Estimation of fair value

The Company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:

Current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences

The main input used is the price per square metre as per state government's registration and stamps department rate for the property All resulting fair value estimates for investment properties are included in level 2.

Terms/ rights attached to equity shares

The company has only one class of equity shares having face value of INR 10 per share. Each holder of equity shares is entitled to one vote per share.

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

As per records of the Company including its register of share holders/members and other declarations received from share holders regarding benificial interest, the above share holding represents legal ownership of shares as at balance sheet date.

The Company has alloted 50,86,765 equity shares of Rs,10/- each on 14th March,2020 at a premium of Rs.27.01 to promotors group by conversion out of 1,52,73,682 share warrants alloted on 27th January, 2019 on preferential basis.

The Company has alloted 53,54,490 equity shares of Rs,10/- each on 20th May,2020 at a premium of Rs.27.01 to promotors group by conversion out of 1,52,73,682 share warrants alloted on 27th January, 2019 on preferential basis.

Nature and purpose of other reserves Securities Premium Reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act. Fair value of Equity Instruments through Other Comprehensive Income (FVOCI)

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity. The Comapany transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

General Reserve

The General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purpose. As General Reserve is created by a transfer from one component of Equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclasified subsequently to profit or loss.

There is no default as at 31st March, 2023 and 31st March 2022, in repayment of loans and interest payments on Term Loans.

Terms of repayment

** Indian Bank Term Loan (Rs. 10000 Lakhs sanctioned for Chloromethanes expansion is repayable in 20 quarterly instalment from June 2022 at interest rate of 1 Year MCLR 0.70%).

"***Working Capital term loans availed from Indian Bank (Rs. 5000 lakhs repayable in 60 monthly instalments from Febuary, 2019 at interest rate of MCLR 1year Spread 3.15%p.a).“"

"COVID working capital term loans availed from, Indian Bank Rs 867 lakhs is repayable in 30 monthly instalments starting from April 2021 at interest rate of 1 Year MCLR., South Indian Bank Limited Rs. 75 lakhs is repayable in 12 monthly instalments starting from Dec 2020 at interest rate of MCLR 1.85.

GECLs working capital term loans availed from Indian Bank Rs. 953 lakhs are repayable in 48 monthly instlaments starting from Feb 2022 at interest rate of 1 Year MCLR 1%, “IDBI Bank Ltd. Rs. 957 lakhs is repayable in 48 monthly instlaments starting from Jan 2022 at interest rate of MCLR 1%,

Punjab National Bank Rs. 225 lakhs is repayable in 48 monthly instlaments starting from Jan 2022 at interest rate of MCLR 1%, and “South Indian Bank Limited Rs. 86 lakhs is repayable in 48 monthly instlaments starting from March 22 at interest rate of MCLR 1%.

GECL Term loan availed from IDBI Bank Rs. 480 lakhs is repayable in 48 monthly instalments starting from March 23 at interes rate of MCLR 1% and from Indian Bank Rs. 1800 lakhs repayable in 48 monthly instalments from Jan 24 at intereset rate of MCLR 1%."

Security Term loans

"The above Term Loan from Banks i.e., Indian Bank is secured by first pari passu charge on all fixed assets of the company including fixed assets of Chlorometahnes expansion project (excluding specific LC charges).

Working capital loans

The above Working capital term loan from Indian Bank secured by pari passu first charge on existing fixed assets of the Company and specific lien on government incentives receivable and personal guarantee of Shri. T.G.Venkatesh.“For COVID / GECLs term loans from Banks India Bank, IDBI Bank, Punjab National Bank and South Indian Bank shall rank 2nd charge with existing credit faciliites.

Letter of Credit

Letters of credit for capital goods secured by exclusive charge on specific asset procured and guaranteed by Shri T.G.Venkatesh. The LC creditors for Capital goods were fully secured with 100% margin with Indian Bank.

There is no default as at 31st March, 2023, 31 st March 2022, in repayment of loans and interest payments on Working capital Loans, Letters of Credit issued and Bills discounted with Banks and others.

Security

a) Short Term Loans from Banks:

The above Working Capital Demand Loans and Cash Credits are with various banks at interest rate of MCLR plus Spread. Spread varies from 2.10% to 3.15%.

The Working Capital Demand Loans, Cash Credits and Bills discounted by Banks are secured by 1st pari passu charge by way of hypothecation of inventories and receivable of the Company and further secured by 2nd pari passu charge on land, building and Plant and machinery and guaranteed by Shri TG.Venkatesh.

b) Letters of Credit from Banks:

The above Letter of credit facility availed from Banks were secured by 1st pari passu by way of hypothecation of inventories and receivable of the Company and further secured by 2nd pari passu charge on land, building and Plant and machinery and Letters of credit for capital goods secured by exclusive charge on specific asset procured and guaranteed by Shri TG.Venkatesh.

c) Bills discounted with Can Bank Factors Ltd:

The above Sale Bill discounting facility from Can Bank Factors ltd is secured by second charge on respective fixed assets of the Company ranking pari passu with charges already created/ to be created by the Company and further guaranteed by Shri TG.Venkatesh and purchase bill discounting facility sanctioned by Can Bank Factors Ltd are secured by 2nd pari passu charge on fixed assets of the company."

A) Defined Contribution Plans

The Company makes Provident Fund and Superannuation Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.169.60 Lakhs (Previous year Rs.128.64 Lakhs) for Provident Fund contributions and Rs.47.57 Lakhs (Previous year Rs.28.75 Lakhs) for Superannuation Fund contributions in the Statement of Profit and Loss. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

B) Defined Benefit Plan

The Company's obligation towards the Gratuity Fund is a defined benefit plan and is funded with Life Insurance Corporation of India. The following table sets out the funded status of the defined benefits scheme and the amount recognized in financial statement as per Actuarial Valuation:

The Company records the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the ROU asset at its carrying amount as if the standard had been applied since the commencement date of the lease, but discounted at the Company's incremental borrowing rate at the date of initial application.

Level 1: Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. 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. This is the case for unlisted equity securities included in level 3.

There are no transfers between levels 1 and 2 during the year.

Note 33: Capital Management & Risk management Capital management

The Company being in a capital intensive industry, its objective is to maintain a strong credit rating healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity. “The Company's capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings. “The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and align maturity profile of its debt commensurate with life of the assets, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

Financial risk management and objectives and policies

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact in the financial statements.

A Special Team with Senior Executives having exposure in various fields has been formed to assist Executive Director and CEO in “(a) Overseeing and approving the Company's enterprise wide risk management framework, and “(b) Overseeing that all the risks that the organisation faces such as market risk(including currency risk, interest rate risk and other price risk), Credit risk and liquidity risk have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. “The Executive Director and CEO, monitors and reports on the principal risks and uncertainties that can impact the Company and its ability to achieve strategic objectives. The Company's management systems, organisational structures, processes, standards, code of conduct and behaviors together form the Management and business of the Company.

A. Market risk

The Company is exposed to market risk through changes in foreign currency exchange rates and changes in interest rates. Financial assets/liabilities affected by this risk are borrowings, letter of credits and trade receivables.

The Company's investments in listed and non-listed equity securities are susceptible to price risk arising from uncertainties about future value of the investment secutities. The Company's non-current investment in equity shares are strategic investments and hence are considered as Fair Value through Other Comprehensive Income. The company's Board of Directors reviews and approves all equity investment decisions.

The Company operates internationally and is exposed to foreign currency risk arising from foreign currency transactions, primarily with respect to the US$, EUR, JPY CHF, Foreign exchange risk arises from import as well as exports of goods. The risk is measured through a forecast of highly probable foreign currency cash flows.

The special team as mentioned above analysis the options for hedging. Based on the analysis the management takes decision regarding hedging of foreign currency exposures. Currently, the Company has not hedged any of the foreign currency transactions in the veiw of the natural hedging. The natural hedging is sufficient to manage the current foreign currency risk management.

Interest rate risk is the risk that the fair value or future cash flows of a financial intruments 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 borrowings with floating base interest rates. Based on the interest rate sensitivity the Company decides on the management of interest rate risk.

B. Credit risk

"Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is operating through network of dealers based at different locations. Regular monitoring of the receivables is undertaken by the marketing department and in case the limits are exceeded, steps will be taken by the marketing departments and after discussing with the management the Company will decide whether to stop or not further supplies to the concerned dealer till the amount outstanding is recovered. For the export made by the Company, the sales are backed by ECGC Coverage or advance receipts. The internal risk management committee of the Company meets regularly to discuss the dealers and credit risks, measures taken to address them and the status and level of risk after the measures taken.“Export sales are fully secured through ECGC Coverage or against advance receipts. (refer Note No.8(a) for Trade Receivbles outstanding)."

C. Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company maintains flexibility in funding by maintaining availability under committed credit lines.

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company's short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

(b) During the year 2022-23, the Company lodged a claim on A.P Gas Power Corporation Limited (APGPCL), a captive power generating Company by issuing debit note for an amount of Rs. 4766.73 Lakhs towards power purchased from APGPCL being full credit not given by Southern Power Distribution Company of A.P Ltd (APSPDCL) for the power supplied by APGPCL and APSPDCL also raised demand for the same power purchased from APGPCL on account of certain disputes pending between the above two companies.

Note 38: Revenue from contracts with Customers:

The Company produces Chloro-Alkali & Chloromethane products and also Castor Derivatives and Fatty Acids. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.

Revenue from sale of goods is recognized when control of the products being sold is transferred to our customer and when there are no longer any unfulfilled obligations.

The Performance Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

Income from services rendered is recognized based on agreements/arrangements with the customers as the service is performed and there are no unfulfilled obligations.

Interest income is recognized using the effective interest rate (EIR) method.

B. Remaining Performance Obligations

The remaining performance obligation disclosure provides the aggregate amount of transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue.

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 recognized corresponds directly with the value to the customer of entity's performance completed to date.

The aggregate amount of transaction price allocated to remaining performance obligations as per the requirements of Ind AS 115 is Rs.8500.34 Lakhs (Previous year Rs.15173.49 Lakhs) out of which, approximately 100% (Previous year 100%) is expected to be recognized as revenues within one year.

Note:

1. Total Debt = Long term Borrowings (including current maturities of Long term Borrowings), Sales tax deferrment loan (current and non-current),“short term borrowings and Interest accrued on Debts

2. Earning for Debt Service = Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest“ other adjustments like loss on sale of Fixed assets etc

3. Debt service = Interest & Lease Payments Principal Repayments

4. Avg. Shareholder's Equity = Average of Opening Total Equity and Closing Total Equity

5. Avg. Inventory = Average of Opening Inventory and Closing Inventory

6. Avg. Trade Receivable = Average of Opening Trade Receivables and Closing Trade Receivables

7. Avg. Trade Payables = Average of Opening Trade Payables and Closing Trade Payables

8. Working capital shall be calculated as current assets minus current liabilities

9. Capital Employed = Tangible Net Worth (excluding revaluation reserve) Total Debt Deferred Tax Liability

10. Average Total Assets = Average of Opening Total Assets and Closing Total Assets

11. Avgerage Total equity = Average of Opening Equity Share capital Other equity and Closing Equity share capital Other equity.

Note 43: Additional Regulatory Information:

(1) The Company has not granted any loans or Advances in the nature of Loans to Promoters, Directors , KMPs and other related parties

(2) The Company is not holding any Benami property and no proceeding has been initiated or pending against the company.

(3) The Company has no transaction which is not recorded in the books of accounts that has been surrendered or

disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey or any relevant provisions of Income Tax Act, 1961).

(4) (A) The Company has not advanced or loaned or invested any funds in any other person(s) or entity(ies),

including foreign entities (intermediaries).

(B) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (funding party).

(5) The Company is not declared as willful defaulter by any Bank or Financial Institutions or RBI or other lenders.

(6) The Company has borrowings from Banks or Financial Institutions on the basis of security of Current Assets.

Quarterly returns or Statement of Current Assets filed by the company with Banks or Financial Institutions are in agreement with the Books of Accounts with some insignificant variances.

(7) There are no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond the statutory period.

(8) The company has no transactions and no relationship with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.

(9) The company has no subsidiaries.

(10) There are no Schemes of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

(11) The Company has not invested or traded in Crypto currency or Virtual Currency during the financial year 202223 and Previous year 2021 -22.

44. Figures have been rounded off to the nearest decimal of lakhs as required under Schedule III.

45. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.