3.1 Depreciation for the year 2022-23 includes Rs. 46.98 Lakhs (Previous year Rs. 46.99 Lakhs) as depreciation arising on revaluation of Fixed Assets.

3.2 Fixed Assets are stated at values determined by the valuer less depreciation. Capital Spares are transferred to capital work in progress and are capitalised as and when issued. Direct costs are capitalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Statement of Profit & Loss.

3.3 The Company has charged depreciation on fixed assets on straight-line basis (SLM) as per their useful life based on past operational experience as certified by the technical staff of the plant. Fixed Assets individually costing upto Rs. 5,000/- are depreciated 100% in the year of purchase. The intangible assets are being amortised over a period of 5 years.

3.4 The Company had revalued its Fixed Assets (other than the100 TPD Membrane Cell Plant Power Line) as on 31^st March, 2004 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 27^th October, 2005 and the revalued figures were incorporated in the accounts in the financial year 2005-06. Accordingly a sum of Rs. 6243.16 Lakhs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

3.5 The Company had revalued its 100 TPD Membrane Cell Plant Power Line as on 31^st March, 2006 on the basis of existing use value by an independent professional valuer. The revaluation of the asset had been approved by the Board of Directors in its meeting held on 29^th October, 2007 and the revalued figure was incorporated in the accounts in the financial year 2007-08. Accordingly, a sum of Rs. 27.78 Lakhs being the surplus of the value of the asset over the written down value, had been credited to the Revaluation Reserve.

3.6 The Company had revalued its Fixed Assets as on 31^st March, 2009 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 29^th January, 2010 and the revalued figures were incorporated in the accounts in the financial year 2009-10. Accordingly a sum of Rs. 4819.99 Lakhs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

3.7 Addition in leasehold land of Rs. 47.10 Lakhs represent the present value of right to use of assets of future lease rent calculated in accordance with Ind AS 116 and is being amortised on straight line basis over the remaining term of the lease.

3.8 The company has not revalued its Property, Plant & Equipment during the current financial year.

27.1 The Company's liabilities towards leave encashment and gratuity are determined by an independent actuary, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds. Actuarial gains and losses are recognised immediately in the Statement of Profit & Loss as income or expense and other comprehensive income as per I nd-AS 19. Present value of Defined Benefit Obligation is calculated by projecting salaries, exits due to death, resignation and other decrements, if any, and benefit payments made during each month till the time of retirement of each active member using assumed rates of salary escalation, mortality & employee turnover rates. The expected benefit payments are then discounted back from the expected future date of payment to the date of valuation using the assumed discount rate.

NOTE NO. 28: CONTINGENT LIABILITIES AND COMMITMENTS

Gratuity

The Company is having payment of gratuity plan through gratuity trust. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

Asset Volatility

The plan liabilities are calculated using a discount rate set with references to government bond yields; if plan assets underperform compared to this yield, this will create or increase a deficit. The defined benefit plans may hold equity type assets, which may carry volatility and associated risk.

Changes in bond yields

A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the plans' investment in debt instruments.

Inflation risk

The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability. The post retirement benefit obligation is sensitive to inflation and accordingly, an increase in inflation rate would increase the plan's liability.

Life expectancy

The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants, both during and after the employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

NOTE NO. 42: CORPORATE SOCIAL RESPONSIBILITY: In accordance with section 135 (5) of the Companies Act, 2013, a Company, meeting the Corporate Social Responsibility (CSR) applicability criteria, needs to spend in every financial year, at least 2% of its average net profits made during the three immediately preceding financial years in pursuance of its CSR Policy. Since the Company has earned net profit before tax of Rs. 18,649.80 Lakhs, it meets the CSR applicability criteria and accordingly needs to spend minimum 2% of its average net profits for the immediately preceding three years on CSR activities in pursuance of its CSR policy. The Company has spent CSR amount of Rs. 67.60 Lakhs in pursuance of it's CSR Policy during the year 2022-23.

NOTE NO. 44: A total of 3102 chlorine tonners (including rented tonners) were in circulation with various customers as returnable empties as on 31.3.2023.

NOTE NO. 45: Additional Regulatory Information to be provided as per amendments in Schedule III of Companies Act, 2013 are as follows:

a) The Company has not held any Benami property.

b) The Company has not been declared wilful defaulter by any bank or financial institution.

c) All the title deeds of Immovable Properties are held in the name of the company except leased properties.

d) There are no pending registration of charges or satisfaction of charges with the Registrar of Companies (ROC).

e) The company has not granted any loans or advances in the nature of loans to promoters, Directors, key managerial personnel and the related parties.

f) Compliance with number of layers of companies: This is not applicable

g) Utilisation of borrowed funds & Share Premium

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(s) or entity(ies), 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 whether, directly or indirectly lend or invest in other persons or entities identify by on or behalf of the company (ultimate beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.

The company's activities expose it to a variety of financial risks: credit risk, liquidity risk, foreign currency risk and interest rate risk. The company's primary focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance.

Financial Guarantees

The Company is exposed to credit risk in relation to guarantees given to bank. The company's maximum exposure in this regard is Rs. 2.04 crores, which is the maximum amount company would have to pay if the guarantee is called upon. Further the company has given bond of Rs. 364.30 crores to Custom Authorities against which the liability of custom duty has since been paid. The continuity bond after cancellation is awaited from Custom Authorities.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company's receivables from customer and

investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding account receivables. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Trade and other 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 influence on credit risk assessment. The company has taken dealer securities which are considered in determination of expected carried losses, where applicable. The company makes an allowance for doubtful trade receivable using the simplified approach for expected credit loss and by continuously monitoring the recoverability of receivable balances.

The receivables of Rs. 889.76 Lakhs (Prevoius year Rs. 2062.68 Lakhs) are secured by security deposits. Investments

The company limits its exposure to credit risk by generally investing in liquid securities and only with counter parties that have a good credit rating. The company does not expect any loses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors.

Liquidity Risk

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they become due. The company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also the company is utilising cash credit limits (Fund Based and Non Fund Based) of Rs. 65 crore sanctioned by banks from time to time as and when required.

Foreign Currency risk.

The company is exposed to foreign currency risk to the extent of exchange rate fluctuation at the time of payment of purchase price applicable in Foreign Letter of Credit (FLC) .The currencies in which these transactions are primarily denominated are US Dollar and EURO.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market interest rates. The company do not have exposure to the risk of changes in market interest rates relating to company's debt obligations as it is on fixed interest rates.

The Company's policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence and to sustain future development of the business. The Company determines the amount of capital required on the basis of annual business plan coupled with long-term and short-term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long-term and short-term bank borrowings. The Company reviews the capital structure of the company on a regular basis and uses debt equity ratio to monitor the same.

NOTE NO. 48: The Code on Social Security, 2020 (the Code) has been enacted, which would impact the contributions by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified. The Ministry of Labour and Employment (the Ministry) has released draft rules for the Code on November 13, 2020. The Company will complete its evaluation and will give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules are published.

Note:

EBIT - Earnings before interest and taxes including other income EBITDA - Earnings before interest, taxes, depreciation and amortisation.

PAT - Profit after taxes.

* Net working capital is -ve

Explanation for variances exceeding 25%

Current ratio is improved on account of increase in debtors outstanding (increased turnover) and decrease in other liabilities.

Change in Debt equity ratio is on account of raising of new term loans.

Debt service coverage ratio has come down on account of increase in debt and corresponding increase in interest expenses on account of raising of fresh loans

Return on Equity, Net profit ratio, EBIT, EBITDA % and Return on capital employed is improved on account of increase in profits during the year ended March 31,2023

Trade Payable Turnover Ratio has gone up on account of increase in trade payables and increase in sales. Return on investment ratio increase on account of increase in Interest rates.

NOTE NO. 50: The Company operates in a single business segment viz. chemicals.

NOTE NO. 51:

a) The Corresponding figures of the previous year have been re-grouped/reclassified, wherever necessary.

b) The figures have been rounded off to the nearest Rs. Lakhs.