Disclosures:

18.1 Deferred payment liability - Interest Free Sales Tax Loan (IFST)

The Company was sanctioned Interest Free Sales Tax Deferment of ' 345.86 lakhs under Target - 2000 Scheme by the State Government vide final eligibility Certificate No.LR 4/2001/0878/0878/ID dt. 24^th July, 2001 for a period of 14 years starting from 20^th March 1999 to 19* March 2013. The Company has availed itself of total Sales Tax Deferment of ' 269.79 Lakhs up to 31^st March 2013 and the same is shown as liability in the Balance Sheet. The repayment started from March, 2016 and the Company has made the payments as per the final eligibility certificate. An amount of ' 27.52 Lakhs is payable in the financial year 2024-25 hence shown under the Other Financial Liabilities under Current Liabilities Pursuant to requirement under Ind AS 109 on financial instruments and in view of the option exercised under Ind AS 101 on first time adoption of Ind AS, un-winding ofinterest using effective interest rate was made and the deferred grant carved out, from the said loan, is being amortised in equal installments over the remaining repayment period of the IFST loan.

39. DISCLOSURE AS PER SCHEDULE III OF THE ACT AND IND AS-37 ON PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:A. CONTINGENT LIABILITIES

B. DEFINED BENEFIT PLAN i. Gratuity obligation of the Company

The employees’ gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognised each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation. The obligation for leave encashment is recognised in the books as per Actuarial Valuation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

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

41.5. DISCLOSURE AS PER IND AS108 - OPERATING SEGMENTS:

As the Company is predominantly engaged in the manufacture and sale of chemicals where the risks and returns associated with the products are uniform, the Company has identified geographical segments based on location of customers as reportable segments in accordance with Ind AS 108 issued by ICAI.

42. FINANCIAL INSTRUMENTS

A. Capital management

The Company manages its capital structure and makes adjustments to it, in light of changes in economic condition. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders. No changes were made in the objectives, policies and procedures in the past three years.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, borrowings, trade and other payables, other liabilities, less cash and cash equivalents Capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders.

B. Financial instruments by category

The carrying and fair value of financial instruments by categories of 31^st March 2024 and 31^st March 2023 were as follows

C. Financial Risk Management

Financial Risk Factors :

The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include market risk, and liquidity risk. The management reviews and design policies and procedures to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company’s exposure to credit risk is influenced mainly by the customer repayments. The Company’s exposure to liquidity risks are on account of interest rate risk on borrowings. The following sections provide details regarding the Company’s exposure to the above-mentioned financial risks and the management thereof.

Market Risk:

The Company operates internationally, and a portion of the business is transacted in foreign currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in those countries. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company’s operations are affected as the rupee appreciates/depreciates against these currencies. The Company leaves exchange rate risk with regard to foreign exposures unhedged when the local currency is appreciating against the foreign currency.

Credit Risk:

Credit risk is the risk of loss that may arise on outstanding financial instruments when counter party defaults on its obligations. The Company’s exposure to credit risk arises primarily from loans extended, security deposits, balances with bankers and trade and other receivables. The Company minimises credit risk by dealing exclusively with high credit rating counterparties. The Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Company trades only with recognised and creditworthy third parties. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.

Credit Risk Exposure:

At the end of the reporting period, the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. No other financial assets carry a significant exposure to credit risk.

Liquidity Risk:

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has short term borrowings from banks. Short term loans repayable on demand from banks are obtained for the working capital requirements of the Company.

As of 31^st March, 2024, the Company had a working capital of ' 717.17 Lakhs including cash and cash equivalents of ' 3.83 Lakhs. As of 31^st March, 2023, the Company had a working capital of ' 606.02 Lakhs including cash and cash equivalents of' 109.80 Lakhs.

As of 31^st March, 2024, and 31^st March, 2023, the outstanding gratuity liability was ' 307.63 Lakhs and ' 236.93 Lakhs, respectively, which have been substantially funded. Accordingly, no liquidity risk is perceived.

Interest Rate Risk:

The interest rate risk is the risk that the fair value or the future cash flows of the Company’s financial instruments will fluctuate because of the change in market interest rates. The Company is exposed to interest rate risks as it has significant interest-bearing working capital loans from bank. Short term loans repayable on demand are subject to prevailing market rate fluctuations and sanctioned facilities are availed on a need to borrow basis to ensure minimum exposure to interest rate fluctuations.

43. DIVIDEND:

The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. Income Tax consequences of dividends on financial instruments classified as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits. The Company declares and pays dividends in Indian rupees. Companies are required to pay/distribute dividend after deducting applicable withholding income taxes.

45. CONFIRMATION OF BALANCES:

The Company had sent letters seeking confirmation of balances to various parties under trade payables, trade receivables, advance to suppliers and other advance from customers. Based on the confirmations received and upon proper review, corrective actions have been initiated and the amounts have been trued up, accounting adjustments have been made wherever found necessary.

46. BORROWINGS SECURED AGAINST CURRENT ASSETS:

The Company files Monthly Stock Statements and Quarterly Declarations to Bank regarding the End Use ofFunds and Unhedged Foreign Currency and Investments.

The data provided by Company is in line with the Books of Accounts. The Company has not been declared as Wilful Defaulter as per the relevant RBI Circular.

47. RELATIONSHIP WITH STRUCK OFF COMPANIES:

The Company has verified Debtors and Creditors Companies status with respect to being Struck Off and none of them are being shown as Struck Off in the records of MCA.

49. UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

i. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or, any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities (“Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

ii. No funds have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

50. The Company has used the borrowings from Banks and Financial institutions for their specific purpose for which they have been taken.

51. In the opinion of the Board of Directors, all the Assets (Other than Property, Plant, Equipment, Intangible Assets and Non-Current Investments) are expected to realise a value which is at least equivalent to the amount at which they are stated in the financial statements, in the ordinary course of the business. The Board is also of the opinion that no material uncertainty exists regarding the capability of the Company in meeting its liabilities existing as on the date of Balance Sheet as and when they fall due.

52. As the Company does not have any downstream companies, the compliance with regard to the number of layers prescribed under Clause (87) of Section 2 of the Companies Act, 2013 read with Companies (Restrictions on Number of Layers), Rules, 2017 and the disclosure requirements of the names of such Companies and their CIN, beyond specified layers and the relation and extent of holding, are not applicable.

53. With regard to Charge Creation or Satisfaction, no documents are pending for filling with Registrar of Companies beyond the specified Statutory period.

54. The Company does not have any transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in tax assessments under the Income Tax, 1961. The Company does not also have any previously unrecorded income and related assets that are properly required to be recorded in the books of account during the year.

55. The Company has not traded or invested in crypto currency or any virtual currency during the financial year.

56. • During the financial year, the Company had transferred an Unclaimed Dividend amount of

' 0.64 lakhs (Final Dividend for FY 2015-16) and 3,951 shares of 48 shareholders to IEPF authorities. As per the procedure, the Company has transferred the Unclaimed Dividend to IEPF Authorities through NEFT and tried to link the NEFT challan but due to technical issue in the MCA portal, the challan is not getting linked thereby the e-Form IEPF-1 (Statement of amounts credited to IEPF or transfer of amounts on account of shares transferred to the fund) is not approved and the relevant excel file containing the breakup of Unclaimed Dividend is also not getting uploaded. As a result of this, the Company is also not able to file e-Form IEPF-4 (Statement of shares transferred and information of shares & unclaimed or unpaid dividend not transferred to the IEPF) and the relevant excel containing break up of Unclaimed Shares despite completing the transfer of shares to IEPF.

• The Unclaimed Dividend amount of '1.24 lakhs pertaining to Interim Dividend of FY 2015-16 which was originally transferred in February 2023 was also reversed and the said amount was parked in Suspense Account of the Bank. The Company was made aware of this fact only in the Month of February 2024 by the Bankers. The Company immediately requested the Bankers to transfer the funds from Suspense Account to IEPF Authorities Account and the same was transferred on 29^th February, 2024. However, due to technical issue in the MCA portal, the Company is facing similar issue as stated above.

• The Company is in continuous contact with the authorities and Bankers to resolve the issue at the earliest.

57. Previous Year’s figures have been regrouped / reclassified wherever necessary to correspond with the

Current Year's classification/ disclosure.