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Notes to Accounts of Gujarat Alkalies & Chemicals Ltd.

Mar 31, 2023

The Company had invested an amount of Rs.7,122.00 Lakhs in equity shares of Bhavnagar Energy Company Limited (BECL). The Gujarat Government vide notification dated 27th August, 2018 in terms of Gujarat Electricity Industry (Reorganisation and Regulation) Act, 2003, formulated the Gujarat Electricity Reform (Transfer of Generation Undertakings) Scheme, 2018 (the scheme), whereby BECL merged with effect from 1st April, 2018 into Gujarat State Electricity Corporation Ltd. (GSECL). In terms of the said notification, the Company received one equity share of Rs. 10/- of Gujarat State Electricity Corporation Ltd. for its investment in BECL. Accordingly, during 2018-19, the Company has impaired its investment in BECL by debit to Other Comprehensive Income.

During the year, the company has transferred 1 share of Gujarat State Electricity Corporation limited to Gujarat Urja Vikas Nigam Limited and received consideration of Rs. 37/-. Consequently on transfer of shares, the company has reclassified impairment loss on Investment from Other Comprehensive Income to Retained earnings.

Capital Advances includes advance payment made for leasehold lands allotted pending execution of lease deeds :

(i) Rs. 923.08 lakhs (FY 2021-22 Rs. 923.08 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

In the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Non-Current Provisions (Note no. 19). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.32 lakhs (Total Rs.1,257.55 lakhs) during 2012-13 and 2013-14 respectively. As the matter is pending with Honourable High Court, the amount paid has been shown under Balance with Govt. Department under Other Non-Current Assets.

Other than mentioned in Note No. 10.2 above, Balance with Govt. Departement includes amount paid under protest relatining to matters pending with respect to Sales Tax & Service Tax.

12.1 Refer Note No. 38 for related party receivable.

12.2 Trade Receivables include overdue outstanding from various parties aggregating to Rs. 1,610.42 lakhs, (Previous Year Rs.1,322.42 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of Rs. 1,610.42 lakhs (Previous Year Rs.1,322.42 lakhs) exists for such doubtful debts as on 31.03.2023.

The average credit period on sale of goods is 23 days. However, no interest is charged on Trade Receivables for delay in payment beyond 31 days from the date of the Invoice.

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

The Company has used a practical expedient by computing the expected credit loss allowance for Trade Receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates are given in the provision matrix. The provision matrix at the end of the Reporting Period is as follows. :

(ii) Rights, preferences and restrictions attached to equity shares :

The Company has one class of equity shares having a par value of Rs.10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(v) Dividend :

For current financial year 2022-23, The Company has proposed dividend of Rs. 23.55 per equity share (Previous year Rs. 10.00 per share declared). Proposed dividends on equity share are subject to approval at the Annual General Meeting and are not recognised as a liability as at Balance Sheet date.

a. 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 reclassified subsequently to profit or loss.

b. Securities Premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

c. Reserve for equity instruments through other comprehensive income

The reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income.

17.3 The Company has working capital facilities with various Banks carrying interest rate ranging from 8.25% p.a. to 8.85% p.a. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

17.4 Represents repayment falling due in next twelve months :

(i) Rs. 2,191.20 lakhs to ICICI Bank towards ECB loan secured against Hypothecation charge on plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

(ii) Rs. 11,503.80 lakhs to State Bank of India towards ECB loan secured against Hypothecation charge on plant and machinery of Chloromethanes plant at Plot no D-II/9 P.O. Dahej Taluka Vagra Dist Bharuch, Gujarat carrying interest rate of LIBOR plus 1.28% p.a.

36 EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

An amount of Rs.1,081.41 Lakhs (FY 2021-22 Rs.1,087.90 Lakhs) contributed to Provident Fund and amount of Rs.833.13 lakhs (FY 2021-22 Rs.692.52 lakhs) contributed to Employees Superannuation Trust is recognised as an expense and included in “Employee Benefits Expenses” (Note 28) of Statement of Profit & Loss.

Defined Benefit Plans

The Company offers the following employee benefit schemes to its employees :

i. Gratuity (included as part of b (iii) in Note 28 Employees benefit expense)

ii. Leave encashment (included as part of a in Note 28 Employee benefit expense)

The following table sets out the funded status of the defined benefits scheme and the amount recognised in financial statement :

As per Actuarial Valuation as on March 31, 2023

37 FINANCIAL INSTRUMENTS

37.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximising the return to stakeholders through optimisation of the Debt and Equity Balance.

The Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBDITA ratio of 3 times (consolidated) for one bank and Interest Coverage ratio of 2.75 times for another bank, a Debt Service Coverage ratio of 1.3 times for one bank and 1.5 times for another bank, Total Debt to Tangible Net Worth ratio of 1 : 1 for one bank.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratios on an annual basis and ensuring that the same is in Compliance with the requirements of the Financial Covenants.

37.3 Financial Risk Management Objectives

The Company’s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge. The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

37.4 Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account. 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 securities. 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.

37.5 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans and towards import obligations out of the said account.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities are restated at the end of each quarter. The same at the end of the reporting period are as follows :

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company’s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the key management personnel and represents management’s assessment of the reasonably possible changes in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

37.6 Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past visa-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit before tax for the year ended would be impacted to the extent of Rs.156.00 Lakhs (Rs.56.28 lakhs for the year 2021-22).

37.7 Credit Risk Management

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. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit 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.

Domestic & Export trade receivables are secured to the extent of interest free security deposits and bank guarantees / letter of credit received from the customers amounting to Rs.2,182.90 Lakhs and Rs.5,275.36 Lakhs as at 31st March, 2023 and 31st March, 2022 respectively. (Refer Note No. 12 for Trade Receivables outstanding).

37.8 Liquidity Risk Management

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 its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

43 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

[Rs. in Lakhs]

Particulars

Year ended

Year ended

31.03.2023

31.03.2022

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debt

18,674.68

19,978.46

(b) Various pending cases before Labour court and Industrial Tribunal

Not ascertainable

Not ascertainable

(c) Disputed Sales Tax liability [Including Purchase Tax Liability (2000-01 to 2005-06)]

21,085.14

21,085.14

(d) Disputed Excise Duty liability

3,191.55

3,190.02

(e) Disputed Service Tax liability

602.82

706.29

(f) Disputed Income Tax liability (excluding interest) :

(i) Pending Before Appellate Authorities in respect of which the Company is in appeal

949.38

1,098.91

(ii) Decided in Company’s favour by Appellate Authorities and Department is in further appeal

15,306.88

13,086.28

59,810.45

59,145.10

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at various forums / authorities.

(g) Guarantees given by the Company’s Bankers for various purposes are

18,508.70

12,316.45

Total (i)

78,319.15

71,461.55

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for

11,541.78

39,502.67

Total (ii)

11,541.78

39,502.67

Total

89,860.93

110,964.22

The Company’s operations fall under single segment namely “Chemicals” hence no separate disclosure of segment reporting is required to be made as required under Ind AS 108 ‘Operating Segments’.

All non Current assets are located in the company’s country of domicile.

One customer (PY: One Customer) individually contribute more than 10% of entity’s revenues. The total revenue from such entity is Rs. 76,154 Lakhs (P.Y. Rs. 53,415 Lakhs)

47 OTHER STATUTORY INFORMATION

47.1 The Company does not have any Immovable Property whose title deeds are not held in the name of the Company.

47.2 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

47.3 The Company has utilised funds raised from issue of securities or borrowings from banks and financial institutions for the specific purposes for which they were issued/taken.

47.4 Quarterly return/statement of current assets filed by the company with bank are in agreement with the books of accounts.

47.5 The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when financial statements are approved.

47.6 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:

47.6(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

47.6(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

47.7 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:

47.7(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

47.7(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

47.8 On the basis of information available, the Company does not have any transactions with struck-off companies.

47.9 The Company does not have any transaction which is not recorded in the books of accounts but 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).

47.10 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

47.11 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

47.12 The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period.

48 Previous Year’s figures have been regrouped / rearranged wherever necessary to correspond with current year’s presentation.

49 Approval of Financial Statements

The financial statements are approved for issue by the Board of Directors on 22nd May, 2023.


Mar 31, 2022

10.1 Capital Advances includes advance payment made for leasehold lands alloted pending execution of lease deeds :

(i) Rs. Nil (FY 2020-21 Rs. 1,732.59 lakhs) towards plot No. D-IM/3 in exchange of Plot No. 42/1 at Dahej admeasuring 5,16,548 sq. mtrs.

(ii) Rs. 923.08 lakhs (FY 2020-21 Rs. 923.08 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

10.2 In the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Non-Current Provisions (Note no. 19). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.32 lakhs (Total Rs.1,257.55 lakhs) during 2012-13 and 2013-14 repsectively. As the matter is pending with Honourable High Court, the amount paid has been shown under Balance with Excise and customs’ under Other Non-Current Assets.

12.1 Trade Receivables include overdue outstanding from various parties aggregating to Rs.1,322.42 lakhs, (Previous Year Rs.1,335.42 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cummulative provision of Rs. 1,322.42 lakhs (Previous Year Rs.1,335.42 lakhs) exists for such doubtful debts as on 31.03.2022.

The average credit period on sale of goods is 31 days. However, no interest is charged on Trade Receivables for delay in payment beyond 31 days from the date of the Invoice.

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

The Company has used a practical expedient by computing the expected credit loss allowance for Trade Receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates are given in the provision matrix. The provision matrix at the end of the Reporting Period is as follows. :

Rights, preferences and restrictions attached to equity shares :

The Company has one class of equity shares having a par value of Rs.10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(v) Dividend :

For current financial year 2021-22, The Company has proposed dividend of Rs. 10.00 per equity share (Previous year Rs. 8.00 per share declared). Proposed dividends on equity share are subject to approval at the Annual General Meeting and are not recognised as a liability as at Balance Sheet date.

a. 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 reclassified subsequently to profit or loss.

b. Securities Premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

c. Reserve for equity instruments through other comprehensive income

The reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income.

The terms of repayment of borrowings are stated below:

17.1 The Loan is secured by plant and machinery of 14.7 MW Wind Farm Project at Dist. Porbandar, Gujarat, 915 nos. Cell Elements at Ranoli Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 15 equal half yearly installments from 10.09.2017 and carries interest rate of LIBOR plus 1.64% p.a.

17.2 The Loan is secured by plant and machinery of 31 MW Wind Farm Project at Dist. Rajkot & Kachchh, Gujarat and Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat. It has to be repaid in 10 equal half yearly installments from 07.01.2018 and carries interest rate of LIBOR plus 1.80% p.a.

17.3 The loan is secured by plant and machinery of Chloromethanes Plant at Plot No. D-II/9 P. O. Dahej, Tal. Vagra. Dist Bharuch, Gujarat. It has to repaid in 10 equal half yearly installments from 17.09.2023 and carries interest rate of LIBOR plus 1.28% p.a.

17.4 The Company has working capital facilities with various Banks carrying interest rate ranging from 7.10% p.a. to 7.30% p.a. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

17.5 Represents repayment falling due in next twelve months :

(i) Rs. 2,266.06 lakhs to HSBC Bank towards ECB loan secured against 0.75 times of the facility amount at all times over all the movable assets relating to 31 MW Windmills phase - VIII & IX located at Rajkot and Kutch districts, Gujarat and 0.50 times of facility amount at all times over all the movable assets relating to existing Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat including future expansion carrying interest rate of LIBOR plus 1.80% p.a.

(ii) Rs. 2,021.13 lakhs to ICICI Bank towards ECB loan secured against plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

An amount of Rs.1,087.90 Lakhs (FY 2020-21 Rs.3,342.89 Lakhs) contributed to Provident Fund and amount of Rs.692.52 lakhs (FY 2020-21 Rs.706.12 Lakhs) contributed to Employees Superannuation Trust is recognised as an expense and included in “Employee Benefits Expenses” (Note 28) of Statement of Profit & Loss.

Defined Benefit Plans

The Company offers the following employee benefit schemes to its employees :

i. Gratuity (included as part of b (iii) in Note 28 Employees benefit expense)

ii. Leave encashment (included as part of a in Note 28 Employee benefit expense)

The following table sets out the funded status of the defined benefits scheme and the amount recognised in financial statement :

FINANCIAL INSTRUMENTS

Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximising the return to stakeholders through optimisation of the Debt and Equity Balance.

The Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBIDTA ratio of 2.75 times (standalone) for one bank and 3 times (consolidated) for another bank, a Debt Service Coverage ratio of 2 times for one bank and 1.30 times for another bank and a Total Debt to Tangible Net Worth ratio of 1 : 1.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratios on an annual basis and ensuring that the same is in Compliance with the requirements of the Financial Covenants. The Total Debt to EBIDTA ratio at the end of the reporting period was as follows :

The Company’s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge. The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account. 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 securities. 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.

Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans and towards import obligations out of the said account.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities are restated at the end of each quarter. The same at the end of the reporting period are as follows :

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company’s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the key management personnel and represents management’s assessment of the reasonably possible changes in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past visa-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit before tax for the year ended would be impacted to the extent of Rs.56.28 Lakhs (Rs.87.41 lakhs for the year 2020-21).

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. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit 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.

Domestic & Export trade receivables are secured to the extent of interest free security deposits and bank guarantees / letter of credit received from the customers amounting to Rs.5,275.36 Lakhs and Rs.4,792.44 Lakhs as at 31st March, 2022 and 31st March, 2021 respectively. (Refer Note No. 12 for Trade Receivables outstanding).

i Liquidity Risk Management

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 its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

43 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

[Rs. in Lakhs]

Particulars

Year ended

Year ended

31.03.2022

31.03.2021

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debt

19,978.46

22,472.11

(b) Various pending cases before Labour court and Industrial Tribunal

Not ascertainable

Not ascertainable

(c) Disputed Sales Tax liability [Including Purchase Tax Liability (2000-01 to 2005-06)]

21,085.14

21,085.14

(d) Disputed Excise Duty liability

3,190.02

3,175.50

(e) Disputed Service Tax liability

706.29

706.50

(f) Disputed Income Tax liability (excluding interest) :

(i) Pending Before Appellate Authorities in respect of which the Company is in appeal

1,098.91

1,313.88

(ii) Decided in Company’s favour by Appellate Authorities and Department is in further appeal

13,086.28

13,086.28

59,145.10

61,839.41

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at various forums / authorities.

(g) Guarantees given by the Company’s Bankers for various purposes are

12,316.45

13,375.87

Total (i)

71,461.55

75,215.28

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for

39,502.67

92,622.96

Total (ii)

39,502.67

92,622.96

Total

1,10,964.22

1,67,838.24

OTHER STATUTORY INFORMATION

The Company does not have any Immovable Property whose title deeds are not held in the name of the Company.

The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

The Company has utilised funds raised from issue of securities or borrowings from banks and financial institutions for the specific purposes for which they were issued/taken.

The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when financial statements are approved.

47.5 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:

47.5(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

47.5(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

47.6 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:

47.6(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

47.6(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

47.7 On the basis of information available, the Company does not have any transactions with struck-off companies.

47.8 The Company does not have any transaction which is not recorded in the books of accounts but 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).

47.9 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

47.10 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the

Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

47.11 The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period.

48 Previous Year’s figures have been regrouped / reclassified wherever necessary to correspond with current year’s classification / disclosure.

49 Approval of Financial Statements

The financial statements are approved for issue by the Board of Directors on 24th May, 2022


Mar 31, 2018

(1) Fair value of Financial Instruments

I n determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include available quoted market prices, valuation reports from independent valuers etc. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

(2) Impairment of Financial Assets

The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.

(3) Earnings per share

Basic earnings per share are computed by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The Company did not have any potentially dilutive securities in any of the period presented.

4) Recent Accounting Pronouncements

(i) Standards issued but not yet effective:

I n March, 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendment to Ind AS 115 - ‘Revenue from Contracts with Customers’. This accounting standard is applicable to the Company from April 1, 2018.

This will replace Ind AS 18 which covers contracts for goods and services. Entities will have a choice of full retrospective application, or modified retrospective application with additional disclosures. The new standard is based on the principle that revenue is recognized when control of goods and service transfers to a customer and essentially replaces the existing notion of risk and rewards. The management is evaluating the requirements of the new standard and effect on the financial statements.

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) (Amendment) Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The company is in the process of evaluating the impact.

(20) Critical judgments in applying accounting policies

The following are the critical judgments, apart from those involving estimations that the management have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements. Actual results may differ from these estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Useful lives and residual value of property, plant and equipment:

The Company reviews the useful life and residual value of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

Allowance for expected credit losses:

Note -12 describes the use of practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The expected credit allowance is based on the aging of the days receivables which are past due and the rates derived based on past history of defaults in the provision matrix.

Dismantling cost of property, plant and equipment:

Note-3 describes assets retirement obligation on estimate basis for property, plant and equipment. The management estimates dismantling cost considering size of the asset and its useful life in line with industry practices.

Stores and spares inventories:

The Company’s manufacturing process is continuous and highly mechanic with wide range of different types of plant and machineries. The Company keeps stores and spares as standby to continue the operations without any disruption. Considering wide range of stores and spares and long lead time for procurement of it and based on criticality of spares, the Company believes that net realizable value would be more than cost.

Fair value of investments:

The Company has invested in the equity instruments of various companies. However, the percentage of shareholding of the Company in such investee companies is very low and hence, it has not been provided with future projections including projected profit and loss account by those investee companies. Hence, the valuation exercise carried out by the Company with the help of an independent valuer, etc. has estimated fair value at each reporting period based on available historical annual reports and other information in the public domain.

Income taxes:

Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid / recovered for uncertain tax positions.

Contingent liability judgment:

Note - 42 describes claims against the Company not acknowledged as debt. It includes certain penalties and charges payable to Government agencies although as per the contracts, the Management, based on past experience, believes that the penalties and charges are negotiable and not certain and accordingly it is not considered as an obligation as at balance-sheet date and disclosed as contingent liabilities.

* Lease hold land amortized during Financial Year 2017-18 of Rs. 61.40 lakhs (Ref. Sr. No. 10 of Note No. 2).

The lease deed in respect of Plot No. 3 for the partial land admeasuring 44,032 sq. mtrs acquired at Dahej Complex having value of Rs. 15.86 lakhs is pending for execution.

** The Company’s contribution or expenditure towards Power, Water and Services not owned by the Company has been capitalized and is amortized over a period of eighteen years starting from 15.08.1998 being the date of start of operations.

Borrowing Cost capitalized during the year Rs. 0.43 Lakhs (Previous Year: Rs. 267.41 Lakhs) for acquisition of Long Term Assets.

* Capital Advances includes advance payment made for lease hold lands alloted pending execution of lease deeds :

(i) Rs. 1,732.59 lakhs (FY 2016-17 Rs. 1,732.59 lakhs) towards plot No. D-III/3 in exchange of Plot No. 42/1 at Dahej admeasuring 5,16,548 sq. mtrs.

(ii) Rs. 923.08 lakhs (FY 2016-17 Rs. 923.08 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

** I n the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Noncurrent Provisions (Note no. 18). The Company has contested the demand and has paid under protest Rs. 924.23 lakhs and Rs. 333.32 lakhs (Total Rs. 1,257.55 lakhs) during 2012-13 and 2013-14 repsectively. As the matter is pending with Honourable Hight Court, the amount paid has been shown under balance with excise and custom under Other Non-Current Assets.

* The Trade Receivables include overdue outstanding from various parties aggregating to Rs. 1,163.41 lakhs, (Previous Year Rs. 1,206.92 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of Rs. 1,163.41 lakhs (Previous Year Rs. 1,206.92 lakhs) exists for such doubtful debts as on 31.03.2018.

The average credit period on sale of goods is 54 days. However, no interest is charged on Trade Receivables for delay in payment beyond 54 days from the date of the Invoice.

5- TRADE RECEIVABLES (Contd.)

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

The Concentration of Credit Risk is limited due to the fact that the customer base is large and unrelated.

(ii) Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The terms of repayment of borrowings are stated below:

* The Loan is secured by plant and machinery of 14.7 MW Wind Farm Project at Kuchhdi, Dist. Porbandar, Gujarat, 915 nos. Cell Elements at Ranoli Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 15 equal half yearly installments from 10.09.2017 and carries interest rate of LIBOR plus 1.64% p.a.

** The Loan is secured by plant and machinery of 31 MW Wind Farm Project at in Dist. Rajkot & Kachchh, Gujarat and Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat. It has to be repaid in 10 equal half yearly installments from 07.01.2018 and carries interest rate of LIBOR plus 1.80% p.a.

* The Company has working capital facilities with various Banks carrying interest rate ranging from 9.45% to 14.75%. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

* I n the earlier Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon.

The Average Credit Period on Purchases of Goods and Services is 44 days for current year (previous year 38 days). However, no interest is charged on the outstanding balance in case of delay in payment beyond the credit period. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

* Represents repayment falling due in next twelve months :

(i) Rs. 3,910.50 lakhs to HSBC Bank towards ECB loan secured against 0.75 times of the facility amount at all times over all the movable assets relating to 31 MW Windmills phase - VIII & IX located at Rajkot and Kutch districts, Gujarat and

0.50 times of facility amount at all times over all the movable assets relating to existing Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat including future expansion carrying interest rate of LIBOR plus 1.80% p.a.

(ii) Rs. 1,738.00 lakhs to ICICI Bank towards ECB loan secured against plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

6 - EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

An amount of Rs. 793.65 lakhs (FY 2016-17 Rs.648.84 lakhs) contributed to Provident Fund Trust and amount of Rs. 580.95 lakhs (FY 2016-17 Rs. 564.66 lakhs) contributed to Employees Superannuation Trust is recognized as an expense and included in “Employee Benefits Expenses” (Note 27) of Statement of Profit & Loss.

The Company’s Provident Fund is exempted under Section 17 of Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trust vis-a-vis Statutory rate.

Defined Benefit Plans

The Company offers the following employee benefit schemes to its employees :

i. Gratuity (included as part of (b) (iii) in Note 27 Employees benefit expnese) ii Leave encashment (included as part of (a) in Note 27 Employee benefit expense)

The following table sets out the funded status of the defined benefits scheme and the amount recognized in financial statement :

7- FINANCIAL INSTRUMENTS 36.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximizing the return to stakeholders through optimization of the Debt and Equity Balance.

The Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBDITA ratio of 2.75 times, a Debt Service Coverage ratio of 2 times and a Total Debt to Tangible Net Worth ratio of 1 time.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratios on an annual basis and ensuring that the same is in compliance with the requirements of the Financial Covenants.

8 Financial Risk Management Objectives

The Company’s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge.

The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

9 Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account.

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 securities. 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.

10- FINANCIAL INSTRUMENTS (Contd.)

36.5 Foreign Currency Risk Management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans and towards import obligations out of the said account.

Foreign Currency Sensitivity Analysis

The Company is mainly exposed to US Dollar.

The following table details the Company’s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is a sensitivity rate used when reporting foreign currency internally to the key management personnel and represents management’s assessment of the reasonably possible changes in the foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in the foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

11 Interest Rate Risk Management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unhedged conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

I f the interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit before tax for the year ended would be impacted to the extent of Rs. 182 Lakhs (Rs. 169 lakhs for the year 2016-17).

12 Credit Risk Management

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. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the SAP system of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit 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.

Domestic trade receivables are secured to the extent of interest free security deposits and bank guarantees received from the customers amounting to Rs. 5,454.02 lakhs and Rs. 4,520.08 lakhs as at 31st March, 2018 and 31st March,

2017 respectively. (Refer Note No. 12 for Trade Receivables outstanding).

13 Liquidity Risk Management

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 its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

14 - The Company’s operations fall under single segment namely “Chemicals” hence no separate disclosure of segment

reporting is required to be made as required under Ind AS 108 ‘Operating Segments’.

15 - Previous Year’s figures have been regrouped / reclassified wherever necessary to correspond with current year’s

classification / disclosure.

16 - Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on 24th May, 2018.


Mar 31, 2017

* Lease hold land amortized during Financial Year 2016-17 of Rs.15.62 lakhs (Ref. Sr. No. 10 of Note No. 2).

The lease deed in respect of Plot No. 3 for the partial land admeasuring 44,032 sq. mtrs acquired at Dahej Complex having value of Rs.15.86 lakhs is pending for execution.

** The Company''s contribution or expenditure towards Power, Water and Services not owned by the Company has been capitalized and is amortized over a period of eighteen years starting from 15.08.1998 being the date of start of operations. *** The Gross value and depreciation / amortization amounting to Rs.1,283.00 lakhs of Recoating / Remembraning is eliminated from Gross Block and Depreciation / amortization for those assets which are fully written off till 31.03.2016. Recoating and Remembraning expenditure are amortized over a useful life of 8 years and 4 years respectively as decided by management.

Borrowing Cost capitalized during the year Rs.267.41 Lakhs (Previous Year: Rs.424.15 Lakhs) for acquisition of Long Term Assets.

* Capital Advances includes advance payment made for lease hold lands alloted pending execution of lease deeds :

(i) Rs.1,732.59 lakhs (F.Y. 2015-16 Rs.1,591.36 lakhs, F.Y. 2014-15 Rs.1,555.87 lakhs) towards plot No. D-III/3 in exchange of Plot No. 42/1 at Dahej measuring 5,16,548 sq. mtrs.

(ii) Rs. Nil lakhs (F.Y. 2015-16 Rs.4,411.70 lakhs, FY. 2014-15 Rs.4,304.18 lakhs) towards Plot No. D-II/9 at Dahej admeasuring 7,68,709.48 sq. mtrs.

(iii) Rs.923.08 lakhs (F.Y. 2015-16 Rs.923.08 lakhs, F.Y. 2014-15 Rs.924.02 lakhs) towards plot No. B-37 to B-44 at village Atali admeasuring 50,714.48 sq. mtrs.

** In the Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Non-Current Provisions (Note No. 18). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.32 lakhs (Total Rs.1,257.55 lakhs) during 2012-13 and 2013-14 respectively. As the matter is pending with Honourable Hight Court, the amount paid has been shown under balance with excise and custom under Other Noncurrent Assets.

* The Trade Receivables include overdue outstanding from various parties aggregating to Rs. 1,206.92 lakhs, (Previous Year Rs.1,301.67 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of Rs. 1,206.92 lakhs (Previous Year Rs.1,230.30 lakhs) exists for such doubtful debts as on 31.03.2017.

The average credit period on sale of goods is 51 days. However, no interest is charged on Trade Receivables for delay in payment beyond 51 days from the date of the Invoice.

The credit limits for customers are set based on security deposits and bank guarantees. Limits attributed to customers are reviewed periodically.

(ii) Rights, preferences and restrictions attached to equity shares :

The Company has one class of equity shares having a par value of Rs.10/- each. Each Shareholder is eligible for one vote per one share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The terms of repayment of borrowings are stated below:

* The Loan is secured by plant and machinery of 14.7 MW Wind Farm Project at Kuchhdi, Dist. Porbandar, Gujarat, 915 nos. Cell Elements at Ranoli Dist. Vadodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 15 equal half yearly installments from 10.09.2017 and carries interest rate of LIBOR plus 1.64% p.a.

** The Loan is secured by plant and machinery of 20,000 MTA Sodium Chlorate Project at Dahej, Dist. Bharuch, Gujarat. It has to be repaid in 10 equal half yearly installments from 14.08.2013 and carries interest rate of LIBOR plus 3.50% p.a.

*** The Loan is secured by plant and machinery of 31 MW Wind Farm Project at in Dist. Rajkot & Kachchh, Gujarat and Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat. It has to be repaid in 10 equal half yearly installments from 07.01.2018 and carries interest rate of LIBOR plus 1.80% p.a.

* The Company has working capital facilities with various Banks carrying interest rate ranging from 9.65% to 14.75%. These facilities are secured by first charge by hypothecation of stocks and book debts and second charge over the immovable assets of the Company.

The Average Credit Period on Purchases of Goods and Services is 38 days for current year (previous year 41 days). However, no interest is charged on the outstanding balance in case of delay in payment beyond the credit period. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

* Represents repayment falling due in next twelve months :

(i) Rs. 2,543.89 lakhs to HDFC Bank towards ECB loan secured against plant and machinery of 20,000 MTA Sodium Chlorate Project at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 3.50% p.a.

(ii) Rs. 1,945.50 lakhs to HSBC Bank towards ECB loan secured against 0.75 times of the facility amount at all times over all the movable assets relating to 31 MW Windmills phase - VIII & IX located at Rajkot and Kutch districts, Gujarat and 0.50 times of facility amount at all times over all the movable assets relating to Potassium Hydroxide Plant at Ranoli, Dist. Vadodara, Gujarat including future expansion carrying interest rate of LIBOR plus 1.80% p.a.

(iii) Rs. 1,729.34 lakhs to ICICI Bank towards ECB loan secured against plant and machinery of 14.70 MW Windmills phase-X located at Porbandar district, Gujarat, 915 nos. Cell Elements at Ranoli, Dist. Vaodara, Gujarat and 440 nos. Cell Elements at Dahej, Dist. Bharuch, Gujarat carrying interest rate of LIBOR plus 1.64% p.a.

1. - Tax Expense

During the Current Year, the Tax Liability under normal Provisions of the Income Tax Act, 1961 comes to Rs. 2,992.34 Lakhs (Previous Year Rs. 278.17 Lakhs) and Tax Liability under MAT Provisions of Income Tax Act, 1961 is Rs. 8,140.07 Lakhs ( Previous Year Rs. 5,424.75 Lakhs). Hence, the Company is required to pay the tax under MAT Provisions of Income Tax Act, 1961. Accordingly, MAT credit Entitlement reflects the difference between the normal tax and tax under MAT Provisions.

The tax rate used for the F.Y. 2016-17 in reconciliation above is the corporate tax rate of 34.608% payable by corporate entities in India on taxable profits under the Indian tax law.

The Company''s Provident Fund is exempted under Section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trust vis-a-vis Statutory rate.

2.- Financial Instruments 36.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a Going Concern while maximizing the return to stakeholders through optimization of the Debt and Equity Balance.

The Company is subject to externally imposed capital requirements as part of its debt covenants such as maintaining a Total Debt to EBDITA ratio of 2.75 times, a Debt Service Coverage ratio of 2 times and a Total Debt to Tangible Net Worth ratio of 1 time.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital by computing the above ratios on an annual basis and ensuring that the same is in Compliance with the requirements of the Financial Covenants.

3. Financial Risk Management objectives

The Company''s Corporate Treasury Function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Corporate Treasury does not enter into any trade financial instruments, including derivative financial instruments and relies on natural hedge.

The Corporate Treasury Function monitors risks and policies implemented to mitigate risk exposures on a periodical basis.

4. Market Risk

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company currently has not hedged any External Commercial Borrowings (ECBs). The Company performs an analysis of the impact of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unheeded conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks. Further, the Company parks its earnings in foreign currency in Exchange Earners Foreign Currency (EEFC) account and discharges its obligations in case of foreign currency loans out of the said account.

5. Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at floating interest rates. The risk is managed by the Company by monitoring the exchange rate on regular basis and also parking the export proceeds in the EEFC account which also provides a natural hedge for the outflows in foreign currency. Further, the Company performs an impact analysis of not hedging its ECBs. This has been done by comparing the actual cash outflows related to ECBs under current unheeded conditions in the past vis-a-vis the scenario of complete hedging of individual ECB on the disbursement day through quotes provided by the banks.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If the interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s profit before tax for the year ended would be impacted to the extent of Rs.169 Lakhs (Rs. 127 lakhs for the year 2015-16).

6. Credit Risk Management

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. In order to ensure the security of receivables, the Marketing Department computes an exposure ratio for every dealer based on his past turnover, track record, etc. The same is overseen and approved by the Board. Further, the Company also collects bank guarantees / security deposits from the respective dealers. Regular monitoring of the receivables is undertaken by the Marketing Department and in case the limits are exceeded, an auto lock system is in place in the existing ERP of the Company to stop further supplies to the concerned dealer till the amount outstanding is recovered. In case of new customers, the goods are supplied only against advance receipts. For the export made by the Company, the sales are backed by letters of credit 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.

Domestic trade receivables are secured to the extent of interest free security deposits and bank guarantees received from the customers amounting to Rs.4,520.08 lakhs, Rs.4,159.64 lakhs and Rs.4,064.64 lakhs as at 31st March, 2017, 31st March, 2016 and 1st April, 2015 respectively. Export sales are fully secured through letters of credit or against advance receipts. (refer Note No. 12 for Trade Receivables outstanding).

7. Liquidity risk management

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 its funds mainly from internal accruals. The liquidity risk is managed by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Note 1: The Company has invested in the equity instruments of various companies. However, the percentage of shareholding of the Company in such investee companies is very low and hence, it has not been provided with future projections including projected profit and loss account by those investee companies. Hence, the independent valuer appointed by the Company has estimated fair value based on available historical Annual Reports of such companies and other information as available in the public domain. Since the future projections are not available, discounted cash flow approach for fair value determination has not been followed.

Note 2: In case of some companies, there are no comparable companies valuations available and some are recent startup companies. In light of no information available for future projections, capacity utilisation, commencement of operations, etc., the valuation is based on cost approach.

8. - The Company''s operations fall under single segment namely "Chemicals” hence no separate disclosure of segment reporting is required to be made as required under Ind AS 108 ''Operating Segments''.

9. - Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

10. - Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on 26th May, 2017.

11. - First Time Ind AS adoption reconciliations

All amounts are in Rs. Lakhs unless otherwise stated

12. Effect of Ind AS adoption on the balance sheet as at March 31, 2016 and April 1, 2015.

Notes to the reconciliations :

a. Under previous GAAP current investments were measured at lower of cost or Fair Value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition. The fair value changes are recognized in the Statement of Profit and Loss.

Under previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, these financial assets have been classified as FVTOCI. On the date of transition to Ind AS, these financial assets have been measured at their fair value and the restatement gain / (loss) has been taken to Other Comprehensive Income (OCI).

b. Under previous GAAP, dividends on Equity shares recommended by the Board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under Ind AS, such dividends together with dividend distribution tax are recognized when approved by the members in the General Meeting.

c. Under Ind AS, the initial estimates of the costs of dismantling and of removing the item of Property, Plant and Equipment and restoring the site on which it is located is required to be included in the cost of the respective item of property, plant and equipment. Under previous GAAP there was no such requirement and cost incurred as and when was charged to Statement of profit and loss.

Further adjustments include recognition of spare parts in accordance with Ind AS 16 when they meet the definition of property, plant and equipment. Under previous GAAP these items were carried as inventory. The adjustment is on account of depreciation on classifying the same as property, plant and equipment from the date they are available for use. It also include impact on account of effective interest on borrowings and certain pre-operative expenses viz. liquidated damages / penalty, etc. capitalized under previous GAAP taken to the Statement of profit and loss under Ind AS.

d. Under Ind AS, expected life time credit provision is made on trade receivables. Under previous GAAP the provision for doubtful debts was made using ageing analysis and an individual assessment of recoverability.

e. Under Ind AS, re-measurements, i.e. actuarial gains and losses included in the net gratuity expense on the net defined liability are recognized in other comprehensive income instead of profit or loss.

f. Deferred tax adjustments are on account of above Ind AS adjustments.

g. Under Ind AS, other comprehensive income adjustments are on account of fair valuation of non-current investments and actuarial gain / loss on defined benefit plan - gratuity, net of tax effect.

13.There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.


Mar 31, 2016

1 - Tax Expense :

During the current year the tax liability under normal provisions of the Income Tax Act,1961 comes out to Rs.278.17 lakhs (Previous Year Rs.Nil) and tax liability under MAT provisions of Income Tax Act,1961 is Rs.5,424.75 lakhs (Previous Year Rs.4,333.19 lakhs), hence the Company is required to pay the tax under MAT provisions of Income Tax Act,1961. Accordingly, MAT credit entitlement reflects the difference between the normal tax and the tax under MAT provisions.

2 - In the earlier Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty, interest and penalty thereon. The same has been shown as provision for other liabilities under Long Term Provision (Note no. 6). The Company has contested the demand and has paid under protest Rs.924.23 lakhs and Rs.333.31 lakhs (Total Rs.1,257.54 lakhs) during 2012-13 and 2013-14 respectively. The amount paid has been shown under balance with excise and custom under Long term Loans & Advances (Note no. 12).

3 - The Company''s operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting

is required to be made as required under Accounting Standard -17 of Institute of Chartered Accountants of India.

4 - Employee Benefits [Accounting Standard -15 (Revised)] :

(i) Defined Contribution Plans :

An amount of Rs.623.19 lakhs (Previous Year Rs.603.09 lakhs) contributed to Provident Fund Trust and amount of Rs.543.08 lakhs (Previous Year Rs.574.31 lakhs) contributed to Employees Superannuation Trust is recognized as an expense and included in "Employee Benefits Expenses" (Note 23) of Statement of Profit & Loss.

(ii) Defined Benefit Plans : - As per Actuarial Valuation as on March 31, 2016 :-

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

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

(vi) The Company''s Provident Fund is exempted under Section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trust vis-a-vis Statutory rate.

5 - Interest in subsidiary :

The Company and National Aluminium Company Ltd. (NALCO), a Government of India Enterprise (A Navratna Company) have jointly incorporated a new Company viz. GACL-NALCO Alkalies & Chemicals Pvt. Ltd. (JV Company) on 4th December, 2015 for setting up of 800 TPD Caustic Soda Plant and 100 MW Coal based Power Plant at Dahej, Gujarat.

The Company considers the subsidiary to be not material in terms of its investment (Rs.6.00 lakhs only in Equity Shares) as well as non-commencement of operations during the year ended 31st March, 2016 and therefore consolidated financial statements are not prepared.

The proportionate share of assets, liabilities, income, expenditure and contingent liabilities of subsidiary- GACL-NALCO Alkalies & Chemicals Pvt. Ltd is given below :-

6 - Borrowing cost capitalized during the year is Rs.424.15 lakhs (Previous Year Rs.NIL) for acquisition of long term assets.

7 - (a) Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

(b) Balances shown under Long-term borrowings, Long term provisions, Short term provisions, Trade payables, Other current liabilities, Long term loans and advances, inventories, Trade Receivables, Short term loans and advances and other current assets, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year''s financial statements.


Mar 31, 2015

Note 1

Tax Expense :

(i) Deferred Tax of Rs.1,195.46 lakhs includes reversal of timing difference pertaining to claim u/s 80 IA of Income Tax Act,1961 for wind mills commissioned in earlier years.

(ii) During the current year there is no tax liability under normal provisions of the Income Tax Act,1961 and hence the Company is required to pay the tax under MAT provisions of Income Tax Act,1961. Accordingly, the total amount paid under MAT is reflected as MAT credit entitlement.

Note 2

In the earlier Financial Year 2012-13, the Company received a demand of Rs. 1,719.66 lakhs from the revenue authorities for excise duty,interest and penalty thereon. The same has been shown as provision for other liabilities under Long Term Provision (note no. 6). The Company has contested the demand and has paid under protest Rs. 924.23 lakhs and Rs. 333.31 lakhs (Total Rs.1,257.54 lakhs) during 2012-13 and 2013-14 repsectively. The amount paid has been shown under balance with excise and custom under Other Non- Current Assets

Note 3 [ Rs. in Lakhs ]

Contingent Liabilities and As At As At Commitments (to the extent not provided for) 31.03.2015 31.03.2014

(i) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debt 13,041.07 7,051.11

(b) Various pending cases before Labour court and Industrial Not Not Tribunal ascertainable ascertainable

(c) Disputed Purchase Tax liability (1998-99 to 2005-06) 20,431.56 20,884.60

(d) Disputed Income Tax liability (excluding interest) :

(i) Pending Before Appellate Authorities in respect of which the Company is in appeal 12,670.00 13,165.00

(ii) Decided in Company's favour by Appellate Authorities and Department is in further appeal 8,503.00 9,165.00

54,645.63 50,265.71

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at various forums / authorities.

(e) Guarantees :

(i) Total loans outstanding under corporate guarantees aggregating to Rs. 424.65 lakhs (Previous Year Rs. 424.65 lakhs) to Housing Development Finance Corporation Limited (HDFC) for housing loans extended to employees. 7.94 25.59

(ii) Guarantees given by the Company's Bankers for various purposes are 5,738.33 4,164.29

(f) Sponsor Support Agreement executed with Bhavnagar Energy Not Not Co. Ltd. and their lenders. ascertainable ascertainable

Total (i) 60,391.90 54,455.59

(ii) Commitments :

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for 17,373.31 7,963.41

(b) Other commitments - liability to GIDC for leasehold land at Dahej (including pending execution of lease deeds) Not ascertainable Not ascertainable

Total (ii) 17,373.31 7,963.41

Total : 77,765.21 62,419.00

Note 4

The Company's operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting

is required to be made as required under Accounting Standard -17 of Institute of Chartered Accountants of India.

Note 5

Employee Benefits [Accounting Standard -15 (Revised)] :

(i) Defined Contribution Plans :

An amount of Rs. 603.09 lakhs (Previous Year Rs.555.05 lakhs) contributed to Provident Fund Trust and amount of Rs. 574.31 lakhs (Previous Year Rs. 575.00 lakhs) contributed to Employees Superannuation Trust is recognised as an expense and included in "Employee Benefits Expenses" (Note 25) of Statement of Profit & Loss.

Note 6

Related Party Information :

(1) List of Related Parties :

Key Management Personnel : Shri Atanu Chakraborty, IAS, Managing Director (up to 28th August,2014)

Shri A M Tiwari, IAS, Managing Director (From 29th August, 2014)

Dr. H B Patel, Executive Director (Finance) & Chief Financial Officer (From 14th May, 2014)

Shri S S Bhatt, Company Secretary & Additional General Manager (Legal, HR & CC) (From 14th May, 2014)

Note 7

Borrowing cost capitalised during the year is Rs.NIL (Previous Year Rs.457.39 lakhs) for acquisition of long term assets.

Note 8

(a) Previous Year's figures have been regrouped / reclassified wherever necessary to correspond with current year's

classification / disclosure.

(b) Balances shown under Long-term borrowings, Short-term borrowings, Long term provisions, Short term provisions, Trade payables, Other current liabilities, Long term loans and advances, other non-current assets, inventories, Trade Receivables, Short term loans and advances and other current assets etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year's financial statements.


Mar 31, 2013

1 - During the current year, other exceptional item amounting to Rs.1,719.67 lakhs represents provision made towards demand of Excise Duty and delay payment charges paid under protest and interest payable for earlier years.

2 - Tax expense includes Rs.971.96 lakhs being reversal of excess provision for Income Tax in respect of earlier years (Previous Year Rs. Nil).

3 - The Company''s operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting is required to be made as required under AS-17 of ICAI.

4 - Employee Benefits AS -15 (Revised) :

(i) Defined Contribution Plans :

An amount of Rs.481.40 lakhs (Previous Year Rs.480.00 lakhs) contributed to employees superannuation trust is recognised as an expense and included in "Employee Benefits Expenses" (Note 26) of Statement of Profit & Loss.

(ii) Defined Benefit Plans : - As per Actuarial Valuation as on March 31, 2013 :

5 - Related Party Information :

(1) List of Related Parties :

(a) Key Management Personnel : Dr. Guruprasad Mohapatra, IAS, Managing Director

(up to 18th July, 2011)

Shri M S Dagur, IAS, Managing Director (from 19th July, 2011)

(2) Transactions with related parties :

Details related to parties referred to in (1) (a) above.

6 - Borrowing cost capitalised during the year is Rs.471.26 lakhs (Previous Year Rs.56.56 lakhs) for acquisition of long term assets.

7 - (a) Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

(b) Balances shown under Secured/Unsecured Loan, Advances, Deposits, Debtors, Creditors, Loans and Materials with others, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year''s financial statements.


Mar 31, 2012

NOTES :

* Lease hold land amortised during Financial Year 2011-12 for the expired period of the lease of Rs.27.43 lakhs (Ref. Sr. No. 3 (c) of Note No. 1) and shown as deduction in Gross Block.

** The lease deed in respect of Plot No. 3, land admeasuring 44,032 sq. mtrs. acquired at Dahej Complex having value of Rs.15.86 lakhs is pending for execution. The refund of amount as per GIDC Rs.132.86 lakhs is yet to be received and rectification deed is yet to be executed, in respect of land admeasuring 61,700 sq. mtrs of Plot No. CH-17, surrendered to GIDC. The actual amounts payable / receivable in both the cases will be as per policy of GIDC.

*** Depreciation and amortization for the year includes Net Debit of Rs.25.94 lakhs for prior period adjustment (Previous Year Net Debit of Rs.2.32 lakhs)

# The Company's contribution or expenditure towards Power, Water and Services not owned by the Company is capitalized under the general head "Capital Expenditure" and written off to revenue over a period of eighteen years starting from 15.08.1998 i.e. date of start of operations.

* Advances for capital goods includes payment and provision of (1) Rs.1,695.82 lakhs (Previous Year Rs.1,591.20 lakhs) towards lease hold land allotted at Dahej admeasuring 5,20,000 sq. mtrs and (2) Rs.4,611.70 lakhs (Previous Year Rs.4,410.19 lakhs) towards lease hold land allotted at village Dahej admeasuring 10,20,900 sq. mtrs. and (3) Rs.930.57 lakhs (Previous Year Rs.793.53 lakhs) towards plot B-37 to B-44 lease hold land admeasuring 50,714.48 sq. mtrs. allotted at village Atali for proposed Housing Colony, for which possession is yet to be taken from GIDC.

1 - Disclosure pursuant to Note No. T of Part I of Schedule VI to the Companies Act, 1956

[ Rs. in Lakhs ]

Contingent Liabilities and commitments As at As at

(to the extent not provided for) 31.03.2012 31.03.2011

(i) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debt 7,380.57 6,829.43

(b) Various pending cases before Labour Court and Industrial Tribunal Not ascertainable Not ascertainable

(c) Guarantees :

(i) The Company has given corporate guarantees aggregating to Rs. 484.25 lakhs (Previous Year Rs. 484.25 lakhs) to Housing Development Finance Corporation Limited (HDFC) for housing loans extended to employees. Total loans outstanding under the arrangement, are : 83.15 113.27

(ii) Guarantees given by the Company's bankers for various purposes are : 4,283.97 4,529.88

(d) Disputed Purchase tax liability 20,925.52 20,947.88

(e) Disputed Income Tax liability 4,114.07 -

Total (i) 36,787.28 32,420.46

(ii) Commitments :

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for 9,696.89 3,258.08

(b) Other commitments - Unascertained land liability to GIDC for leasehold land at Dahej Not ascertainable Not ascertainable

Total (ii) 9,696.89 3,258.08

Total : 46,484.17 35,678.54

The Board of Directors of the Company has recommended dividend of Rs.3.00 per share on 7,34,36,928 equity shares of Rs.10/- each, amounting to Rs.2,203.11 lakhs (excluding tax on dividend Rs.357.40 lakhs). The provision for proposed dividend is shown separately in Note -11 - Short Term Provisions.

2 - Under Clean Development Mechanism, various projects of the Company have been registered with UNFCCC. Three Wind Mill projects of Company are in the process of registration.

3 - Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006". Amount overdue as on 31st March, 2012, to Micro, Small and Medium Enterprises on account of principal amount with interest in aggregate is Rs. NIL (Previous Year Rs. Nil).

4 - The Company's operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting is required to be made as required under AS-17 of ICAI.

5 - Employee Benefits AS -15 (Revised) :

(i) Defined Contribution Plans :

An amount of Rs.480.00 lakhs (Previous Year Rs.490.12 lakhs) contributed to employees superannuation trust is recognised as an expense and included in "Employee Benefits Expenses" (Note 28) of Statement of Profit & Loss.

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Group Gratuity-cum-life Assurance cash accumulation policy offered by Life Insurance Corporation (LIC) of India. The investment return earned on the policy comprises bonuses declared by LIC having regard to LIC's investment earnings. The information on the allocation of the fund into major assets classes and expected return on each major class are not readily available. We understand that LIC's overall portfolio of assets is well diversified as such, the long term return on the policy is expected to be higher than the rate of return on Central Government Bonds. Historically too, the returns declared by LIC on such policies have been higher than Government bond yields. As such, the expected return on assets assumption is taken by adding a margin on the current market yield on the Central Government bonds (of term consistent with the terms of liabilities).

6 - Related Party Information :

(1) List of Related Parties :

(a) Where control exists : Joint Venture Parties

Gujarat Alkalies and Chemicals Ltd. (99.10%); and Dow-Europe GmbH (0.90%)

(b) Joint Venture : Dow-GACL SolVenture Ltd.

(c) Key Management Personnel : Dr. Guruprasad Mohapatra, IAS, Managing Director

(up to 18th July, 2011)

Shri M S Dagur, IAS, Managing Director (from 19th July, 2011)

(d) Relatives of key management personnel and their enterprises, where transactions have taken place : Nil

* During the year, pursuant to allotments of further 28,62,339 equity shares in JV, the percentage ownership of the Company in JV increased to 99.10%, which is held temporarily. Since Dow-GACL SolVenture Ltd. (JV) has filed an application on 16th April, 2012 for striking off the name of Dow-GACL SolVenture Ltd. from Registrar of Companies under the Fast Track Exit Scheme of MCA, Government of India pursuant to the same, the total amount of Rs.288.86 lakhs paid as subscription to equity shares in Dow-GACL SolVenture Ltd. has been written off for the diminution in equity investments and charged to Statement of Profit and Loss of the Company for the Financial Year 2011-12. Therefore, financials of JV are not being consolidated as per AS-21.

7 - (a) Pursuant to the Notification No. F.No.2/6/2008-C.L-V dated 30th March, 2011 issued by Ministry of Corporate Affairs, Government of India, the Company has prepared the financial statements as per Revised Schedule VI to the Companies Act, 1956. This has significantly impacted the disclosure and presentation made in the financial statements. Previous Year's figures have been regrouped / reclassified wherever necessary to correspond with current year's classification / disclosure.

Company is not availing the exemption granted vide Notification dated 8th February, 2011 issued by Ministry of Corporate Affairs, Government of India regarding disclosure of paragraph 3 (i) (a) and 3 (ii) (a) of Part II of erstwhile Schedule VI of the Companies Act, 1956.

(b) Balances shown under Secured/Unsecured Loan, Advances, Deposits, Debtors, Creditors, Loans and Materials with others, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current year's financial statements.

8 - Borrowing cost capitalised during the year is Rs.56.56 lakhs (Previous Year NIL) for acquisition of long term assets.

9 - Other exceptional item represents provision made towards interest Rs.1,141.86 lakhs and delay payment charges of Rs.456.75 lakhs on electricity duty paid under protest for earlier years.


Mar 31, 2010

Rs.in Lakhs 2009-2010 2008-2009

1, Contingent Liabilities. (a) The Company has given corporate guarantees aggregating to Rs.661,90 lakhs (Previous Year 7682.80 lakhs) to Housing Development Finance Corporation Limited (HDFC) for housing loans extended to employees. Total loans outstanding under the arrangement, are : 142.65 175.32 (b) (i) Estimated amount of contracts on Capital Account remaining to be executed and not provided for are : 8,857.40 4,945.74

(ii) Amount for Leasehold Land at Dahej. Not ascertainable Not ascertainable

(c) Claims from various parties disputed but not acknowledged as debt : 6,616.18 5,471.96

(d) Guarantees given by the Companys bankers for various purposes are : 4,065.31 2,657.86

(e) Disputed Purchase tax liability (Net of provision made). 21,185.69 21,316,56

2. The Sundry Debtors include overdue outstanding from various parties aggregating to Rs.1,555.94 lakhs, (Previous Year Rs.1,568.39 lakhs), for which the Company has taken legal steps for recovery of the outstanding dues and the management is hopeful of the recovery. However, cumulative provision of 71,076.27 lakhs (Previous Year 71,022.03 lakhs) exists for such doubtful debts.

3. Provisions were made by the Company in F.Y. 2005-06 and 2006-07 without taking into consideration the deduction allowable in respect of its 90 MW combined cycle power plant set up in its Dahej Complex for captive requirements towards tax liability under section 80-IA of the Income Tax Act, 1961. As per para 52 of the AS 29, issued by ICAI, "Provision should be reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision should be reversed". Accordingly ?6,405.69 lakhs has been written back in its tax provisions in view of the Revised / Original returns filed for the respective years and the same being allowed in tax assessment / appeal orders during the year.

4. Under Clean Development Mechanism, three projects of the Company have been registered with UNFCCC. The Company in the meantime has put up three Wind Mill projects for which the process of registration has been started. It has further identified small energy saving projects and expects to start the process of registration for these projects also. It has monetized 83783 CERs during the financial year 2009-10.

5. Derivative Transactions :

In line with the requirement of AS-30 ( Financial Instruments : Recognition and Measurement) to provide for mark-to-market (MTM) losses on open positrons in derivative contracts as on the date of the Balance Sheet, the Company has reduced the provision to Rs.1,356.71 lakhs from Rs. 1,804.17 lakhs provided till previous year for such tosses in respect of its open positions in Cross Currency Swap transactions and the same is shown separately in Schedule 11 - "Current Liabilities and Provisions" and in Schedule 13 - "Other Income".

During the year, an income of Rs.50.00 lakhs (Previous Year Rs. 100.00 lakhs) has been recognised on realisation basts towards coupon settlement of the Cross Currency Swap transaction and is shown in Schedule 13 - "Other Income".

6. In accordance with the provisions of Value Added Tax Act, 2003, the amount collected as VAT and eligible for remission benefit at Dahej Complex, during the year Rs.1,357.63 lakhs (Previous Year Rs.1,822.06 lakhs) has been treated as Other Income.

7. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006". Amount overdue as on 31st March, 2010, to Micro, Small and Medium Enterprises on account of principal amount with interest in aggregate is Rs.NIL(Previous Year Rs. Nil).

8. Borrowing cost capitalised during the year is Rs. NIL (Previous Year Rs.406.88 lakhs) for acquisition of long term assets.

9. The Companys operations fall under single segment namely "Chemicals", hence no separate disclosure of segment reporting is required to be made as required under AS-17 of ICAI.

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(v) Amount recognised as an expense in respect of Compensated Leave absences is 7927.97 lakhs (Previous Year Rs.587.95 lakhs) on actuarial valuation basis as on 31,03.2010.

(vi) Basis used to determine expected rate of return on assets :

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Group Gratuity-cum-life Assurance cash accumulation policy offered by Life Insurance Corporation (LIC) of India. The investment return earned on the policy comprises bonuses declared by LIC having regard to LICs investment earnings. The information on the allocation of the fund into major assets classes and expected return on each major class are not readily available. We understand that LICs overall portfolio of assets is well diversified as such, the long term return on the poticy is expected to be higher than the rate of return on Central Government Bonds. Historically too, the returns declared by LIC on such policies have been higher than Government bond yields. As such, the expected return on assets assumption is taken by adding a margin on the current market yield on the Centra! Government bonds (of term consistent with the terms of liabilities).

10. The Company has been allotted 10,00,000 equity shares of Rs.10/- each fully paid-up on 30th March, 2009 as bonus shares in the ratio 1 : 1 on the equity investment with Gujarat State Petroleum Corporation Ltd. {GSPC). The Company has made a further investment of Rs.1,249.99 lakhs on 17th December, 2009 in 1,54,320 equity shares of Rs.10/- each of GSPC at a premium of Rs.800/- per share.

Thereafter, GSPC has splitted one equity share of the face value of 710/- each into ten equity shares of the face value of Re.1/- each on 29th December, 2009. Hence, the Companys shareholding in GSPC as at 31st Marcb,2010, stands at 2,15,43,200 fully paid-up equity shares of Re.1/- each.

The Company has paid 7 1,000 lakhs on 15th February, 2010 and further 71,000 lakhs on 5th April,2010, as Share Application Money for allotment of 40,00,000 fully paid-up equity shares of 710/- each at a premium of 740/- per share in GSPC Gas Company Ltd. Allotment is pending as at 31" March, 2010.

The Company has paid 7210 lakhs on 26th November, 2009, as advance Share Application Money to Dow-GACL Sol Venture Ltd. (DGSL). Allotment is pending as at 31st March, 2010.

11. The Company holds 1.14,90,000 fully paid-up Bquity shares of 710/- each of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL). The net worth of GCPTCL has substantially eroded and it was referred to Corporate Debt Restructuring {CDR) Cell. As per CDR scheme approved by CDR Cell on 26tn February,2010 and the resolution passed by the Shareholders of GCPTCL at the EOGM held on 15th December,2009, the paid-up value of the said equity shares has been written down from Rs.10/- per share to Re.1/- per share and accordingly, there is a permanent diminution in the value of the said investment by 71,034.10 lakhs. The said amount has been provided and charged to the Profit and Loss Account of the Company for the Financial Year 2009-10.

12. Related Party Information :

(1) List of Related Parties :

(a) Where control exists : Joint Venture Parties

Gujarat Alkalies And Chemicals Ltd.

(50%); and

Dow-Europe GmbH (50%)

(b) Joint Venture : Dow GACL SotVenture Ltd.

(c) Key Management Personnel : Shri Guruprasad Mohapatra. IAS, Managing Director

(d) Relatives of key management personnel and their enterprises, where transactions have taken place : Nil

13. (a) Corresponding figures of the previous year have been regrouped to make them comparable with this years figures, wherever necessary (b) Balances shown under Secured/Unsecured Loan, Advances, Deposits, Debtors, Creditors, Loans and Materials with others, etc. are subject to confirmation / reconciliation, if any. The management does not expect any material difference affecting the current years financial statements.

14. Excise Duty :

As required under Accounting Standard AS-9 on Revenue Recognition issued by The Institute of Chartered Accountants of India :

(i) Gross Sales is reduced by the excise duty charged to arrive at net sales

(ii) The difference of excise duty payable on opening and closing stock of finished goods is reflected as a separate expenditure item in the Profit and Loss Account.

(iii) The difference in excise duty recovered and paid, if any, is shown as selling expenses under the head of Administration, General and Marketing Expenses.

15. a) Capacity, Production and Stocks :

NOTES : The Licensed Capacities and Installed Capacities are as certified by the Management.

(A) The over all Caustic Soda Lye / Caustic Potash Capacity as per Liecense of both Baroda and Oahej is 4,52,600 M.T.Thus overall Installed Capacity is 4,29,050 M.T.

(B) This represents 4,01,037 M.T. of Caustic Soda Lye and 20,802 M.T. of Caustic Potash Lye.

(1) Out of 4,01,037 M.T. Actual Production of Caustic Soda Lye, 1,87,798 M.T. consumed for manufacturing of Caustic Flakes/Prills and 7,188 M.T. consumed for production of Sodium Hypochlorite.

(2) Out of 20,802 M.T. Actual Production of Caustic Potash Lye, 9,283 M.T. consumed for manufacturing of Caustic Potash Flakes and 9,242 M.T. consumed for manufacturing of Potassium Carbonate.

(C) (1) The capacity of Caustic Soda Flakes/Prills and Caustic Potash Flakes is within the capacity of Caustic Soda Lye and Caustic Potash Lye for Baroda.

(2) The capacity of Caustic Soda Prills and Caustic Soda Flakes is within the capacity of Caustic Soda (100%) at Dahej.

(D) This represents 1,87,790 M.T. of Caustic Soda Flakes/Prills and 10.315 M.T. of Caustic Potash Flakes.

(E) Out of 3,80,236 M.T. Actual Production of Chlorine Gas, 2,81,521 M.T. consumed for manufacturing of Liquid Chlorine, Hydrochloric Acid, Sodium Hypochlorite & Anhydrous Aluminium Chloride.

(E1) Quantity and value of Chlorne includes value of stock of Chlorine with Jobwork Parties (CPW & ALC),

(F) For Baroda, Production from both Caustic Soda Plant and Chloromethanes Plant is included.

(G) Out of 12,01.70,520 NM3 Actual production of Hydrogen Gas, 4,60,93,437 NM3 consumed for manufacturing of Caustic Soda Flakes & 2,77,90,695 NM3 consumed for HCL for Baroda and Dahej Complex.

(H) Aluminium Chloride & Chlorinated Parafin Wax are manufactured on job work basis.

(I) 21 MW Wind Farm has been Commissioned on 22nd March, 2010 (5 nos.) on 29lh March, 2010 (4 nos.) and on 30th March, 2010 (2 nos.).

(J) Installed Capacity based on 100% of Calcium Chloride Lye and includes Flakes and Powder.

(K) Installed Capacity based on 18% of Poly Aluminium Chloride.

(L) Benzyl Chloride are manufactured on job work basis from November,2009.

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