employees Benefits

All employee benefits payable wholly within twelve
months of rendering services are classified as short
term employee benefits. Benefits such as salaries,
wages, short-term compensated absences,
performance incentives etc., are recognised during
the period in which the employee renders related
services and are measured at undiscounted
amount expected to be paid when the liabilities are
settled.

Post-employment benefits

The Company provides the following post¬
employment benefits:

i) Defined benefit plans such as gratuity

ii) Defined Contribution plans such as provident
fund

Defined benefits plans

The cost of providing defined benefit plans such
as gratuity is determined on the basis of present
value of defined benefits obligation which is
computed using the projected unit credit method
with independent actuarial valuation made at the
end of each annual reporting period.
Re-measurements comprising of actuarial gains
and losses arising from experience adjustments
and change in actuarial assumptions, the effect of
change in assets ceiling (if applicable) and the return
on plan asset (excluding net interest as defined
above) are recognised in other comprehensive
income (OCI) except those included in cost of
assets as permitted in the period in which they
occur. Re-measurements are not reclassified to
the Statement of Profit and Loss in subsequent
periods.

Defined Contribution Plans

Payments to defined contribution retirement
benefit plans, viz., Provident Fund for eligible
employees are recognised as an expense when
employees have rendered the service entitling
them to the contribution.

7 Income Taxes

Income tax expense represents the sum of
tax currently payable and deferred tax. Tax is
recognised in the profit or loss section of Statement
of Profit and Loss, except to the extent that it relates
to items recognised directly in equity or in other
comprehensive income.

Current tax

Current tax is the expected tax payable/ receivable
on the taxable income/ loss for the year using
applicable tax rates for the relevant period, and
any adjustment to taxes in respect of previous
years. Penalties, if any, related to income tax are
included in other expenses. Interest Income, if any,
related to Income tax is included in Other Income.

Deferred Tax

Deferred tax is recogn ised on temporary
differences between the carrying amounts of
assets and liabilities in the balance sheet and the
corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are recognised
for all taxable temporary differences. Deferred tax
assets are recognised for all deductible temporary
differences, unabsorbed losses and unabsorbed
depreciation to the extent that it is probable that
future taxable profits will be available against
which those deductible temporary differences,
unabsorbed losses and unabsorbed depreciation
can be utilised.

! Financial Instruments
a) Financial Assets

Investments in subsidiaries

I nvestments in equity shares of subsidiaries
are carried at cost.

Financial assets other than investment in
subsidiaries

Financial assets of the Company comprise
trade receivable, cash and cash equivalents,
Bank balances, Investments in equity shares
of companies other than in subsidiaries,
Investment in units of Mutual Funds, loans/
Debt instrument/ advances to employee /
related parties / others, security deposit,
claims recoverable etc.

Initial recognition and measurement

All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or
loss, transaction costs that are attributable
to the acquisition of the financial asset.
However, Trade receivables that do not
contain a significant financing component are
measured at Transaction Price. Transaction
costs of financial assets carried at fair value
through profit or loss are expensed in profit
or loss.

For purposes of subsequent measurement
financial assets are classified in three
categories:

• Financial assets measured at amortised
cost

• Financial assets at fair value through OCI

• Financial assets at fair value through
profit or loss

Financial assets measured at amortised
cost

Bank deposits, Security deposits, investment
in Debt Instruments and Export benefits
receivable are measured at amortised cost.
Financial assets are measured at amortised
cost if the financials asset is held within a
business model whose objective is to hold
financial assets 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. These financials assets are
amortised using the effective interest rate
(EIR) method, less impairment. Amortised
cost is calculated by taking into account any
discount or premium on acquisition and fees
or costs that are an integral part of the EIR.
The EIR amortisation is included in finance
income in the statement of profit and loss.

Financial assets at fair value through profit
or loss (‘FVTPL’)

Any financial asset that does not meet the
criteria for classification as at amortised cost
or as financial assets at fair value through
other comprehensive income is classified as
financial assets at fair value through profit or
loss.

Derecognition

The Company derecognises a financial
asset only when the contractual rights to the
cash flows from the asset expire, or when it
transfers the financial asset and substantially
all the risks and rewards of ownership of the
asset to another entity.

The Company assesses impairment based
on expected credit loss (‘ECL’) model on the
following:

• Financial assets that are measured at
amortised cost; and

ECL is measured through a loss allowance on
a following basis:-

• The 12 month expected credit losses
(expected credit losses that result from
those default events on the financial
instruments that are possible within 12
months after the reporting date)

• Full life time expected credit losses
(expected credit losses that result from
all possible default events over the life
of financial instruments)

The Company follows ‘simplified approach’
for recognition of impairment on trade
receivables or contract assets resulting
from normal business transactions. The
application of simplified approach does not
require the Company to track changes in
credit risk. However, it recognises impairment
loss allowance based on lifetime ECLs at
each reporting date, from the date of initial
recognition.

For recognition of impairment loss on other
financial assets, the Company determines
whether there has been a significant increase
in the credit risk since initial recognition. If
credit risk has increased significantly, lifetime
ECL is provided. For assessing increase in
credit risk and impairment loss, the Company
assesses the credit risk characteristics on
instrument-by-instrument basis.

Impairment loss allowance (or reversal)
recognised during the period is recognised
as expense/income in Profit and Loss.

b) Financial Liabilities

The Company’s financial liabilities include
bank overdraft, trade payable, accrued
expenses and other payables etc.

All financial liabilities at initial recognition are
classified as financial liabilities at amortised
cost or financial liabilities at fair value through
profit or loss, as appropriate. All financial
liabilities are recognised initially at fair value
and, in the case of loans and borrowings
and payables, net of directly attributable
transaction costs.

Financial Liabilities classified as Amortised
Cost

All Financial Liabilities other than derivatives
are measured at amortised cost at the end
of subsequent accounting periods. Interest
expense that is not capitalised as part of costs
of assets is included as Finance costs in profit
or loss.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged /
cancelled / expired. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the de recognition of the original
liability and the recognition of a new liability.
The difference in the respective carrying
amounts is recognised in profit or loss.

Derivative instruments are initially recognised
at fair value on the date a derivative contract
is entered into and are subsequently re¬
measured to their fair value at the end of each
reporting period. The resulting gain or loss is
recognised in profit or loss immediately unless
the derivative is designated and effective as
a hedging instrument and is recognised in
Other Comprehensive Income (OCI).

9 Business Combination

Business combinations through common control
transactions are accounted on a pooling of
interests method. No adjustments are made to
reflect the fair values, or recognise any new assets
or liabilities, except to harmonise accounting
policies. The identity of the reserves are preserved
and the reserves of the transferor becomes the
reserves of the transferee. The difference between
consideration paid and the net assets acquired, if
any, is recorded under capital reserve / retained
earnings, as applicable.

E Recent accounting pronouncements

The Ministry of Corporate Affairs (MCA) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended 31
March, 2025 MCA has not notified any new standards
or amendments to the existing standards applicable to
the Company.

Notes:

i. Title deeds of Freehold Land are held in the name of the Company. Title deeds in respect of Buildings on immovable
properties which are constructed on company''s Freehold/Leasehold Land is based on documents consituting evidence
of legal ownership of the Buildings except for the building and leasehold land acquired through amalgamation wherein
change in favour of the Company is pending.

ii. During the year, the Company has capitalised the following expenses of revenue nature to the cost of Property, Plant and
Equipment/Capital Work-In-Progress;

NOTE 25

A. Capital Management

For the purpose of Company''s Capital Management, capital includes Issued Equity Capital, Securities Premium, and all
other Equity Reserves attributable to the Equity Holders of the Company. The primary objective of the Company''s Capital
Management is to maximise the Share Holder Value.

As at 31 March, 2025, the Company has only one class of equity shares and has no long term debt. Consequent to such
capital structure, there are no externally imposed capital requirements. The Company allocates its capital for distribution as
dividend or re-investment into business based on its long term financial plans.

B. Financial Risk Management

The Company’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these
financial liabilities is to finance the operations of the Company. The principal financial assets include trade and other
receivables, investments in mutual funds/equity shares & debt instruments and cash and short term deposits.

The Company has assessed market risk, credit risk and liquidity risk to its financial liabilities.

i) Market Risk

Market Risk is the risk of loss of future earnings, fair values or cash flows that may result from a change in the price of
a financial instrument, as a result of interest rates, foreign exchange rates and other price risks. Financial instruments
affected by market risks, primarily include investments, foreign currency receivables, payables and borrowings.

Interest Rate Risks

The Company borrows funds in Indian Rupees to meet short term funding requirements. Interest on Short term
borrowings is subject to floating interest rate and are repriced regularly. The sensitivity analysis detailed below have
been determined based on the exposure to variable interest rates on the outstanding amounts due to bankers over a
year.

If the interest rates had been 1% higher / lower and all other variables held constant, the Company''s profit for the year
ended 31 March, 2025 would have been decreased/increased by '' 0.62 crores (P.Y. 2023-24 - '' 0.45 crores.)

Foreign Currency Risks

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in
foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and liabilities
denominated in a currency that is not its functional currency. The exposure to foreign currency risk of the Company at
the end of the reporting period expressed is as follows:

Price Risks

More than two-third of the Company''s revenues are generated from exports and the raw materials are procured
through import and local purchases where local purchases track import parity price. The Company is affected by
the price stability of certain commodities. Due to the significantly increased volatility of certain commodities, the
Company enters into contract with the customers that has provision to pass on the change in the raw material prices..
The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in
commodity prices and freight costs.

The Company is exposed to price risk due to its investments in debt instruments and mutual funds. The price risk
arises due to uncertainties about the future market values of these investments. The Company manages the securities
price risk through investments in debt funds and diversification by placing limits on individual and total investments.
Reports on Investment Portfolio are reviewed on regular basis and all approvals of investment decisions are done in
concurrence with the senior management.

As at 31 March, 2025 the investments in mutual funds/Debt Instruments/ETF/Equity Shares amounts to '' 26.41 crores
(PY 2023-24 - '' 39.38 crores). A 1% point increase or decrease in the NAV with all other variables held constant would
have lead to aprroximately an additional '' 0.26 crores (P.Y. 2023-24 - '' 0.39 crores) on either side in the statement of
profit and loss.

i) Credit Risk

Credit Risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to
the Company. It arises from credit exposure to customers, financial instruments viz., Investments in Debt Funds and
Balances with Banks.

Trade receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the customer, including the default risk of the industry and country in which the customer operates,
also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit
limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in
the normal course of business. The Company also has an external credit risk insurance cover with ECGC Policy for
specific customer(s).. The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31
March, 2025 is 13.60% (PY 2023-24 - 0.21%) of the total trade receivables. The Company uses Expected Credit Loss
(ECL) Model to assess the impairment loss or gain. Historical experience of collecting receivables of the Company is
supported by low level of past default and hence the credit risk is perceived to be low.

There are no transactions with single customer which amounts to 10% or more of the Company''s revenue.

The Company maintains exposure in cash and cash equivalents, term deposits with banks, investments in mutual
funds , debt funds and loans to other companies. It has a diversified portfolio of investments with various number
of counterparties which have secure credit ratings, hence the risk is reduced. Individual risk limits are set for each
counterparty based on financial position, credit rating and past experience. Credit limits and concentration of exposures
are actively monitored by its treasury department.

iii) Liquidity Risk

The principal sources of liquidity of the Company are cash and cash equivalents, investment in mutual funds, fund and
non-fund based working capital lines from banks and the cash flow that is generated from operations. It believes that
current cash and cash equivalents, tied up borrowing lines and cash flow that is generated from operations is sufficient
to meet requirements. Accordingly, liquidity risk is perceived to be low.

The details of the contractual maturities of significant financial liabilities as at 31 March, 2025 are as under:

The Fair Value of financial assets and liabilities included is the amount at which the instrument could be exchanged in a current
transaction between willing parties. The following methods and assumptions were used to estimate the fair value.

Level 1: This includes financial instruments measured using quoted prices/Net Asset Value. The fair value of all debt instruments
which are traded on the Stock Exchanges is valued using the closing price as at the reporting period.

Level 2: The Company enters into Derivative financial instruments with counterparties principally with Banks with investment
grade credit ratings. The foreign exchange forward contracts are valued using valuation techniques which employs the use of
market observable inputs namely, Marked-to-Market.

k) Disclosures pursuant to the Regulation 34(3) read with para A of Schedule V to the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and Section 186 (4) of the Companies Act, 2013.

i) Details of Investments made are given in Note 3.

ii) Amount of Loans and advances in the nature of loans outstanding from /to subsidiaries '' Nil (Previous year '' Nil).

iii) Loans to employees have been considered to be outside the purview of disclosure requirements.

iv) Investment by Loanee in the shares of the Parent company- Nil ( Previous year Nil).

l) Events Occuring after the Balance Sheet date

The proposed final dividend for 2024-25 amounting to '' 77.75 crores (PY 2023-24 : 72.57 crores) will be recognised as
distribution to owners during the financial year 2025-26 on its approval by Shareholders. The proposed final dividend per
share amounts to '' 7.50/- (PY 2023-24 : '' 7/-).

m) Other Statutory Information

(i) The Company does not have any Benami property nor any proceeding has been initiated or pending against the
Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

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

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

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

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

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

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

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

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

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

(viii) The Company has not been declared a wilful defaulter by any bank or financial institution or any of the lenders.

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

n) The figures for the corresponding previous year have been regrouped and/or rearranged wherever considered
necessary.

For M M Nissim & Co LLP For and on behalf of Board of Directors

Chartered Accountants

Firm Reg.No. 1107122W/W100672 Vinati Saraf Mutreja Vinod Saraf

Managing Director & CEO Chairman

DIN: 00079184 DIN: 00076708

Dimple Maru

Partner

Mem.No. 141312 Nand Kishor Goyal Milind Wagh

Chief Financial Officer Company Secretary

Mumbai, Dated 15 May, 2025

---

Mar 31, 2024

4 Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present legal or constructive obligation as a result of a past event and it is probable (i.e. more likely than not) 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.

Provision for separate sales related obligations is made for probable future claims on sales effected and are estimated based on previous claim experience on a scientific basis. This provision is revised annually

Contingent liabilities are disclosed on the basis of judgment of management / independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate

5 Revenue Recognition and Other Income

The Company derives revenues primarily from sale of goods comprising of speciality chemicals. Revenue from contract with customers is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration The Company expects to receive in exchange for those products or services. Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price allocated to that performance obligation.

The transaction price of goods sold and services rendered is net of variable consideration on account of turnover/product/prompt payment discounts and schemes offered by the Company as part of the contract with the customers.When the level of discount varies with increase in levels of revenue transactions, the Company recognises the liability based on its estimate of the customer’s future purchases using expected value method. The Company recognises changes in the estimated amounts of obligations for discounts in the period in which the change occurs. Revenue also excludes taxes collected from customers Revenue in excess of invoicing are classified as contract assets while invoicing in excess of revenues are classified as contract liabilities Use of significant judgements in revenue recognition

• Judgement isrequired to determine the transaction price for the contract. The transaction price could be either a fixed amount of consideration or variable consideration with elements such as turnover discounts.Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product or service from the customer.The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period.

The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time.The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

Export incentives are recognised as income of the year on accrual basis. In case of utilisation for Import purpose the same is recognised as raw material cost in the year of import.

6 Employee Benefits Short-term Employees Benefits

All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., are recognised during the period in which the employee renders related services and are measured at undiscounted amount expected to be paid when the liabilities are settled.

Post-employment benefits

The Company provides the following postemployment benefits:

i) Defined benefit plans such as gratuity

ii) Defined Contribution plans such as provident fund

Defined benefits plans

The cost of providing defined benefit plans such as gratuity is determined on the basis of present value of defined benefits obligation which is computed using the projected unit credit method with independent actuarial valuation made at the end of each annual reporting period.

Re-measurements comprising of actuarial gains and losses arising from experience adjustments and change in actuarial assumptions, the effect of change in assets ceiling (if applicable) and the return on plan asset (excluding net interest as defined above) are recognised in other comprehensive income (OCI) except those included in cost of assets as permitted in the period in which they occur. Re-measurements are not reclassified to the Statement of Profit and Loss in subsequent periods.

Defined Contribution Plans

Payments to defined contribution retirement benefit plans, viz., Provident Fund for eligible employees are recognised as an expense when employees have rendered the service entitling them to the contribution.

7 Income Taxes

Income tax expense represents the sum of tax currently payable and deferred tax.Tax is recognised in the profit or loss section of Statement of Profit and Loss, except to the extent that it relates to items recognised directly in equity or in other comprehensive income

Current tax

Current tax is the expected tax payable/ receivable on the taxable income/ loss for the year using applicable tax rates for the relevant period, and any adjustment to taxes in respect of previous years. Penalties, if any, related to income tax are included in other expenses. Interest Income, if any, related to Income tax is included in Other Income.

Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilised.

8 Financial Instruments

a) Financial Assets

Investments in subsidiaries

Investments in equity shares of subsidiaries are carried at cost

Financial assets other than investment in subsidiaries

Financial assets of the Company comprise trade receivable, cash and cash equivalents, Bank balances, Investments in equity shares of companies other than in subsidiaries, Investment in units of Mutual Funds, loans/Debt instrument/ advances to employee / related parties / others, security deposit, claims recoverable etc

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. However, Trade receivables that do not contain a significant financing component are measured at Transaction Price. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Subsequent measurement

For purposes of subsequent measurement financial assets are classified in three categories:

• Financial assets measured at amortised cost

• Financial assets at fair value through OCI

• Financial assets at fair value through profit or loss

Financial assets measured at amortised cost

Bank deposits, Security deposits, investment in Debt Instruments and Export benefits receivable are measured at amortised cost.Financial assets are measured at amortised cost if the financials asset is held within a business model whose objective is to hold financial assets 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. These financials assets are amortised using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit and loss.

Financial assets at fair value through profit or loss (‘FVTPL’)

Any financial asset that does not meet the criteria for classification as at amortised cost or as financial assets at fair value through other comprehensive income is classified as financial assets at fair value through profit or loss.

Derecognition

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

Impairment of financial assets

The Company assesses impairment based on expected credit loss (‘ECL’) model on the following:

• Financial assets that are measured at amortised cost; and

ECL is measured through a loss allowance on a following basis:-

• The 12 month expected credit losses (expected credit losses that result from those default events on the financial instruments

that are possible within 12 months after the reporting date)

• Full life time expected credit losses (expected credit losses that result from all possible default events over the life of financial instruments)

The Company follows ‘simplified approach’ for recognition of impairment on trade receivables or contract assets resulting from normal business transactions. The application of simplified approach does not require the Company to track changes in credit risk. However, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, from the date of initial recognition.

For recognition of impairment loss on other financial assets, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has increased significantly, lifetime ECL is provided. For assessing increase in credit risk and impairment loss, the Company assesses the credit risk characteristics on instrument-by-instrument basis.

Impairment loss allowance (or reversal) recognised during the period is recognised as expense/ income in Profit and Loss.

b) Financial Liabilities

The Company’s financial liabilities include bank overdraft, trade payable, accrued expenses and other payables etc.

Initial recognition and measurement

All financial liabilities at initial recognition are classified as financial liabilities at amortised cost or financial liabilities at fair value through profit or loss, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Financial Liabilities classified as Amortised Cost

All Financial Liabilities other than derivatives are measured at amortised cost at the end of subsequent accounting periods. Interest expense that is not capitalised as part of costs of assets is included as Finance costs in profit or loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged / cancelled / expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

Derivatives

Derivative instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period.The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument and is recognised in Other Comprehensive Income (OCI).

9 Business Combination

Business combinations through common control transactions are accounted on a pooling of interests method. No adjustments are made to reflect the fair values, or recognise any new assets or liabilities, except to harmonise accounting policies. The identity of the reserves are preserved and the reserves of the transferor becomes the reserves of the transferee. The difference between consideration paid and the net assets acquired, if any, is recorded under capital reserve / retained earnings, as applicable.

E Recent accounting pronouncements

The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March, 2024 MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

A. Capital Management

For the purpose of Company''s Capital Management, capital includes Issued Equity Capital, Securities Premium, and all other Equity Reserves attributable to the Equity Holders of the Company. The primary objective of the Company''s Capital Management is to maximise the Share Holder Value.

As at 31 March, 2024, the Company has only one class of equity shares and has no long term debt. Consequent to such capital structure, there are no externally imposed capital requirements. The Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

B. Financial Risk Management

The Company’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the operations of the Company. The principal financial assets include trade and other receivables, investments in mutual funds/equity shares & debt instruments and cash and short term deposits.

The Company has assessed market risk, credit risk and liquidity risk to its financial liabilities.

i) Market Risk

Market Risk is the risk of loss of future earnings, fair values or cash flows that may result from a change in the price of a financial instrument, as a result of interest rates, foreign exchange rates and other price risks. Financial instruments affected by market risks, primarily include investments, foreign currency receivables, payables and borrowings.

Interest Rate Risks

The Company borrows funds in Indian Rupees to meet short term funding requirements. Interest on Short term borrowings is subject to floating interest rate and are repriced regularly. The sensitivity analysis detailed below have been determined based on the exposure to variable interest rates on the outstanding amounts due to bankers over a year.

If the interest rates had been 1% higher / lower and all other variables held constant, the Company''s profit for the year ended 31 March, 2024 would have been decreased/increased by '' 4.65 lakhs (P.Y. 2022-23 - '' 24.87 lakhs) (PY 202122 : '' 18.40 lakhs)

Foreign Currency Risks

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from future commercial transactions and recognised financial assets and liabilities denominated in a currency that is not its functional currency. The exposure to foreign currency risk of the Company at the end of the reporting period expressed is as follows:

Price Risks

More than two-third of the Company''s revenues are generated from exports and the raw materials are procured through import and local purchases where local purchases track import parity price. The Company is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities, the Company enters into contract with the customers that has provision to pass on the change in the raw material prices. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

The Company is exposed to price risk due to its investments in debt instruments and mutual funds. The price risk arises due to uncertainties about the future market values of these investments. The Company manages the securities price risk through investments in debt funds and diversification by placing limits on individual and total investments. Reports on Investment Portfolio are reviewed on regular basis and all approvals of investment decisions are done in concurrence with the senior management.

As at 31 March, 2024 the investments in mutual funds/Debt Instruments/ETF/Equity Shares amounts to '' 3,938.43 lakhs (PY 2022-23 - '' 15,290.37 lakhs) (PY 2021-22 : '' 9,361.28 lakhs lakhs). A 1% point increase or decrease in the NAV with all other variables held constant would have lead to aprroximately an additional '' 39.38 lakhs (P.Y. 2022-23 - '' 152.90 lakhs) (PY 2021-22 : '' 93.61 lakhs) on either side in the statement of profit and loss.

ii) Credit Risk

Credit Risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. It arises from credit exposure to customers, financial instruments viz., Investments in Debt Funds and Balances with Banks.

Trade receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company also has an external credit risk insurance cover with ECGC Policy for specific customer(s).. The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31 March, 2024 is 0.21% (PY 2022-23 - 0.15%) (PY 2021-22: 0.16%) of the total trade receivables. The Company uses Expected Credit Loss (ECL) Model to assess the impairment loss or gain. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low.

There are no transactions with single customer which amounts to 10% or more of the Company''s revenue.

The Company maintains exposure in cash and cash equivalents, term deposits with banks, investments in mutual funds , debt funds and loans to other companies. It has a diversified portfolio of investments with various number of counterparties which have secure credit ratings, hence the risk is reduced. Individual risk limits are set for each counterparty based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by its treasury department.

iii) Liquidity Risk

The principal sources of liquidity of the Company are cash and cash equivalents, investment in mutual funds, fund and non-fund based working capital lines from banks and the cash flow that is generated from operations. It believes that current cash and cash equivalents, tied up borrowing lines and cash flow that is generated from operations is sufficient to meet requirements. Accordingly, liquidity risk is perceived to be low.

h) Business Combination under Common Control

FCThe Board of Directors of the Company, in its meeting held on 06 February, 2021, approved The Scheme of Amalgamation under Sections 230 - 232 and other applicable provisions of the Companies Act, 2013 for amalgamation of Veeral Additives Private Limited ‘Amalgamating Company’) with the Company (‘Scheme’).

The aforesaid Scheme was sanctioned by Hon’ble National Company Law Tribunal (NCLT) Mumbai Bench vide order dated 16 January, 2024 . The Scheme has become effective on 07 February, 2024 upon filing of the certified copy of the orders passed by NCLT with the Registrar of Companies. In terms of the Scheme, all the assets, liabilities, reserves and surplus of the Amalgamating Company have been transferred to and vested in the Company. The Appointed Date of the Scheme is 01 April, 2021.

Accounting Treatment

The amalgamation has been accounted in accordance with “Pooling of interest method” as laid down in Appendix C -‘Business combinations of entities under common control’ of Ind AS 103 notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as specified in the scheme, such that

a) All assets and liabilities of the Amalgamating Company are stated at the carrying values as appearing in the standalone financial statements of Amalgamating Company.

b) The identity of the reserves have been preserved and are recorded in the same form and at the carrying amount as appearing in the standalone financial statements of Amalgamating Company

c) The inter-company balances between both the companies have been eliminated.

d) Comparative financial information in the financial statements of the Amalgamated Company has been restated for the accounting impact of merger, as stated above, as if the merger had occurred from the beginning of the comparative period

The difference between the consideration paid and the net assets acquired as adjusted by the retained earnings amount, has been adjusted in the “Capital Reserve” as required by Appendix C to Ind AS 103 irrespective of the fair value of the net assets/liabilities acquired.

Consequent on the Scheme coming into effect and in accordance with the Share Exchange Ratio enshrined in the Scheme, on 26 February, 2024 the Company has allotted its 8,83,582 equity shares of '' 1/- each (fully paid-up) to the equity shareholders of erstwhile Veeral Additives Private Limited as on the ‘Record Date’ fixed for the said purpose.

As required under Ind AS 103, the current accounting period and comparative accounting period presented in the financial statements of the Company and accompanying Notes have been prepared by including the accounting effects of the acquisition of the business, as stated above, as if the purchase had occurred from the beginning of the comparative period in the financial statements, i.e. 01 April, 2022.

Details of assets and liabilities of Erstwhile Veeral Additives Private Limited added to the opening balances of the Company (i.e., 01 April, 2022) and consequential adjustment to Capital Reserve:

k) Disclosures pursuant to the Regulation 34(3) read with para A of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 186 (4) of the Companies Act, 2013.

i) Loans given to employees as per the policy of the Company are not considered.

ii) The loanees did not hold any shares in the share capital of the Company.

l) Events Occuring after the Balance Sheet date

The proposed final dividend for 2023-24 amounting to '' 7,256.59 lakhs (PY 2022-23 : 7,194.74 lakhs) will be recognised as distribution to owners during the financial year 2024-25 on its approval by Shareholders. The proposed final dividend per share amounts to '' 7/- (PY 2022-23 : '' 7/-)

m) Other Statutory Information

(i) The Company does not have any Benami property nor any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

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

period.

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

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign

entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

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

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

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

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

(viii) The Company has not been declared a wilful defaulter by any bank or financial institution or any of the lenders.

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

n) The figures for the corresponding previous year have been regrouped and/or rearranged wherever considered necessary.

For M.M.Nissim & Co LLP For and on behalf of Board of Directors

Chartered Accountants

Firm Reg.No. 1107122W/W100672 Vinati Saraf Mutreja Vinod Saraf

Managing Director & CEO Chairman

DIN: 00079184 DIN: 00076708

N.Kashinath

Partner

Mem.No.036490 Nand Kishor Goyal Milind Wagh

Chief Financial Officer Company Secretary

Mumbai, Dated 17 May, 2024 Mumbai, Dated 17 May, 2024

---

Mar 31, 2023

A. Capital Management

For the purpose of Company''s Capital Management, capital includes Issued Equity Capital, Securities Premium, and all other Equity Reserves attributable to the Equity Holders of the Company. The primary objective of the Company''s Capital Management is to maximise the Share Holder Value.

As at 31 March 2023, the Company has only one class of equity shares and has no long term debt. Consequent to such capital structure, there are no externally imposed capital requirements. The Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

B. Financial Risk Management

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the operations of the Company. The principal financial assets include trade and other receivables, investments in mutual funds/equity shares & debt instruments and cash and short term deposits.

The Company has assessed market risk, credit risk and liquidity risk to its financial liabilities.

i) Market Risk

Market Risk is the risk of loss of future earnings, fair values or cash flows that may result from a change in the price of a financial instrument, as a result of interest rates, foreign exchange rates and other price risks. Financial instruments affected by market risks, primarily include loans and borrowings, investments and foreign currency receivables, payables and borrowings.

Interest Rate Risks

The Company borrows funds in Indian Rupees to meet short term funding requirements. Interest on Short term borrowings is subject to floating interest rate and are repriced regularly. The sensitivity analysis detailed below have been determined based on the exposure to variable interest rates on the outstanding amounts due to bankers over a year.

If the interest rates had been 1% higher / lower and all other variables held constant, the company''s profit for the year ended 31 March 2023 would have been decreased/increased by H 0.20 Lakhs. (PY 2021-22 : H 18.40 Lakhs)

The company is mainly exposed to changes in US Dollar. The sensitivity to a 1% increase or decrease in US Dollar against INR with all other variables held constant will be H 158.26 Lakhs (Previous Year - H 234.05 Lakhs)

The Sensitivity analysis is prepared on the net unhedged exposure of the company at the reporting date.

Derivatives - Forward Contracts

The Company enters into foreign exchange forward contracts with the intention to minimise the foreign exchange risk of firm commitments. The derivative that is either not designated as hedge or is so designated but is ineffective is categorised as a financial asset or liability at fair vale through Profit or Loss.

Price Risks

More than two-third of the Company''s revenues are generated from exports and the raw materials are procured through import and local purchases where local purchases track import parity price. The Company is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities, the Company enters into contract with the customers that has provision to pass on the change in the raw material prices and also the volatility in the exchange rate. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

The Company is exposed to price risk due to its investments in debt instruments and mutual funds. The price risk arises due to uncertainties about the future market values of these investments. The company manages the securities price risk through investments in debt funds and diversification by placing limits on individual and total investments. Reports on Investment Portfolio are reviewed on regular basis and all approvals of investment decisions are done in concurrence with the senior management.

As at 31st March 2023 the investments in mutual funds/Debt Instruments/ETF/Equity Shares amounts to H 15,290.37 Lakhs (PY 2021-22 : H 9,361.28 Lakhs Lakhs). A 1% point increase or decrease in the NAV with all other variables held constant would have lead to aprroximately an additional H 152.90 Lakhs (PY 2021-22 : H 93.61 Lakhs) on either side in the statement of profit and loss.

ii) Credit Risk

Credit Risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. It arises from credit exposure to customers, financial instruments viz., Investments in Debt Funds and Balances with Banks.

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company also has an external credit risk insurance cover with ECGC Policy for specific customer(s).. The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31 March 2023 is 0.04% (PY 202122: 0.16%) of the total trade receivables. The company uses Expected Credit Loss (ECL) Model to assess the impairment loss or gain. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low.

The Company maintains exposure in cash and cash equivalents, term deposits with banks, investments in mutual funds , debt funds and loans to other companies. It has a diversified portfolio of investments with various number of counterparties which have secure credit ratings, hence the risk is reduced. Individual risk limits are set for each counterparty based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by its treasury department.

iii) Liquidity Risk

The principal sources of liquidity of the Company are cash and cash equivalents, investment in mutual funds, fund and nonfund based working capital lines from banks and the cash flow that is generated from operations. It believes that current cash and cash equivalents, tied up borrowing lines and cash flow that is generated from operations is sufficient to meet requirements. Accordingly, liquidity risk is perceived to be low.

The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed undiscounted cash flows as at the Standalone Balance Sheet date.

h) Commitment

(i) Estimated amount of contracts remaining to be executed on Capital Account, net of advances and not provided for H 2038.25 Lakhs (Previous Year H 6682.40 Lakhs)

(ii) Other Commitments

a Bank Guarantees - H 2941.81 Lakhs (Previous Year - H 1921.84 Lakhs). b Letters of Credit issued by the Banks - H 1500.24 Lakhs (Previous Year - H 762.72 Lakhs).

i) Contingent Liabilities not provided for:

(a) Disputed Excise/Customs Duty/Service tax demands pending before the Appellate Authorities/High Court - H 49.32

Lakhs (Previous Year H 49.32 Lakhs) against which payment of H 1.88 Lakhs (Previous Year H 1.88 Lakhs) has been made.

(b) Disputed Income Tax Demands - H 10.59 Lakhs ((Previous Year H 0.86 Lakhs).

(c) Electricity Duty contested on co-power generation - H 1,713.62 Lakhs (Previous Year. H 1,294.79 Lakhs)

k) The Company has subscribed to additional 2,39,16,400 (P Y. 42,60,000) fully paid up equity shares of the face value of H 10/- each at par by way of subscription towards the right issue of Veeral Organics Pvt. Ltd., a wholly owned subsidiary of the company

l) i) Regarding the proposed scheme of amalgamation of Veeral Additives Private Limited with the Company, all necessary

approvals has been obtained except the final approval of the Hon''ble NCLT, Mumbai, which is pending for hearing.

ii) This is to facilitate forward integration to the existing product lines of the company. To expedite the completion of the project in time, and to avoid delays in the execution due to ongoing pandemic, the company has advanced loans of H 7619.50 Lakhs (PY. H 12,048 Lakhs) Lakhs to the proposed amalgamating company with a reference made in the scheme that Veeral Additives Private Limited will conduct all activites as trustees for the Company.

m) Events Occuring after the Balance Sheet date

The proposed final dividend for FY 2022-23 amounting to H 7,194.74 Lakhs (PY 2021-22 : 6,680.83 Lakhs) will be recognised as distribution to owners during the financial year 2023-24 on its approval by Shareholders. The proposed final dividend per share amounts to H 7/- (PY 2021-22 : H 6.50/-)

n) The company did not have any material transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act,1956 during the financial year

o) The figures for the corresponding previous year have been regrouped and/or rearranged wherever considered necessary

---

Mar 31, 2022

A. Capital Management

For the purpose of Company''s Capital Management, capital includes Issued Equity Capital, Securities Premium, and all other Equity Reserves attributable to the Equity Holders of the Company. The primary objective of the Company''s Capital Management is to maximise the Share Holder Value.

As at 31 March 2022, the Company has only one class of equity shares and has no long term debt. Consequent to such capital structure, there are no externally imposed capital requirements. The Company allocates its capital for distribution as dividend or reinvestment into business based on its long term financial plans.

B. Financial Risk Management

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the operations of the Company. The principal financial assets include trade and other receivables, investments in mutual funds/equity shares & debt instruments and cash and short term deposits.

i) Market Risk

Market Risk is the risk of loss of future earnings, fair values or cash flows that may result from a change in the price of a financial instrument, as a result of interest rates, foreign exchange rates and other price risks. Financial instruments affected by market risks, primarily include loans and borrowings, investments and foreign currency receivables, payables and borrowings.

Interest Rate Risks

The Company borrows funds in Indian Rupees to meet short term funding requirements. Interest on Short term borrowings is subject to floating interest rate and are repriced regularly. The sensitivity analysis detailed below have been determined based on the exposure to variable interest rates on the outstanding amounts due to bankers over a year.

If the interest rates had been 1% higher / lower and all other variables held constant, the company''s profit for the year ended 31 March 2022 would have been decreased/increased by H 18.40 Lacs. (PY 2020-21 : H 2.02 Lacs)

Foreign Currency Risks

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from future commercial transactions and recognised financial assets and liabilities denominated in a currency that is not its functional currency. The exposure to foreign currency risk of the Company at the end of the reporting period expressed is as follows:

The company is mainly exposed to changes in US Dollar. The sensitivity to a 1% increase or decrease in US Dollar against INR with all other variables held constant will be H 234.05 Lacs (Previous Year - H 1 57.59 Lacs)

The Sensitivity analysis is prepared on the net unhedged exposure of the company at the reporting date.

Derivatives - Forward Contracts

The Company enters into foreign exchange forward contracts with the intention to minimise the foreign exchange risk of firm commitments. The derivative that is either not designated as hedge or is so designated but is ineffective is categorised as a financial asset or liability at fair vale through Profit or Loss.

Price Risks

More than two-third of the Company''s revenues are generated from exports and the raw materials are procured through import and local purchases where local purchases track import parity price. The Company is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities, the Company enters into contract with the customers that has provision to pass on the change in the raw material prices and also the volatility in the exchange rate. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

The Company is exposed to price risk due to its investments in debt instruments and mutual funds. The price risk arises due to uncertainties about the future market values of these investments. The company manages the securities price risk through investments in debt funds and diversification by placing limits on individual and total investments. Reports on Investment Portfolio are reviewed on regular basis and all approvals of investment decisions are done in concurrence with the senior management.

As at 31at March 2022 the investments in mutual funds/Debt Instruments/ETF/Equity Shares amounts to H 9,361.28 Lacs (PY 2020-21 : H H 28,866.43 Lacs Lacs). A 1% point increase or decrease in the NAV with all other variables held constant would have lead to aprroximatly an additional H 93.61 Lacs (PY 2020-21 : H 288.66 Lacs) on either side in the statement of profit and loss.

ii) Credit Risk

Credit Risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. It arises from credit exposure to customers, financial instruments viz., Investments in Debt Funds and Balances with Banks.

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company also has an external credit risk insurance cover with ECGC Policy. The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31 March 2022 is 0.16% (PY 2020-21: 0.45%) of the total trade receivables. The company uses Expected Credit Loss (ECL) Model to assess the impairment loss or gain. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low.

"The Company maintains exposure in cash and cash equivalents, term deposits with banks, investments in mutual funds , debt funds and loans to other companies. It has a diversified portfolio of investments with various number of counterparties which have secure credit ratings, hence the risk is reduced. Individual risk limits are set for each counterparty based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by its treasury department.

iii) Liquidity Risk

The principal sources of liquidity of the Company are cash and cash equivalents, investment in mutual funds, fund and non-fund based working capital lines from banks and the cash flow that is generated from operations. It believes that current cash and cash equivalents, tied up borrowing lines and cash flow that is generated from operations is sufficient to meet requirements. Accordingly, liquidity risk is perceived to be low.

The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed undiscounted cash flows as at the Standalone Balance Sheet date.

Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the year ended 31 March 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2021: H Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

h) Commitment

(i) Estimated amount of contracts remaining to be executed on Capital Account, net of advances and not provided for H 6682.40 Lacs (Previous Year H 8440.95 Lacs).

(ii) Other Commitments

a Bank Guarantees - H 1921.84 Lacs (Previous Year - H 860.34 Lacs). b Letters of Credit issued by the Banks - H 762.72 Lacs (Previous Year - H 4458.70 Lacs).

i) Contingent Liabilities not provided for:

(a) Disputed Excise/Customs Duty/Service tax demands pending before the Appellate Authorities/High Court - H 49.32 Lacs (Previous Year H 49.32 Lacs) against which payment of H 1.88 lacs (Previous Year H 1.88 lacs) has been made.

(b) Disputed Income Tax Demands - H0.86 Lacs ((Previous Year H 3.48 Lacs).

(c) Disputed demand by The Tahasildar, Mahad for Royalty and Penalty on Sand/Metal of H23.25 Lacs (Previous Year H23.25 Lacs). The Company had filed the Appeal to The Additional Commissioner,Kokan Division against demand of H2.02 Lacs and appeal for Balance amount of H21.23 Lacs to Minister of Revenue. Companyis hopeful for the demand likely to be waived off against which payment of H 6.99 Lacs (Previous Year - H 6.99 Lacs) has been made.

(d) Delayed Payment Charges (DPC) of Water bill demanded by MIDC, Mahad for Plot No. B-5/6 H14.39 Lacs (Previous Year H14.39 Lacs). The Company requested MIDC to waive the DPC and hopeful to be waived off.

i) Loans given to employees as per the policy of the Company are not considered.

ii) The loanees did not hold any shares in the share capital of the Company.

k) Income tax adjustments for earlier years represent accrued tax benefits based on judicial pronouncement (net off H 562.72 Lacs towards additional tax liability) amounting to H 1092.37 (P. Y. H 1726.89 Lacs for accrued tax benefits) for year ended on March 2022.

l) The Company has subscribed to additional 42,60,000 fully paid up equity shares of the face value of H10/- each at par by way of subscription towards the right issue of Veeral Organics Pvt. Ltd., a wholly owned subsidiary of the company.

m) i) The Board of Directors of the Company have approved a scheme of amalgamation of Veeral Additives Private Limited into

Vinati Organics Limited in their meeting held on Februrary 2, 2021. The scheme provides April 1, 2021 as appointed date. Pending approval of the Scheme, no effect has been given to the Scheme in preparing accounts of the year ended March 31, 2022

ii) This is to facilitate forward integration to the existing product lines of the company. To expedite the completion of the project in time, and to avoid delays in the execution due to ongoing pandemic, the company has advanced loans of H 12,048 (P.Y. H 13186.40 Lacs) Lacs to the proposed amalgamating company with a reference made in the scheme that Veeral Additives Private Limited will conduct all activites as trustees for the Company. Approval of the shareholders is sought in the ensuing general meeting"

n) Events Occuring after the Balance Sheet date

The proposed final dividend for FY 2021-22 amounting to H 6,680.83 Lacs (PY 2020-21 : 6,166.92 Lacs) will be recognised as distribution to owners during the financial year 2021-22 on its approval by Shareholders. The proposed final dividend per share amounts to H 6.50/- (PY 2020-21 : H 6/-)

o) The company did not have any material transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act,1956 during the financial year.

p) Previous year''s figures have been re-grouped/re-classifed to confirm to the requirements of the amended schedule III to the Companies Act,2013 effective 01st, April 2021.

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Mar 31, 2019

A General Information

The Company was established in 1989 and is engaged in manufacturing of speciality chemicals. The manufacturing facilities are located at Mahad and Lote Parashuram, Maharashtra. The company is listed on Bombay Stock Exchange and National Stock Exchange. The registered office is located at B-12 & B-13/1, MIDC indl. Area, Mahad - 402 309, Dist. Raigad, Maharashtra.

B Basis of preparation of Financial Statements

The principal accounting policies applied in the preparation of these financial statements are set out in Para C below. These policies have been consistently applied to all the years presented:

i Statement of Compliance

These Separate financial statements (also known as Standalone Financial Statements) have been prepared in accordance with IND AS as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) rules, 2015 and subsequent amendments thereto.

ii Basis of preparation and presentation

The financial statements have been prepared on historical cost basis considering the applicable provisions of Companies Act 2013, except for the following material item that has been measured at fair value as required by relevant Ind AS. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services

A) Certain financial assets/liabilities measured at fair value and

B) Any other item as specifically stated in accounting policy.

The Financial Statement are presented in Indian Rupee (‘INR’) and all values are rounded to the Rupee in Lacs, unless otherwise stated.

Whenever the company changes the presentation or classification of items in its financial statements materially, the company reclassifies comparative amounts, unless impracticable. No such material reclassification has been made during the year.

The financial statements of the Company for the year ended 31st March, 2019 were authorised for issue in accordance with a resolution of the board of directors on 11th May, 2019.

iii Major Sources of Estimation Uncertainty

In the application of accounting policy which are described in note (C) below, the management is required to make judgment, estimates and assumptions about the carrying amount of assets and liabilities, income and expenses, contingent liabilities and the accompanying disclosures that are not readily apparent from other sources.The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant and are prudent and reasonable. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

The few critical estimations and judgments made in applying accounting policies are:

Property, Plant and Equipment:

Useful Life of Property plant and Equipment and intangible Assets are as specified in Schedule II to the Companies Act, 2013 and on certain intangible assets based on technical advice which considered the nature of the asset, the usage of the asset and anticipated technological changes. The company reviews the useful Life of Property, plant and Equipment at the end of each reporting period. This reassessment may result in change in depreciation charge in future periods.

Impairment of Non-financial Assets:

For calculating the recoverable amount of non-financial assets, the company is required to estimate the value-in-use of the asset or the Cash Generating Unit and the fair value Less costs to disposal. For calculating value in use the company is required to estimate the cash flows to be generated from using the asset. The fair value of an assets is estimated using a valuation technique where observable prices are not available. Further, the discount rate used for value in use calculations includes an estimate of risk assessment specific to the asset.

The company impairs financial assets other than those measured at fair value through profit or Loss or designated at fair value through other comprehensive income on expected credit Losses.The estimation of expected credit Loss includes the estimation of probability of default (PD), Loss given default (LGD) and the exposure at default (EAD). Estimation of probability of default apart from involving trend analysis of past delinquency rates include an estimation on forward-Looking information relating to not only the counterparty but also relating to the industry and the economy as a whole. The probability of default is estimated for the entire Life of the contract by estimating the cash flows that are likely to be received in default scenario. The Lifetime PD is reduced to 12 month PD based on an assessment of past history of default cases in 12 months. Further, the Loss given default is calculated based on an estimate of the value of the security recoverable as on the reporting date. The exposure at default is the amount outstanding at the balance sheet date.

Defined Benefit Plans:

The cost of the defined benefit plan and other postemployment benefits and the present value of such obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. 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

Fair Value Measurement of Financial Instruments:

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgments include considerations of inputs such as Liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

ii. The disposal/adjustment includes an amount of RS.3173.38 Lacs, representing reimbursement towards capital contribution for specific items of plant And equipment incurred by the Company during the earlier and current financial year. Consequently, the Company has written back a sum of RS.208.44 Lacs representing depreciation for the year ending 31st March, 2017 of RS.157.25 Lacs and for the year ending 31st March, 2016 of RS.51.19 Lacs.

iii. During the year, the company has capitalised the following expenses of revenue nature to the cost of property, plant & Equipment/ capital Work-In-Progress;

The management determines that the segment information reported is sufficient to meet the disclosure objective with respect to disaggregation of revenue under Ind AS 115 Revenue from contract with Customers. Hence, no seperate disclosures of disaggregated revenues are reported. (Refer Note 28(c))

Note 1.

A. Capital Management

For the purpose of Company’s capital Management, capital includes Issued Equity capital, Securities Premium, and all other Equity Reserves attributable to the Equity Holders of the Company, The primary objective of the Company’s capital Management is to maximise the Share Holder value.

As at 31st March, 2019, the Company has only one class of equity shares and has no Long term debt. Consequent to such capital structure, there are no externally imposed capital requirements. The Company allocates its capital for distribution as dividend or re-investment into business based on its Long term financial plans.

B. Financial Risk Management

The Company’s principal financial liabilities comprise Loans and borrowings, trade and other payables. The main purpose of these

Financial liabilities is to finance the operations of the Company, The principal financial assets include trade and other receivables, investments in mutual funds and cash and short term deposits.

The Company has assessed market risk, credit risk and Liquidity risk to its financial liabilities.

I) Market Risk

Market Risk is the risk of Loss of future earnings, fair values or cash flows that may result from a change in the price of a financial instrument, as a result of interest rates, foreign exchange rates and other price risks. Financial instruments affected by market risks, primarily include Loans And borrowings, investments and foreign currency receivables, payables and borrowings.

Interest Rate Risks

The Company borrows funds in Indian Rupees to meet short term funding requirements. Interest on Short term borrowings is subject to floating interest rate and are repriced regularly, The sensitivity analysis detailed below have been determined based on the exposure to variable interest rates on the average outstanding amounts due to bankers over a year.

If the interest rates had been 1% higher / Lower and all other variables held constant, the company’s profit for the year ended 31st March, 2019 would have been decreased/increased by RS.3.68 Lacs.

Foreign Currency Risks

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates.Foreign currency risks from financial instruments at the end of the reporting period expressed in INR :

The company is mainly exposed to changes in US dollar, The sensitivity to a 0.25% to 1% increase or decrease in US dollar against INR with all other variables held constant will be RS.153.75 Lacs (Previous Year - 102.26 Lacs)

The Sensitivity analysis is prepared on the net unhedged exposure of the company at the reporting date.

Derivatives - Forward Contracts

The Company enters into foreign exchange forward contracts with the intention to minimise the foreign exchange risk of firm commitments. The derivative that is either not designated as hedge or is so designated but is ineffective is categorised as a financial asset or liability at fair vale through Profit or Loss.

Price Risks

More than two-third of the Company’s revenues are generated from exports and the raw materials are procured through import and local purchases where local purchases track import parity price. The Company is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities, the Company enters into contract with the customers that has provision to pass on the change in the raw material prices and also the volatility in the exchange rate. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

The Company’s investments in Unquoted Securities are susceptible to market price risk arising from uncertainties about future values of investment securities. The company manages the securities price risk through investments in debt funds and diversification by placing Limits on individual and total investments. Reports on Investment portfolio are reviewed on regular basis and all approvals of investment decisions are done in concurrence with the senior management.

As at 31^st March 2019 the investments in mutual funds/Debt Instruments amounts to RS.9647.34 Lacs. A 1% point increase or decrease in the NAV with all other variables held constant would have Lead to aprroximatly an additional RS.96.47 Lacs on either side in the statement of profit and Loss.

ii) Credit Risk

Credit Risk is the risk that a counterparty will default on its contractual obligations resulting in a financial Loss to the Company, It arises from credit exposure to customers, financial instruments viz., Investments in Debt Funds and balances with Banks.

The Company holds cash and cash equivalents with banks which are having highest safety rankings and hence has a Low credit risk.

The Company Limits its exposure to credit risk by generally investing in Liquid securities and only with counterparties that have a good credit rating. The Company does not expect any Losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks. Investments in mutual funds are primarily debt funds, which have high safety ratings and are monitored on a monthly basis and the Company is of the opinion that its investments in mutual funds and debt securities have Low credit risk.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit Limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company also has an external credit risk insurance cover with ECGC Policy, The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31st March 2019 is 0.01% of the total trade receivables. The company uses Expected Credit Loss (ECL) model to assess the impairment Loss or gain.

iii) Liquidity Risk

The Company manages Liquidity risk by maintaining adequate surplus, banking facilities and reserve borrowings facilities by continuously monitoring forecasts and actual cash flows.

The Company has obtained fund and non-fund based working capital Lines from various banks. The Company invests its surplus funds in bank fixed deposit/Debt mutual Funds which carry Low mark to market risks. The Company monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility

ALL payments are made along due dates and requests for early payments are entertained after due approval and availing early payment discounts.

The Company has a system of forecasting rolling one month cash inflow and outflow and all Liquidity requirements are planned.

Exposure to liquidity risk:

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments.

Note 2. Fair Values and Hierarchy

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The Fair value of financial assets included is the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate the fair value.

1. The Fair values of Investments in mutual Funds and Debt Securities are based on NAV at the reporting date.

2. Non current financial assets measured at amortised cost - Discounted cash flow technique : The valuation model considers present value of expected payments discounted using an appropriate discounting rate.

3. The Company enters into Derivative financial instruments with counterparties principally with Banks with investment grade credit ratings. The foreign exchange forward contracts are valued using valuation techniques which employs the use of market observable inputs namely, Marked-to-Market,

b) The Company has taken certain facilities under operating Lease arrangements. The Lease can be terminated at the option of either parties by giving due notice. The rental expenses under operating Leases -Other expenses- in the statement of profit and Loss. The Company does not have any non-cancellable Leasing arrangements. The Lease rentals recognised in the Statement of Profit and Loss (Refer note 24) for the year are RS.3.25 Lacs/- (previous year RS.4 Lacs/-).

(ii) Geographic information

The geographic information analyses the Group’s revenues and non-current assets by the Company’s country of domicile and other countries. In presenting geographic information, segment revenue has been based on the selling Location in relation to sales to customers and segment assets are based on geographical Location of assets.

(iii) There are no transactions with single external customer which amounts to 10% or more of the Company’s revenue.

Note:-

The Company is engaged interalia in the manufacture of chemicals. These in the context of Ind AS 108 - Operating Segment- is considered to constitute one single primary segment.

c) Disclosures under The Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED’):

The details of liabilities to Micro and Small Enterprises, to the extent information available with the Company are given under and have been relied upon by the auditors:

Note: Other information/ disclosures relating to payments made beyond appointed date, interest accrued And paid and cumulative intrest are not applicable, being NIL.

d) As required by section 135 of Companies Act, 2013 and rules therein, a Corporate Social Responsibility committee has been formed by the Company, The Company has spent the following amount during the year towards corporate Social Responsibility (CSR) for activities Listed under Schedule VII of the Companies Act, 2013.

e) Terms and conditions of transactions with related parties;

The transactions with related parties are made on terms equivalent to those that prevail in arm’s Length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March 2019, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st March 2018: hnil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

vii) Amount, Timing and Uncertainty of Future Cash Flows

A. Sensitivity Analysis

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

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

B. Asset Liability Matching Strategies

The scheme is managed on funded basis.

C. Effect of Plan on Entity’s Future Cash Flows - Funding arrangements and Funding Policy

The scheme is managed on funded basis.

a) Commitment

(i) Estimated amount of contracts remaining to be executed on capital Account, net of advances and not provided for -RS.11036.95 Lacs (Previous Year RS.21571.91 Lacs)

I) Contingent Liabilities not provided for:

(i) Bank Guarantees - RS.1181.74 Lacs (Previous Year - RS.1732.63 Lacs)

(ii) Letters of Credit issued by the Banks - RS.1018.75 Lacs (Previous Year - RS.1684.83 Lacs)

(iii) claims not acknowledged as debts:

(a) Disputed Excise/Customs Duty demands pending before the appellate Authorities/High Court - RS.87.61 Lacs (Previous Year RS.87.61 Lacs) against which payment of RS.11.95 Lacs (Previous Year RS.11.95 Lacs) has been made.

(b) Disputed Income Tax Demands - RS.3.48 Lacs ((Previous Year RS.3.48 Lacs)

(c) Disputed demand by The tahasildar, Mahad for royalty and penalty on Sand/metal of RS.23.25 Lacs (Previous Year RS.23.25 Lacs). The Company had filed the appeal to The collector of Raigad, alibag,and hopeful for the demand likely to be waived off against which payment of RS.6.99 Lacs (Previous Year - RS.6.99 Lacs) has been made (d) delayed Payment Charges (DPC) of Water bill demanded by MIDC, Mahad for plot No. B-5/6 RS.14.39 Lacs (Previous Year RS.14.39 Lacs). The Company requested MIDC to waive the DPC and hopeful to be waived off.

D) Events Occuring after the Balance Sheet date

The proposed final dividend for FY 2018-19 amounting to RS.3597.37 Lacs will be recognised as distribution to owners during the financial year 2019-20 on its approval by Shareholders. The proposed final dividend per share amounts to RS.7.

---

Mar 31, 2018

A General Information

The Company was established in 1989 and is engaged in manufacturing of speciality organic intermediates and monomers. The manufacturing facilities are Located at Mahad and Lote Parashuram, Maharashtra. The Company is Listed on Bombay Stock Exchange and National Stock Exchange.

B Basis of preparation of Financial Statements

The principal accounting policies applied in the preparation of these Financial Statements are set out below. These policies have been consistency applied to all the financial years presented, unless otherwise stated. (Refer Note:- D for the details of first-time adoption exemptions availed by the Company).

The Company has adopted all the applicable Indian Accounting Standards (‘Ind AS’) in accordance with Ind AS 101 - First Time Adoption of Indian Accounting Standards. The Company has transited from its previous GAAP as defined in Ind AS 101 with the necessary disclosures relating to reconciliation of Shareholders equity under Previous GAAP and Ind AS and of the net profit as Previous GAAP and Total Comprehensive Income under Ind AS.

i Statement of Compliance

In accordance with the notification dated 16th February, 2015, issued by the Ministry of Corporate Affairs, the Company has adopted Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1st April, 2016.

The Standalone Financial Statements have been prepared in accordance with Ind AS as prescribed under Section 133 of the Companies Act, 2013 (‘the Act’), the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.

The Financial Statements up to year ended 31st March, 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 and other relevant provisions of the Act (‘Previous GAAP’).

The Financial Statements for the year ended 31st March, 2018 are the first Financial Statements of the Company which have been prepared in accordance with Ind AS. Previous period numbers for the year ended 31st March, 2017 in the Financial Statements have been restated to confirm to Ind AS. Accordingly, the date of transition to Ind AS is 1st April, 2016.

ii Basis of preparation and presentation

The Financial Statements have been prepared on historical cost basis considering the applicable provisions of Companies Act 2013 except the following material items that have been measured at fair value as required by relevant Ind AS. Nevertheless, historical cost is generally based at the fair value of the consideration given in exchange for goods and services.

a) Certain financial assets/Liabilities measured at fair value (Refer Note 27 for Fair Value of Financial Assets/Liabilities) and

b) Any other item as specifically stated in accounting policy.

The Financial Statement are presented in Indian Rupee (‘INR’) and all values are rounded to Rupees in Lacs, unless otherwise stated.

Whenever the company changes the presentation or classification of items in its financial statements materially, the company reclassifies comparative amounts, unless impracticable. No such material! reclassification has been made during the year

The financial statements of the Company for the year ended 31st March, 2018 were authorised for issue in accordance with a Resolution of the Board of Directors on 12th May, 2018.

Use of Estimate and judgment

In the application of accounting policy which are described in note (C) below, the management is required to make judgment, estimates and assumptions about the carrying amount of assets and Liabilities, income and expenses, contingent Liabilities and the accompanying disclosures that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant and are prudent and reasonable. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future period.

The few critical estimations and judgments made in applying accounting policies are:

Property, Plant and Equipment:

Useful life of Property Plant and Equipment and Intangible Assets are as specified in Schedule II to the Companies Act, 2013 and on certain intangible assets based on technical advice which considered the nature of the asset, the usage of the asset and anticipated technological changes.

Impairment of Non-financial Assets:

For calculating the recoverable amount of non-financial assets, the Company is required to estimate the value-in-use of the asset or the Cash Generating Unit and the fair value less costs to disposal. For calculating value in use the Company is required to estimate the cash flows to be generated from using the asset. The fair value of an asset is estimated using a valuation technique where observable prices are not available. Further, the discount rate used for value in use calculations includes an estimate of risk assessment specific to the asset.

Impairment of Financial Assets:

The Company impairs financial assets other than those measured at fair value through profit or loss or designated at fair value through other comprehensive income on expected credit losses. The estimation of expected credit loss includes the estimation of probability of default (PD), loss given default (LGD) and the exposure at default (EAD). Estimation of probability of default apart from involving trend analysis of past delinquency rates include an estimation on forward-looking information relating to not only the counterparty but also relating to the industry and the economy as a whole. The probability of default is estimated for the entire life of the contract by estimating the cash flows that are likely to be received in default scenario. The lifetime PD is reduced to 12 month PD based on an assessment of past history of default cases in 12 months. Further, the loss given default is calculated based on an estimate of the value of the security recoverable as on the reporting date. The exposure at default is the amount outstanding at the balance sheet date.

Defined Benefit Plans:

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. 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.

Fair Value Measurement of Financial Instruments:

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

Note 1 (d) Footnotes to the reconciliation of equity as at 1st April, 2016 and 31st March, 2017 and total comprehensive income for the year ended 31st March, 2017

i) FVTPL Financial Assets:

Under previous GAAP, the Company accounted for current investments in unquoted mutual funds units at cost Less provision for other than temporary diminution in the value of investments. Under Ind-AS, the investments are required to be classified and measured subsequently at fair value through profit or Loss. At the date of transition to Ind-AS, difference between the fair value and GAAP carrying amount of RS.62.28 Lacs has been recognised in the retained earnings. The impact of RS.4.69 Lacs as at 31st March, 2017 has been recognised in the statement of profit and Loss.

ii) Other Payables:

Under previous GAAP, proposed dividend including Dividend Distribution Tax are recognised as a Liability in the period to which they relate, irrespective of when they are declared. Under Ind-AS, dividend is recognised as a Liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting).

Accordingly, the Liability of RS.310.50 Lacs for the year ended on 31st March, 2016 recorded for proposed dividend has been derecognised against retained earnings on 1st April, 2016.

iii) Defined Benefit Obligation:

Both under previous GAAP and Ind-AS, the Group recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to statement of profit and loss. Under Ind-AS, re-measurements comprising of actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, the effect of change in asset ceiling (if applicable) and the return on plan assets (excluding net interest) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI). Thus, the employee benefit cost is reduced by RS.145.48 Lacs (Net of Tax of RS.76.99 Lacs) for 2016-17 and re-measurement losses on defined benefit plans has been recognised in the Other Comprehensive Incomes (net of tax)

iv) Other Comprehensive Income:

Under previous GAAP, the Company has not presented Other Comprehensive Income (OCI) separately. Hence, it has reconciled previous GAAP profit to profit as per Ind-AS. Further, Indian GAAP profit is reconciled to total comprehensive income as per Ind-AS.

v) Property Plant And Equipment, Capital Work-in-Progress And Inventory

Under previous GAAP, spare parts of PPE were usually charged to the Statement of Profit And Loss as and when consumed except the spares that could be used in connection with particular items of fixed asset (PPE) and whose use was expected to be irregular. However, as per Ind AS, spares parts procured along with the Plant And Equipment or subsequently which meets the recognition criteria of PPE are to be capitalized and added to the carrying amount of PPE. Hence, spare parts forming part of inventory which meet the recognition criteria of PPE under Ind AS are capitalised as part of PPE as on 1st April, 2016 (transition date) and for the financial year 2016-17. The effect of this change is an increase in PPE and reduction in inventory (i.e. PPE and Current Assets - Inventory).

vi) Other IND AS Adjustments (Non Current Financial Assets / Liabilities and provisions)

Under previous GAAP, the Company accounted for non-current Financial Assets / Liabilities and provisions at undiscounted values. In contrast, the IND AS requires that where the effect of time value of money is material, the amount of Non Current Financial Assets / Liabilities and provisions should be the present value of expenditure / income expected to be required to settle the obligations / received upon maturity. This impact is recognised as an Interest Income or as other borrowing cost.

Note 2

A. Capital Management

For the purpose of Company’s Capital Management, capital includes Issued Equity Capital, Securities Premium, and all other Equity Reserves attributable to the Equity Holders of the Company. The primary objective of the Company’s Capital Management is to maximise the Share Holder Value.

As at 31st March, 2018, the Company has only one class of equity shares and has no long term debt. Consequent to such capital structure, there are no externally imposed capital requirements. The Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

B. Financial Risk Management

The Company’s principal financial Liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial Liabilities is to finance the operations of the Company. The principal financial assets include trade and other receivables, investments in mutual funds and cash and short term deposits.

The Company has assessed market risk, credit risk and liquidity risk to its financial Liabilities.

i) Market Risk

Market Risk is the risk of loss of future earnings, fair values or cash flows that may result from a change in the price of a financial instrument, as a result of interest rates, foreign exchange rates and other price risks. Financial instruments affected by market risks, primarily include loans And borrowings, investments and foreign currency receivables, payables and borrowings.

Interest Rate Risks

The Company borrows funds in Indian Rupees and Foreign currency, to meet both the long term and short term funding requirements.The Interest rate risk in terms of Foreign currency is managed through financial instruments available to convert floating rate Liability into fixed rate Liability. Interest on Short term borrowings is subject to floating interest rate and are repriced regularly. The sensitivity analysis detailed below have been determined based on the exposure to variable interest rates on the average outstanding amounts due to bankers over a year.

If the interest rates had been 1% higher / lower and all other variables held constant, the company’s profit for the year ended 31st March, 2018 would have been decreased/increased by RS.16.35 Lacs.

Foreign Currency Risks

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company does not enter into forward exchange contracts to hedge its foreign currency exposures. Foreign currency risks from financial instruments at the end of the reporting period expressed in INR :

The Company is mainly exposed to changes in US Dollar. The sensitivity to a 0.25% to 1% increase or decrease in US Dollar against INR with all other variables held constant will be RS.102.26 Lacs (Previous Year - 78.73 Lacs)

The Sensitivity analysis is prepared on the net unhedged exposure of the company at the reporting date.

Price Risks

More than two-third of the Company’s revenues are generated from exports and the raw materials are procured through import and local purchases where local purchases track import parity price. The Company is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities, the Company enters into contract with the customers that has provision to pass on the change in the raw material prices and also the volatility in the exchange rate. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

The Company’s investments in Quoted and Unquoted Securities are susceptible to market price risk arising from uncertainties about future values of investment securities. The company manages the securities price risk through investments in debt funds and diversification by placing limits on individual and total investments. Reports on Investment Portfolio are reviewed on regular basis and all approvals of investment decisions are done in concurrence with the senior management.

As at 31at MarcRs.2018 the investments in mutual funds and equity instruments amounts to RS.13173.86 Lacs. A 1% point increase or decrease in the NAV/quoted prices with all other variables held constant would have lead to aprroximatly an additional RS.131.74 Lacs on either side in the statement of profit and loss.

ii) Credit Risk

Credit Risk is the risk that a counterparty will default on its contractual obligations resulting in a financial Loss to the Company. It arises from credit exposure to customers, financial instruments viz., Investments in Equity Shares, Debt Funds and Balances with Banks.

The Company holds cash and cash equivalents with banks which are having highest safety rankings and hence has a Low credit risk.

The Company Limits its exposure to credit risk by generally investing in Liquid securities and only with counterparties that have a good credit rating. The Company does not expect any Losses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks. Investments in mutual funds are primarily debt funds, which have high safety ratings and are monitored on a monthly basis and the Company is of the opinion that its mutual fund investments have Low credit risk.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit Limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company also has an external credit risk insurance cover with ECGC Policy. The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31 MarcRs.2018 is 0.66% of the total trade receivables. The company uses Expected Credit Loss (ECL) Model to assess the impairment Loss or gain.

iii) Liquidity Risk

The Company manages Liquidity risk by maintaining adequate surplus, banking facilities and reserve borrowings facilities by continuously monitoring forecasts and actual cash flows.

The Company has obtained fund and non-fund based working capital Lines from various banks. The Company invests its surplus funds in bank fixed deposit/Debt Mutual Funds/Equity Investments which carry Low mark to market risks. The Company monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility

ALL payments are made along due dates and requests for early payments are entertained after due approval and availing early payment discounts.

The Company has a system of forecasting rolling one month cash inflow and outflow and all Liquidity requirements are planned. Exposure to liquidity risk:

The following are the remaining contractual maturities of financial Liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments

Note 3 Fair Values and Hierarchy

1. Financial instruments - Fair values

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial Liabilities, including their levels are presented below . It does not include the fair value information for financial assets and financial Liabilities not measured at fair value if their carrying amount is a reasonable approximation of fair value

B. Measurement of fair values

Valuation techniques and significant unobservable inputs

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current Liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The Fair Value of financial assets included is the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate the fair value.

1. The Fair values of Mutual Funds and Quoted Equities are based on NAV / Quoted Price at the reporting date.

2. Non current financial assets / Liabilities measured at amortised cost - Discounted cash flow technique : The valuation model considers present value of expected payments discounted using an appropriate discounting rate.

Note 4 Additional/Explanatory Information

a) Earnings Per Share

b) The Company has taken certain facilities under operating Lease arrangements. The Lease can be terminated at the option of either parties by giving due notice. The rental expenses under operating Leases “Other expenses” in the statement of profit and Loss. The Company does not have any non-cancellable Leasing arrangements. The Lease rentals recognised in the Statement of Profit and Loss (Refer note 24) for the year are Rs. 4 Lacs/- (previous year Rs. 2.61 Lacs/-).

c) Disclosures under Ind AS 108 - ““Operating Segment” - (Refer Note below)

(i) Entity wide disclosure required by Ind AS 108 are as detailed below:

(ii) Geographic information

The geographic information analyses the Group’s revenues and non-current assets by the Company’s country of domicile and other countries. In presenting geographic information, segment revenue has been based on the selling Location in relation to sales to customers and segment assets are based on geographical Location of assets.

(iii) There are no transactions with single external customer which amounts to 10% or more of the Company’s revenue. Note:-

The Company is engaged interlaid in the manufacture of Chemical. These in the context of Ind AS 108 “ Operating Segment” is considered to constitute one single primary segment.

d) Disclosures under The Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED’):

The details of Liabilities to Micro and Small Enterprises, to the extent information available with the Company are given under and have been relied upon by the auditors:

e) As required by section 135 of Companies Act, 2013 and Rules therein, a Corporate social responsibility committee has been formed by the Company. The Company has spent the following amount during the year towards corporate social responsibility (CSR) for activities listed under schedule VII of the Companies Act, 2013.

f) Related party disclosures (As per Ind AS 24 - Related Party Disclosures):

(a) Names of related parties and nature of relationship where control exists are as under:

(b) Names of other related parties and nature of relationship:

d) Terms and conditions of transactions with related parties;

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 MarcRs.2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 MarcRs.2017: H Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

g) Disclosures as per IND AS - 19 - Employee Benefits

During the year, the company has recognised the following amounts in the Statement of Profit and Loss:

ii) Defined benefit obligation:

The valuation results for the defined benefit gratuity plan as at 31-3-2018 are produced in the tables below:

- In the absence of detailed information regarding Plan assets which is funded with Insurance Company, the composition of each major category of Plan assets, the percentage or amount for each category to the fair value of Plan assets has not been disclosed.

vi) Actuarial Assumptions

a. Financial Assumptions

The principal financial assumptions used in the valuation are shown in the table below:

vii) Amount, Timing and Uncertainty of Future Cash Flows

a. Sensitivity Analysis

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

b. Asset Liability Matching Strategies

The scheme is managed on funded basis.

c Effect of Plan on Entity’s Future Cash Flows

- Funding arrangements and Funding Policy The scheme is managed on funded basis.

h) Commitment

(i) Estimated amount of contracts remaining to be executed on Capital Account, net of advances and not provided for -RS.21571.91 Lacs (Previous Year RS.2942.31 Lacs)

i) Contingent Liabilities not provided for:

(i) Bank Guarantees - RS.1732.63 Lacs (Previous Year - RS.1102.34 Lacs)

(ii) Letters of Credit issued by the Banks - RS.1684.83 Lacs (Previous Year - RS.834.26 Lacs)

(iii) Claims not acknowledged as debts:

(a) Disputed Excise/Customs Duty demands pending before the Appellate Authorities/High Court - RS.87.61 Lacs (Previous Year RS.124.18 Lacs)

(b) Disputed Income Tax Demands - RS.3.48 Lacs ((Previous Year RS.10.47 Lacs)

(c) Disputed demand by The Tahasildar, Mahad for Royalty and Penalty on Sand/Metal of RS.23.25 Lacs (Previous Year RS.23.25 Lacs). The Company had filed the Appeal to The Collector of Raigad, ALibag,and hopeful for the demand Likely to be waived off.

(d) Delayed Payment Charges (DPC) of Water bill demanded by MIDC, Mahad for PLot No. B-5/6 RS.14.39 Lacs (Previous Year RS.14.39 Lacs). The Company requested MIDC to waive the DPC and hopeful to be waived off,

j) Events Occuring after the Balance Sheet date

The proposed final dividend for FY 2017-18 amounting to RS.2312.60 Lacs will be recognised as distribution to owners during the financial year 2018-19 on its approval by Shareholders. The proposed final dividend per share amounts to RS.4.50

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Mar 31, 2017

1. For the year ended March 31, 2017 , Divided per Share is proposed by the Board of Directors as Rs.0.50 (Previous year, Rs.4.00). Pursuant to Companies Accounting Standard Amendment Rules 2016 mortified by Ministry of Corporate Affairs (G.S.R. 364(E) dated 30.03.2016) amending Accounting Stranded 4, dividends proposed/declared after the balance sheet date has not been recognized as Provision/Liability.

2. Nature of Security for Secured Loan from:

IFC (ECB):

Term loan from International Finance Corporation (IFC) is secured by first Pari Passu charge on all Fixed assets of the Company - immovable and movable (present and future) excluding the office premises located at Parinee Crescenzo, Bandra Kurla Complex) and second pari passu charge on all the Current Assets and unconditional and personal irrevoable guarantee of Managing Director, Mr. Vinod Saraf. Loan has been fully paid during the year.

SBI (ECB):

Term Loan from State of India (SBI) is secured by first Pari Passu charge on all Fixed assets of the Company -immovable and movable (present and future) (excluding the office premises located at Parinee Crescenzo, Bandra Kurla Complex) and second pari passu charge on all the Current Assets and unconditional and personal irrevocable guarantee of Managing Director, Mr. Vinod Saraf. Loan has been fully paid during the year.

3. Rate of Interest:

4. IFC (ECB): ECB carries interest of 240 bps six months libor.

5. SBI (ECB): ECB carries interest of 280 bps six months libor.

6. Terms of Repayment:

7. IFC ECB: Repayable in 10 half yearly equal installments from December 2012 to June 2017.

8. SBI ECB: Repayable in 9 half yearly equal installments from September 2013 to September 2017.

9. LEASES (AS-19)

Operating Lease: Company as Lessee

The Company has entered into operating lease on Tankers and staff residences which normally have an life of 12 months and renewable every year at the option of the lessor and/or the lesseee. There is no contingent rent. The lease rental charged to statement of profit and loss during the year is Rs. 58.05 lacs (Previous Year - Rs.53.24 lacs).

10. IMPAIRMENT OF ASSETS (AS-28)

Based on exercise of impairment of assets undertaken by the management in due cognizance of paragraphs 5 to 13 of

Accounting standard -28, the Company has concluded that no impairment loss is required to be booked.

11. CONTINGENT LIABILITIES

Contingent Liabilities not provided for in respect of:

12. Counter Guarantees given by the Company in respect of guarantees issued / Letter of Credit established by banks on behalf of the company Rs. 1936.60 Lacs (Previous Year Rs.3653.71 Lacs).

13. Disputed Excise duty demands of Rs. 124.18 (Previous Year Rs.113.49 Lacs) pertaining to various financial years for which company has gone in the appeal. Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

14. Disputed Income tax demands of Rs.10.47 Lacs (Previous Year Rs.51.43 Lacs) pertaining to various assessment years against which nothing paid. Based on judicial decisions and interpretations of other relevant provisions of the statute, the Company is hopeful of the demand likely to be either deleted or substantially reduced and accordingly no provision has been made.

15. Disputed demand by The Tahasildar, Mahad for Royalty and Penalty on Sand/Metal of Rs.23.25 Lacs (Previous Year Rs.21.23 Lacs). The Company had filed the Appeal to The Collector of Raigad, Alibag,and hopeful for the demand likely to be waived off, Hence no provision has been made.

16. Delayed Payment Charges (DPC) of Water bill demanded by MIDC, Mahad for Plot No. B-5/6 Rs.14.39 Lacs (Previous Year NIL). The Company requested MIDC to waive the DPC and hopeful to be waived off, Hence no provision has been made.

17. capitalization of expenditure

During the year, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/capital work-in-progress (CWIP), Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

18. In the opinion of the Board of Directors, the Current Assets, Loans and Advances have value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the foregoing Balance Sheet and adequate provision for all known liabilities on the Company has been made.

19. PREVIOUS YEAR FIGURES

Figures of previous year have been reworked/regrouped/reclassified wherever necessary.

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Mar 31, 2016

1 SEGMENT INFORMATION- (AS-17)

The Company is engaged in manufacturing of Chemicals, which as per AS-17 is considered as the only reportable business segment.

2 LEASES (AS-19)

Operating Lease: Company as Lessee

The company has entered into operating lease on Tankers and staff residences which normally have an life of 12 months and renewable every year at the option of the lessor and/or the lesseee. There is no contingent rent. The lease rental charged to statement of Profit and loss during the year is Rs.53.24 lacs (Previous Year - Rs.49.86 lacs).

3 IMPAIRMENT OF ASSETS (AS-28)

Based on exercise of impairment of assets undertaken by the management in due cognizance of paragraphs 5 to 13 of Accounting standard -28, the Company has concluded that no impairment loss is required to be booked.

4 CONTINGENT LIABILITIES

Contingent Liabilities not provided for in respect of:

(a) Counter Guarantees given by the Company in respect of guarantees issued / Letter of Credit established by banks on behalf of the company Rs. 3653.71 Lacs (Previous Year Rs.3307.13 Lacs).

(b) Disputed Excise duty demands of Rs. 113.49 (Previous Year Rs.198.18 Lacs) pertaining to various financial years for which company has gone in the appeal. Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

(c) Disputed Income tax demands of Rs.51.43 Lacs (Previous Year Rs.51.43 Lacs) pertaining to various assessment years against which nothing paid. Based on judicial decisions and interpretations of other relevant provisions of the statute, the Company is hopeful of the demand likely to be either deleted or substantially reduced and accordingly no provision has been made.

(d) Disputed demand by The Tahasildar, Mahad for Royalty and Penalty on Sand/Metal of Rs.21.23 Lacs (Previous Year Rs. NIL). The Company had fled the Appeal to The Collector of Raigad, Alibag, and hopeful for the demand likely to be waived off, hence no provision has been made.

5 CAPITALIZATION OF EXPENDITURE

During the year, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/capital work-in-progress (CWIP), Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

6 In the opinion of the Board of Directors, the Current Assets, Loans and Advances have value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the foregoing Balance Sheet and adequate provision for all known liabilities on the Company has been made.

7 PREVIOUS YEAR FIGURES

Figures of previous year have been reworked/regrouped/reclassified wherever necessary.

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Mar 31, 2013

1 SEGMENT INFORMATION- (AS-17)

The Company is engaged in manufacturing of Chemicals, which as per AS-17 is considered as the only reportable business segment.

2 LEASES (AS-19)

Operating Lease: Company as Lessee

The company has entered into operating lease on Tankers, certain office premises and staff residences which normally have an life of 12 months and renewable every year at the option of the lessor and/or the lessee. There is no contingent rent. The lease rental charged to Statement of Profit & Loss during the year is Rs.60.19 lacs. (Previous year Rs. 17.27 lacs)

3 IMPAIRMENT OF ASSETS- (AS-28)

Based on exercise of impairment of assets undertaken by the management in due cognizance of paragraphs 5 to 13 of AS-28, the Company has concluded that no impairment loss is required to be booked.

4 CONTINGENT LIABILITIES

Contingent Liabilities not provided for in respect of:

(a) Counter Guarantees given by the Company in respect of guarantees issued / Letter of Credit established by banks on behalf of the company Rs. 891.93 Lacs (Previous Year Rs.669.07 Lacs).

(b) Disputed Excise duty demands of Rs. 42.12 (Previous Year Rs.42.12 Lacs) for which company has gone in the appeal and paid Rs. 11.85 lacs. Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

(c) Disputed Income tax demands of Rs.41.18 Lacs pertaining to various assessment years against which a sum of Rs.33.72 Lacs has been paid (Previous Year Rs.37.02 Lacs and paid Rs.10 Lacs) Based on judicial decisions and interpretations of other relevant provisions of the statute, the Company is hopeful of the demand likely to be either deleted or substantially reduced and accordingly no provision has been made.

(d) During the year 2011-2012, Company has issued Foreign Currency Convertible Bond(FCCB) of Rs. 22.02 crores (USD5 Mn) which are Convertible in equity share at Rs. 100 each during any period starting from the Date of subscription i.e. 28th July 2011 and ending 5 years. If the option is not exercised, then interest is payable @ 3.5% compounded semi annually as accumulated arrears on the final redemption date. Contingent liability towards arrears of interest as on 31/03/2013 is Rs. 165.52 lacs (previous year Rs. 53.41 Lacs)

5 DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006

The Company has sought the confirmation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act 2006. Based on the confirmations received from the some of the suppliers:

6 CAPITALIZATION OF EXPENDITURE

During the year, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/capital work-in- progress (CWIP), Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

7 From the previous financial year the company has changed its policy of capitalising exchange gain/loss on foreign currency loan before the same has been put to use. Such gain/losses which were hitherto capitalised to the cost of the fixed assets has been charged to Statement of Profit and Loss in accordance with the requirement of Accounting Standard 11 - '' Effects of changes in foreign exchange rates.

8 In the opinion of the Board of Directors, the Current Assets, Loans and Advances have value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the foregoing Balance Sheet and adequate provision for all known liabilities on the Company has been made.

9 Previous year figures

Figures of previous year have been reworked/regrouped/reclassified wherever necessary.

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Mar 31, 2012

A) Terms/Rights attached to equity shares:

The Company has only one class of equity share having a par value of Rs. 2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend except interim dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

Note 1(a):

(a) Nature of Security for Secured Loan from:

Banks:

(i) Term Loan from Axis Bank are secured by first pari passu charge on all the fixed assets (present and future) of Lote Works, and second pari passu charge on all the fixed assets (present and future) at Mahad Works; Second pari passu charge on entire current assets of the Company (present and future) and also by personal irrevocable guarantee of Managing Director, Mr. Vinod Saraf.

(ii) Term Loan from Barclays Bank is secured by first pari passu charge on all the fixed assets (present and future) of Lote Works. Second pari passu charge on entire Current Assets of the Company (present and future) and also by personal irrevocable guarantee of Managing Director, Mr. Vinod Saraf.

IFC:

Term Loan from International Finance Corporation (IFC) is secured by first pari passu charge on all fixed assets of the Company -immovable and movable (present and future) and second pari passu charge on all the current assets and unconditional and irrevocable personal guarantee of Managing Director, Mr. Vinod Saraf.

(b) Rate of Interest:

(i) Axis Bank

Foreign Currency loan carries interest ranging from six months libor 400 to 800 bps.

(ii) Barclays Bank:

Foreign Currency loan carries interest ranging from six months libor 550 to 600 bps.

(iii) IFC:

ECB: Foreign Currency loan carries interest six months libor 240 bps.

(iv) FCCB: Fixed Coupon Rate of @ 0.55%.per annum and accumulated arrears of interest @ 3.5% compounded half-yearly, if the bonds are redeemed on the redemption date and option of conversion into equity shares is not exercised.

(c) Terms of Repayment:

(i) Axis Bank

Loan of Rs.5.36 Crores - Repayble in 13 quarterly equal installments starting from 31st March, 2010 and ending on 31st March, 2013.

Loan of Rs.28.30 Crores repayable in 18 quarterly equal installments starting from 31st March, 2011 and ending on 30th June, 2015.

(ii) Barclays Bank:

Loan of Rs. 23 crores repayable in 16 quarterly equal installments starting from 1st Ferbuary 2009 and ending on 1st November, 2013.

(iii) ECB:

Loan of USD 11 Million - Repayable in 10 half yearly equal installments starting from 15th December, 2012 and ending on 15th June, 2017.

(iv) FCCB:

Loan of USD 5 Million - Convertible at the option of the lender into equity shares of Rs.100 each during any time starting from the date of subscription i.e. 28th July, 2011 and ending 5 years. If the option is not exercised , then it is to be redeemed on the final redemption date alongwith accumulated arrears of interest on pro-rata basis @ 3.5% per annum compounded semi annually.

Note 2(a):

(a) Nature of Security for Secured Loan from:

Banks:

Hypothecation of inventories, all the present and future book debts and other receivables, first charge on all present and future fixed assets situated at Mahad Works and residential building at Mahad and second charge on all fixed assets situated at Lote Works and personal guarantee of Managing Director, Mr. Vinod Saraf.

(b) Rate of interest:

(i) Working Capital Advances From Banks

Foreign Currency loan carries interest ranging from six months libor 200 bps to 400 bps. Rupee Loan carries interest ranging from 13.25% to 14%.

(ii) Unsecured Loan

Foreign Currency loan carries interest ranging from three to six months libor 400 bps to 450 bps.

1 NOTES DETAILS OF UNHEDGED FOREIGN CURRENCY AMOUNT

Unhedged foreign currency

Disclosure in accordance with announcement dated 2nd December, 2005 issued by the Council of the Institute of Chartered Accountants of India(ICAI) with respect to details of foreign currency balance not hedged:

2 NOTES SEGMENT INFORMATION- (AS-17)

The Company is engaged in manufacturing of Chemicals, which as per AS-17 is considered as the only reportable business segment.

3 NOTES LEASES (AS-19)

Operating Lease: Company as Lessee

The Company has entered into operating lease on certain office premises and staff residences on leave and licence basis which normally have an life of 12 months and renewable every year at the option of the lessor and/or the lessee. There is no contingent rent. The lease rental charged to statement of Profit & Loss during the year is Rs. 17.27 lacs. (Previous year Rs. 15.54 lacs)

4 NOTES IMPAIRMENT OF ASSETS- (AS-28)

Based on exercise of impairment of assets undertaken by the management in due cognizance of paragraphs 5 to 13 of AS-28 issued by ICAI, the Company has concluded that no impairment loss is required to be booked.

5 NOTES contingent liabilities

Contingent Liabilities not provided for in respect of:

(a) Counter Guarantees given by the Company in respect of guarantees issued / Letter of Credit established by banks on behalf of the Company Rs.1,813.00 Lacs (Previous Year Rs.1,743.64 Lacs).

(b) Disputed Excise duty demands of Rs. 42.12 Lacs (Previous Year Rs.67.94 Lacs) for which Company has gone in appeal. The Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

(c) Disputed Income tax demands of Rs.37.02 Lacs pertaining to various assessment years against which a sum of Rs.59.41 Lacs has been paid (Previous Year Rs.160.10 Lacs and paid Rs.67.34 Lacs) Based on judicial decisions and interpretations of other relevant provisions of the statute, the Company is hopeful of the demand likely to be either deleted or substantially reduced and accordingly no provision has been made.

(d) During the year Company has issued Foreign Currency Convertible Bond(FCCB) of Rs.2202 Lacs (USD5 Million) which are convertible in equity share of Rs.100 each during any period starting from the Date of subscription i.e. 28th July, 2011 and ending 5 years. If the option is not exercised, then interest is payable @ 3.5% compounded semi annually as accumulated arrears on the final redemption date.Contingent liability toward arrears of interest as on 31/03/2012 is Rs. 53.41 lacs.

6 NOTES CAPITALIZATION OF EXPENDITURE

During the year, the Company has capitalized the following expenses of revenue nature to the cost of fixed asset/capital work-in- progress (CWIP), Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

7 NOTES

In the opinion of the Board of Directors, the Current Assets, Loans and Advances have value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the foregoing Balance Sheet and adequate provision for all known liabilities on the Company has been made.

8 NOTES

From the current financial year the company has changed its policy of capitalising exchange gain/loss on foreign currency loan before the same has been put to use. Such gain/losses which were hitherto capitalised to the cost of the fixed assets has been charged to Statement of Profit and Loss in accordance with the requirement of Accounting Standard 11 - ' Effects of changes in foreign exchange rates. Accordingly Rs. 206.21 lacs has been charged to Statement of Profit & Loss which otherwise would have been capitalised to cost of fixed assets had the earlier policy were followed. In view of the above the Profit for the period is lower by Rs. 169.97 lacs including effect of deferred tax of Rs. 36.24 lacs.

9 NOTES PREVIOUS YEAR FIGURES

Till the year ended 31st March, 2011, the company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012 the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification. Except accounting for dividend on investments in subsidiaries, the adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.

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Mar 31, 2011

1 Contingent Liabilities not provided for in respect of

a) Counter Guarantees given by the Company in respect of guarantees issued / Letter of Credit established by banks on behalf of the company Rs. 1,743.64 Lacs (Previous Year Rs. 1,204.43 Lacs]

b) Estimated amount of contracts remaining to be executed on Capital Account (Net of Advance] Rs.2655.77 Lacs (Previous Year Rs.956.88 Lacs).

c) Disputed Excise duty demands of Rs.67.94 Lacs (Previous Year Rs.38.78 Lacs) for which company has gone in appeal. The Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

d) Disputed Income tax demands of Rs.160.10 Lacs pertaining to various assessment years against which a sum of Rs.67.34 Lacs has been paid (Previous Year Rs.266.00 Lacs and paid Rs.67.34 Lacs) Based on judicial decisions and interpretations of other relevant provisions of the statute, the Company is hopeful of the demand likely to be either deleted or substantially reduced and accordingly no provision has been made.

3 The Company has sought the confirmation from suppliers regarding their status under the Micro, Smalt and Medium Enterprises Development Act 2006. Based on the confirmations received from the some of the suppliers.

a) No principal amount and the interest due thereon are outstanding at on 31st March 2011 Nil

b) The amount of interest paid by the Company along with the amount of the payment made to : Nil the supplier beyond the appointed day for the year ending 31st March 2011.

c) The amount of interest due and payable for the period of delay in making payment (beyond Nil the appointed day during the year)

d) The amount of interest accrued and remaining unpaid for the year ending 31st March 2011 Nil

e) The amount of further interest remaining due and payable for the earlier years. Nil

4 The balance of Debtors, Creditors are subject to confirmation & reconciliation.

7 Related parties Disclosures (AS-18) (as certified by the management)

a. Information about related parties:

Sr. No. Particulars Name of Related Party,

1 Key Management Personnel i) Mr. Vinod Saraf - Managing Director

ii) Ms. Vinati Saraf Mutreja - Executive Director

iii) Mr. Mohit Mutreja - Director (Finance)

iv) Ms. Viral Saraf Mittal - Director [Corporate Strategy]

2 Relatives of Key Management Personnel i] Mr. Sunil Saraf

ii] Mr. Anandkumar Tibrewala (Resigned as Non- Executive Director on 24th Jan 2011)

3 Enterprises owned or significantly 1) Viral Alkalis Limited influenced by any management 2] Vinati Wax Industries Pvt. Ltd. personnel or their relatives. 3) Shilpa Pharma Pvt. Ltd.

4) Mithali Chemicals Pvt. Ltd.

5) Viral Chemicals Pvt. Ltd.

6) Viral Pharma Pvt. Ltd.

7) Suchir Chemicals Pvt. Ltd.

8) Suchir Investment & Finance Pvt. Ltd.

9) Manan Pharma Pvt. Ltd.

10) Nishit Pharma Chem Pvt. Ltd.

11) Kavita Organics Pvt. Ltd.

12) Pluspoint Securities Pvt. Ltd.

13) llluminati Software Pvt. Ltd.

11 During the year the Company, in accordance with Guidance note No. 22 on Accounting for Credit available in respect of Minimum Alternative Tax under The Income-Tax Act, 1961 issued by the Institute of Chartered Accountants Of India, has recognised MAT credit entitlement to be availed, of Rs. 490.67 Lacs as an asset in respect of Minimum Alternative Tax paid u/s 115JB of the Income-tax Act, 1961 in the earlier years as a matter of prudence, as in the opinion of the directors of the company, there is reasonable certainty and probability that future economic benefits in respect of MAT Credit will flow to the company by paying normal income-tax from next year onwards.

12 Based on exercise of impairment of assets undertaken by the management in due cognizance of paragraphs 5 to 13 of AS-28 issued by ICAI, the Company has concluded that no impairment loss is required to be booked.

13 In the opinion of the Board of Directors, the Current Assets, Loans and Advances have value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the foregoing Balance Sheet and adequate provision for all known liabilities on the Company has been made.

14 Lease rent paid for the containers taken on lease and used exclusively for transport of raw material has been considered as part of purchase cost of raw material.

Figures of the previous year have been reworked/regrouped/reclassified wherever necessary.

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Mar 31, 2010

1 Contingent Liabilities not provided for in respect of:

a) Counter Guarantees given by the Company in respect of guarantees issued / Letter of Credit established by banks on behalf of the company Rs. 1,204.43 Lacs (Previous Year Rs.1,590.96 Lacs)

b) Estimated amount of contracts remaining to be executed on Capital Account (Net of Advance) Rs.956.88 Lacs (Previous Year Rs.385.62 Lacs).

c) Disputed Excise duty demands of Rs.38.78 Lacs (Previous Year Rs.117.70 Lacs)

d) Disputed Income tax demands of Rs.266.00 Lacs pertaining to various assessment years against which a sum of Rs.67.34 Lacs has been paid (Previous Year Rs.336.43 Lacs and paid Rs.77.34 Lacs).

e) Disputed Custom duty (Anti Dumping Duty) demands of Rs.Nil (Previous Year Rs.1.76 Lacs)

2 During the year the Face Value of One Equity Share of Rs.10/- each was split and sub-divided into 5 Equity Share of Rs.2/- each consequently the number of paid up Equity Shares has increased from 9874500 to 49372500 shares.

3 Related parties Disclosures (AS-18) (as certified by the management) a. Information about related parties;

Sr. No. Particulars Name of Related Party

1 Key Management Personnel

[i) Mr. Vinod Saraf - Managing Director

ii) Mrs. Vinati Saraf Mutreja - Executive Director iii) Ms. Viral Saraf - Director (Corporate Strategy)

2 Relatives of Key Management Personnel

i) Mr. Sunil Saraf

ii) Mr. Anandkumar Tibrewala iii) Mr. Mohit Mutreja

3 Enterprises owned or significantly 1) Viral Alkalis Limited influenced by any management 2) Vinati Wax Industries Pvt. Ltd. personnel or their relatives. 3) Shilpa Pharma Pvt. Ltd. 4) Mithali Chemicals Pvt. Ltd. 5) Viral Chemicals Pvt. Ltd. 6) Viral Pharma Pvt. Ltd. 7) Suchir Chemicals Pvt. Ltd. 8) Suchir Investment & Finance Pvt. Ltd. 9) Manan Pharma Pvt. Ltd.

10) Nishit Pharma Chem Pvt. Ltd. 11) Kavita Organics Pvt. Ltd. 12) Pluspoint Securities Pvt. Ltd.

4 Based on exercise of impairment of assets undertaken by the management in due cognizance of paragraphs 5 to 13 of AS-28 issued by ICAI, the Company has concluded that no impairment loss is required to be booked.

5 In the opinion of the Board of Directors, the Current Assets, Loans and Advances have value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the foregoing Balance Sheet and adequate provision for all known liabilities on the Company has been made.

6 Lease rent paid for the containers taken on lease and used exclusively for transport of raw material has been considered as part of purchase cost of raw material.