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Notes to Accounts of Tuticorin Alkali Chemicals & Fertilizers Ltd.

Mar 31, 2023

Employee benefit plansa) Defined contribution plans

The Company has recognised Rs. 93.32 lakhs (March 31, 2022: Rs. 72.26 lakhs) as expense in Statement of Profit or Loss towards defined contribution plans. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Based on the Supreme Court Judgement dated March 2, 2019, the Company has reassessed the components to be included in the basic salary for the purposes of deduction of PF. Accordingly, there was no impact and hence the company has not provided for any additional liability as on March 31,2023 in the books of accounts.

b) Defined benefit plans

In respect of Gratuity plan, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as March 31, 2023. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit cost method. The following table sets forth the status of the Gratuity Plan of the Company and the amount recognised in the Balance Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through annual contributions to insurer managed funds.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows;

Investment risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Interest risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the planâs liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Group is exposed to the risk of actual experience turning out to be worse compared to the assumption.

The Company has generally invested the plan assets with the insurer managed funds. The insurance company has invested the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds, Money Market Instruments and Time Deposits. The expected rate of return on plan asset is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset)

Sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

31 Capital management

The Companyâs capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirement s of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves. Net debt includes all long and short-term borrowings, trade and other payables as reduced by cash and cash equivalents.

32.3 Financial Risk and Management Objectives

The Company''s activities expose it to a variety of financial risks, credit risks, liquidity risks and market risks.

The Companyâs board of directors has overall responsibility for the establishment and oversight of the risk management framework.

The Risk management policies are established to identify and analyse the risks faced by the company, to set appropriate risk limits and controls and to monitor risks and adhere to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and company''s activities. The company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

1. Credit Risks

Credit risk is the risk of financial loss to the Company, of a customer or the counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers. The carrying amount of financial assets represents the maximum credit risk exposure. The Company evaluates the concentration with respect to trade receivables considering the sales to top 4 customers which contribute 75% of the revenue.

Trade receivables

The company''s exposure to credit risks is influenced mainly by individual characteristics of each customer. However management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry. Credit risk has always been managed by the company through its credit approvals, establishing credit limits and continuously monitoring the credit worthiness of its customer based on which the company agrees on the credit terms with the customers in the normal course of business. Credit risks on cash and cash equivalents and other bank balances is limited as the Company generally transacts with banks and financial institutions with high credit ratings assigned by International and Domestic Credit Rating Agencies. Credit risk from balances with banks, borrowings from financial institutions are managed by the Companyâs treasury department in accordance with the guidelines framed by the board of directors of the Company. Guidelines broadly covers the selection criterion and over all exposure which the Company can take with a particular financial institution or bank. The Company does not maintain significant amount of cash and deposits other than those required for its day to day operations.

2. Liquidity Risks

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damaging to the company''s reputation.

3. Market Risks

Market risk is this risk that changes in market prices, such as foreign exchange rates and Interest rates will affect the company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the returns.

4. Foreign Currency Risks

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which transactions are denominated and the functional currency of the company. The functional currency of the company is Indian Rupees (INR). The currencies in which these transactions are primarily denominated is US Dollars (USD).

b. Foreign currency sensitivity analysis

10% appreciation/depreciation of the respective foreign currency with respect to functional currency of the company would result in increase/ decrease in loss before taxes by approximately Rs. 81.24 Lakhs for the year ended March 31,2022

5. Interest Rate Risks

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk.

33. Contingent liabilities and commitments		Rupees in Lakhs
Particulars	As at 31 March 2023	As at 31 March 2022
a) Claims against the company for Purchase Tax, Sales Tax and Penalties not acknowledged as debt and not provided for	415.90	415.90
b) Disputed claims for rent and Interest on Dues of VOC port trust, Tuticorin	3,646.97	3,267.66
c) Excise and Service tax dues on appeal by the department	83.10	192.10
d) Employees provident fund interest and damages for delayed payment	52.93	52.93
Total	4,198.90	3,928.59

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. The Company is contesting these demands and the Management, including its advisors, believe that its position will likely be upheld in the appellate process.

No expense has been accrued in the stand alone financial statements for the demands raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

37 Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

38 Disclosure of transaction with Struck off Companies

Based on management analysis, Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.

39 Details of Benami Property held

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

40 Utilisation of borrowed funds and securities premium

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

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

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries)

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

41 Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous 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).

42 Corporate Social Responsibility

In view of absence of Profit as per the computation of Section 198 of the Companies Act 2013, Company is not required to spend towards CSR Activity as per Section 135 of Companies Act, 2013.

43 Details of Crypto Currency or Virtual Currency

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

44 Note on Social Security Code 2020

The Code on Social Security 2020 (âthe Codeâ) relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

45 Going Concern

The Company made a net profit of Rs 7,876.09 lakhs for financial year ended March 31, 2023 (PY Loss of Rs 3,397.39 lakhs) with significant improvement in operation. Considering the profit earned during the year and the fair value gain on revaluation of assets as mentioned above, the Company''s net worth has turned positive as at the end of the year amounting to Rs 967.07 lakhs (PY Negative net worth of Rs 28,977.14 lakh). The Management of the Company is continuing to improve the production capacity by

incurring additional capital expenditure for refurbishing/replacing old identified machineries. The cash flow forecasts for a period

of 12 months from the date of approval of these financial results indicate that, the Company will have sufficient funds, through its operations and funding from its promoters and group companies to meet its liabilities as and when they fall due for that period.

Based on this continuing support and improvement in the operations of the Company, the directors believe that it remains appropriate to

prepare the financial statements on a going concern basis.

46 The figures for the previous year have been regrouped wherever necessary to confirm to current yearâs classification.

47 The Board of Directors has reviewed the realizable value of all current assets of the Company and has confirmed that all the value of such assets in the ordinary course of business will not be less than the value at which these are recognized in the financial statements. Further, the board, duly taking into account all relevant disclosures made, has approved these financial statement for the year ended 31 March 2023 in its meeting held on 24 May 2023.

Mar 31, 2018

Note 1 GENERAL INFORMATION

Tuticorin Alkali Chemicals And Fertilizers Limited (âthe Companyâ/âTFLâ), having its registered office at Chennai is a Public Limited Company, incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Limited. The Company is manufacturing and selling Soda Ash and Ammonium Chloride Fertiliser and has its manufacturing facility at Tuticorin.

Tax losses of Rs. 16,585 Lakhs (31 March 2017: Rs. 11,815 Lakhs, 1 April 2016: Rs. 8,394 Lakhs) are available for offsetting for a maximum period of eight years against future taxable profits of the Company. The Company has recognized Deferred tax Assets only to the extent of Deferred Tax Liabilities in the absence of convincing evidence of future taxable profits. The majority of the Deferred Tax Liabilities represent accelerated tax relief for the depreciation of Property, Plant and Equipment.

2A. Cash and Cash Equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks, cheques and drafts on hand. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the balance sheet as follows:

(i) Terms attached to Equity Shares

The Company has one class of equity share having a par value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital on liquidation will be in proportion to the number of equity shares held.

Capital redemption reserve has been created pursuant to the requirements of the Act under which the Company is required to transfer certain amounts on redemption of the preference shares. The Company has redeemed these preference shares in the earlier years. The capital redemption reserve can be utilised for issue of bonus shares.

(ii) Rights, Preference and restrictions attaching to each class of shares

8% Redeemable Cumulative Preference - These shares shall confer the holders thereof, the right to a fixed preferential dividend (cumulative in nature and payable in arrears) from the date of allotment at a rate of 8 %, on the capital being paid up. These shares are redeemable at par at the end of 20 years from the date of allotment. Rs.150 Lakhs was allotted on 1st January 1998 and the remaining Rs.150 Lakhs was allotted on 1st May 1998.

5% Redeemable Cumulative Preference - These shares shall confer the holders thereof, the right to a fixed preferential dividend (cumulative in nature and payable in arrears) from the date of allotment on 29th September 2004 at a rate of 5 %, on the capital being paid up. These shares are redeemable at par at the end of 20 years from the date of allotment.

Notes

(i) Borrowings from SPIC are repayable on demand. No interest is charged on the outstanding loan balance.

(ii) Cash Credit from Banks are secured by hypothecation of raw materials, finished goods, work-in-process, stores and book debts and a second charge on the other assets of the company.

(iii) The Company has obtained approval of the shareholders for issue of Equity Shares on Preferential Basis to Promoter and their Associates at the Extraordinary General Meeting held on 10th April 2018. Pursuant to the proposed issue of Equity Shares, the Authorised Share Capital for Equity Shares has been increased from Rs.39 Crores to Rs.122 Crores.

The Company proposes to issue 10,70,40,000 Equity Shares of Rs.10/- âat parâ on the Preferential Basis to promoter and promoter group by conversion of existing Preference Shares issued and conversion of advances received from promoter group Companies subject to regulatory approvals.

Terms and Conditions of the above financial liabilities

Trade payables are normally Non-Interest bearing. For maturity profile of trade payables and other financial liabilities refer Note No.29.3. For explanations on the groupâs credit risk management processes, refer to Note No. 29.3.

3. Segment Reporting

The Company is engaged in the manufacture of Soda Ash and Ammonium Chloride (Dual Products) which is the only business segment determined in accordance with Ind AS 108, âOperating Segmentâ. Hence there are no reportable business segments to be disclosed as required by the said standard.

4 Financial Instruments 29.1 Capital Management

The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/shortterm borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

The following table summarises the capital of the Company:

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March 2018 and 31st March 2017.

5.1. Financial Risk and Management Objectives

The Companyâs activities expose it to a variety of financial risks, credit risks, liquidity risks and market risks

The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

The risk management policies are established to identify and analyse the risks faced by the company, to set appropriate risk limits and controls and to monitor risks and adhere to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and companyâs activities. The company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control enviornment in which all employees understand their roles and obligations.

1. Credit Risks

âCredit risk is the risk of financial loss to the company, if a customer or the counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers. The carrying amount of financial assets represents the maximum credit risk exposure.

Trade Receivables

The Companyâs exposure to credit risks is influenced mainly by individual charecteristics of each customer. However management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry. Credit risk has always been managed by the company through its credit approvals, establishing credit limits and continuously monitoring the credit worthiness of its customer based on which the company agrees on the credit terms with the customers in the normal course of business.

Credit risks on cash and cash equivalents and other bank balances is limited as the company generally transacts with banks and financial institutions with high credit ratings assigned by International and Domestic Credit Rating Agencies.Credit risk from balances with banks, borrowings from related parties and financial institutions is managed by the Companyâs treasury department in accordance with the guidelines framed by the board of directors of the Company. Guidelines broadly covers the selection criterion and over all exposure which the Company can take with a particular financial institution or bank. The Company does not maintain the significant amount of cash and deposits other than those required for its day to day operations.

2. Liquidity Risks

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The companyâs approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damaging to the companyâs reputation.

The table below provides the details regarding the contractual maturities of significant financial liabilities as follows;

3. Market Risks

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, which will affect the companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the returns.

4. Foreign Currency Risks

a. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities based on gross exposure at the end of the reporting period is as under:

b. Foreign Currency Sensitivity Analysis

The sensitivity of profit or loss to changes in exchange rates arises mainly from foreign currency denominated financial instruments.

5. Interest Rate Risks

Fair Value Measurements

The following table shows the carrying amounts and fair values of financial assets and financial liabilities including their levels in fair value hierarchy

6. Employee Benefit Plans

a) Defined Contribution Plans

The Company has recognised Rs.75.78 lakhs (March 31, 2017: Rs. 64.97 lakhs) as expense in Statement of Profit or Loss towards defined contribution plans. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

b) Defined Benefit Plans

In respect of Gratuity plan, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as March 31, 2018. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit cost method. The following table sets forth the status of the Gratuity Plan of the Company and the amount recognised in the Balance Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through annual contributions to insurer managed funds.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows;

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Interest Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

The details of actuarial valuation in respect of Gratuity and Long Term Compensated Absenses liability are given below:

ASSUMPTIONS

The principal assumptions used for the purposes of the actuarial valuations of Gratuity are given below

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and attrition rate. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:

There was no change in the methods of assumptions used in preparing the sensitivity analysis from prior years.

The Companyâs best estimate of the contribution expected to be paid to the plan during the next year is Rs. 17.45 Lakhs (2017; Rs. 65.38)

B. Commitments

The company does not have any contracts remaining to be executed.

7. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

There are no over due amounts payable to Micro, Small & Medium Enterprises [MSME] as on the Balancesheet date or anytime during the year and hence no interest has been paid/payable. This is based on the information on such parties having been identified on the basis of information available with the Company and relied upon by the auditors.

8. Related Party Disclosure

i) The list of related parties as identified by the Management and relied upon by the auditors are as under

Entities exercising Significant Influence over the Company

Southern Petrochemicals Industries Corporation Limited Key managerial personnel G.Ramachandran, Managing Director

9 Transtion to INDAS

These financial statements are the first set of Ind AS financial statements prepared by the Company. Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ending on 31 March 2018, together with the comparative year data as at and for the year ended 31 March 2017, as described in the significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1 April 2016, being the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

Exemptions availed on first time adoption of Ind AS

Ind AS 101, First-time Adoption of Indian Accounting Standards, allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions.

a. Deemed Cost

The Company has elected to continue with the carrying value of all of its plant and equipment recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

Mandatory Exemption on first-time adoption of Ind AS

a. Estimates

An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with Indian GAAP.

b. Derecognition of Financial Assets and Financial Liabilities

âA first-time adopter should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospective^ to transactions occurring on or after the date of transition. Therefore, if a first-time adopter derecognized non-derivative financial assets or non-derivative financial liabilities under its Indian GAAP as a result of a transaction that occurred before the date of transition, it should not recognize those financial assets and liabilities under Ind AS (unless they qualify for recognition as a result of a later transaction or event). A first-time adopter that wants to apply the derecognition requirements in Ind AS 109, Financial Instruments, retrospectively from a date of the entityâs choosing may only do so, provided that the information needed to apply Ind AS 109, Financial Instruments, to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the derecognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.â

c. Classification and measurement of Financial Assets

Financial Instruments: (Loan to employees and security deposits paid) :

Financial assets like loan to employees and security deposits paid, has been classified and measured at amortised cost on the basis of the facts and circumstances that exist at the date of transition to Ind ASs. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind As by applying amortised cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.

Impairment of financial assets: (Trade receivables and other financial assets):

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101. The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.

Reconciliations

The following reconciliations provides the effect of transition to Ind AS from Indian GAAP in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards:

(f) Notes to first-time adoption

(i) Preference shares

Under previous GAAP, redeemable preference shares were classified as part of total equity. Accumulated unpaid dividend on these preference shares were reflected as contingent liabilities and not recognised as finance costs in profit or loss. However, under Ind AS, financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not based on its legal form. These preference shares do not contain any equity component and hence, have been classified in their entirety as a financial liability under Ind AS. The resultant dividends have been recognised as finance costs in profit or loss.

(ii) Excise Duty

âUnder previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense is presented separately on the face of the consolidated statement of profit and loss. The change does not affect total equity as at April 1, 2016 and March 31, 2017, profit before tax or total profit for the year ended March 31, 2017.â

(iii) Defined benefit liabilities

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to Statement of Profit and Loss. Under Ind AS, re-measurements comprising of actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost for the year ended 31 March 2017 is reduced by Rs 80.75 lakhs and re-measurement gains / losses on defined benefit plans of the corresponding amount has been recognized in the OCI for Rs 63.59 lakhs. The impact on the opening equity comes to Rs 1.83 lakhs.

(iv) Capitalized Stores and Spares

Spares that meet the definition of property, plant and equipment under IND AS 16 have been reclassified from Inventory to Property, Plant and Equipments. Spares worth Rs 44.23 lakhs as of April 01, 2016 have been identified and reclassified as Property, Plant and Equipment. Depreciation on these spares for the year 2016-17 amounted to Rs 4.12 lakhs.

10. Standards (including amendments) issued but not yet effective

The standards and interpretations that are issued, but not yet effective up to the date of issuance of the financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

a. Appendix B to Ind AS 21, Foreign currency transactions and advance consideration

On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) 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.

b. Ind AS 115- Revenue from Contract with Customers

On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The standard permits two possible methods of transition:

(i) Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

(ii) Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The Company is currently evaluating the requirements of amendments. The Company believe that the adoption of the above standards are not expected to have any significant impact on the Companyâs financial statements

11 Going Concern

The company has incurred a Net Loss of Rs 4,514 lakhs during the year ended March 31, 2018 and, as on that date, the Companyâs accumulated loss is Rs.26,487 lakhs which has fully eroded the Companyâs net worth. However, having regard to continued production of the company, financial support from its promoters, further restructuring exercise being persued etc, the financial statements have been prepared on the basis that the Company is a going concern and that no adjustments are required to the carrying value of assets and liabilities. The losses during the year are due to lower operating level consequent to the limitations imposed by the CO₂ Capture Plant / Boiler and the restriction on availability of required quantity of CO₂ for production.

12 Approval of financial statements

The financial statements were approved for issue by the Board of Directors on May 16, 2018.

Mar 31, 2017

1. Retirement Benefits

a. Retirement benefits in the form of Provident Fund / Superannuation Fund are defined contribution schemes and the contributions are charged to Statement of Profit and Loss in the year in which the contributions to the respective funds are due.

b. Employees Gratuity Fund scheme managed by Life Insurance Corporation of India is a Defined Benefit Plan. The present value of obligation is provided for on the basis of actuarial valuation using the Projected Unit Credit method at the end of each financial year.

c. Actual gain / losses are charged to statement of Profit and Loss.

2. SEGMENTAL REPORTING FOR THE PERIOD ENDED 31^st MARCH ''17

The business segment consisting only of Tuticorin operations (Soda Ash / Ammonium Chloride - Dual Products). Hence, the Segmental Reporting has not been furnished.

Mar 31, 2015

1. Contingent Liabilities and Commitments

(Rupees in Lakhs)

Particulars As at As at 31st March 2015 31st March 2014

Claims against company not acknowledged as debt

a) No provision is made for Purchase Tax, Sales Tax and penalties thereon imposed by Sales Tax Authorities relating to earlier years, which are under appeal. 350.26 350.26

b) Disputed claims for rent and Interest on rent dues of VOC Port Trust, Tuticorin 2,552.09 2,059.65

c) Arrears of dividend 1,471.45 1,347.45 on Preference Shares

d) Excise and Service Tax dues on appeal by the Department 83.10 192.10

Total Contingent Liabilities and Commitments 4,456.90 3,949.46

2. Related Party disclosure under Accounting Standard -18

I. The list of related party as identified by the Management are as under:

Associates:

Southern Petrochemical Industries Corporation Limited

Key Management Personnel of the Company:

G. Ramachandran, Managing Director S. Nandakumar, Chief Financial Officer S. Raghavan, Company Secretary

3. Retirement Benefits

a. Retirement benefits in the form of Provident Fund / Superannuation Fund are defined contribution schemes and the contributions are charged to Statement of Profit and Loss in the year in which the contributions to the respective funds are due.

b. Employees Gratuity Fund scheme managed by Life Insurance Corporation of India is a Defined Benefit Plan. The present value of obligation is provided for on the basis of actuarial valuation using the Projected Unit Credit method at the end of each financial year.

c. Actual gain / losses are charged to Statement of Profit and Loss.

4. Accounting Policies

Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements as Annexure I.

Mar 31, 2014

1. Deferred Tax Liability / Asset

As regards recognition of deferred tax, in accordance with Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India the total deferred tax / liability as on 31st March, 2014 is as under:

As a matter of prudence the Company has recognised Deferred Tax Asset of Rs.2,138.14 lakhs to the extent of Deferred Tax Liability.

2. Related Party disclosure under Accounting Standard -18

I. The list of related party as identified by the Management is as under:

Associates:

Southern Petrochemical Industries Corporation Limited

Key Management Personnel of the Company:

G. Ramachandran, Managing Director

II. The following transactions were carried out with the related parties:

3. Retirement Benefits

a. Retirement benefits in the form of Provident Fund / Superannuation Fund are defined contribution schemes and the contributions are charged to Statement of Profit and Loss in the year in which the contributions to the respective funds are due.

b. Employees Gratuity Fund scheme managed by Life Insurance Corporation of India is a Defined Benefit Plan. The present value of obligation is provided for on the basis of actuarial valuation using the Projected Unit Credit method at the end of each financial year.

c. Actual gain / losses are charged to Statement of Profit and Loss.

4. SEGMENTAL REPORTING FOR THE PERIOD ENDED 31ST MARCH 2014

The business segment consisting only of Tuticorin operations (Soda Ash / Ammonium Chloride - Dual Products). Hence, the Segmental Reporting has not been furnished.

5. Accounting Policies

Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements as Annexure I.

Mar 31, 2013

1. Related Party disclosure under Accounting Standard -18

I. The list of related party as identified by the Management is as under:

Associates:

Southern Petrochemical Industries Corporation Limited

Key Management Personnel of the Company:

G. Ramachandran, Vice President and Whole Time Director

2. Retirement Benefits

a. Retirement benefits in the form of Provident Fund / Superannuation Fund are defined contribution schemes and the contributions are charged to Profit and Loss Account in the year in which the contributions to the respective funds are due.

b. Employees Gratuity Fund scheme managed by Life Insurance Corporation of India is a Defined Benefit Plan. The present value of obligation is provided for on the basis of actuarial valuation using the Projected Unit Credit method at the end of each financial year.

c. Actual gain / losses are charged to Statement of Profit and Loss.

3. SEGMENTAL REPORTING FOR THE PERIOD ENDED 31 MARCH 2013

The business segment consisting only of Tuticorin operations (Soda Ash /Ammonium Chloride - Dual Products). Hence, the Segmental Reporting has not been furnished.

4. The financial statements for the year ended 31 March 2012 are prepared under revised Schedule VI. Accordingly, current year financial statements have also been prepared on similar lines.

Mar 31, 2012

1. Related Party disclosure under Accounting Standard Ã18

I. The list of related party as identified by the Management are as under:

Associates:

Southern Petrochemical Industries Corporation Limited

Key Management Personnel of the Company:

Thiru G. Ramachandran, VP/Whole Time Director

2. Retirement Benefits

a. Retirement benefits in the form of Provident Fund / Superannuation Fund are defined contribution schemes and the contributions are charged to Statement of Profit and Loss in the year in which the contributions to the respective funds are due.

b. Employees Gratuity Fund scheme managed by Life Insurance Corporation of India is a Defined Benefit Plan. The present value of obligation is provided for on the basis of actuarial valuation using the Projected Unit Credit method at the end of each financial year.

c. Obligation for Leave encashment is recognized in the same manner as Gratuity.

d. Actual gain / losses are charged to Statement of Profit and Loss.

3. SEGMENTAL REPORTING FOR THE PERIOD ENDED 31ST MARCH '12

The business segment consisting only of Tuticorin operations (Soda Ash / Ammonium Chloride Ã Dual Products). Hence, the Segmental Reporting has not been furnished.

4. The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre- revised Schedule VI to the Companies Act,1956. Consequent to the notification under the Companies Act,1956, the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.

5. Accounting Policies

Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements as Annexure I.

Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs. Nil (Previous year Rs.Nil)

2. Security Deposit lodged with Sales Tax Authorities Rs.0.14 lakhs. (Previous year Rs.0.14 lakhs)

3. Sundry Creditors include Rs.Nil (Previous year Rs.Nil) due to Small Scale Industrial (SSI) undertaking to the extent identified by the Management.

4. Manufacturing Expenses includes one-time repairs & maintenance expenditure of Rs.311.60 lakhs and additional raw material and utilities consumption of Rs.77.61 lakhs incurred at the time of start up and stabilization of plant.

(Rupees in lakhs)

5. Contingent Liabilities 31.03.11 31.03.10

a. No provision is made for Purchase Tax, Sales Tax and penalties thereon imposed 345.82 345.82 by Sales Tax Authorities relating to earlier years, which are under appeal.

b. Disputed claims for Rent and Interest under appeal. 1,606.81 1089.46

c. Arrears of dividend on Preference Shares 975.45 851.45

6. Related Party disclosure under Accounting Standard Ã18

I. The list of related party as identified by the Management are as under:

Associates:

Southern Petrochemical Industries Corporation Limited

Key Management Personnel of the Company:

Thiru S. Chandramohan, Managing Director

7. Retirement Benefits

a. Retirement benefits in the form of Provident Fund / Superannuation Fund are defined contribution schemes and the contributions are charged to Profit and Loss Account in the year in which the contributions to the respective funds are due.

b. Employees Gratuity Fund scheme managed by Life Insurance Corporation of India is a Defined Benefit Plan. The present value of obligation is provided for on the basis of actuarial valuation using the Projected Unit Credit method at the end of the each financial year.

c. Obligation for Leave encashment is recognized in the same manner as Gratuity.

d. Actual gain / losses are charged to Profit and Loss Account.

8. Segmental Reporting for the year ended 31st March '11

The business segment consisting only of Tuticorin operations (Soda Ash / Ammonium Chloride Ã Dual Products). Hence, the Segmental Reporting has not been furnished.

9. As regards recognition of deferred tax, in accordance with Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India the total deferred tax / liability as on 31st March, 2011 are as under:

As a matter of prudence the company has recognised Deferred Tax Asset of Rs. 3,170.43 lakhs to the extent of Deferred Tax Liability.

Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs. Nil (Previous year Rs.Nil)

2. Security Deposit lodged with Sales Tax Authorities Rs. 0.14 lakhs. (Previous year Rs.0.14 lakhs)

3. Sundry Creditors include Rs.Nil (Previous year Rs.Nil) due to Small Scale Industrial (SSI) undertaking to the extent identified by the Management.

* No provision is made for special pay amounting to Rs.10 lakhs (Previous year - Rs.15 lakhs) due to acute liquidity crisis arising out of shutdown of the plants. The same will be decided as and when the situation improves. ** Perquisites exclude contribution to Superannuation and Gratuity Fund.

4. Related Party disclosure under Accounting Standard -18

I. The list of related party as identified by the Management are as under:

Associates:

Southern Petrochemical Industries Corporation Limited

Key Management Personnel of the Company:

5. Retirement Benefits

a. Retirement benefits in the form of Provident Fund / Superannuation Fund are defined contribution schemes and the contributions are charged to Profit and Loss Account in the year in which the contributions to the respective funds are due.

b. Employees Gratuity Fund scheme managed by Life Insurance Corporation of India is a Defined Benefit Plan. The present value of obligation is provided for on the basis of actuarial valuation using the Projected Unit Credit method at the end of each financial year.

c. Obligation for Leave encashment is recognized in the same manner as Gratuity.

d. Actual gain / losses are charged to Profit and Loss Account.

6. Segmental Reporting for the year ended 31st March 10

The business segment consisting only of Tuticorin operations (Soda Ash / Ammonium Chloride - Dual Products). Hence, the Segmental Reporting has not been furnished.

As a matter of prudence the company has recognised Deferred Tax Asset of Rs.3531.28 lakhs to the extent of Deferred Tax Liability.

7. The figures for the current financial period are for twelve months and hence not comparable with the eighteen months previous accounting period.

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