m. PROVISIONS
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits
will be required to settle the obligation and a
reliable estimate can be made of the amount
of the obligation. When the Company expects
some or all of a provision to be reimbursed,
for example, under an insurance contract, the
reimbursement is recognised as a separate asset,
but only when the reimbursement is virtually
certain. The expense relating to a provision is
presented in the Statement of Profit and Loss net
of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage of
time is recognised as a Finance Cost.
n. CONTINGENT LIABILITIES
Contingent liability is:
(i) a possible obligation arising from past events
and whose existence will be confirmed only
by the occurrence or non-occurrence of one
or more uncertain future events not wholly
within the control of the entity or
(ii) a present obligation that arises from past
events but is not recognized because;
- it is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation or
- the amount of the obligation cannot be
measured with sufficient reliability.
The Company does not recognize a contingent
liability but discloses the same as per the
requirements of Ind AS 37.
o. LEASES
The Company assesses at contract inception
whether a contract is or contains a lease. That is,
if the contract conveys the right to control the
use of an identified asset for a period of time in
exchange for consideration.
Company as a Lessee
The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-value
assets. The company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right to use the underlying assets.
i) Right-of-use-assets
The Company recognises right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available
for use). Right-of-use assets are measured
at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs
incurred, and lease payments made at or
before the commencement date less any lease
incentives received. Right-of-use assets are
depreciated on a straight-line basis over the
shorter of the lease term and the estimated
useful lives of the assets
ii) Lease Liabilities
At the commencement date of the lease,
the Company recognises lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include fixed payments
(including in substance fixed payments) less
any lease incentives receivable, variable lease
payments that depend on an index or a rate,
and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised
by the Company and payments of penalties
for terminating the lease, if the lease term
reflects the Company exercising the option to
terminate. Variable lease payments that do not
depend on an index or a rate are recognised as
expenses (unless they are incurred to produce
inventories) in the period in which the event
or condition that triggers the payment occurs.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion of
interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.
Lease payments have been classified as
financing activities in Statement of Cash Flow.
The Company has elected not to recognize
Right-Of-Use Assets and Lease Liabilities for
short term leases that have a lease term of less
than or equal to 12 months with no purchase
option and assets with low value leases. The
Company recognises the lease payments
associated with these leases as an expense
in statement of profit and loss over the lease
term. The related cash flows are classified as
operating activities.
iii) Short-term leases and leases of low-value
assets
The Company applies the short-term lease
recognition exemption to its short-term leases
of machinery and equipment (i.e., those leases
that have a lease term of 12 months or less
from the commencement date and do not
contain a purchase option).
The Company applies the low-value asset
recognition exemption on a lease-by-lease
basis, if the lease qualifies as leases of low-
value assets, with a value when new of up to
INR 3 lacs. In making this assessment, the
Company also factors below key aspects:
? The assessment is conducted on an
absolute basis and is independent of the
size, nature, or circumstances of the lessee.
? The assessment is based on the value of
the asset when new, regardless of the
asset’s age at the time of the lease.
? The lessee can benefit from the use of the
underlying asset either independently
or in combination with other readily
available resources, and the asset is not
highly dependent on or interrelated with
other assets.
? If the asset is subleased or expected to be
subleased, the head lease does not qualify
as a lease of a low-value asset.
Based on the above criteria, the Company has
classified leases of IT equipment for individual
employees, and leases of office furniture and
water dispensers as leases of low value assets.
Lease payments on short-term leases and
leases of low-value assets are recognised as
expense on a straight- line basis over the
lease term.
p. EARNING PER SHARE
Basic Earnings Per Share
Basic Earnings Per Share are calculated by dividing
the net profit or loss for the period attributable
to Equity Shareholders by the weighted average
number of equity shares outstanding during
the period.
Diluted Earnings per Share
For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to Equity Shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential Equity Shares.
q. CASH AND CASH EQUIVALENTS
Cash and Cash Equivalent in the Financial
Statements comprise Cash at Banks and on Hand
and Short-Term Deposits with an original maturity
of three months or less, that are readily convertible
to a known amount of cash and and subject to an
insignificant risk of changes in value.
For the purpose of the Statement of Cash Flows,
Cash and Cash Equivalents consist of Cash
and Short-Term Deposits, as defined above,
net of outstanding bank overdrafts as they are
considered an integral part of the Company’s
cash management.
r. Government Grants and Subsidies:
Government Grants are recognised when there
is a reasonable assurance that the same will
be received and all attached conditions will be
complied with. When the grant relates to an
expense item, it is recognised in the Statement of
Profit and Loss by way of a deduction to the related
expense on a systematic basis over the periods
that the related costs, for which it is intended
to compensate, are expensed. When the grant
relates to an asset, it is recognized as income on
a systematic basis over the expected useful life of
the related asset.
Government grants, that are receivable towards
capital investments under State Investment
Promotion Scheme, are recognised in the
Statement of Profit and Loss in the period in
which they become receivable.
The benefit of a government loan at a below-
market rate of interest is treated as a government
grant, measured as the difference between
proceeds received and the fair value of the loan
based on prevailing market interest rates and
is being recognised in the Statement of Profit
and Loss
When the company receives grants of non¬
monetary assets, the asset and the grant are
recorded at fair value amounts and released to
profit or loss over the expected useful life in a
pattern of consumption of the benefit of the
underlying asset i.e. by equal annual instalments.
s. SEGMENT REPORTING
Based on "Management Approach” as defined
in Ind AS 108 -Operating Segments, the
Chief Operating Decision Maker evaluates
the Company’s performance and allocates
the resources based on an analysis of various
performance indicators by business segments.
Inter segment sales and transfers are reflected at
market prices.
Unallocable items includes general corporate
income and expense items which are not allocated
to any business segment.
Segment Policies:
The Company prepares its segment information in
conformity with the accounting policies adopted
for preparing and presenting the financial
statements of the Company as a whole. Common
allocable costs are allocated to each segment on
an appropriate basis.
t. Dividend to Equity and Redeemable Preference
Shareholders of the Company
The Company recognises a liability for dividends to
Equity Holders of the Company when the dividend
is authorised and the dividend is no longer at the
discretion of the Company. As per the Corporate
laws in India, a dividend is authorised when it is
approved by the shareholders. A corresponding
amount is recognised directly in Equity.
The Company recognises liability for dividends
to Redeemable Preference share Holders of
the Company on accrual basis. Dividend is paid
based on authorisation by the Board of Directors.
Dividend to Redeemable Preference Shareholders
is cumulative and recognised in finance cost as
interest expense.
u. New Standards, Interpretations and
amendments adopted by the company
The accounting policies adopted in the preparation
of the financial statements are consistent with
those followed in the preparation of the Company’s
annual financial statements for the year ended
March 31, 2026, except for amendments to the
existing Indian Accounting Standards (Ind AS).
The Company has not early adopted any other
standard, interpretation or amendment that has
been issued but is not yet effective.
The new and amended standards that are
notified by the Ministry of Corporate Affairs
(MCA), but not yet effective, up to the date of
issuance of the Company’s financial statements
are disclosed below. The Company will adopt
these amendments to the standards, when they
become effective.
(i) Amendments to Ind AS 1 - Classification of
Liabilities as Current or Non-current and
Non-current Liabilities with Covenants:
In August 2025, the MCA notified amendments
to paragraphs 69 to 76 of Ind AS 1 to specify
the requirements for classifying liabilities as
current or non-current. The amendments
clarify:
? What is meant by a right to defer settlement
? That a right to defer must exist at the end
of the reporting period
? That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
? That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability
not impact its classification
In addition, a requirement has been introduced
to require disclosure when a liability arising
from a loan agreement is classified as
non-current and the entity’s right to defer
settlement is contingent on compliance with
future covenants within twelve months.
If there is a breach of a material covenant of a
long term loan arrangement on or before the
end of the reporting period, resulting in the
liability becoming payable on demand as at the
reporting date, and the lender agrees—after
the reporting period but before the financial
statements are approved for issue—not to
demand repayment for at least 12 months
as a consequence of the breach, this shall be
treated as an adjusting event. Accordingly, the
entity is not required to classify the liability
as current.
The amendments are effective for annual
reporting periods beginning on or after 1 April
2025 retrospectively in accordance with Ind
AS 8.
The amendments have not resulted in an
impact on the classification of Company’s
liabilities and neither on the disclosures in the
financial statements.
(ii) Amendments to Ind AS 21 - Lack of
exchangeability
The Ministry of Corporate Affairs (MCA)
notified the Companies (Indian Accounting
Standards) Amendment Rules, 2025, which
amend Ind AS 21, The Effects of Changes in
Foreign Exchange Rates to specify how an
entity should assess whether a currency is
exchangeable and how it should determine
a spot exchange rate when exchangeability
is lacking. The amendments also require
disclosure of information that enables users
of its financial statements to understand how
the currency not being exchangeable into the
other currency affects, or is expected to affect,
the entity’s financial performance, financial
position and cash flows.
The amendments are effective for annual
reporting periods beginning on or after 1 April
2025. When applying the amendments, an
entity cannot restate comparative information.
The amendments do not have a material
impact on the Company’s financial statements.
(iii) Amendments to Ind AS 7 and Ind AS 107 -
Supplier Finance Arrangements
In August 2025, the MCA notified amendments
to Ind AS 7 Statement of Cash Flows and Ind
AS 107 Financial Instruments: Disclosures
to clarify the characteristics of supplier
finance arrangements and require additional
disclosure of such arrangements. The
disclosure requirements in the amendments
are intended to assist users of financial
statements in understanding the effects
of supplier finance arrangements on an
entity’s liabilities, cash flows and exposure to
liquidity risk.
The amendments do not have a material
impact on the Company’s financial statements.
(iv) International Tax Reform—Pillar Two Model
Rules - Amendments to Ind AS 12
In August 2025, the MCA notified amendments
to Ind AS 12 Income Taxes in response to the
OECD’s BEPS Pillar Two rules and include:
? A mandatory temporary exception to the
recognition and disclosure of deferred
taxes arising from the jurisdictional
implementation of the Pillar Two model
rules; and
? Disclosure requirements for affected
entities to help users of the financial
statements better understand an entity’s
exposure to Pillar Two income taxes arising
from that legislation, particularly before its
effective date.
The mandatory temporary exception - the use
of which is required to be disclosed - applies
immediately. The remaining disclosure
requirements apply for annual reporting
periods beginning on or after 1 April 2025,
but not for any interim periods ending on or
before 31 March 2026.
The amendments had no impact on the
Company’s financial statements as the
Company is not in scope of the Pillar Two
model rules.
Notes:
a) Terms of Optionally Convertible Debentures (OCDs) are as under:
The OCDs shall be optionally convertible into equity share capital at the discretion of issuer, the issuer shall
have right to convert all or any of the OCDs into fixed number of equity shares at the price determined on
the date of issue of OCDs based on valuation report, or the issuer may after the expiry of 25 years from the
date of first allotment pay the OCDs consideration and any unpaid coupon. The interest shall be accrued at
the end of each financial year and payable at the discretion of the issuer.
(i) Equity Share:
The Company has only one class of Equity Shares with par value of H10 per share. Each Equity Shareholder is
entitled to one vote per share. All Equity Shareholders have equal dividend rights. In the event of liquidation
of the Company, the holders of Equity Shares will be entitled to receive the remaining assets of the Company,
after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity
shares held by the shareholders.
(ii) During the previous year, the Company basis approval of Fund Raising Committee in their meeting dated
October 24, 2024 has issued 15,91,180 Equity Shares of face value of H10 each in a Qualified Institutional
Placement (QIP) pursuant to Chapter VI of Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2018, as amended, at an issue price of H2,093.13 per Equity Share
(including securities premium of H2,083.13 per Equity Share) aggregating to H333.05 Crore . The Company has
received listing and trading approval for the shares issued from BSE Limited and National Stock Exchange
of India Limited on October 25, 2024 and October 28, 2024 respectively.
Pursuant to allotment of above mentioned Equity Shares, the paid up share capital of the Company
increased from H41.55 Crore comprising 4,15,50,158 Equity Shares to H43.14 Crore comprising 4,31,41,338 Equity
Shares. In accordance with Ind AS 32,the transaction costs amounting H8.33 Crore in relation to QIP has been
accounted for as deduction from equity under Securities Premium.
During the previous year ended March 31, 2025, the Company had utilised the proceeds for repayment of
existing debt of the Company amounting to H250.00 Crore, for funding capital expenditure amounting to
H30.00 Crore and for General Corporate Purpose (including share issue expenses) amounting to H53.05 Crore.
(iii) There are no shares allotted as fully paid-up by way of bonus shares or allotted as fully paid up pursuant
to a contract, without payment being received in cash, or bought back during the period of five years
immediately preceding the reporting date.
Securities Premium
Securities Premium pertains to issue of Equity Shares during the year in a Qualified Institutional Placement
(QIP) (refer note 16).
Securities Premium is used to record the premium on issue of Shares. The Reserve can be utilised only for
limited purposes such as issuance of Bonus shares, Buy back of Shares in accordance with the provisions of the
Companies Act, 2013.
Capital Reserve
The balance in Capital Reserve represents difference between consideration paid and net asset acquired
under common control business combination transactions and cancellation of shares pursuant to Scheme of
Arrangement. The Reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
Retained Earnings
Retained earnings are the profits that the Company has earned till date, less any transfer to General Reserve,
Dividend paid to Shareholders. It also includes Re-measurement gain/(loss) on defined benefit plans that will
not be re-classified to the Statement of Profit and Loss.
18. Borrowings (Contd.)
Details of Security and Repayment Terms :
i) The Company has availed following Rupee Term Loan facilities:
1) Term Loan amounting H350.00 Crore from Axis Bank Limited is for capital expenditure towards setting
up of new Chloro Toluene and its Value Chain Plant and expansion of Chloro Polyvinyl Chloride, the
outstanding balance for the facility is H320.83 Crore as at Balance Sheet date (31st March 2025 : H350.00
Crore). The borrowing carries interest @ Repo Rate plus spread (fixed@ 1.65%) payable on monthly rest.
The Term Loan is repayable in 24 quarterly installment of H14.58 Crore each starting from December 2025.
2) Term Loan amounting H284.75 Crore from HDFC Bank Limited is for capital expenditure towards setting
up of new Chloro Polyvinyl Chloride Plant and expansion of Caustic capacity with 36 MW Captive Power
Plant. Outstanding balance for the facility is H128.14 Crore as at the Balance Sheet date (31st March 2025:
H185.09 Crore). The borrowing carries interest at Repo rate (Benchmark rate) 300 bps. The Term Loan is
repayable in 20 quarterly instalments of H14.24 Crore each starting from September 2023.
The Company has entered into a cross currency swap (“CCS") transaction on the said Rupee Term loan
facility whereby outstanding Rupee Term loan of H256.27 Crore has been swapped with notional principal
of EUR 2.83 Crore. As per the terms of CCS agreement, the Company receives interest at 9.15% p.a. on
notional principal outstanding in INR and pays interest at 5.18% p.a. on notional principal of EUR at
monthly rest. The notional principal will be settled in EURO by the Company in exchange of INR on
quarterly basis starting from financial year 2024-25.
3) The Term Loan facilities are secured by first pari passu mortgage charge of all immovable properties of
the Company and first pari passu hypothecation charge over all the movable assets of the Company.
ii) The Company has executed an Indenture of Mortgage with Lenders of above term loans (Secured Parties)
by creating mortgages on Immovable properties of the Company by creating a charge by way of registered
mortgage. According to the indenture, all the Secured Parties will share pari passu charge with first ranking
and priority over the Immovable Properties of the Company, both present and future.
iii) Bank loans availed by the Company are subject to certain covenants relating to Interest Service Coverage
Ratio, Current Ratio, Debt Service coverage Ratio, Total Outside Liabilities to Total Net Worth, Fixed Assets
Coverage Ratio, Ratio of Total Term Liabilities to Net Worth and Return on Property, Plant and Equipments.
The Company has complied with the covenants as per the terms of the loan agreements.
iv) The Company has not defaulted for any repayment of Borrowings and Interest during the year.
Note:
The Company has sanctioned Working Capital Facility of H600.00 Crore (31st March 2025: H400.00 Crore) as
sanctioned limit from consortium comprising of ICICI Bank Limited H140.00 Crore, Standard Chartered Bank
H110.00 Crore and HDFC Bank Ltd. H80.00 Crore, State Bank of India H100.00 Crore, Axis Bank H50.00 Crore and
Kotak Mahindra Bank H120.00 Crore.
Rate of interest stipulated by ICICI Bank Limited is 6 Month MCLR Nil spread on the principal amount remains
outstanding each day.
Rate of interest stipulated by Standard Chartered Bank is monthly MCLR .
Rate of interest stipulated by HDFC Bank Limited is as per prevailing 6 Month MCLR Nil Spread
Rate of interest stipulated by Kotak Mahindra Bank is 6 month MCLR NIL Spread.
Rate of interest stipulated by Axis Bank is 6 month MCLR NIL Spread.
Rate of interest stipulated by State Bank of India is 6 month MCLR NIL Spread.
The Company has not defaulted for any repayment of Borrowings and Interest during the year.
The company submits quarterly statements of assets mortgaged and the same are in agreement with the books.
Bank loans availed by the Company are subject to certain covenants relating to Interest Service Coverage Ratio,
Current Ratio, Debt Service Coverage Ratio, Total Outside Liabilities to Total Net Worth, Fixed Assets Coverage
Ratio, Ratio of Total Term Liabilities to Net Worth and Return on Property, Plant and Equipments. The Company
has complied with the covenants as per the terms of the loan agreements.
27.4 Performance Obligation
All sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations
which is typically upon dispatch/ delivery. The Company does not have any remaining performance obligation for
sale of goods or services which remains unsatisfied as at March 31, 2026 or March 31, 2025. Applying the practical
expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related
disclosures for contracts where the revenue recognised corresponds directly with the value to the customer of
the entity’s performance completed to date
27.5 Information about Major Customers
No single Customer represents 10% or more of the Company’s total Revenue during the year ended 31st March
2026 and 31st March 2025.
27.6 Refer note 39 for segmental information.
Includes amount transferred to separate CSR bank account as per section 135 of the Companies Act, transferred
subsequent to the year end on April 30, 2026.
Refer note 38 for Contribution to CSR foundation
Nature of CSR Activities
(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health and
sanitation, plantation for environment sustainability.
(ii) Safeguarding environmental sustainability by plantation activities.
(iii) Promoting education including special education and employment enhancing vocation skills in
educational institutes.
(iv) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans;
setting up old age homes, day care centres and such other facilities for senior citizens and measures for
reducing inequalities faced by socially and economically backward groups.
(iii) Research & Development Expenses
The Company’s R&D Center is a hub of innovation, driving advancements in the specialty chemicals sector.
Equipped with state-of-the-art facilities, the team of Scientists and Researchers focuses on developing
new molecules and advanced specialty intermediates. The Company’s R & D has been recognized by the
Department of Scientific and Industrial Research (DSIR) and Ministry of Science & Technology.
1. Capital Expenditure is included in Property, Plant & Equipment and depreciation is provided at the
respective applicable rates.
2. Details of Revenue expenditure (excluding depreciation and amortisation expenses) incurred on R&D
which is mainly related to product development/improvement has been included in the respective
account heads in the statement of accounts.
38. Related Parties Disclosures (Contd.)
Terms and Conditions of transactions with related parties:
(1) Sales to Related Parties and concerned Balances
For terms of transaction
Sales are made to related parties on the same terms as applicable to third parties in an arm’s length
transaction and in the ordinary course of business. The Company mutually negotiates and agrees sales
price, discount and payment terms with the related parties by benchmarking the same to transactions
with non-related parties, who purchase goods and services of the Company in similar quantities. Such sales
generally include payment terms requiring related party to make payment within 60 to 120 days from the
date of invoice.
For terms of balance
Trade Receivables outstanding balances are unsecured, interest free and require settlement in cash. No
guarantee or other security has been received against these receivables. The amounts are recoverable
within 60 to 120 days from the reporting date (31 March 2025: 60 to 120 days from the reporting date). For the
year ended 31 March 2026, the Company has not recorded any impairment on receivables due from related
parties (31 March 2025: Nil).
(2) Purchases of Goods and related Balances
For terms of transaction
Purchases are made from related parties on the same terms as applicable to third parties in an arm’s length
transaction and in the ordinary course of business. The Company mutually negotiates and agrees purchase
price and payment terms with the related parties by benchmarking the same to sale transactions with
non-related parties entered into by the counter-party and similar purchase transactions entered into by the
Company with the other non-related parties. Such purchases generally include payment terms requiring
the Company to make payment within 60 to 120 days from the date of invoice.
For terms of balance
Trade payables outstanding balances are unsecured, interest free and require settlement in cash. No
guarantee or other security has been given against these payables. The amounts are payable within 60 to
120 days from the reporting date (31 March 2025: 60 to 120 days from the reporting date).”
(3) Services received from Related Parties
During the year 2025-26, the company has obtained renting services of its office premises over which one
of the Director exercises significant influence. The amount billed for this service was INR 1.19 crores (2024-25:
1.48 crores) and it was agreed based on mutual negotiation between parties. The service agreement included
payment terms requiring the Company to make upfront payment at the time of receipt of invoice.
(4) Compensation to KMP of the Company
The amounts disclosed in the table are the amounts recognised as an expense during the financial year
related to KMP. The amounts do not include expense, if any, recognised toward post-employment benefits
and other long-term benefits of key managerial personnel. Such expenses are measured based on an
actuarial valuation done for each Company as a whole. Hence, amounts attributable to KMPs are not
separately determinable.
(5) The Company’s transactions with Related Parties are at arm’s length. Management believes that the
Company’s domestic transactions with related parties post 31st March 2026 continue to be at arm’s length
and that the transfer pricing legislation will not have any impact on the Financial Statements particularly on
the amount of the tax expense for the year and the amount of the provision for taxation at the period end.
Transactions with related parties are disclosed including applicable taxes.
(6) The Company had issued Redeemable Preference Shares of H10 each is cumulative and carry coupon/
dividend rate of 8.00% p.a. with redeemable tenure of 20 Years from the date of allotment. The Company has
the right to exercise the option of early redemption, considering which Company has redeemed H Nil (31st
March 2025 : H95.00 Crore). Redemption is done at face value. The company had accrued dividend at the rate
of 8% on Redeemable Preference Shares for the year ended March 31,2025.
39. Segment Reporting
The Company’s Chief Operating Decision Maker (CODM) examines the Company’s performance from business
and geographic perspective. In accordance with Ind AS-108 - Operating Segments, evaluation by the CODM and
based on the nature of activities performed by the Company, which primarily relate to manufacturing of Chloro
Alkali & its Derivatives, the Company does not operate in more than one business segment.
Analysis By Geographical Segment
Segment Revenue is analysed based on the location of Customers regardless of where the goods are produced.
The following provides an analysis of the Sales by Geographical Markets.
*Income tax demand comprise demand from the Indian Income Tax authorities for payment of additional
tax of H16.63 Crore (31 March 2025: H16.63 Crore). The tax demands are mainly on account of adjustment
pertaining to 80 IA benefits claimed for captive power plant against sale of steam and power. During
FY 2024-25, the Company has received a favourable Order amounting to H11.08 Crore from ITAT for AY 2016-17
and AY 2017-18, however the department has further filed an appeal in High Court against the ITAT Order.
Further, the company also received favourable order pertaining to AY 2011-12 from CIT(Appeal).
**Service tax demand comprise demand from Service tax Authorities for payment of additional tax of H0.25
Crore (31 March 2025: H0.25 Crore), upon completion of their tax review for the financial year 2012-13 and
2014-15. The tax demands are on account of service tax on sales commission and classification of coal. The
matter is pending before Commissioner of Excise Service Tax Appellate Tribunal (CESTAT).
40. Contingent Liabilities & Commitments (Contd.)
***Customs duty demand comprise demand from Custom Authorities for payment of additional duty of
H6.22. Crore (31 March 2025: H6.22. Crore), upon completion of their tax review for the financial year 2012-13.
The tax demands are on account of classification of coal. The matter is pending before Commissioner of
Excise Service Tax Appellate Tribunal (CESTAT).
**** The GST demand represents an amount of ^17.34 crore (as at 31 March 2025: Nil) raised by the Goods and
Services Tax authorities following completion of their tax review for the financial years 2018-19 to 2024-25. The
demand primarily pertains to GST liabilities under the reverse charge mechanism on External Commercial
Borrowings (ECB), other borrowing cost and other imported services. The matter is currently under litigation
and is pending adjudication before the Commissioner of Customs, Excise and Service Tax Appellate Tribunal
(CESTAT).
*****Other claims / litigations comprise demand on account of litigations for alleged non-fulfilment of
obligations as per the terms of agreement by the counter party to H44.22 Crore(31 March 2025: H44.22 Crore).
The matters are pending at various stages in judicial authorities.
The Company is contesting the demands and the management, including its tax advisors, believe that its
position will likely be in favour of Company in the appellate process and no tax expense has been accrued in
the financial statements for the tax demand raised. The management believes that the ultimate outcome
of this proceeding will not have a material adverse effect on the company’s financial position and results of
operations.
B. Capital Commitment
The estimated amount of Contract to be executed on Capital Account of H54.61 Crore (31st March 2025 H186.87
Crore) and not provided for (Net of Advances).
C. Other Commitment
The Company has imported capital good for the various expansion projects under the EPCG Scheme at
nil rate of custom duty by undertaking obligation to export. Future outstanding export obligation under
the scheme is H176.07 Crore (31st March 2025: H25.02 Crore). The export obligation need to be completed by
February 2032.
41. Disclosures as per Msmed Act, 2006
The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26th August,
2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its
Customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance
with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the MSMED Act’).
Accordingly, the disclosure in respect of the amounts payable to such Enterprises as at 31st March, 2026 has
been made in the Financial Statements based on information received and available with the Company. The
Company has not received any claim for interest from any Supplier as at the Balance-Sheet date.
42.Leases
The Company has lease contracts for storage facilities. Leases are having lease terms of 2 to 3 years. The
Company’s obligations under its leases are secured by the lessor’s title to the leased assets. The Company is
restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain
premises in good state. The lease contract include extension and termination options. The Company also has
certain premises and assets with lease terms of 12 months or less. The Company applies the ‘short-term lease’
recognition exemptions for these leases.
Terms of Cancellation and Escalation
The Leases are cancellable by giving one month notice by either parties and these does not carries any escalation.
43. Capital Management
For the purpose of the 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 shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions
and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may
adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company
includes within net debt, interest bearing borrowings, lease liabilities, less cash and cash equivalents. There were
no changes in the objectives, policies or processes during the year ended March 31, 2026 and March 31, 2025.
44. Financial Instruments - Fair Values and Risk Management
The Material Accounting Policies, including the criteria for recognition, the basis of measurement and the basis
on which income and expenses are recognised, in respect of each class of Financial Asset, Financial Liability and
Equity Instrument are disclosed in Note 2 to the Financial Statements.
B. Measurement of Fair values and Sensitivity analysis
Fair Value Hierarchy:
The fair value of the Financial Assets and Liabilities is included at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale. The Company uses the following hierarchy for determining and/or disclosing the fair value of financial
instruments by valuation techniques:
(i) Level 1: quoted prices (unadjusted) in active markets for identical Assets or Liabilities.
(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the Asset or
Liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
(iii) Level 3: inputs for the Asset or Liability that are not based on observable market data (unobservable
inputs).
In determining fair value measurement, the impact of potential climate related matters which may affect
this fair value measurement of assets and liabilities in the financial statements have been considered.
44. Financial Instruments - Fair Values and Risk Management (Contd.)
Financial Instrument measured at Amortised Cost
The carrying amount of Financial Assets and Financial Liabilities measured at amortised cost in the Financial
Statements are a reasonable approximation of their fair values since the Company does not anticipate that
the carrying amounts would be significantly different from the values that would eventually be received
or settled.
Reconciliation of level 1 Fair Values
There have been no transfers between level 1, level 2 and level 3 during the year ended March 31, 2026 and
March 31, 2025.
Description of significant unobservable inputs to valuation:
The significant unobservable inputs used in the fair value measurement categorised within Level 2 of the fair
value hierarchy is based on the Fair value as ascertained and provided by the banks.
Financial Risk Management Framework
The Company’s Board of Directors have overall responsibility for the establishment and oversight of the
Company’s risk management framework. The Company manages market risk through treasury operations,
which evaluates and exercises independent control over the entire process of market risk management.
The finance team recommends risk management objectives and policies. The activities of this operations
include management of cash resources, hedging of foreign currency exposure, credit control and ensuring
compliance with market risk limits and policies.
The Company’s principal Financial Liabilities, other than Derivatives, comprises of Long Term and Short
Term Borrowings, Trade and Other Payables, and Financial Liabilities. The main purpose of these Financial
Liabilities is to finance the Company’s operations. The Company’s principal Financial Assets include Loans,
Trade and other Receivables, Cash and Cash Equivalents, other Bank Balances and Other Financial Assets
that derive directly from its Operations.
The Company has an effective risk management framework to monitor the risks controls in key business
processes. In order to minimise any adverse effects on the bottom line, the Company takes various mitigation
measures such as credit control, foreign exchange forward contracts to hedge foreign currency risk exposures.
Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
The Company has exposure to the following risks arising from Financial Instruments
? Credit Risk ;
? Liquidity Risk ; and
? Market Risk
i. Credit Risk
Credit Risk is the risk that counter party will not meet its obligation leading to a financial loss. The
Company is exposed to credit risk arising from its operating activities primarily from Trade Receivables
and from financing activities primarily relating to parking of surplus funds as Deposits with Banks. The
Company considers probability of default upon initial recognition of Assets and whether there has been
a significant increase in credit risk on an ongoing basis throughout the reporting period.
44. Financial Instruments - Fair Values and Risk Management (Contd.)
The carrying amount of following Financial Assets represents the maximum credit exposure:
Financial Instruments and Cash Deposit:
Credit Risk from Balances with Banks and Financial Institutions is managed by the Company’s Treasury
Department. Investments of surplus funds are made only with approved counterparties and within
credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and
therefore mitigate financial loss through counterparty’s potential failure to make payments.
Trade Receivables
Trade receivables consist of a large number of customers. The Company has credit evaluation policy
for each customer and based on the evaluation credit limit of each customer is defined. The exposure
in credit risk is backed either by bank guarantee, letter of credit or security deposits in case of few
customers. The Company’s exposure and wherever appropriate the credit ratings of its counterparties
are continuously monitored and spread amongst various counterparties. Credit exposure is controlled by
counterparty limits that are reviewed and approved by the management of the Company.
The Company does not have higher concentration of credit risks. Total trade receivable as on March 31,
2026 is H416.53 Crore (March 31, 2025 - H232.32 Crore).
Refer Note 10 for ageing of trade receivables.
The Company measures the expected credit loss of Trade Receivables and Loan from individual
Customers based on historical trend, industry practices and the business environment in which the
Entity operates.Loss rates are based on actual credit loss experience and past trends.
Expected credit loss assessment
For trade receivables, as a practical expedient, the Company compute credit loss allowance based on
a provision matrix. The provision matrix is prepared based on historically observed default rates over
the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting
date, the historically observed default rates and changes in the forward-looking estimates are updated.
Accordingly, loss allowances on trade receivables are measured using provision matrix at an amount
equal to life time expected losses i.e. expected cash shortfall. There is no history of bad debts and
accordingly ECL is Nil for year ended March 31, 2026 and March 31,2025.
Credit Impaired
For expected credit loss as at each reporting date the Company assesses position for the assets for which
credit risk has not significantly increased from initial recognition, assets for which credit risk has increased
significantly but are not credit impaired and for assets for which credit risk has increased significantly
and are credit impaired. The Company assesses detrimental impacts on the estimated future cash flows
of the financial asset including loans, receivables and other assets. Based on the assessment of the
observable data relating to significant financial difficulty and creditworthiness of the counterparties, the
management believes that there are no financial assets which are credit impaired except as disclosed in
the notes to the financial statements.
ii. Liquidity Risk
Liquidity Risk is the risk that the Company will not be able to meet its financial obligations as they fall
due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Company’s reputation.
Exposure to Liquidity Risk
The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring
forecast and Actual Cash flows and matching the maturity profiles of the Financial Assets and Liabilities.
The table below summarises the remaining contractual maturities of Financial Liabilities at the reporting
date. The amounts are gross and undiscounted, and include estimated interest payments and exclude
the impact of netting agreements.
The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities
including interest that will be paid on those liabilities upto the maturity of the instruments.
The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted
cash flows relating to derivative financial liabilities held for risk management purposes and which are
not usually closed out before contractual maturity. The disclosure shows net cash flow amounts for
derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that have
simultaneous gross cash settlement.
Excessive Risk Concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or
activities in the same geographical region, or have economic features that would cause their ability to
meet contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting
a particular Industry
In order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines
to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are
controlled and managed accordingly. Selective hedging is used within the Company to manage risk
concentrations at both the relationship and industry levels.
iii. Market Risk
Market Risk is the risk that the fair value of future Cash Flows of a Financial Instrument will fluctuate
because of changes in market prices. Market risk comprises three types of risk: Currency Risk, Interest
Rate Risk, and Other Price Risk such as Equity Price Risk. Financial Instruments affected by market
risk include Loans and Borrowings, Deposits, FVTOCI and Amortised Cost Investments and Derivative
Financial Instruments.
44. Financial Instruments - Fair Values and Risk Management (Contd.)
Foreign Currency Risk
Foreign Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign
exchange rates relates primarily to the Company’s operating activities (when revenue or expense is
denominated in a foreign currency).
The Company manages its foreign currency risk by hedging transactions that are expected to occur
of actual sales, purchases and for foreign currency loans based on management risk perception and
comapny’s policy. When a derivative is entered into for the purpose of being a hedge, the Company
negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of
forecast transactions the derivatives cover the period of exposure from the point the cash flows of the
transactions are forecasted up to the point of settlement of the resulting receivable or payable that is
denominated in the foreign currency.
Exposure to Currency Risk
The Currency profile of Financial Assets and Financial Liabilities as at 31st March, 2026 and 31st March ,
2025 are as below:
The Company’s exposure to Foreign Currency Risk at the end of the reporting period expressed in H, are
as follows
Interest Rate Risk
Interest Rate Risk is the risk that the fair value or future Cash Flows of a Financial Instrument will fluctuate
because of changes in market interest rates. The Company’s exposure to the risk of changes in market
interest rates relates primarily to the Company’s Long-Term Debt obligations with floating interest rates.
The Company manages its Interest Rate Risk by having balanced portfolio of fixed and variable rate
Loans and Borrowings.
46. Events occurred after the Balance Sheet date
The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior
to approval of Financial Statement to determine the necessity for recognition and/or reporting of any of these
events and transactions in the Financial Statements. As of 02nd May 2026 there were no material subsequent
events to be recognized or reported that are not already disclosed.
47. Other Statutory Information for the year ended March 31,2026 and March 31,2025
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act,
1988 and rules made thereunder.
(ii) The Company do not have any transactions or balance with companies struck off under section 248 of
Companies Act, 2013 or section 560 of Companies Act, 1956.
(iii) The Company do 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 and
in previous 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 Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company does not have transaction which are not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.
(ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act
read with Companies (restriction in number of layers) rules,2017.
48. The Company uses an accounting software for maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant
transactions recorded in the accounting software, except that audit trail feature is not enabled for certain
changes made using privileged administrative access rights at the application and database layer.
Further,there are no instance of audit trail feature being tampered. Additionally, the audit trail of prior
year(s) has been preserved by the Company as per the statutory requirements for record retention to the
extent it was enabled and recorded in the respective years.
49. On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages,
2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety,
Health and Working Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour
& Employment published draft Central Rules and FAQs to enable assessment of the financial impact due
to changes in regulations.
The Company on the basis of available information has assessed incremental liability for own employees
which is disclosed under employee benefit expenses as it is not material to the standalone financial results
as per the guidance provided by the Institute of Chartered Accountants of India. The Company continues
to monitor the finalisation of Central / State Rules and clarifications from the Government on other aspects
of the Labour Code and would provide appropriate accounting effect on the basis of such developments,
as required.
As per our Report of even date
For S R B C & CO LLP For and on behalf of the Board of Directors of
Chartered Accountants Epigral Limited
ICAI Firm Registration No. 324982E / E300003 (CIN: L24100GJ2007PLC051717)
per Abhishek Karia Rakesh Agrawal Maulik Patel
Partner Chief Financial Officer Chairman & Managing Director
Membership No. 132122 DIN: 02006947
Gaurang Trivedi Kaushal Soparkar
Company Secretary Executive Director
DIN: 01998162
Place: Ahmedabad Place: Ahmedabad
Date: 2nd May, 2026 Date: 2nd May, 2026
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