1.19 Provisions and contingent liabilities
A provision is recognised if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount is recognised as finance cost.
1.19 Provisions and contingent liabilities (contd...)
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but will probably not,
require an outflow of resources. When there is a possible obligation of a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision disclosure is made.
1.20 Earnings per share
Basic earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.
For calculating the weighted average number of equity shares outstanding, 23,689,390 (2024-25: 23,689,390) equity shares and 46,750
(2024-25: 46,750) equity shares are being excluded on consolidation of equity shares held by IEI Shareholding (Staff Welfare) Trusts and
HMIL Shareholding (Staff Welfare) Trusts respectively.
For the purpose of calculating diluted earnings per equity 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.
1.21 Segment reporting policies
Identification of segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has
been identified as the Executive Chairman / Managing Director & CEO who makes strategic decisions.
Inter-segment Transfers
The company accounts for inter-segment sales and transfers at cost plus appropriate margin.
Allocation of common costs
Common allocable costs are allocated to each segment according to the turnover of the respective segments.
unallocated costs
The unallocated segment 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.
1.22 cash and cash equivalents
Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original
maturity of three months or less.
1.23 Leases
Where the company is the lessor
Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating
leases. Assets given on operating lease by the company are included in property, plant and equipment. Lease income is recognised in the
statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognised as an expense in the
statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of
profit and loss.
Where the company is the lessee
Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is accounted at the lease commencement
date.
Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred.
The lease liability is initially measured at the present value of the lease payments, discounted using the rate implicit in the lease. If this rate
cannot be readily determined then the company's incremental borrowing rate is used. It is remeasured when there is a change in future
lease payments arising from a change in an index or a rate, or a change in the estimate of the guaranteed residual value, or a change in the
assessment of purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is recorded in the statement of profit and loss if the carrying amount of the right-
of-use asset has been reduced to zero.
1.23 Leases (contd...)
The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated amortisation and cumulative
impairment, if any. The right-of-use asset is amortised, using the straight-line method over the period of lease, from the commencement
date to the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased by
interest on lease liability and reduced by lease payments made.
Lease payments associated with following leases are recognised as expense on straight-line basis:
(i) Low value leases; and
(ii) Leases which are short-term.
1.24 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset till such time that it is required
to complete and prepare the assets to get ready for its intended use. All other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
1.25 Dividend payable
Final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividend are recorded as a
liability on the date of declaration by the company's board of directors. A corresponding amount is recognised directly in equity.
The company pays / distributes dividend after deducting applicable taxes.
1.26 Recent accounting pronouncements
The Ministry of Corporate Affairs (“MCA”) has notified amendments to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. This notification has resulted into amendment in the following existing accounting standard.
Ind AS 1- Presentation of Financial Statements:
The amendment relates to classification of liabilities as current or non-current and non-current liabilities with covenants. In the context
of classifying a liability as current, it removes the requirement of existence of a right to defer settlement for at least 12 months after the
reporting date and instead requires that the said right should exist on the reporting date and have substance. The amendment also
introduces guidance on classification of liabilities with covenants.
Ind AS 7- Statement of Cash Flows:
The amendments requires to inform users of the financial statements of the existence of supplier finance arrangements and explain the
nature of the arrangements, the carrying amount of liabilities and the range of payment due dates.
Ind AS 107- Financial Instruments Disclosures:
The amendments to add supplier finance arrangements as a factor that may cause concentration of liquidity risk.
Ind AS 12 - Income Taxes:
The amendments to the Pillar Model Rules introduce a temporary mandatory exemption from deferred tax accounting for top-up taxes and
require companies to disclose their use of this exemption. This relief takes effect immediately and applies retrospectively. In addition; the
amendments mandate new disclosures to compensate for any potential loss of information resulting from the exemption.
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates:
The amendments provide guidance on determining exchangeability between currencies and estimating spot rates when a currency is not
exchangeable.
The company has evaluated the amendments and there is no material impact on its Financial Statement.
2. Property, plant and equipment (contd...)
Notes
a) Freehold land includes land at Pune and Tamil Nadu, the title deeds of which are in the names of the nominees of the company.
Deemed gross book value INR 27.44 Lacs (31st March 2025: INR 27.44 Lacs)
b) Buildings on freehold land includes residential flats, the cost of which includes:
- INR 250 (31st March 2025: INR 250) being the value of 5 Shares (unquoted) of INR 50 each, fully paid up in Sunrise
Co-operative Housing Society Limited.
- INR 3,500 (31st March 2025: INR 3,500) being the value of 70 Shares (unquoted) of INR 50 each, fully paid up in usha Milan
Co-operative Society Limited.
c) Buildings on freehold land includes residential flats acquired at Mumbai, the society formation of which is in progress.
Deemed gross book value INR 41.15 Lacs (31st March 2025: INR 41.15 Lacs)
Net book value INR 30.77 Lacs (31st March 2025: INR 31.81 Lacs)
d) Buildings on freehold land includes residential flats comprising of 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur,
the title deeds of which are awaited from authorities.
Deemed gross book value INR Nil (31st March 2025: INR Nil)
Net book value INR Nil (31st March 2025: INR Nil)
e) Buildings on freehold land includes office premises given on operating lease :
Deemed gross book value INR 126.31 Lacs (31st March 2025: INR 126.31 Lacs)
Accumulated depreciation INR 47.58 Lacs (31st March 2025: INR 42.69 Lacs)
Depreciation for the year INR 4.89 Lacs (2024-25: INR 4.93 Lacs)
Net book value INR 78.73 Lacs (31st March 2025: INR 83.62 Lacs)
f) Addition to Property, plant and equipment includes amount of INR 85.83 Lacs (2024-25: INR 153.08 Lacs) pertaining to research and
development.
g) Certain property, plant and equipment are given as security for borrowings, the details relating to which have been described in note
19 and note 22.
17. Equity share capital (contd...)
(d) Aggregate number of equity shares issued for consideration other than cash during the period of five years immediately
preceding the reporting date.
Nil equity shares (Previous period of five years ended 31st March 2025: Nil equity shares)
(e) equity shares reserved for issued under ESoS
There are no pending equity shares reserved for issue under Employee Stock Option Schemes (ESOS).
(f) Details of shares held by promoters
Notes
(a) Description of nature and purpose of each reserve
Securities premium account: Securities premium account is used to record the premium on issue of shares. Securities premium
account also includes the difference between the face value of the equity shares and the consideration received in respect of shares
issued pursuant to employee stock options scheme. The reserve is utilised in accordance with the provisions of the Act.
Special reserve: Special reserve is created by the company in past as per provision of section 45 - IC of the Reserve Bank of India
Act, 1934 for repayment of fixed deposit holders.
General reserve: The company created a General reserve in earlier years pursuant to the provisions of the Companies Act wherein
certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act
2013, the requirement to transfer profits to General Reserve is not mandatory. General reserve represents appropriation of retained
earnings and are available for distribution to shareholders.
Treasury shares: Treasury shares represents equity shares of the company held by IEI Shareholding (Staff Welfare) Trusts as well
as HMIL Shareholding (Staff Welfare) Trusts.
Notes
(a) Indian rupees loan from financial institution for capital expenditure carrying interest rate @ 9.25% p.a. as on 31st March 2026. The loan
is secured by exclusive charge on movable and immovable fixed assets pertaining to Reverse Osmosis Membrane manufacturing
facility project at Goa, under Phase I under and is repayable in 20 equal quarterly instalments from 1st August 2023.
(b) Indian rupees loan from financial institution for capital expenditure carrying interest rate @ 8.30% p.a. as on 31st March 2026.
The loan is secured by first charge on movable and immovable fixed assets (on present and future assets) pertaining to a Resin
manufacturing facility project in Roha, Maharashtra and is repayable in 20 equal quarterly instalments from 30th September 2026.
(c) Indian rupees loan from a bank for execution of BOOT order from a company and carries interest rate @ 8.70% p.a. as on 31st March
2026. The loan is secured by exclusive charge on movable fixed assets of this plant, stock and book debts arising out of the said
BOOT order and on present and future cash flows and is repayable in 20 equal quarterly instalments from 31st March 2026.
(a) The working capital loan is secured by joint hypothecation of book debts and stocks and collateral security by way of charge on the
fixed assets at its manufacturing facilities situated in Hosur, Patancheru, Vashi, Goa, Ankleshwar and Mumbai (Office Premises). The
working capital loan is repayable on demand and carries interest @ 8.10% to 9.90% p.a. (31st March 2025: 8.90% to 11.65% p.a.).
(b) The working capital demand loan of INR 1,300.00 Lacs (31st March 2025: Nil) is secured by joint hypothecation of book debts and
stocks and collateral security by way of charge on the fixed assets at its manufacturing facilities situated in Hosur, Patancheru, Vashi,
Goa, Ankleshwar and Mumbai (Office Premises). The working capital loan is repayable on respective due date(s) and carries interest
@ 8.25 % p.a.
39. Employee benefits
A. Gratuity
The company has a defined benefit gratuity plan. The plan provides for lump sum payment to vested employees at retirement, on
death while in employment or on termination of the employment in terms of the provisions of the Payment of Gratuity Act, 1972 or
as per the Company's Scheme, as applicable. Every employee who has completed five years or more of service gets a gratuity on
departure. The scheme is funded to a separate trust duly recognised by Income tax authorities.
The following table summarises the components of net benefit expense recognised in the statement of profit and loss and the funded
status and amounts recognised in the balance sheet for the gratuity plan.
Notes:
a) Amounts recognised as an expense and included in note 32:
Gratuity in “Contribution to provident and other funds” INR 1,609.76 Lacs (2024-25: INR 345.07 Lacs).
B. Provident fund
The company's provident fund schemes which are administered through Government of India are defined contribution plan. The
company's contribution paid / payable under the scheme is recognised as expense in the statement of profit and loss during the year in
which the employee renders the related services. There are no other obligations other than the contribution payable to the respective
fund.
The company's provident fund scheme which is managed by trust set up by the company, the contribution to the provident fund is
remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees' salary and charged to
statement of profit and loss. Shortfall, if any, in the fund assets, based on the government specified minimum rate of return, will be made
good by the company and charged to statement of profit and loss. The actual return earned by the fund has mostly been higher than the
government specified minimum rate of return in the past years. There is no shortfall in the fund as on 31st March 2026 as per valuation
report. (As on 31st March 2025 there was also no shortfall)
C. Defined contribution plan
Amount recognised as an expense and included in the note 32 - “Contribution to provident and other funds” of the statement of profit
and loss INR 1,033.70 Lacs (2024-25: INR 880.77 Lacs). There is no deficit in the accumulated corpus of the fund which is to be
recognised in statement of profit and loss.
D. Other employee benefits
Amounts recognised as an expense and included in note 32
Leave encashment in “Salaries, wages and bonus” INR 1,321.87 Lacs (2024-25: INR 515.33 Lacs)
E. The net provision for leave encashment liability upto 31st March 2026 is INR 2,887.01 Lacs (31st March 2025: INR 1,834.24 Lacs)
Note:
On 21st November 2025 the Government of India notified four Labour Codes. These Labour Codes consolidate twenty-nine existing labour
laws into a unified framework governing employee benefits during employment and post-employment and amongst other things introduce
changes, including a uniform definition of wages and enhanced benefits relating to leave. The adjustments for Labour Codes represent
an increase in gratuity liability arising out of past service cost and increase in leave liability together by INR 1,454.41 Lacs in financials.
Considering the impact arising out of an enactment of the new legislation is an event of non-recurring nature, the company has presented
this incremental amount as ’’Impact of Labour Codes” under “Exceptional Item” in the financials for the year ended 31st March 2026. The
company continues to monitor the developments pertaining to Labour Codes and will evaluate impact if any on the measurement of liability
pertaining to employee benefits.
40. Financial instruments
Financial instruments - Fair values and risk management
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. It does not
include the fair value information for current financial assets and current financial liabilities not measured at fair value if their carrying amount
is a reasonable approximation of fair value.
40. Financial instruments (contd...)
B. Measurement of fair values
Valuation techniques and significant unobservable inputs
The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable
inputs used. The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide
range of possible fair value measurements and the cost represents estimate of fair value within that range.
Financial instruments measured at fair value
c. fair value hierarchy:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consists of the following three levels:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This includes listed equity
instruments, traded debentures and mutual funds that have quoted price / declared NAV The fair value of all equity instruments (including
debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period.
level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/debentures,
over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximize the use of observable
market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
level 3: If one or more of the significant Inputs is not based on observable market data, the instrument is included in level 3. Fair values are
determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current
market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity
shares, loans are included in this hierarchy.
D. Inter level transfers:
There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year
E. Financial risk management:
The company has exposure to the following risks arising from financial instruments:
Ý Credit risk;
Ý Liquidity risk; and
Ý Market risk
Ý Capital risk management
Risk management framework
The company's board of directors has overall responsibility for the establishment and oversight of the company's risk management
framework.
The company's risk management policies are established to identify and analyse the risks faced by the company, to set appropriate risk
limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the company's activities. The company, through its training and management standards and procedures,
aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The audit committee oversees how management monitors compliance with the company's risk management policies and procedures and
reviews the adequacy of the risk management framework in relation to the risks faced by the company. The audit committee is assisted in
its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures,
the major observation are periodically reported to the audit committee.
40. Financial instruments (contd...)
(i) 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 customers.
Trade receivables
Credit risk is managed through credit approvals and continuously monitoring the creditworthiness of customers to which the company
grants credit terms in the normal course of business. In respect of trade receivables, the company is not exposed to any significant
credit risk exposure to any single counter party or any group of counterparties having similar characteristics. Trade receivables consist
of a large number of customers in various geographical areas. The company assesses the credit quality of the customer based on
market intelligence, past payment history and defaults.
Credit risk management procedure includes regular monitoring of outstanding trade receivables to ensure risk of credit loss is minimal.
As per policy, trade receivables are classified into different buckets based on the overdue period. There are different provisioning
norms for each bucket which are ranging from 25% to 100%.
The movement in the provision for expected credit loss in respect of trade receivables (including retention money) and accrued value
of work done during the year is as follows:
Note:
Further ECL on other current assets during the year INR 380.00 Lacs (2024-25: INR Nil) has been provided.
Cash and cash equivalents
The company held cash and cash equivalents of INR 14,113.70 Lacs as at 31st March 2026 (as at 31st March 2025: INR 11,581.46 Lacs).
The cash and cash equivalents are held with banks with good credit ratings.
Other bank balances
The company held other bank balances equivalents of INR 12,998.64 Lacs as at 31st March 2026 (as at 31st March 2025:
INR 30,860.92 Lacs). The other bank balances are mainly temporary surplus fund invested in fixed deposits with banks having good
rating and margin money against bank guarantees issued by banks on the company's behalf.
Investments
The company has invested an insignificant amount in listed securities. The company does not expect any losses.
Other financial assets
Other financial assets mainly comprise of tender deposits and security deposits which are given to customers or governmental
agencies in relation to contracts bid / execution and are assessed by the company for credit risk on a continuous basis.
(ii) Liquidity risk
Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The company's approach to managing liquidity is to ensure, as far as
possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the company's reputation.
The company has obtained fund and non-fund based working capital limits from various banks. The company invests its temporary
surplus funds in bank fixed deposit.
(iii) Market risk
The company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and
certain other price risks, which result from both its operating and investing activities.
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 to the floating rate debt obligations.
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of
changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings
are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest
bearing investments will fluctuate because of fluctuations in the interest rates.
Exposure to interest rate risk:
Company's interest rate risk arises primarily from borrowings. The interest rate profile of the company's interest-bearing financial
instruments is as follows.
Fair value sensitivity analysis for fixed-rate instruments:
The company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, a change in interest rates
at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable-rate instruments:
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity
and profit or loss by the amount shown below. This analysis assumes that all other variables remain constant.
The risk estimates provided assume a change of 100 basis points interest rate for the interest rate benchmark as applicable to
the borrowings summarised above. This calculation also assumes that the change occurs at the balance sheet date and has been
calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the
average debt outstanding during the period.
Foreign currency risk
The company is exposed to currency risk on account of its revenue generating and operating activities in foreign currency. The
functional currency of the company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has
changed in recent periods and may continue to fluctuate in the future.
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:
(a) The company offers wide range of solutions across the water cycle from pre-treatment to process water treatment, waste water
treatment, recycle, zero liquid discharge, sewage treatment, packaged drinking water, sea water desalination etc. The company is
also engaged in manufacturing resins, speciality chemicals for water and waste water treatment as well as non-water applications.
The type of work in the contracts with the customers involves designing, engineering, supply of materials, installation and commissioning
of the plant, project management, operations and maintenance. The effect of initially applying Ind AS 115 on the Company's revenue
from contracts with customers is described in Note 1.17.
(b) Revenue disaggregation as per industry vertical and geography has been included in segment information (Refer note 42).
(c) reconciliation of contract assets and liabilities
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers in
respect of contracts in progress:
(d) remaining performance obligations
The following table includes revenue expected to be recognised in future related to performance obligations that are unsatisfied or
partially unsatisfied at reporting date.
The company applies practical expedient included in Para 121 of Ind AS 115 and does not disclose information about the remaining
performance obligations that have an original expected contract duration of one year or less
(e) Performance obligation
The company evaluates whether each contract consists of a single performance obligation or multiple performance obligations.
Contracts where the company provides a significant integration service to the customer by combining all the goods and services are
concluded to have a single performance obligations. Contracts with no significant integration service, and where the customer can
benefit from each unit on its own, are concluded to have multiple performance obligations. In such cases consideration is allocated
to each performance obligation, based on standalone selling prices. Where the company enters into multiple contracts with the same
customer, the company evaluates whether the contract is to be combined or not by evaluating factors such as commercial objective
of the contract, consideration negotiated with the customer and whether the individual contracts have single performance obligations
or not.
The company recognises contract revenue over time as the performance creates or enhances an asset controlled by the customer.
For such arrangements revenue is recognised using cost based input methods. revenue is recognised with respect to the stage of
completion, which is assessed with reference to the proportion of contract costs incurred for the work performed at the balance sheet
date relative to the estimated total contract costs.
Any costs incurred that do not contribute to satisfying performance obligations are excluded from the Company's input methods of
revenue recognition as the amounts are not reflective of our transferring control of the plant to the customer. Significant judgment is
required to evaluate assumptions related to the amount of net contract revenues, including the impact of any performance incentives,
liquidated damages, and other forms of variable consideration.
If estimated incremental costs on any contract, are greater than the net contract revenues, the Company recognises the entire
estimated loss in the period the loss becomes known.
variations in contract work, claims, incentive payments are included in contract revenue to the extent that may have been agreed with
the customer and are capable of being reliably measured.
(f) Revenue from sale of goods is recognises at the point in time when control of the assets is transferred to the customer, basis
incoterms.
(g) Revenue related to fixed price maintenance and support services contracts where the company is standing ready to provide services
is recognised based on time elapsed mode and revenue is straight lined over the period of performance.
(h) Reconciliation of revenue recognised in the statement of profit and loss
The following table discloses the reconciliation of amount of revenue recognised:
43. Related party disclosures (contd...)
II. Company has given letter for continuous financial support to its Subsidiaries - Ion Exchange Asia Pacific Pte. Ltd., Singapore, Ion Exchange
Enviro Farms Ltd. and Ion Exchange Projects And Engineering Ltd.
III. Disclosure pursuant to the regulation 34(3) read with para A of schedule V of (Listing Obligations and Disclosure Requirements)
Regulations, 2015:
45. (a) The company as at 31st March 2026, has an investment of INR 54.70 Lacs (31st March 2025: INR 54.70 Lacs) in equity shares and
INR 1,500.00 Lacs (31st March 2025: INR 1,500.00 Lacs) in 7% Secured redeemable Non-Convertible Debentures in Ion Exchange
Enviro Farms Limited (IEEFL), a subsidiary company. Further as at 31st March 2026 loans and advances outstanding aggregating to
INR 5,138.00 Lacs (Net of provision for expected credit loss INR 654.00 Lacs) [(31st March 2025: INR 5,287.21 Lacs (Net of provision
for expected credit loss INR Nil)] to IEEFL. As at 31st March 2026, the accumulated losses of IEEFL have substantially exceeded its
paid-up share capital.
IEEFL has adequate assets in the form of developed and undeveloped land and the redeemable non-convertible debentures are
secured by way of mortgage of office premises.
Also, in response to the SEBI (Collective Investment Schemes) Regulations, 1999 (the “Guidelines”), notified by Securities and
Exchange Board of India (SEBI) on 15th October 1999, IEEFL had applied for registration to SEBI on 14th December 1999. In
response, SEBI had granted provisional registration to IEEFL on 13th February 2001, subject to certain conditions. The provisional
registration was subsequently extended and expired on 13th February 2003.
IEEFL applied to SEBI seeking exemptions from provisions of the regulations, because it was not able to comply with certain
requirements of SEBI (CIS) Regulations, 1999. The SEBI did not grant exemption and further vide letter dated 7th January 2003;
SEBI called upon IEEFL to show cause why the provisional registration granted to it should not be revoked. After hearing the IEEFL's
submission, SEBI vide order dated 27th November, 2003 directed IEEFL to wind up the scheme and refund the monies with returns to
investors.
Against the aforesaid order IEEFL filed an appeal before Securities Appellate Tribunal (SAT) which vide its order pronounced on
5th May, 2006 upheld that SEBI order in so far as it relates to refund the monies along with the return to the investors by IEEFL and to
wind up of the scheme.
IEEFL had filed appeal against the order of SAT in Hon'ble Supreme Court of India on 4th July, 2006. The Hon'ble Supreme Court
of India had dismissed IEEFL's appeal on 26th February 2013. IEEFL in order to comply with SAT order dated 5th May 2006 has
submitted a letter on 17th May 2013 to SEBI seeking its directions to comply with the SAT order.
Subsequent to this there was a meeting with SEBI Officials on 27th November 2013, wherein some additional details about compliance
of the Scheme and financial results etc. were called for which have been duly complied with vide letter dated 13th December 2013.
Pursuant to this, IEEFL has initiated actions in line with the aforesaid meetings with SEBI Officials and letters submitted to SEBI.
Subsequent to SEBI order of 30th December 2015, for closer of the CIS Scheme (which inter-alia included directions to refund
INR 2,006 Lacs to investors, as per the earlier order of 27th November 2003), IEEFL was granted a personal hearing on 3rd February
2016 and additional information called for was submitted on 23rd March 2016. IEEFL has requested permission to wind up the
scheme in terms of rule 73(1) to (9) of CIS Regulation as it has completed all obligations towards the investors, i.e., sale of lands and
development and maintain the lands then after as per the agreements.
As SEBI refused to accede to IEEFL's request, IEEFL filed a fresh appeal at Securities Appellate Tribunal (SAT) on 9th February 2017
no (1) 40 0f 2017 - citing practical difficulties in execution of the SEBI order to refund to all investors as investors have already received
their lands / refunds as per the agreements.
IEEFL's plea in SAT is for issuing suitable directions to SEBI for verifying the documentary proofs submitted by IEEFL for conveying of
lands, refunds made and thereafter calling outstanding claims, if any, and thereafter declaring wind up of the scheme in terms of the
CIS Regulations. Appeal has been already admitted by SAT and certain hearings have also taken place.
The appeal was heard and vide order dated 18th October, 2019 SAT has dismissed the appeal. IEEFL thereafter filed a review petition
before the SAT, Mumbai on 3rd December 2019 seeking correction of factual errors in the order. Additionally, based on the legal advice
and pending final order from SAT on the review petition, IEEFL filed an appeal before the Hon'ble Supreme Court against SAT order
on 18th February 2020. As the SAT hearing held on 19th March 2021, it was held that, there was no error apparent on the face of
the record and accordingly, the review application was dismissed. Consequently, the appeal stood set aside against IEEFL. Further
vide order No. 2853/2021 dated 6th December 2021, the Hon'ble Supreme Court granted liberty to IEEFL to approach Securities and
Exchange Board of India and seek reconsideration of the matter by submitting additional material.
Pursuant to the above, IEEFL submitted a representation requesting reconsideration of the matter by filing additional documents
through its advocates vide letter dated 2nd March 2022. Further SEBI, vide its letter dated 17th May 2022 made certain observations
and has advised IEEFL to provide for additional comments / documents, which were duly submitted through their advocate vide letter
dated 12th July 2022. Thereafter, SEBI appointed M/s. SKvM & Co as a forensic auditor to examine IEEFL's documents and records
and to submit a report. IEEFL furnished all required documents to the auditor. Further during the course of audit, queries raised by
M/s. SKvM & Co. have been addressed by IEEFL through its counsel. Based on the report, submitted by the auditor to SEBI, SEBI has
sought certain clarifications from IEEFL, which were provided. Subsequently, SEBI, vide its letter dated 16th May 2024 directed IEEFL
to deposit an amount of INR 2,202 Lacs towards repayment to investors. IEEFL has represented to SEBI to reconsider the matter in
line with audit findings. However, SEBI rejected the request vide email dated 7th August 2024. IEEFL has since filed an appeal before
SAT, which was listed for hearing on 17th October 2024. During the hearing, the counsel for SEBI made a statement that SEBI will
not initiate any recovery proceedings till the next date of hearing. The matter is currently pending, with the next hearing scheduled for
24th June 2026.
The management is of the opinion, that there is no diminution, other than temporary, in the value of investments and the loans and
advances are fully recoverable and adequate provision has been provided.
45. (b) Further, book values of certain other long term investments in subsidiaries measured at cost, aggregating to INR 3,006.95 Lacs
(31st March 2025: INR 2,979.99 Lacs) are lower than its cost. The company has also granted loans and advances to these subsidiaries
aggregating INR 1,333.46 Lacs (31st March 2025: INR 2,067.63 Lacs). Considering the strategic and long term nature of the aforesaid
investments, and asset base and business plan of the investee companies; in the opinion of the management the recoverable amount
is not less than its carrying amount recognised in the books.
46. Capital expenditure incurred on research and development during the year is INR 85.83 Lacs (2024-25: INR 153.08 Lacs). revenue
expenditure of INR 1,266.59 Lacs (2024-25: INR 1,217.63 Lacs) incurred on research and development has been expensed to the statement
of profit and loss under various expense heads. Location wise details are as follows:
47. Lease
Operating Lease
Company as lessor:
The company has entered into commercial property lease of its surplus office. The lease agreement is for 5 years. The lease includes a
clause to enable upward revision by 15% after completion of 3 years from the date of commencement of the lease agreement.
Further undiscounted minimum rentals receivable under non-cancellable operating lease are as follows:
49. Capital and other commitments
Estimated amount of contracts (net of advances) remaining to be executed on capital account not provided for is INR 7,774.26 Lacs
(31st March 2025: INR 12,967.74 Lacs).
50. Contingent liabilities
Contingent liabilities not provided for:
(a) Guarantee given by the company on behalf of:
i) Subsidiaries - INR 14,158.53 Lacs (31st March 2025: INR 12,251.35 Lacs)
ii) Associates - INR 1,100.00 Lacs (31st March 2025: INR 1,100.00 Lacs)
iii) Others - INR 38.88 Lacs (31st March 2025: INR 38.88 Lacs)
(b) Demand raised by authorities against which the company has filed an appeal.
i) Income tax - INR Nil (31st March 2025: INR Nil)
ii) Excise duty - INR 28.58 Lacs (31st March 2025: INR 28.58 Lacs)
iii) Service tax - INR 499.36 Lacs (31st March 2025: INR 499.36 Lacs)
iv) Sales tax / VAT - INR 609.05 Lacs (31st March 2025: INR 741.06 Lacs)
v) GST - INR 1,440.55 Lacs (31st March 2025: INR 1,127.84 Lacs)
(c) Claims against the company arising in the course of business not acknowledged as debts (to the extent ascertainable) INR 2,102.37
Lacs (31st March 2025: INR 1,437.10 Lacs).
Note: Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/ decisions pending with
various forums/authorities.
52. Capital advance includes amount of INR Nil (31st March 2025: INR 25.33 Lacs) paid for acquiring furnished office premises at Hyderabad,
the ownership of which was under legal dispute.
53. Corporate Social Responsibility expenses:
A. Gross amount required to be spent by the company during the year INR 530.87 Lacs (2024-25: INR 486.76 Lacs).
B. Amount approved by the committee to spent during the year INR 530.87 Lacs (2024-25: INR 486.76 Lacs).
D. Shortfall at the end of the year: INR Nil (31st March 2025: INR Nil)
E. Reason for shortfall at the end of the year: Not applicable
F. Nature of CSR activities: Education, Environment, Water, Sanitation, Health and Hygiene, Rural development, Skill development,
sports.
G. Related party transaction in relation to Corporate Social Responsibility: INR 530.10 Lacs (2024-25: INR 472.42 Lacs)
Majority of the CSR projects under the Ion Exchange umbrella are implemented by Ion Foundation, a company incorporated under
Section 8 of the Companies Act, 2013
H. Provision during the year INR Nil (31st March 2025: INR Nil)
56. Other Statutory Information
(i) The company does not have any benami property, where any proceedings has been initiated or pending against the company for
holding any benami property.
(ii) The company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iii) The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iv) 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.
(v) 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,
(vi) The company does not have any such transaction which is not recorded in the books of account 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.
57. Events after reporting period
No material adjusting / Non adjusting subsequent event occurred after the balance sheet date and date of the approval of these financial
statements by the board of directors of the company requiring adjustment or disclosure. Also refer note 59.
58. Information with regard to other matters, as required by Schedule III to the Act is either nil or not applicable to the company for the year.
59. Dividends
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