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Notes to Accounts of Ion Exchange (India) Ltd.

Mar 31, 2023

a) Freehold land includes land at Pune and Tamil Nadu, the title deeds of which are in the name of the nominees of the company. Deemed gross book value INR 27.44 Lacs (2021-22: INR 27.44 Lacs)

b) Buildings on freehold land includes residential flats, the cost of which includes:

- INR 250 (2021-22: INR 250) being the value of 5 Shares (unquoted) of INR 50 each, fully paid up in Sunrise Co-operative Housing Society Limited.

- INR 3,500 (2021-22: INR 3,500) being the value of 70 Shares (unquoted) of INR 50 each, fully paid up in usha Milan Co-operative Society Limited.

c) Buildings on freehold land includes residential flats acquired at Mumbai, the society formation of which is in progress.

Deemed gross book value INR 41.15 Lacs (2021-22: INR 41.15 Lacs)

Net book value INR 33.88 Lacs (2021-22: INR 34.92 Lacs)

d) Buildings on freehold land includes residential flats comprising of 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur, the title deeds of which are awaited from authorities.

Deemed gross book value INR Nil (2021-22: INR Nil)

Net book value INR Nil (2021-22: INR Nil)

e) Buildings on freehold land includes office premises given on operating lease :

Deemed gross book value INR 168.96 Lacs (2021-22: INR 144.44 Lacs)

Accumulated depreciation INR 44.52 Lacs (2021-22: INR 38.61 Lacs)

Depreciation for the year INR 5.91 Lacs (2021-22: INR 5.84 Lacs)

Net book value INR 124.43 Lacs (2021-22: INR 105.83 Lacs)

f) Addition to Property, plant and equipment includes amount of INR 157.09 Lacs (2021-22: INR 219.76 Lacs) pertaining to research and development.

g) Certain property, plant and equipment are given as security for borrowings, the details relating to which have been described in note 18 and note 21

(a) Description of nature and purpose of each reserve

Security premium account: Securities premium account is used to record the premium on issue of shares. Securities premium also includes the difference between the face value of the equity shares and the consideration received in respect of shares issued pursuant to employee stock options scheme. The reserve is utilised in accordance with the provisions of the Act.

Special reserve: Special reserve is created by the company in past as per provision of section 45 - IC of the Reserve Bank of India Act, 1934 for repayment of fixed deposit holders.

General reserve: The company created a General Reserve in earlier years pursuant to the provisions of the Companies Act wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirement to transfer profits to General Reserve is not mandatory. General reserve represents appropriation of retained earnings and are available for distribution to shareholders.

Treasury shares: Treasury shares represents equity shares of the company held by IEI Shareholding (Staff Welfare) Trusts as well as HMIL Shareholding (Staff Welfare) Trusts

(a) Indian rupees loan from financial institution for capital expenditure carries interest @ 10.05% p.a. The loan is secured by first charge on movable and immovable fixed assets pertaining to a manufacturing facility at Goa and is repayable in 54 months with moratorium of 6 months from the date of actual commercial operation date.

(b) Indian rupees loan from financial institution for capital expenditure carries interest @ 8% p.a. The loan is secured by first charge on movable and immovable fixed assets pertaining to a manufacturing facility at Goa and is repayable in 20 equal quarterly instalments with moratorium of 6 months from the date of actual commercial operation date.

(c) Indian rupees loan of INR 925.00 Lacs from a bank for capital expenditure. Loan is repayable in 48 months from the date of the first disbursement and carries interest rate of 10% to 10.95% p.a. The loan is secured by exclusive first charge on three residential properties.

(d) Indian rupees loan of INR 1,400.00 Lacs from a bank for capital expenditure. Loan is repayable in 48 months from the date of the first disbursement and carries interest rate of 8.40% to 9.35% p.a. The loan is secured by exclusive first charge on three residential properties.

(e) Indian rupee vehicle loans from banks and finance companies carries interest @ 7.50% to 9.00% p.a. The loans are repayable within a period of 60 months in equal monthly installments along with interest, from the various dates of disbursements. The loans are secured by hypothecation of under lying vehicles.

B. Provident fund

The company''s provident fund schemes which are administered through Government of India are defined contribution plan. The company''s contribution paid / payable under the scheme is recognised as expense in the statement of profit and loss during the year in which the employee renders the related services. There are no other obligations other than the contribution payable to the respective fund.

The company''s provident fund scheme which is managed by trust set up by the company, the contribution to the provident fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees'' salary and charged to statement of profit and loss. Shortfall, if any, in the fund assets, based on the government specified minimum rate of return, will be made good by the company and charged to statement of profit and loss. The actual return earned by the fund has mostly been higher than the government specified minimum rate of return in the past years. There is a shortfall of INR 74.56 Lacs in the fund as on 31st March 2023 as per valuation report, which has been provided for by the company. There was no shortfall in the fund as on 31st March 2022.

B. Measurement of fair values

Valuation techniques and significant unobservable inputs

The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used. The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

C. Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

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

Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/debentures, over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant Inputs is not based on observable market data, the instrument is included in level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

D. Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year

E. Financial risk management:

The company has exposure to the following risks arising from financial instruments:

Â¦ Credit risk;

Â¦ Liquidity risk; and

Â¦ Market risk

(i) Risk management framework

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

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

The audit committee oversees how management monitors compliance with the company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the major observation are periodically reported to the audit committee.

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the company''s receivables from customers.

Trade receivables

Credit risk is managed through credit approvals and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business. In respect of trade receivables, the company is not exposed to any significant credit risk exposure to any single counter party or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. The company assesses the credit quality of the customer based on market intelligence, past payment history and defaults.

Credit risk management procedure includes regular monitoring of outstanding trade receivables to ensure risk of credit loss is minimal.

As per policy, trade receivables are classified into different buckets based on the overdue period. There are different provisioning norms for each bucket which are ranging from 25% to 100%.

Cash and cash equivalents

The company held cash and cash equivalents of INR 15,856.48 Lacs as at 31st March 2023 (as at 31st March 2022: INR 15,355.83 Lacs). The cash and cash equivalents are held with banks with good credit ratings.

Other bank balances

The company held other bank balances equivalents of INR 35,834.63 Lacs as at 31st March 2023 (as at 31st March 2022: INR 35,899.76 Lacs). The other bank balances are mainly temporary surplus fund invested in fixed deposits with banks having good rating and margin money against bank guarantees issued by banks on the company''s behalf.

Investments

The company has invested an insignificant amount in listed securities. The company does not expect any losses.

Other financial assets

Other financial assets mainly comprise of tender deposits and security deposits which are given to customers or governmental agencies in relation to contracts bid / execution and are assessed by the company for credit risk on a continuous basis.

(ii) Liquidity risk

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

The company has obtained fund and non-fund based working capital limits from various banks. The company invests its temporary surplus funds in bank fixed deposit.

The company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risks, which result from both its operating and investing activities.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company''s exposure to the risk of changes in market interest rates relates to the floating rate debt obligations.

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

The risk estimates provided assume a change of 100 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarised above. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

Foreign currency risk

The company is exposed to currency risk on account of its revenue generating and operating activities in foreign currency. The functional currency of the company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed in recent periods and may continue to fluctuate in the future.

40. Disclosure as per Ind AS 115

(a) The company offers wide range of solutions across the water cycle from pre-treatment to process water treatment, waste water treatment, recycle, zero liquid discharge, sewage treatment, packaged drinking water, sea water desalination etc. The company is also engaged in manufacturing resins, speciality chemicals for water and waste water treatment as well as non-water applications.

The type of work in the contracts with the customers involves designing, engineering, supply of materials, installation and commissioning of the plant, project management, operations and maintenance. The effect of initially applying Ind AS 115 on the Company''s revenue from contracts with customers is described in Note 1.17.

(b) Revenue disaggregation as per industry vertical and geography has been included in segment information (Refer note 41).

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers in respect of contracts in progress:

(e) Performance obligation

The company evaluates whether each contract consists of a single performance obligation or multiple performance obligations. Contracts where the company provides a significant integration service to the customer by combining all the goods and services are concluded to have a single performance obligations. Contracts with no significant integration service, and where the customer can benefit from each unit on its own, are concluded to have multiple performance obligations. In such cases consideration is allocated to each performance obligation, based on standalone selling prices. Where the company enters into multiple contracts with the same customer, the company evaluates whether the contract is to be combined or not by evaluating factors such as commercial objective of the contract, consideration negotiated with the customer and whether the individual contracts have single performance obligations or not.

The company recognises contract revenue over time as the performance creates or enhances an asset controlled by the customer. For such arrangements revenue is recognised using cost based input methods. Revenue is recognised with respect to the stage of completion, which is assessed with reference to the proportion of contract costs incurred for the work performed at the balance sheet date relative to the estimated total contract costs.

Any costs incurred that do not contribute to satisfying performance obligations are excluded from the Company''s input methods of revenue recognition as the amounts are not reflective of our transferring control of the plant to the customer. Significant judgment is required to evaluate assumptions related to the amount of net contract revenues, including the impact of any performance incentives, liquidated damages, and other forms of variable consideration.

If estimated incremental costs on any contract, are greater than the net contract revenues, the Company recognises the entire estimated loss in the period the loss becomes known.

Variations in contract work, claims, incentive payments are included in contract revenue to the extent that may have been agreed with the customer and are capable of being reliably measured.

(f) Dividend income is recorded when the right to receive payment is established. Interest income is recognised using the effective interest method.

(g) Revenue from sale of goods is recognises at the point in time when control of the assets is transferred to the customer, generally on delivery of the goods.

(h) Revenue related to fixed price maintenance and support services contracts where the company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance.

(i) Reconciliation of revenue recognised in the statement of profit and loss

44. (a) The company has an investment of INR 54.70 Lacs (31st March 2022: INR 54.70 Lacs) in equity shares and INR 1,500.00 Lacs (31st March 2022: INR 1,500.00 Lacs) in 7% Secured Redeemable Non-Convertible Debentures in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company as at 31st March 2023 and it has also granted loans and advances as at 31st March 2023 aggregating INR 4,236.49 Lacs (31st March 2022: INR 3,802.78 Lacs) to IEEFL. As at 31st March 2023, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital.

IEEFL has adequate assets in the form of developed and undeveloped land and the redeemable non-convertible debentures are secured by way of mortgage of office premises.

Also IEEFL had filed appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding-up of scheme with Supreme Court of India on 4th July 2006. The Hon''ble Supreme Court of India had dismissed the IEEFL''s appeal on 26th February 2013. Subsequent to this dismissal, IEEFL approached SEBI with a proposal related to the compliance of the said order vide letter dated 17th May 2013. During personal hearing with SEBI officials on 27th November 2013, pursuant to the above letter, SEBI had called for furnishing additional details which have been duly complied with vide letter dated 13th December 2013. Pursuant to this, IEEFL has initiated actions in line with the aforesaid meetings with SEBI officials and letters submitted to SEBI.

Subsequent to SEBI order of 30th December 2015, for closer of the CIS Scheme (which inter-alia included directions to refund INR 2,006 Lacs to investors, as per the earlier order of 27th November 2003), IEEFL was granted a personal hearing on 3rd February 2016 and additional information called for was submitted on 23rd March 2016. IEEFL has requested permission to wind up the scheme in terms of rule 73(1) to (9) of CIS Regulation as it has completed all obligations towards the investors, i.e., sale of lands and development and maintain the lands then after as per the agreements.

As SEBI refused to accede to IEEFL''s request has preferred a fresh appeal at Securities Appellate Tribunal (SAT) on 9th February 2017 no (1) 40 0f 2017 - citing practical difficulties in execution of the SEBI order to refund to all investors as investors have already received their lands / refunds as per the agreements.

IEEFL''s plea in SAT is for issuing suitable directions to SEBI for verifying the documentary proofs submitted by IEEFL for conveying of lands, refunds made and thereafter calling outstanding claims, if any, and thereafter declaring wind up of the scheme in terms of the CIS Regulations. Appeal has been already admitted by SAT and certain hearings have also taken place.

The appeal was heard and vide order dated 18th October 2019 SAT has dismissed the appeal. The IEEFL had filed a review petition before the SAT, Mumbai on 3rd December 2019 for correction of factual errors in the said order. Further, based on the legal advice, pending final order from SAT on the review petition, an appeal is filed in the Supreme Court against order of SAT on 18th February 2020. As per the SAT hearing dated 19th March 2021, it was held that, there is not an error apparent on the face of the record and thus review application filed was dismissed by SAT. As such the appeal is set aside against IEEFL and further vide order No. 2853/2021 dated 6th December 2021, the Supreme Court has granted liberty to IEEFL to approach Securities and Exchange Board of India and request for reconsideration of the matter by producing additional material. IEEFL has filed additional documents through its advocates vide letter dated 2nd March 2022. Further SEBI vide letter dated 17th May 2022 has made certain observations and has advised IEEFL to provide for additional comments/documents, which were submitted through their advocate vide letter dated 12th july 2022. Thereafter SEBI has appointed forensic auditor who is examining the documents and records of the IEEFL in order to submit his report to SEBI. Further the queries of the said auditor have been addressed by IEEFL''s counsel.

In view of the foregoing, the management is of the opinion, that there is no diminution, other than temporary, in the value of investments and the advances are fully recoverable. Hence presently no provision is considered necessary.

(b) Further, book values of certain other long term investments in subsidiaries measured at cost, aggregating to INR 4,032.62 Lacs (31st March 2022: INR 3,658.94 Lacs) are lower than its cost. The company has also granted loans and advances to these subsidiaries as at 31st March 2023 aggregating INR 2,153.66 Lacs (31st March 2022: INR 3,556.89Lacs). Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the management the recoverable amount is not less than its carrying amount recognised in the books.

.45. Capital expenditure incurred on research and development during the year is INR 157.09 Lacs (2021-22: INR 219.76 Lacs). Revenue expenditure of INR 987.23 Lacs (2021-22: INR 901.32 Lacs) incurred on research and development has been expensed to the statement of profit and loss under various expense heads. Location wise details are as follows:

55. Other Statutory Information

(i) The company do not have any benami property, where any proceeding has been initiated or pending against the group for holding any benami property.

(ii) The company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iii) The company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iv) The company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall

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

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

(v) The company have 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 group shall:

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

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

(vi) The company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

56. Subsequent events

No significant adjusting event occurred between the balance sheet date and date of the approval of these financial statements by the board of directors of the company requiring adjustment or disclosure. Also refer note 58, 59 and 60.

Proposed dividends on equity shares are subject to the approval at the annual general meeting and are not recognised as a lability as at 31st March.

59. Split of shares

The board of directors and the shareholders of the company has approved the sub-division / stock split of 1 equity share of face value of INR 10.00 each into 10 equity Shares of face value of INR 1.00 each. The record date has been fixed as 12th June 2023.

60. Amalgamation

(a) The board of directors has on 3rd February 2023, approved a scheme of amalgamation between Global Composites And Structurals Limited and Ion Exchange Environment Management Limited with Ion Exchange (India) Limited with appointed date as 1st April 2023, subject to approval from regulatory or administrative authority.

(b) The board of directors has on 23rd March 2023, approved a scheme of amalgamation between Ion Exchange Projects And Engineering Limited with Ion Exchange (India) Limited with appointed date as 1st April 2023, subject to approval from regulatory or administrative authority.

Mar 31, 2022

(a) Description of nature and purpose of each reserve

Security premium: Securities premium is used to record the premium on issue of shares. Securities premium also includes the difference between the face value of the equity shares and the consideration received in respect of shares issued pursuant to employee stock options scheme. The reserve is utilised in accordance with the provisions of the Act.

Special reserve: Special reserve is created by the company in past as per provision of section 45 - IC of the Reserve Bank of India Act, 1934 for repayment of fixed deposit holders.

Treasury shares: Treasury shares represents equity shares of the company held by IEI Shareholding (Staff Welfare) Trusts as well as HMIL Shareholding (Staff Welfare) Trusts

(a) Indian rupees loan from financial institution for capital expenditure carries interest @ 9.80 to 11.30% p.a. The loan is secured by first charge on movable and immovable fixed assets pertaining to a manufacturing facility at Goa and is repayable in 54 months with moratorium of 6 months from the date of actual commercial operation date.

(b) Indian rupees loan of INR 1,500.00 Lacs from a bank for capital expenditure. Loan is repayable in 48 months from the date of the first disbursement and carries interest @ 9.40% to 10.20% p.a. The loan is secured by exclusive first charge on three residential properties.

(c) Indian rupees loan of INR 925.00 Lacs from a bank for capital expenditure. Loan is repayable in 48 months from the date of the first disbursement and carries interest rate of 10% to 10.90% p.a. The loan is secured by exclusive first charge on three residential properties.

(d) Indian rupees loan of INR 1400.00 Lacs from a bank for capital expenditure. Loan is repayable in 48 months from the date of the first disbursement and carries interest rate of 8.40% p.a. The loan is secured by exclusive first charge on three residential properties.

(e) Indian rupee vehicle loans from banks and finance companies carries interest @ 8.00% to 13.50% p.a. The loans are repayable within a period of 36 to 60 months in equal monthly installments along with interest, from the various dates of disbursements. The loans are secured by hypothecation of under lying vehicles.

B. Provident fund

The company''s provident fund scheme which is managed by trust set up by the company, the contribution to the provident fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees'' salary and charged to statement of profit and loss. Shortfall, if any, in the fund assets, based on the government specified minimum rate of return, will be made good by the company and charged to statement of profit and loss. The actual return earned by the fund has mostly been higher than the government specified minimum rate of return in the past years. There is a shortfall of INR 33.64 Lacs in the fund as on 31st March 2021 as per valuation report, which has been provided for by the company. There was no shortfall in the fund as on 31st March 2022.

C. Defined contribution plan

Amount recognised as an expense and included in the note 31 - âContribution to provident and other fundsâ of the statement of profit and loss INR 677.06 Lacs (2020-21: INR 584.77 Lacs).

D. Other employee benefits

Amounts recognised as an expense and included in note 31

Leave encashment in âSalaries, wages and bonusâ INR 433.92 Lacs (2020-21: INR 237.49 Lacs)

E. The net provision for leave encashment liability upto 31st March 2022 is INR 1,928.43 Lacs (31st March 2021: INR 1,662.91 Lacs) Note:

The Indian parliament has approved the Code of Social Security, 2020 (âthe code''), which, inter alia, deals with employee benefits during employment and post-employment. The code has been published in the gazette of India. The effective date of the code and rules thereunder are yet to be notified. In view of this, the impact of the change, if any, will be assessed and recognised post notification of the relevant provisions.

B. Measurement of fair values

Valuation techniques and significant unobservable inputs

C. Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

D. Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year

E. Financial risk management:

The company has exposure to the following risks arising from financial instruments:

Â¦ Credit risk;

Â¦ Liquidity risk; and

Â¦ Market risk

(i) Risk management framework

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

Trade receivables

Credit risk management procedure includes regular monitoring of outstanding trade receivables to ensure risk of credit loss is minimal.

As per policy, trade receivables are classified into different buckets based on the overdue period. There are different provisioning norms for each bucket which are ranging from 25% to 100%.

Cash and cash equivalents

The company held cash and cash equivalents of INR 15,355.83 Lacs as at 31st March 2022 (as at 31st March 2021: INR 18,128.58 Lacs). The cash and cash equivalents are held with banks with good credit ratings.

Other bank balances

The company held other bank balances equivalents of INR 35,899.76 Lacs as at 31st March 2022 (as at 31st March 2021: INR 30,568.86 Lacs). The other bank balances are mainly temporary surplus fund invested in fixed deposits with banks having good rating and margin money against bank guarantees issued by banks on the company''s behalf.

Investments

The company has invested an insignificant amount in listed securities. The company does not expect any losses.

Other financial assets

(ii) Liquidity risk

The company has obtained fund and non-fund based working capital limits from various banks. The company invests its temporary surplus funds in bank fixed deposit.

Interest rate risk

Foreign currency risk

40. Disclosure as per Ind AS 115

(b) Revenue disaggregation as per industry vertical and geography has been included in segment information (Refer note 41).

(e) Performance obligation

Any costs incurred that do not contribute to satisfying performance obligations are excluded from the company''s input methods of revenue recognition as the amounts are not reflective of our transferring control of the plant to the customer. Significant judgment is required to evaluate assumptions related to the amount of net contract revenues, including the impact of any performance incentives, liquidated damages, and other forms of variable consideration.

If estimated incremental costs on any contract, are greater than the net contract revenues, the Company recognises the entire estimated loss in the period the loss becomes known.

Variations in contract work, claims, incentive payments are included in contract revenue to the extent that may have been agreed with the customer and are capable of being reliably measured.

(f) Dividend income is recorded when the right to receive payment is established. Interest income is recognised using the effective interest method.

(g) Revenue from sale of goods is recognises at the point in time when control of the assets is transferred to the customer, generally on delivery of the goods.

(i) Reconciliation of revenue recognised in the statement of profit and loss

The following table discloses the reconciliation of amount of revenue recognised:

44. (a) The company has an investment of INR 54.70 Lacs (31st March 2021: INR 54.70 Lacs) in equity shares and INR 1,500.00 Lacs (31st March 2021: INR 1,500.00 Lacs) in 7% Secured Redeemable Non-Convertible Debentures in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company as at 31st March 2022 and it has also granted loans and advances as at 31st March 2022 aggregating INR 3,802.78 Lacs (31st March 2021: INR 3,381.98 Lacs) to IEEFL. As at 31st March 2022, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital.

IEEFL has adequate assets in the form of developed and undeveloped land and the redeemable non-convertible debentures are secured by way of mortgage of office premises.

Also IEEFL had filed appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding-up of scheme with Supreme Court of India on 4th July 2006.The Hon''ble Supreme Court of India had dismissed the IEEFL''s appeal on 26th February 2013. Subsequent to this dismissal, IEEFL approached SEBI with a proposal related to the compliance of the said order vide letter dated 17th May 2013. During personal hearing with SEBI officials on 27th November 2013, pursuant to the above letter, SEBI had called for furnishing additional details which have been duly complied with vide letter dated 13th December 2013. Pursuant to this, IEEFL has initiated actions in line with the aforesaid meetings with SEBI officials and letters submitted to SEBI.

Subsequent to SEBI order of 30th December 2015, for closure of the CIS Scheme (which inter-alia included directions to refund INR 2,006.00 Lacs to investors, as per the earlier order of 27th November 2003) IEEFL was granted a personal hearing on 3rd February 2016 and additional information called for was submitted on 23rd March 2016. IEEFL had requested permission to wind up the scheme in terms of rule 73(1) to (9) of CIS Regulations as it has completed all obligations towards the investors, i.e. sale of lands and development and maintaining the lands thereafter, as per agreements.

As SEBI refused to accede to IEEFL''s request, IEEFL has preferred a fresh appeal at Securities Appellate Tribunal (SAT) on 9th February 2017 - appeal No. (l) 40 of 2017- citing practical difficulties in execution of the SEBI order for refund to all investors as investors have already received their lands / refunds as per the agreements.

The appeal was heard and vide order dated 18th October 2019 SAT has dismissed the appeal. IEEFL had filed a review petition before the SAT, Mumbai on 3rd December 2019 for correction of factual errors in the said order. Further, based on the legal advice, pending final order from SAT on the review petition, an appeal is filed in the Supreme Court against order of SAT on 18th February 2020. As per the SAT hearing dated 19th March 2021, it was held that, there is not an error apparent on the face of the record and thus review application filed was dismissed by SAT. As such the appeal is set aside against IEEFL and further vide order No. 2853/2021 dated 6th December 2021, the Supreme Court has granted liberty to IEEFL to approach Securities and Exchange Board of India and request for reconsideration of the matter by producing additional material. IEEFL has filed representation requesting reconsideration of the matter by filing additional documents through its advocates vide letter dated 2nd March, 2022. Further SEBI vide letter dated 17th May, 2022 has made certain observations and has advised IEEFL to provide for additional comments/documents. IEEFL is in the process of responding to the observations of SEBI.

Further, SEBI had on 25th April 2019 under SEBI (Appointment of Administrator and Procedure for Refunding of Investors) Regulations 2018 has appointed an administrator for selling the land at Goa (Quepam) of IEEFL and recovering the dues vide letter dated 30th April 2019. IEEFL has requested the Recovery Office of SEBI to keep the proceedings in abeyance. Further, in view of the above developments the proceedings are in abeyance or on hold as on date.

(b) Further, book values of certain other long term investments in subsidiaries measured at cost, aggregating to INR 3,658.94 Lacs (31st March 2021: INR 3,520.06 Lacs) are lower than its cost. The company has also granted loans and advances to these subsidiaries as at 31st March 2022 aggregating INR 3,556.89 Lacs (31st March 2021: INR 3,310.98 Lacs). Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the management the recoverable amount is not less than its carrying amount recognised in the books.

55. Other Statutory Information

(i) The company do not have any benami property, where any proceeding has been initiated or pending against the group for holding any benami property.

(ii) The company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iii) The company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iv) The company have 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.

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

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

56. Subsequent events

57. Previous period figures have been regrouped/ reclassified, wherever necessary, to conform to current periods classification and in order to comply with the requirements of the amended schedule III to the companies Act 2013 effective 1st April, 2021.

58. Information with regard to other matters, as required by Schedule III to the Act is either nil or not applicable to the company for the year.

Proposed dividends on equity shares are subject to the approval at the annual general meeting and are not recognized as a lability as at 31st March.

Mar 31, 2018

b) Freehold land includes land at Pune, the title deeds of which are in the name of the nominees of the company.

Deemed gross book value INR 18.44 Lacs (2016-17: INR 18.44 Lacs)

c) Buildings on freehold land includes residential flats, the cost of which includes:

- INR 250 (2016-17: INR 250) being the value of 5 Shares (unquoted) of INR 50 each, fully paid up in Sunrise Co-operative Housing Society Limited.

- INR 3,500 (2016-17: INR 3,500) being the value of 70 Shares (unquoted) of INR 50 each, fully paid up in Usha Milan Cooperative Society Limited.

d) Buildings on freehold land includes residential flats acquired at Mumbai, the society formation of which is in progress.

Deemed gross book value INR 41.15 Lacs (2016-17: INR 41.15 Lacs)

Net book value INR 39.07 Lacs (2016-17: INR 40.11 Lacs)

e) Buildings on freehold land includes residential flats comprising of 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur, the title deeds of which are awaited from authorities.

Deemed gross book value INR Nil (2016-17: INR Nil)

Net book value INR Nil (2016-17: INR Nil)

f) Buildings on freehold land includes office premises given on operating lease :

Deemed gross book value INR 128.72 Lacs (2016-17: INR 128.72 Lacs)

Accumulated depreciation INR 11.21 Lacs (2016-17: INR 5.18 Lacs)

Depreciation for the year INR 6.03 Lacs (2016-17: INR 5.18 Lacs)

Net book value INR 122.29 Lacs (2016-17: INR 123.54 Lacs)

g) Plant and machinery includes items taken on finance lease:

Deemed gross book value INR 1,396.81 Lacs (2016-17: INR 1,057.93 Lacs)

Accumulated depreciation INR 287.00 Lacs (2016-17: INR 102.03 Lacs)

Depreciation for the year INR 187.97 Lacs (2016-17: INR 102.03 Lacs)

Net book value INR 1,109.81 Lacs (2016-17: INR 955.90 Lacs)

h) Office equipment includes data processing items taken on finance lease:

Deemed gross book value INR 93.35 Lacs (2016-17: INR 82.45 Lacs)

Accumulated depreciation INR 50.62 Lacs (2016-17: INR 33.30 Lacs)

Depreciation for the year INR 17.32 Lacs (2016-17: INR 33.30 Lacs)

Net book value INR 42.73 Lacs (2016-17: INR 49.15 Lacs)

i) Addition to Property, plant and equipment includes amount of INR 71.69 Lacs (2016-17: INR 110.41 Lacs) pertaining to research and development.

Note 1.

The Company has availed the deemed cost exemption in relation to the Intangible assets on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date. Refer note below for the gross block value and the accumulated depreciation on 1st April 2016 under the previous GAAP.

* Ion Exchange Infrastructure Limited, a subsidiary of Ion Exchange (India) Limited was amalgamated with Ion Exchange Projects and Engineering Limited w.e.f. 1st April 2014 as per order of Bombay High Court, which became operational from 17th December 2015. As per the scheme, 3,968,634 shares were issued by Ion Exchange Projects and Engineering Limited on 24th May 2016 in lieu of shares held in Ion Exchange Infrastructure Limited.

** Astha Technical Services Limited, an associate of Ion Exchange (India) Limited was amalgamated with Total Water Management Services (India) Limited, a subsidiary of Ion Exchange (India) Limited w.e.f. 1st April 2017 as per order dated 24th August 2017 received from The National Company Law Tribunal, Mumbai Bench. As per the scheme, 15,625 shares were issued by Total Water Management Services (India) Limited on 24th January 2018 in lieu of shares held in Astha Technical Services Limited.

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgement is required in determining provision for deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income and the period over which deferred income tax assets will be recovered.

(b) Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

(d) Aggregate number of share issued for consideration other than cash during the period of five years immediately preceding the reporting date.

The aggregate number of equity shares issued pursuant to scheme of amalgamation, without payment being received in cash in immediately preceding last five years ended on 31st March 2018: 1,180,256 shares (Previous period of five years ended 31st March 2017: 1,180,256 shares)

The aggregate number of equity shares issued pursuant to exercise of options granted under the Employee Stock Option Scheme (ESOS) wherein part consideration was received in form of employee services preceding last five years ended on 31st March 2018: 182,300 shares (Previous period of five years ended 31st March 2017: 211,600 shares)

(e) Shares reserved for issued under ESOS

For details of shares allotted under various Employee Stock Option Schemes (ESOS) and shares reserved for issue under the Employees Stock Option Scheme (ESOS) of the company please refer note 39.

Notes 2. Description of nature and purpose of each reserve

Employee stock options outstanding: The employee stock options account is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in the share options outstanding account are transferred to securities premium reserve upon exercise of stock options by employees

Special reserve: Special reserve is created by the company in past as per provision of section 45 - IC of the Reserve Bank of India Act, 1934 for repayment of fixed deposit holders.

Treasury shares: Treasury shares represents equity shares of the company held by IEI Shareholding (Staff Welfare) Trusts

b) Dividends

The following were declared and paid by the company during the year

a) Indian rupees loan from finance company for capital expenditure carries interest @ 13.00% p.a. Loan is repayable within 48 months from the month of first disbursement being 01.10.2014. The loan is secured by exclusive first charge on residential properties of the company situated at Mumbai and Thane. The Loan has been repaid during the year 2016-17.

b) Indian rupees loan from financial institution for capital expenditure carries interest @ 11.00 to 11.70% p.a. The loan is secured by first charge on movable and immovable fixed assets pertaining to a new manufacturing facility at Goa and is repayable in 54 months with moratorium of 6 months from the date of actual commercial operation date.

c) Indian rupee loan from a bank for capital expenditure disbursed in two tranches of Rs. 683.22 Lacs and Rs. 816.78 Lacs. Loan is repayable in 26 months and 37 months respectively from the date of first disbursement and carries interest rate of 10.50% p.a. The loan is secured by exclusive first charge on three residential properties of the company situated at Mumbai and one residential property of the company situated at Thane.

d) Indian rupees loan of Rs. 1,300.00 Lacs from a bank for capital expenditure. Loan is repayable in 48 months from the date of the first disbursement and carries interest rate of 9.50% p.a. The loan is secured by exclusive first charge on three residential properties of the company situated at Mumbai and one residential property of the company situated at Thane.

e) Indian rupee vehicle loans from banks and finance companies carries interest @ 9.35% to 13.50% p.a. The loans are repayable within a period of 36 to 60 months in equal monthly installments along with interest, from the various dates of disbursements. The loans are secured by hypothecation of under lying vehicles.

f) Finance lease obligations are secured by hypothecation of under lying plant and machinery and equipment''s taken on lease. Lease obligations are discharged by monthly / quarterly lease rental payments. The lease terms are for 3 to 4 years.

g) Deposits from shareholders and public carry interest @7.00% to 8.00% p.a. for deposits repayable after 1 year to 3 years from the respective dates of deposits.

(a) The working capital loan is secured by joint hypothecation of book debts and stocks and collateral security by way of pari passu first charge on all fixed assets situated at Hosur and Patancheru, pari passu second charge on fixed assets situated at Mumbai (Office Premises), Vashi, Goa and pari passu second charge on moveable and immovable properties situated at Ankleshwar. The working capital loan is repayable on demand and carries interest @ 11.00% to 12.65% p.a.

(b) The unsecured working capital loan is repayable within 180 days from disbursement date and carries interest @ 11.50% p.a.

(c) MSME Finance Scheme is MSME vendor bills discounting facility with a financial institution and carries interest @ 11.25% p.a

(d) Inter corporate deposit are for a period from 90 to 365 days and carried interest @ 9.50% to 12.25%. p.a.

3. Employee benefits

A. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn basic salary) for each completed year of service. The scheme is funded to a separate trust duly recognized by Income tax authorities.

The expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Notes:

Amounts recognized as an expense and included in note 31:

Gratuity in âContribution to provident and other fundsâ INR 124.72 Lacs (2016-17: INR 193.27 Lacs).

B. Provident fund

The company''s provident fund schemes which are administered through Government of India are defined contribution plan. The group''s contribution paid / payable under the scheme is recognized as expense in the statement of profit and loss during the year in which the employee renders the related services. There are no other obligations other than the contribution payable to the respective fund.

The company''s provident fund scheme which is managed by trust set up by the company, the contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees'' salary and charged to Statement of profit and loss. Shortfall, if any, in the fund assets, based on the government specified minimum rate of return, will be made good by the company and charged to statement of profit and loss. The actual return earned by the fund has mostly been higher than the Government specified minimum rate of return in the past years. There is no shortfall in the fund as on 31st March 2018, 31st March 2017 and 1st April 2016.

C. Defined contribution plan

Amount recognized as an expense and included in the note 31 - âContribution to provident and other fundsâ of the statement of profit and loss INR 389.97 Lacs (2016-17 : INR 339.44 Lacs).

D. Other employee benefits

Amounts recognized as an expense and included in note 31:

Leave encashment in âSalaries, wages and bonusâ INR 218.40 Lacs (2016-17: INR 233.21 Lacs)

E. The net provision for leave encashment liability upto 31st March 2018 is INR 1,209.99 Lacs (31st March 2017: INR 1,065.76 Lacs, 1st April 2016: INR 901.85 Lacs)

4. Employee stock option scheme (ESOS) ESOS 2001

The employee stock compensation committee in its meeting held on 5th June 2007, granted 3,00,000 options to directors and other employees at a price of INR 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on the stock exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of first and second grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, fourth 25% of the options vested in June 2012.The vested options were exercisable up to 5th June 2016.

ESOS 2003

The employee stock compensation committee in its meeting held on 5th June 2007, granted 3,50,000 options to directors and other employees at a price of INR 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on the stock exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of first grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, the fourth 25% of the options vested in June 2012. The vested options were exercisable up to 5th June 2016.

The method of settlement of the above options is equity settled.

As at 31st March 2018, the company has received commitment deposit of INR Nil (2016-2017: Nil) from its directors and employees under ESOS 2001 and ESOS 2003.

Nil (2016-17: 1,09,500) shares were exercised during the year. Weighted average share price at exercise date for the 2016-17 was INR 345.47

The ESOS schemes were exercisable up to 5th June 2016. There are no outstanding ESOS exercisable shares as on 31st March 2018, hence there is no dilutive potential on earning per share.

5. Financial instruments

Financial instruments - Fair values and risk management

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels. It does not include the fair value information for current financial assets and current financial liabilities not measured at fair value if their carrying amount is a reasonable approximation of fair value

* Excludes investments measured at cost

** The Company has not disclosed the fair value of current financial instruments such as trade receivables, cash and cash equivalent, bank balances - others, loans, others, borrowings, trade payables and other financial liabilities because their carrying amounts are a reasonable approximation of fair value.

B. Measurement of fair values

Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

Financial instruments measured at fair value

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk; and

- Market risk

(i) Risk management framework

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

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

The audit committee oversees how management monitors compliance with the company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the major observation are periodically reported to the audit committee.

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company''s receivables from customers.

Trade receivables

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. In respect of trade receivables, the company is not exposed to any significant credit risk exposure to any single counter party or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. The company assesses the credit quality of the trade receivables based on market intelligence, customers payment history and defaults.

Cash and cash equivalents

The Company held cash and cash equivalents of INR 6,061.57 Lacs as at 31st March 2018 (as at 31st March 2017: INR 10,822.45 Lacs, as at 1st April 2016: INR 1,011.62 Lacs). The cash and cash equivalents are held with banks with good credit ratings.

Other bank balances

The Company held other bank balances equivalents of INR 19,024.16 Lacs as at 31st March 2018 (as at 31st March 2017: INR 4,375.70 Lacs, as at 1st April 2016: INR 1,006.93 Lacs). The other bank balances are mainly surplus fund invested in bank fixed deposits and margin money against bank guarantees issued by bank on our behalf.

Investments

The Company has invested an insignificant amount in listed securities. The Company does not expect any losses.

Other financial assets

Other financial assets mainly comprise of tender deposits and security deposits which are given to customers or governmental agencies in relation to contracts executed and are assessed by the Company for credit risk on a continuous basis.

(iii) Liquidity risk

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

The Company has obtained fund and non-fund based working capital limits from various banks. The Company invests its surplus funds in bank fixed deposit.

* Contractual cash flows includes interest payout in the respective years on borrowings.

** Including current maturity of long term borrowings

*** Guarantees issued by the company on behalf of subsidiaries/joint ventures and associates are with respect to working capital facilities raised by the respective subsidiaries/joint ventures and associates. These amounts will be payable on default by the concerned parties. As of the reporting date, none of the subsidiaries/joint ventures and associates have defaulted and hence, the Company does not have any present obligation to third parties in relation to such guarantees (Refer note 44).

Interest rate risk:

Fair value sensitivity analysis for fixed-rate instruments:

The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable-rate instruments:

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amount shown below. This analysis assumes that all other variables remain constant.

(iv) Market risk

The Company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risks, which result from both its operating and investing activities.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates to the floating rate debt obligations.

Foreign currency risk

The Company is exposed to currency risk on account of its revenue generating and operating activities in foreign currency. The functional currency of the Company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future.

Sensitivity analysis:

A reasonably possible strengthening (weakening) of the Indian Rupee against foreign currency at March 31 would have affected the measurement of financial instruments denominated in US dollars and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

6. First Time Adoption of Ind AS

For the purposes of reporting as set out in note 1.1, the company has transitioned our basis of accounting from Indian generally accepted accounting principles (âprevious GAAPâ) to Ind AS. The accounting policies set out in note 1.1 have been applied in preparing the financial statements for the year ended 31st March 2018, the comparative information presented in these financial statements for the year ended 31st March 2017 and in the preparation of an opening Ind AS balance sheet at 1st April 2016 (the âtransition dateâ).

In preparing opening Ind AS balance sheet, the company has adjusted amounts reported in financial statements prepared in accordance with previous GAAP. An explanation of how the transition from previous GAAP to Ind AS has affected the financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, the company did not revise estimates previously made under previous GAAP except where required by Ind AS.

Explanation of transition to Ind AS

In preparing the financial statement, the company has applied the below mentioned optional exemptions and mandatory exceptions. Property, plant and equipment and intangible assets exemption:

The company has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its property, plant and equipment, and intangible assets as recognised in the financial statements as at the date of transition to Ind ASs, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2016).

Investment in Subsidiaries, Joint Ventures and Associates

The company has elected to use the exemption to measure all investments in subsidiaries, joint ventures and associates as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2016).

Derecognition of financial assets and financial liabilities

The company has elected to use the exemption for derecognition of financial assets and liabilities prospectively i.e. after 1st April 2016. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.

(a) FVTPL financial assets:

Under previous GAAP, the Company accounted for investments in unquoted and quoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Ind-AS requires FVTPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the fair value of the instruments and its Previous GAAP carrying amount has been recognised in retained earnings.

(b) Employee benefits:

Both under previous GAAP and Ind-AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind-AS, re-measurements comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

Under previous GAAP, proposed dividends are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind-AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

(d) Interest bearing loans and borrowings:

Under previous GAAP, transaction costs incurred in connection with interest bearing loans and borrowings are amortised upfront and charged to profit or loss for the period. Under Ind-AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

(e) Deferred tax assets (net):

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind-AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind-AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under previous GAAP.

(f) Notional income from corporate guarantees in favor of subsidiaries/associates and Joint ventures:

The Company has given financial guarantees on behalf of subsidiaries/associates and joint ventures which were disclosed as contingent liabilities under previous GAAP. Under Ind AS, financial guarantee contracts are accounted as investment in subsidiaries/ associates and joint venture and measured initially at fair value. Subsequently, the guarantee income is recognised over the period of the guarantee on a straight line basis.

(g) Timing of revenue recognition:

Impact pertains to the difference in timing of revenue recognition on account of transition to Ind AS.

(h) Discounting of retention money:

Under Ind AS, revenue is measured at fair value of the consideration received or receivable. Accordingly, retention money has been recognised at its present value under Ind AS

(i) Consolidation of IEI Shareholding (Staff Welfare Trusts)

It includes adjustment on account of consolidation of employee benefit trusts (j) Other impacts:

It includes adjustment on account of capitalisation of general borrowing costs pertaining to Capital-Work-in-progress and interest cost recognized on vendor bills discounting facility.

III. Notes:

(a) The companyâs operations are organized into three business segments, namely:

Engineering division - comprising of water treatment plants, spares and services in connection with the plants.

Chemicals - comprising of resins, water treatment chemicals and speciality chemicals.

Consumer Products - comprising of water purification equipments for homes, institutions and communities.

(b) The segment revenue in the geographical segments considered for disclosure are as follows:

Revenue within India includes sales to customers located within India and earnings in India. Revenue outside India includes sales to customers located outside India and earnings outside India.

* Gross amount has been considered.

** Provision has been made in respect of the said amount.

*** Includes. INR 1,500.00 Lacs investment in debentures.

**** Includes receivable on account of re-imbursement of expenses.

# Astha Technical Services Limited has amalgamated with Total Water Management Services (India) Limited, w.e.f. 1st April 2017.

III. Stock options granted to key management personnel during the year: Nil (2016-17: Nil).

IV. Disclosure pursuant to the regulation 34(3) read with para A of schedule V of (Listing Obligations and Disclosure Requirements) Regulations, 2015:

Notes:

(i) Loans and advances shown above to the subsidiaries fall under the category of âLoans and Advances in nature of Loans'' which are repayable on demand.

(ii) Interest on loans and advances to the subsidiaries are charged at the prevailing market rates.

V. Disclosure as per Section 186 of the Companies Act, 2013:

The details of loans, guarantees and investments under section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

(a) Details of investment made are given in note 4 and 11

7. The company has an investment of INR 54.70 Lacs (31st March 2017: INR 54.70 Lacs, 1^st April 2016: INR 54.70 Lacs) in equity shares and 15,00,000 (31st March 2017: 15,00,000, 1st April 2016: 15,00,000) 7% Secured Redeemable Non-Convertible Debentures of INR 100 each fully paid up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company as at 31st March 2018 and it has also granted loans and advances as at 31st March 2018 aggregating INR 2,178.85 Lacs (31st March 2017: INR 1,861.70 Lacs, 1st April 2016 Rs. 1,339.09 Lacs) to IEEFL. As at 31st March 2018, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital.

IEEFL has adequate assets in the form of developed and undeveloped land and the redeemable non-convertible debentures are secured by way of mortgage of office premises.

Also the IEEFL had filed appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding-up of scheme with Supreme Court of India on 4th July 2006.The Hon''ble Supreme Court of India had dismissed the IEEFL''s appeal on 26th February 2013. Subsequent to this dismissal, IEEFL approached SEBI with a proposal related to the compliance of the said order vide letter dated 17th May 2013. During personal hearing with SEBI officials on 27th November 2013, pursuant to the above letter, SEBI had called for furnishing additional details which have been duly complied with vide letter dated 13th December 2013. Pursuant to this, IEEFL has initiated actions in line with the aforesaid meetings with SEBI officials and letters submitted to SEBI.

Subsequent to SEBI order of 30th December 2015, for closure of the CIS Scheme (which inter-alia included directions to refund INR 2,006 Lacs to investors, as per the earlier order of 27th November 2003) IEEFL was granted a personal hearing on 3rd February 2016 and additional information called for was submitted on 23rd March 2016. IEEFL had requested permission to wind up the scheme in terms of rule 73(1) to (9) of CIS Regulations as it has completed all obligations towards the investors, i.e. sale of lands and development and maintaining the lands thereafter, as per agreements.

8. Lease

A. Operating Lease

Company as lessee:

The Company has entered into lease agreements for certain items of plants and machineries. The lease agreement is for 5 years. There are no restrictions placed upon the company by entering into this lease.

Company as lessor:

The Company has entered into commercial property lease of its surplus office. The lease agreement is for 5 years. The lease includes a clause to enable upward revision by 15% after completion of 3 years from the date of commencement of the lease agreement.

B. Finance Lease

Company as lessee

The Company has entered into lease agreement for certain items of plant and machineries (including capital work-in-progress) and office equipment. The lease terms are between 3 and 4 years and can be renewed at the option of the company. There is no escalation clause in the lease agreement. There are no subleases. Future minimum lease payment (MLP) under finance leases together with the present value of the net MLP are as follows

9. Capital and other commitments

Estimated amount of contracts (net of advances) remaining to be executed on capital account not provided for is INR 524.29 Lacs (31st March 2017: INR 223.72 Lacs, 1st April 2016: INR 757.03 Lacs).

10. Contingent liabilities

Contingent liabilities not provided for:

(a) Guarantee given by the company on behalf of:

i) Subsidiaries - INR 7,262.71 Lacs (31st March 2017: INR 7,519.32 Lacs, 1st April 2016: INR 8,523.10 Lacs)

ii) Associates - INR 1,241.84 Lacs (31st March 2017: INR 1,629.54 Lacs, 1st April 2016: INR 1,626.20 Lacs)

iii) Joint venture - INR Nil, (31st March 2017: INR Nil, 1st April 2016: INR 128.00 Lacs)

iv) Others - INR 38.88 Lacs (31st March 2017: INR 38.88 Lacs, 1st April 2016: INR 38.88 Lacs)

(b) Demand raised by authorities against which the company has filed an appeal.

i) Income tax - INR 285.27 Lacs (31st March 2017: INR 298.06 Lacs, 1st April 2016: INR 206.21 Lacs)

ii) Excise duty - INR 16.79 Lacs (31st March 2017: INR 16.79 Lacs, 1st April 2016: INR 16.79 Lacs)

iii) Service tax - INR 12.79 Lacs (31st March 2017: INR 13.32 Lacs, 1st April 2016: INR 10.53 Lacs)

iv) Sales tax/VAT - INR 850.57 Lacs (31st March 2017: INR 849.10 Lacs, 1st April 2016: INR 1,023.61 Lacs)

v) Customs Duty - INR 22.58 Lacs (31st March 2017: INR 22.58 Lacs, 1st April 2016: INR 22.58 Lacs)

(c) Claims against the company arising in the course of business not acknowledged as debts (to the extent ascertainable) INR 1,747.41 Lacs (31st March 2017: INR 447.41 Lacs, 1st April 2016: INR 516.15 Lacs).

Note: Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.

11. Back charges represent reimbursement of costs incurred by customers on the company''s behalf in the course of contract execution.

12. Capital advance includes amount of INR 25.33 Lacs (31st March 2017: INR 25.33 Lacs, 1st April 2016: INR 25.33 Lacs) paid for acquiring furnished office premises at Hyderabad, the ownership of which is under legal dispute for which transfer formalities are in progress.

13. Corporate Social Responsibility expenses:

A. Gross amount required to be spent by the company during the year INR 98.56 Lacs (2016-17: INR 74.19 Lacs)

C. Related party transaction in relation to Corporate Social Responsibility: INR 98.60 Lacs (2016-17: INR 74.20 Lacs)

All CSR projects under the Ion Exchange umbrella are implemented by Ion Foundation, a Company incorporated under Section 8 of the Companies Act, 2013

D. Provision during the year INR Nil (2016-17: INR Nil)

14. Capital Management

The company''s objective is to maximise the shareholders'' value by maintaining an optimum capital structure. Management monitors the return on capital as well as the debt equity ratio and makes necessary adjustments in the capital structure for the development of the business.

The company''s debt to equity ratio as at 31st March 2018 was 0.44 (31st March 2017: 0.32 and 1st April 2016 : 0.30)

Note: For the purpose of computing debt to equity ratio, Equity includes Equity share capital and Other equity and Debt includes Long term borrowings, Short term borrowings and Current maturities of long term borrowings.

15. Consequent to the introduction of Goods and Services Tax (GST) with effect from 1st July, 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule Ill of the Companies Act, 2013, unlike Excise Duties, levies like GST, VAT etc. are not part of Revenue. Accordingly, the figures for the previous year are not strictly relatable to those thereafter. The following additional information is being provided to facilitate such understanding.

16. In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115 âRevenue from Contracts with Customers'' (New Revenue Standard), which replaces Ind AS 11 âConstruction Contracts'' and Ind AS 18 âRevenue''. The core principle of the new revenue 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. Some of the key changes introduced by the new revenue standard include additional guidance for multiple-element arrangements, measurement approaches for variable consideration, adjustments for time value of money etc. Significant additional disclosures in relation to revenue are also prescribed. The New Revenue Standard also provides two broad alternative transition options - Retrospective Method and Cumulative Effect Method - with certain practical expedients available under the Retrospective Method. The company is in the process of evaluating the impact of the new revenue standard on the present and future arrangements and shall determine the appropriate transition option once the said evaluation has been completed.

Also, appendix B to Ind AS 21, foreign currency transactions and advance consideration was notified along with the same notification 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 company is in the process of evaluating the effect of these on the financial statements.

The amendments will come into force from 1st April 2018.

17. Information with regard to other matters, as required by Schedule III to the Act is either nil or not applicable to the company for the year.

Mar 31, 2016

(b) Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2016, the amount of per share dividend recognized as distribution to equity shareholders is Rs. 3 (2014-2015 : Rs. 3).

As per records of the company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(d) Aggregate number of share issued for consideration other than cash during the period of five years immediately preceding the reporting date.

The aggregate number of equity shares issued pursuant to scheme of amalgamation, without payment being received in cash in immediately preceding last five years ended on 31st March 2016 : 11,80,256 (Previous period of five years ended 31st March 2015 : 11,80,256)

The aggregate number of equity shares issued pursuant to exercise of options granted under the Employee Stock Option Scheme (ESOS) wherein part consideration was received in form of employee services preceding last five years ended on 31st March 2016 : 2,38,050 (Previous period of five years ended 31st March 2015 : 9,13,100)

(e) Shares reserved for issued under ESOS

For details of shares allotted under various Employee Stock Option Schemes (ESOS) and shares reserved for issue under the Employees Stock Option Scheme (ESOS) of the company please refer note 31.

(a) Indian rupees loan from finance company for capital expenditure carries interest @ 13.00% p.a. Loan is repayable within 48 months from the month of first disbursement being 01.10.2014. The loan is secured by exclusive first charge on residential properties of the company situated at Mumbai and Thane.

(b) Indian rupees loan from financial institution for capital expenditure carries interest @ 11.70% p.a. The loan is secured by first charge on movable fixed assets situated at Goa and is repayable in 54 months with moratorium of 6 months from the date of actual commercial operation date.

(c) Indian rupees loan from a financial institution carries interest @ 15.00% p.a. The loan was secured by first charge on property situated at Bangalore and was repayable in 6 years.

(d) Indian rupee vehicle loans from banks and finance company carries interest @ 9.50% to 13.50% p.a. The loans are repayable within a period of 36 to 60 months in equal monthly installments along with interest, from the various dates of disbursements. The loans are secured by hypothecation of under lying vehicles.

(e) Finance lease obligations are secured by hypothecation of under lying plant and machinery and equipment''s taken on lease. Lease obligations are discharged by monthly / quarterly lease rental payments. The lease terms are for 3 to 4 years.

(f) Deposits from shareholders and public carry interest @7.00% to 8.00% p.a for deposits repayable after 1 year to 3 years from the respective dates of deposits.

(a) The working capital loan is secured by joint hypothecation of book debts and stocks and collateral security by way of pari passu first charge on all immovable and movable properties and plant and machinery situated at Hosur and Patancheru and pari passu second charge on movable and immovable properties situated at Mumbai (Office Premises), Vashi, Goa and Ankleshwar. The Working Capital Loan is repayable on demand and carries interest @ 11.50% to 14.75% p.a.

(b) The working capital loan is unsecured, repayable within 180 days from 23.03.2016 and carries interest @ 11.50% p.a.

a. Freehold land includes land at Pune, the title deeds of which are in the name of the nominees of the Company.

Gross book value Rs. 18,44,060 (2014-2015 : Rs18,44,060)

b. Buildings on freehold land includes residential flats, the cost of which includes:

- Rs. 250 (2014-2015 : Rs. 250) being the value of 5 Shares (unquoted) of Rs. 50 each, fully paid up in Sunrise Co-operative Housing Society Limited.

- Rs. 3,500 (2014-2015 : Rs. 3,500) being the value of 70 Shares (unquoted) of Rs. 50 each, fully paid up in Usha Milan Co-operative Society Limited.

c. Buildings on freehold land includes residential flats acquired at Mumbai, the society formation of which is in progress.

Gross book value Rs. 62,16,250 (2014-2015 : Rs. 62,16,250)

Net book value Rs. 41,14,738 (2014-2015 : Rs. 42,18,471)

d. Buildings on freehold land includes residential flats comprising of 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur, the title deeds of which are awaited from authorities.

Gross book value Rs. 76,882 (2014-2015 : Rs. 76,882)

Net book value Rs. Nil (2014-2015 : Rs. Nil)

e. Buildings on freehold land includes office premises given on operating lease :

Gross book value Rs. 2,30,77,146 (2014-2015 : Rs. 2,30,77,146)

Accumulated depreciation Rs. 1,02,05,233 (2014-2015 : Rs. 96,81,060)

Depreciation for the year Rs. 5,20,450 (2014-2015 : Rs. 6,70,201)

Net book value Rs. 1,28,71,913 (2014-2015 : Rs. 1,33,96,086)

f. Office equipment includes data processing items taken on finance lease :

Gross book value Rs. 2,87,39,617 (2014-2015 : Rs. 2,28,95,891)

Accumulated depreciation Rs. 2,04,95,216 (2014-2015 : Rs. 1,47,18,981)

Depreciation for the year Rs. 57,76,235 (2014-2015 : Rs. 64,00,438)

Net book value Rs. 82,44,401 (2014-2015 : Rs. 81,76,910)

* Excise duty on sales amounting to Rs. 30,72,98,129 (2014-2015 : Rs. 29,69,94,109) has been reduced from sales in the statement of profit and loss and excise duty on (increase)/decrease in stock amounting to Rs. 65,26,469 (2014-2015 : Rs. 63,60,887) has been considered as (income)/expenses in note 28 of financial statements.

** The value of raw materials consumed have been arrived at on basis of opening stocks plus purchases less closing stock. The consumption therefore includes adjustments for materials sold, shortage / excess and obsolescence.

# It is not practicable to furnish information in view of the large number of items which differ in size and nature; each being less than 10% in value of the total.

1. EMPLOYEE BENEFITS

A) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn basic salary) for each completed year of service. The scheme is funded to a separate trust duly recognized by Income tax authorities.

The guidance note on implementing AS 15, âEmployee Benefits'' issued by the Accounting Standard Board (ASB) of the Institute of Chartered Accountants of India states that provident funds set up by employers that guarantee a specified rate of return and which require interest shortfall to be met by the employer would be defined benefit plans in accordance with the requirements of paragraph 26(b) of AS 15.

The following table summarizes the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity and provident fund plan

Notes:

a) Amounts recognized as an expense and included in note 25:

Gratuity in "Contribution to provident and other fundsâ Rs. 99,76,256 (2014-2015 : Rs. 75,84,506).

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

B. Defined contribution plan:

Amount recognized as an expense and included in the note 25 - âContribution to provident and other fundsâ of the statement of profit and loss Rs. 2,30,37,750 (2014-2015 : Rs. 2,11,82,263)

C. Other employee benefits:

Amounts recognized as an expense and included in note 25:

Leave encashment in "Salaries, wages and bonusâ Rs. 1,48,89,676 (2014-2015 : Rs. 1,74,39,841)

2.. EMPLOYEE STOCK OPTION SCHEME (ESOS)

ESOS 2001

The employee stock compensation committee in its meeting held on 5th June 2007, granted 3,00,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on the stock exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of first and second grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, fourth 25% of the options vested in June 2012.The vested options are exercisable up to 5th June 2016.

ESOS 2003

The employee stock compensation committee in its meeting held on 5th June 2007, granted 3,50,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on the stock exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of first grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, the fourth 25% of the options vested in June 2012. The vested options are exercisable upto 5th June 2016.

The method of settlement of the above options is equity settled.

3. EMPLOYEE STOCK OPTION SCHEME (ESOS) (contd...)

As at 31st March 2016, the company has received commitment deposit of Rs. 33,348 (2014-2015 : Rs. 33,348) from its directors and employees under ESOS 2001 and ESOS 2003.

Weighted average remaining contractual life is 0.2 years (2014-2015 : 1.2 years).

25,000 (2014-2015 : Nil) shares were exercised during the year. Weighted average share price at exercise date was Rs.274.82(2014-2015 : N.A). The company has not granted stock options during the year.

The company uses the intrinsic value method for measuring the employee compensation cost. The impact on the reported net profit and earnings per share by applying the fair value method is as under:

4.. SEGMENT (contd...)

III. Notes:

(a) The company''s operations are organized into three business segments, namely:

Engineering division - comprising of water treatment plants, spares and services in connection with the plants.

Chemicals - comprising of resins, water treatment chemicals, sugar chemicals and paper chemicals.

Consumer Products - comprising of domestic water purifiers.

(b) The segment revenue in the geographical segments considered for disclosure are as follows:

Revenue within India includes sales to customers located within India and earnings in India. Revenue outside India includes sales to customers located outside India and earnings outside India.

5.. RELATED PARTY DISCLOSURES (As identified by the Management):

Where control exists

a) Subsidiary companies Ion Exchange Enviro Farms Limited

Water care Investments (India) Limited Aqua Investments (India) Limited Ion Exchange Asia Pacific Pte. Ltd., Singapore Ion Exchange Asia Pacific (Thailand) Limited *

IEI Environmental Management (M) Sdn. Bhd., Malaysia

Ion Exchange Environment Management (BD) Limited, Bangladesh

Ion Exchange Infrastructure Limited **

Ion Exchange LLC, USA

Ion Exchange And Company LLC, Oman

Ion Exchange WTS (Bangladesh) Limited

Ion Exchange Projects and Engineering Limited **

Global Composites and Structuralâs Limited Ion Exchange Safic Pty. Ltd., South Africa Total Water Management Services (India) Limited Ion Exchange Purified Drinking Water Private Limited

Others

b) Associates Aquanomics Systems Limited

IEI Water-Tech (M) Sdn. Bhd., Malaysia ***

Astha Technical Services Limited

Ion Exchange PSS Co. Limited, Thailand ***

Ion Exchange Financial Products Pvt. Limited ***

c) Joint Venture Ion Exchange Waterleaf Limited

d) Entity having significant influence IEI Shareholding Trusts

e) Key Management Personnel Mr. Rajesh Sharma - Chairman & Managing Director

Mr. Dinesh Sharma - Executive Director Mr. Aankur Patni - Executive Director

f) Relatives of Key Mr. Mahabir Patni - Father of Mr. Aankur Patni Management Personnel Mrs. Nirmala Patni - Mother of Mr. Aankur Patni

Mrs. Aruna Sharma - Wife of Mr. Rajesh Sharma Mrs. Poonam Sharma - Wife of Mr. Dinesh Sharma Mrs. Nidhi Patni - Wife of Mr. Aankur Patni Ms. Pallavi Sharma - Daughter of Mr. Rajesh Sharma

g) Enterprise owned or significantly influenced by Ion Foundation key management personnel or their relatives

* Subsidiary company of subsidiary

** Ion Exchange Infrastructure Limited has amalgamated with Ion Exchange Projects and Engineering Ltd. w.e.f. 1st April 2014 as per order of Bombay High Court, which became operational from 17th December 2015.

*** Associate companies of subsidiaries

6.. In early 90s, the company had given loans to Employees'' IEI Shareholding Trusts. The amount outstanding as at 31st March 2016 is Rs. 21,25,09,000 (2014-2015 : Rs. 21,86,35,000). The Company has carried out valuation of the assets held by the Trusts. Considering the valuation, book value of the corpus of the Trusts as on the Balance Sheet date and future opportunities, the Management does not anticipate any ultimate loss arising out of these loans.

7.. The Company has an investment of Rs. 54,70,000 (2014-2015 : Rs.54,70,000) in Equity Shares and 15,00,000 (2014-2015 : 15,00,000) 7% secured redeemable non-convertible debentures of Rs. 100 each fully paid up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company, as at 31st March 2016 and it has also granted loans and advances aggregating Rs. 13,39,08,658 (2014-2015 : Rs. 12,31,74,629) as at 31st March 2016 to IEEFL. As at 31st March 2016, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital.

IEEFL has undertaken various cost reduction programs and it expects better returns in the coming years from its organic farming activities, bio-pesticides and bio-fertilizers marketing. Moreover, IEEFL has adequate assets in the form of developed and undeveloped land and the redeemable non-convertible debentures are secured by way of mortgage of office premises.

Also the company had filed appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding-up of scheme with Supreme Court of India on 4th July 2006.The Hon''ble Supreme Court of India had dismissed the company''s appeal on 26th February, 2013. Subsequent to this dismissal, IEEFL approached SEBI with a proposal related to the compliance of the said order vide letter dated 17th May 2013. During personal hearing with SEBI officials on 27th November 2013, pursuant to the above letter, SEBI had called for furnishing additional details which have been duly complied with vide letter dated 13th December 2013. Pursuant to this, IEEFL has initiated actions in line with the aforesaid meetings with SEBI officials and letters submitted to SEBI.

On 30th December, 2015, SEBI directed completion of the closure of the scheme (as per their original order of 27th November 2003), which inter-alia also include directions to pre-deposit sum of Rs. 20.06 Crores refundable to Investors. IEEFL replied on 14th January, 2016, requesting suitable modifications to the said directives, in view of the latest status of the scheme including several refunds made to Investors in the intervening period as well as direct sale of their lands by many investors etc.

IEEFL also requested permission to wind up the scheme in terms of Rule 73(1) to (9) of CIS Regulations, as the company has complied with all obligations towards the farms owners, i.e. sale of lands to the farms owners and developing and maintaining the said lands thereafter, as per agreements.

SEBI granted personal hearing on 3rd February, 2016 to understand IEEFL''s submission / proposal and during this meeting asked for providing additional details which were submitted on 23rd March 2016, wherein the company proposed to get discharge certificates from 693 farm owners aggregating Rs. 16.89 Crores within 2 years. Further directions from SEBI are awaited.

8.. Capital expenditure incurred on research and development during the year is Rs. 61,23,839 (2014-2015 : Rs. 12,34,639). Revenue expenditure of Rs. 5,47,41,612 (2014-2015 : Rs. 4,71,34,662) incurred on research and development has been expensed to the statement of profit and loss under various expense heads. Location wise details are as follows :

9. LEASE

A. Operating Lease

Company as lessee:

Company as less or:

B. Finance Lease

Company as lease:

10. Back charges represent reimbursement of costs incurred by customers on the company''s behalf in the course of contract execution.

11. Book values of certain long term unquoted investments, aggregating to Rs. 32,27,34,875 (2014-2015 : Rs. 32,27,34,875) are lower than its cost.

Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the management, the decline in the book value of the aforesaid investments is of temporary nature, requiring no provision.

12. Capital advance includes amount of Rs. 25,33,481 (2014-2015 : Rs. 25,33,481) paid for acquiring furnished office premises at Hyderabad, the ownership of which is under legal dispute for which transfer formalities are in progress.

13. The Company with effect from 1st April 2014 has charged depreciation based on the revised remaining useful life of the assets as per the requirement of Schedule II of the Companies Act, 2013. Based on transitional provision provided in note 7(b) of Schedule II of the Companies Act, 2013, in the previous year depreciation of Rs. 2,46,50,129 and deferred tax of Rs. 83,81,044 was adjusted to retained earnings.

14. CORPORATE SOCIAL RESPONSIBILITY EXPENSES:

A. Gross amount required to be spent by the company during the year 2015-2016 : Rs. 64,62,704

B. Amount spent during the year on:

C. Related party transaction in relation to Corporate Social Responsibility : Rs. 75,63,577

All projects under the Ion Exchange umbrella are implemented by Ion Foundation, a Company incorporated under Section 8 of the Companies Act, 2013.

D. Provision during the year 2015-2016 : Rs. Nil

15.. Previous year figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification

Mar 31, 2015

(A) Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2015, the amount of per share dividend recognized as distribution to equity shareholders is Rs. 3 (2013-2014 : Rs. 2). This include special dividend of Re. 1 on the occasion of company's golden jubilee.

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

(B) Shares reserved for issued under ESOS

For details of shares allotted under various Employee Stock Option Schemes (ESOS) and shares reserved for issue under the Employees Stock Option Scheme (ESOS) of the company please refer note 31.

2. LONG-TERM BORROWINGS:

(a) Indian rupees loan from finance company for capital expenditure carries interest @ 13.00% p.a. Loan is repayable within 48 months from the month of first disbursement being 01.10.2014. The loan is secured by exclusive first charge on residential properties of the company situated at Mumbai and Thane.

(b) Indian rupees loan from bank taken for capital expenditure carries interest @ 13.25% p.a. Indian rupees loan from bank is repayable within 36 months from the month following the month of first disbursement being 16.08.2013. The loan is secured by exclusive first charge on properties situated at Mumbai. The loan was repaid during the year.

(c) Indian rupees loan from a financial institution carries interest @ 15.00% p.a. The loan is secured by first charge on property situated at Bangalore and is repayable in 6 years.

(d) Indian rupee vehicle loans from banks and finance company carries interest @ 10.25% to 13.75% p.a. The loans are repayable within a period of 36 to 60 months in equal monthly installments along with interest, from the various dates of disbursements. The loans are secured by hypothecation of under lying vehicles.

(e) Finance lease obligations are secured by hypothecation of under lying plant and machinery and equipment's taken on lease. Lease obligations are discharged by monthly / quarterly lease rental payments. The lease terms are for 3 to 4 years.

(f) Deposits from shareholders and public carry interest @7.00% to 8.00% p.a for deposits repayable after 1 year to 3 years from the respective dates of deposits

Provision for warranties

A provision is recognised for expected warranty claims on Consumer Product Division's products sold during last one year, based on past experience of the level of repairs and returns.

(a) Includes working capital loan of Rs. 33,87,44,054 (2013-2014 : Rs. 54,47,49,817) is secured by joint hypothecation of book debts and stocks and collateral security by way of pari passu first charge on all immovable and movable properties and plant and machinery situated at Hosur and Patancheru and pari passu second charge on movable and immovable properties situated at Mumbai (Office Premises), Vashi and Goa. The Working Capital Loan is repayable on demand and carries interest @ 10.70% to 14.75% p.a.

(b) Includes working capital loan of Rs. Nil (2013-2014 : Rs. 4,19,29,687) from a bank is secured by joint hypothecation of book debts and stocks and collateral security by way of first charge on the immovable property situated at Kolkata and second charge of immovable property situated at Bangalore apart from fixed deposit of Rs. Nil (2013-2014 : Rs. 1,64,34,278). The working capital loan is repayable on demand.

3. TANGIBLE ASSETS

a. Buildings on freehold land includes residential flats, the cost ofwhich includes:

- Rs. 250 (2013-2014 : Rs. 250) being the value of 5 Shares (unquoted) of Rs. 50 each, fully paid-up in Sunrise Co-operative Housing Society Limited.

- Rs. 3,500 (2013-2014 : Rs. 3,500) being the value of 70 Shares (unquoted) of Rs. 50 each, fully paid-up in Usha Milan Co-operative Society Limited.

b. Buildings on freehold land includes residential flats acquired at Mumbai, the society formation ofwhich is in progress.

Gross book value Rs. 62,16,250 (2013-2014 : Rs. 62,16,250)

Net book value Rs. 42,18,471 (2013-2014 : Rs. 43,22,204)

c. Buildings on freehold land includes residential flats comprising of 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur, the title deeds of which are awaited from authorities.

Gross book value Rs. 76,882 (2013-2014 : Rs. 76,882)

Net book value Rs. Nil (2013-2014 : Rs. Nil)

d. Buildings on freehold land includes office premises given on operating lease :

Gross book value Rs. 2,30,77,146 (2013-2014 : Rs. 2,30,77,146)

Accumulated depreciation Rs. 96,81,060 (2013-2014 : Rs. 90,10,859)

Depreciation for the year Rs. 6,70,201 (2013-2014 : Rs. 5,66,774)

Net book value Rs. 1,33,96,086 (2013-2014 : Rs. 1,40,66,287)

e. Office equipment includes data processing items taken on finance lease :

Gross book value Rs. 2,28,95,891 (2013-2014 : Rs. 2,17,75,889)

Accumulated depreciation Rs. 1,47,18,981 (2013-2014 : Rs. 83,18,541)

Depreciation for the year Rs. 64,00,438 (2013-2014 : Rs. 52,53,210)

Net book value Rs. 81,76,910 (2013-2014 : Rs. 1,34,57,348)

A) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn basic salary) for each completed year of service. The scheme is funded to a separate trust duly recognized by Income tax authorities.

The guidance note on implementing AS 15, 'Employee Benefits' issued by the Accounting Standard Board (ASB) of the Institute of Chartered Accountants of India states that provident funds set up by employers that guarantee a specified rate of return and which require interest shortfall to be met by the employer would be defined benefit plans in accordance with the requirements of paragraph 26(b) of AS 15.

The following table summarises the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity and provident fund plan.

B. Defined contribution plan:

Amount recognized as an expense and included in the note 25:

"Contribution to provident and other funds" ofthe statement ofprofit and loss Rs. 2,11,82,263 (2013-2014 : Rs. 1,97,66,567)

C. Otheremployeebenefits:

Amounts recognized as an expense and included in note 25:

Leave encashment in "Salaries, wages and bonus" Rs. 1,74,39,841 (2013-2014 : Rs. 1,26,34,140)

ESOS 2001

The employee stock compensation committee in its meeting held on 5th June 2007, granted 30,0,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The stock exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of first and second grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, fourth 25% of the options vested in June 2012.The vested options are exercisable upto 5th June 2016.

ESOS 2003

The employee stock compensation committee in its meeting held on 5th June 2007, granted 3,50,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on the stock exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of first grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, the fourth 25% of the options vested in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2008

Pursuant to the resolution passed by the shareholders at the annual general meeting held on 26th September 2008, the employee stock compensation committee at its meeting held on 13th October 2008 implemented the fourth employees stock options scheme (ESOS 2008) and granted 12,00,000 options to directors and other employees at a price of Rs. 58.20 per share which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options were exercisable upto 13th October 2013.

The method of settlement of the above options is equity settled.

As at 31st March 2015, the company has received commitment deposit of Rs. 33,348 (2013-2014 : Rs. 33,348) from its directors and employees under ESOS 2001 and ESOS 2003.

Weighted average remaining contractual life is 1.2 years (2013-2014 : 2.2 years).

No options were exercised during the year. Weighted average share price at exercise date during the previous year was Rs. 96.72.

III. Notes:

(a) The company's operations are organized into three business segments, namely:

Engineering division - comprising of water treatment plants, spares and services in connection with the plants.

Chemicals - comprising of resins, water treatment chemicals, sugar chemicals and paper chemicals.

Consumer Products - comprising of domestic water purifiers.

(b) The segment revenue in the geographical segments considered for disclosure are as follows:

Revenue within India includes sales to customers located within India and earnings in India. Revenue outside India includes sales to customers located outside India and earnings outside India.

4. RELATED PARTY DISCLOSURES (As identified by the Management):

Where control exists

a) Subsidiary Companies Ion Exchange Enviro Farms Limited

Watercare Investments (India) Limited Aqua Investments (India) Limited Ion Exchange Asia Pacific Pte. Ltd., Singapore Ion Exchange Asia Pacific (Thailand) Limited*

IEI Environmental Management (M) Sdn. Bhd., Malaysia

Ion Exchange Environment Management (BD) Limited, Bangladesh

Ion Exchange Infrastructure Limited

Ion Exchange LLC, USA

Ion Exchange And Company LLC, Oman

Ion Exchange WTS (Bangladesh) Limited

Ion Exchange Projects and Engineering Limited

Global Composites and Structurals Limited

Ion Exchange Safic Pty. Ltd., South Africa

Total Water Management Services (India) Limited

Ion Exchange Purified Drinking Water Private Limited

Others

b) Associates

Aquanomics Systems Limited

IEI Water-Tech (M) Sdn. Bhd., Malaysia **

Astha Technical Services Limited

Ion Exchange PSS Co. Limited, Thailand **

Ion Exchange Financial Products Pvt. Limited **

c) Joint Venture Ion Exchange Waterleau Limited

d) Entityhavingsignificantinfluence IEI Shareholding Trusts

e) Key Management Personnel

Mr. Rajesh Sharma - Chairman & Managing Director Mr. Dinesh Sharma - Executive Director Mr. Aankur Patni - Executive Director

f) Relatives of Key Mr. Mahabir Patni - Father of Mr. Aankur Patni

Management Personnel

Mrs. Nirmala Patni - Mother of Mr. Aankur Patni Mrs. Aruna Sharma - Wife of Mr. Rajesh Sharma Mrs. Poonam Sharma - Wife of Mr. Dinesh Sharma Mrs. Nidhi Patni - Wife of Mr. Aankur Patni Ms. Pallavi Sharma - Daughter of Mr. Rajesh Sharma

g) Enterprise owned or significantly

influenced by key management personnel or their relatives

Ion Foundation

** Subsidiary Company of Subsidiary * Associate Companies of Subsidiaries

III. Stock options granted to key management personnel during the year: Nil (2013-2014 : Nil).

IV. Disclosure pursuant to clause 32 of the listing agreement:

5. In early 90s, the company had given loans to Employees' IEI Shareholding Trusts. The amount outstanding as at 31st March 2015 is Rs.21,86,35,000 (2013-2014 : Rs. 22,27,46,000). The Company has carried out valuation of the assets held by the Trusts. Considering the valuation, book value of the corpus of the Trusts as on the Balance Sheet date and future opportunities, the Management does not anticipate any ultimate loss arising out of these loans.

6. The Company has an investment of Rs. 54,70,000 (2013-2014 : Rs.54,70,000) in Equity Shares and 15,00,000 (2013-2014 : 15,00,000) 7% secured redeemable non-convertible debentures of Rs. 100 each fully paid-up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company, as at 31st March 2015 and it has also granted loans and advances aggregating Rs. 12,31,74,629 (2013-2014 : Rs. 10,86,84,680) as at 31st March 2015 to IEEFL. As at 31st March 2015, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital.

IEEFL has undertaken various cost reduction programs and it expects better returns in the coming years from its organic farming activities, bio-pesticides and bio-fertilizers marketing. Moreover, IEEFL has adequate assets in the form of developed and undeveloped land and the redeemable non-convertible debentures are secured by way of mortgage of office premises.

Also the company had hied appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding- up of scheme with Supreme Court of India on 4th July 2006. The Hon'ble Supreme Court of India had dismissed the company's appeal on 26th February, 2013. Subsequent to this dismissal, IEEFL approached SEBI with a proposal related to the compliance of the said order vide letter dated 17th May 2013. During personal hearing with SEBI officials on 27th November 2013, pursuant to the above letter, SEBI had called for furnishing additional details which have been duly complied with vide letter dated 13th December, 2013. Pursuant to this, IEEFL has initiated actions in line with the aforesaid meetings with SEBI officials and letters submitted to SEBI. The company does not envisage any liability on this account.

In view of the foregoing, the Management is of the opinion, that there is no diminution, other than temporary, in value of investment and the advances are fully recoverable. Hence, presently no provision is considered necessary.

7. LEASE

A. Operating Lease

Company as lessee:

The Company has entered into lease agreements for certain items of plants and machineries. The lease agreement is for 5 years. There are no restrictions placed upon the company by entering into this lease.

Company as lessor:

The Company has entered into commercial property lease of its surplus office. The lease agreement is for 5 years. The lease includes a clause to enable upward revision by 15% after completion of 3 years from the date of commencement of the lease agreement.

8. CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts (net of advances) remaining to be executed on capital account not provided for is Rs. 4,31,54,846 (2013-2014 : Rs. 95,89,322).

9. CONTINGENT LIABILITIES

Contingent liabilities not provided for:

(a) Guarantee given by the company on behalf of :

i) Subsidiaries - Rs. 1,09,66,62,488 (2013-2014 : Rs. 80,86,05,930)

ii) Associates - Rs. 16,39,07,683 (2013-2014 : Rs. 16,50,50,000)

iii) Joint venture - Rs. 5,00,00,000 (2013-2014 : Rs. 5,00,00,000)

iv) Others - Rs. 38,88,000 (2013-2014 : Rs. 38,88,000)

(b) Demand raised by authorities against which the company has hied an appeal.

i) Income tax - Rs. 53,82,201 (2013-2014 : Rs. Nil)

ii) Excise duty - Rs. 16,78,600 (2013-2014 : Rs. 16,78,600)

iii) Service tax - Rs. 10,52,535 (2013-2014 : Rs. 5,61,092)

iv) Customs Duty - Rs. 22,58,117 (2013-2014 : Rs. 22,58,117)

(c) Claims against the company arising in the course of business not acknowledged as debts (to the extent ascertainable) Rs. 4,82,16,849 (2013-2014 : Rs. 1,79,72,673).

Note: Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.

10. During the year 2013-2014, 47,800 equity shares were allotted to employees and directors under ESOS 2008 on 30th May 2013 and 24th July 2013. Accordingly, dividend of Rs. 2.00 per share (20%) declared at the annual general meeting held on 24th September 2013 was also paid to those shareholders (Book closure date being 24th September 2013).

11. Back charges represent reimbursement of costs incurred by customers on the company's behalf in the course of contract execution.

12. Book values of certain long term unquoted investments, aggregating to Rs. 32,14,34,875 (2013-2014 : Rs. 30,75,67,625) are lower than its cost. Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the management, the decline in the book value of the aforesaid investments is of temporary nature, requiring no provision.

13. Capital advance includes amount of Rs. 25,33,481 (2013-2014 : Rs. 25,33,481) paid for acquiring furnished office premises at Hyderabad, the ownership of which is under legal dispute for which transfer formalities are in progress.

14. The Company with effect from 1st April 2014 has charged depreciation based on the revised remaining useful life of the assets as per the requirement of Schedule II of the Companies Act, 2013. Due to above, depreciation charge for the year ended 31st March 2015 is higher by Rs. 1,52,72,081. Further based on transitional provision provided in note 7(b) of Schedule II of the Companies Act, 2013 depreciation of Rs. 2,46,50,132 and deferred tax of Rs. 83,81,047 have been adjusted to retained earnings.

15. During the year ended 31st March 2013, Ion Exchange Services Limited was amalgamated with Ion Exchange India Limited (the Company) with effect from 1st April 2012, pursuant to a scheme of amalgamation sanction by the High Court. Consequent to this amalgamation, during the year 2013-2014, the company issued 11,80,256 equity shares of Rs. 10 each against the 'Share Capital suspense account' of Rs. 1,18,02,560 outstanding as at 31st March 2013.

16. CORPORATE SOCIAL RESPONSIBILITY EXPENSES:

A. Gross amount required to be spent by the company during the year 2014-2015 : Rs. 58,81,224

B. Amount spent during the year on:

C. Related party transaction in relation to Corporate Social Responsibility : Rs. Nil

D. Provision during the year 2014-2015 : Rs. Nil

17. The company has paid remuneration to the directors as per the terms of their respective service contracts with the company which were approved by the board of directors and shareholders. In view of inadequacy of profit in the current year, pursuant to provision of section 197 read with section II of part II of Schedule V of the Companies Act 2013, the company has made an application with the Central Government for payment of the excess remuneration amounting to Rs. 73,74,532 to the said directors, which is pending approval.

18. Previous year figures have been regrouped / reclassified wherever necessary, to conform to current year's classification. The Financial statement of the previous year have been audited by other auditors

Mar 31, 2013

1. Basis of Preparation:

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared under historical cost convention on accrual basis except in case of assets for which revaluation is carried out. The financial statements comply in all material respects with the Accounting Standards notified under the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 of India (the "Act"). The accounting policies adopted in the preparation offinancial statements are consistent with those of previous year.

The operating cycle in case of projects division comprising of turnkey projects which forms a part of engineering segment is determined for each project separately based on the expected execution period of the contract. In case of the other divisions the company has ascertained its operating cycle as twelve months.

2. EMPLOYEE STOCK OPTION SCHEME (ESOS)

ESOS 2001

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, granted 3,00,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First and Second grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, Fourth 25% of the options vested in June 2012.The vested options are exercisable upto 5th June 2016.

ESOS 2003

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, granted 3,50,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, the Fourth 25% of the options vested in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2008

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 26th September 2008, the Employee Stock Compensation Committee at its meeting held on 13th October 2008 implemented the Fourth Employees Stock Options Scheme (ESOS 2008) and granted 12,00,000 options to directors and other employees at a price of Rs. 58.20 per share which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 13th October 2013.

The method of settlement of the above options is equity settled.

3. RELATED PARTY DISCLOSURES (As identified by the Management):

Where control exists

a) Subsidiary Companies Ion Exchange Enviro Farms Limited

Watercare Investments (India) Limited

Aqua Investments (India) Limited

Ion Exchange Asia Pacific Pte. Ltd., Singapore

Ion Exchange Asia Pacific (Thailand) Limited

IEI Environmental Management (M) Sdn. Bhd., Malaysia

Ion Exchange Environment Management (BD) Limited, Bangladesh

Ion Exchange Infrastructure Limited

Ion Exchange LLC, USA

Ion Exchange & Company LLC, Oman

Ion Exchange WTS (Bangladesh) Limited

Ion Exchange Projects and Engineering Limited (w.e.f. 11.04.2011) Global Composites and Structurals Limited (w.e.f. 29.03.2012)

Ion Exchange Safic Pty. Ltd., South Africa (w.e.f. 20.08.2012)

Total Water Management Services (I) Limited (w.e.f. 01.04.2012)

Others

b) Associates Aquanomics Systems Limited

IEI Water-Tech (M) Sdn. Bhd., Malaysia *

Astha Technical Services Limited

Ion Exchange PSS Co. Limited, Thailand *

Ion Exchange Financial Products Pvt. Limited *

c) Joint Venture Ion Exchange Waterleau Limited

d) Entityhavingsignificantinfluence IEI Shareholding Trusts

e) Key Management Personnel Mr. Rajesh Sharma - Chairman & Managing Director

Mr. Dinesh Sharma - Executive Director Mr. Aankur Patni - Executive Director

f) Relatives of Key

Management Personnel

Mr. Mahabir Patni - Father of Mr. Aankur Patni Mrs. Nirmala Patni - Mother of Mr. Aankur Patni Mrs. Aruna Sharma - Wife of Mr. Rajesh Sharma Mrs. Poonam Sharma - Wife of Mr. Dinesh Sharma Mrs. Nidhi Patni - Wife of Mr. Aankur Patni Ms. Pallavi Sharma - Daughter of Mr. Rajesh Sharma

g) Enterprise owned or significantly influenced by Key Management Personnel or their Relatives

Arkepp and Associates Ion Foundation

* Associate Companies of Subsidiaries

4. In early 90s, the Company had given loans to Employees'' IEI Shareholding Trusts. The amount outstanding as at 31st March 2013 is Rs. 22,68,53,000 (2011-2012 : Rs. 23,09,53,000). The Company has carried out valuation of the assets held by the Trusts. Considering the valuation, book value of the corpus of the Trusts as on the Balance Sheet date and future opportunities, the Management does not anticipate any ultimate loss arising out of these loans.

5. The Company has an investment of Rs. 54,70,000 (2011-2012 : Rs. 54,70,000) in Equity Shares and 15,00,000 (2011-2012 : 15,00,000) 7% Secured Redeemable Non-Convertible Debentures of Rs. 100 each fully paid up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company, as at 31st March 2013 and it has also granted Loans and Advances aggregating Rs. 8,63,80,524 (2011-2012 : Rs. 6,62,65,730) as at 31st March 2013 to IEEFL. As at 31st March 2013, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital. IEEFL has undertaken various cost reduction programs and it expects better returns in the coming years from its organic farming activities, bio-pesticides and bio-fertilizers marketing. Moreover, IEEFL has adequate assets in the form of developed and undeveloped land and the Redeemable Non-Convertible Debentures are secured by way of mortgage of office premises. The Hon''ble Supreme Court of India had dismissed the company''s appeal on 26th February, 2013. IEEFL in order to comply with SAT order dated 5th May 2006 has submitted a letter on 17th May 2013 to SEBI seeking its directions to comply with the SAT order. In view of the foregoing, the Management is of the opinion, that there is no diminution, other than temporary, in value of investment and the advances are fully recoverable. Hence, presently no provision is considered necessary.

6. CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts (net of advances) remaining to be executed on Capital Account not provided for is Rs. 1,92,08,722 (2011-2012 : Rs. 1,98,81,429).

7. CONTINGENT LIABILITIES

Contingent Liabilities not provided for:

(a) Guarantee given by the Company on behalf of :

i) Subsidiaries - Rs. 50,04,06,485 (2011-2012 : Rs. 30,66,76,925)

ii) Associates - Rs. 16,55,60,000 (2011-2012 : Rs. 7,00,00,000)

iii) Joint Venture - Rs. 8,00,00,000 (2011-2012 : Rs. 8,00,00,000)

iv) Others - Rs. 38,88,000 (2011-2012 : Rs. 38,88,000)

(b) Demand raised by authorities against which the Company has filed an appeal.

i) Income Tax - Rs.63,13,907 (2011-2012 : Rs. 83,01,220)

ii) Excise Duty - Rs. 16,78,600 (2011-2012 : Rs. 16,78,600)

iii) Service Tax - Rs. 8,55,356 (2011-2012 : Rs. 16,74,395)

iv) Customs Duty (to the extent ascertainable) - Rs. 22,58,117 (2011-2012 : Rs. 22,58,117)

(c) Claims against the Company arising in the course of business not acknowledged as debts (to the extent ascertainable) Rs. 2,68,40,673 (2011-2012 : Rs. 1,94,94,696).

Note : Future cash outflows/uncertainties, if any, in respect of above are determinable only on receipt ofjudgments/decisions pending with various forums/authorities.

8. During the year 17,300 (2011-2012: 98,250) equity shares were allotted to employees and directors under ESOS 2008 on 25th May, 2012 and 25th July, 2012. Accordingly, dividend of Rs. 2.00 per share (20%) declared at the Annual General Meeting held on 26th September 2012 was also paid to those shareholders (book closure date being 26th September 2012).

9. Back charges represent reimbursement of costs incurred by customers on the Company''s behalf in the course of contract execution.

10. Book values of certain long term unquoted investments, aggregating to Rs.28,58,67,625 (2011-2012 :Rs.14,25,36,619) are lower than its cost.

Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the Management, the decline in the book value of the aforesaid investments is of temporary nature, requiring no provision.

11. DISCONTINUED OPERATIONS

The Board of Directors of the Company at their meeting held on 22nd February 2011, had accorded their approval for the proposal to sell its Project Division (covering domestic turnkey projects) as a going concern under a ''Slump Sale'' basis to Ion Exchange Projects and Engineering Limited, a wholly owned subsidiary company. On 11th April 2011, the Company has received approval of the shareholders for the transfer of the Project Division (covering domestic turnkey projects) by way of postal ballot, accordingly the Company has transferred the Project Division (covering domestic turnkey projects) with effect from 31st July, 2012 on completion of necessary formalities. The Company has transferred the assets and liabilities of Project Division (covering domestic turnkey projects) at book values. The Project Division is being reported as a part of Engineering segment under Segment disclosures as given in note 31.

12. AMALGAMATION

The Honorable High Court of Bombay, on 24th May 2013, sanctioned the "scheme of amalgamation" ("the Scheme") under sections 391 to 394 of the Companies Act, 1956. In accordance with the Scheme, Ion Exchange Services Limited (transferor company) merges with Ion Exchange (India) Limited ("the Company") with effect from 1st April 2012. The transferor company was engaged in the business of providing total water solutions for industry, homes and communities. The amalgamation is expected to channelize synergies and lead to better utilization of available resources and result in greater economies of scale.

Pursuant to the Scheme, the Assets and Liabilities of transferor Company were transferred to and vested in the Company with effect from 1st April 2012. Accordingly, the Scheme has been given effect to in these accounts.

The Company discharged the purchase consideration through issuing 42 fully paid up Equity shares of Rs. 10 each against every 19 Equity shares of the transferor Company. Equity shares were not allotted by 31st March 2013.

The Amalgamation has been accounted for under the "Pooling of interest" method as prescribed under AS -14 "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India. Accordingly the accounting treatment has been given as under -

i. The assets, liabilities, reserves and credit balance of profit and loss of the transferor company as at 1st April 2012 have been incorporated at their book values in the financial statements of the company.

ii. 8,28,800 equity shares of Rs. 10 each fully paid up of transferor company stands cancelled. Further, 2,87,058 equity shares of Rs. 10 each fully paid up of the Company held by the transferor company also stands cancelled.

iii. Consequent to this amalgamation and after considering the extinguishment of shares held in transferor company by the Company, 11,80,256 Equity Shares of Rs. 10 each, aggregating to Rs. 1,18,02,560, of the company are to be issued to the share holders of the transferor company. Pending allotment of the said equity shares, such amount of Rs. 1,18,02,560 has been included in the share capital suspense account as at 31st March 2013.

iv. The excess of the book value of the investment held by transferor company in the equity share capital of Company amounts to Rs.1,41,48,997, Investment held by company in the Equity share capital of transferor Company amounts to Rs.9,20,948 and the excess of share capital of transferor company over the amount credited by the company to the share capital suspense account amounts to Rs. 35,14,560 and accordingly the net amount of Rs. 1,85,84,505 has been adjusted to the Capital Reserves of the Company.

v. Consequently, the financial statement for the year ended on 31st March 2013 includes the operations of transferor company with effect from 1st April 2012.

vi. The Company has as per AS-14, during the current year, changed (with retrospective effect) the method of providing depreciation on fixed assets, from Written Down Value (''WDV'') method to Straight line method (SLM) method at the rates prescribed in Schedule XIV of the Companies Act, 1956 in respect of assets held by transferor company to ensure that uniform set of accounting policies are followed after amalgamation. Had the Company continued to use the earlier basis of providing depreciation, the charge to the Profit and loss account for the current period would have been higher by Rs.47,48,129 and net block of fixed assets would correspondingly have been lower by Rs.47,48,129.

13. Pursuant to the amalgamation of Ion Exchange Services Limited (Refer note 51) and discontinued operations (refer note 49), the figures of the current year are strictly not comparable to those of the previous year. Previous year figures have been regrouped / reclassified wherever necessary, to confirm to current year''s classification.

Mar 31, 2012

1. Basis of Preparation:

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared under historical cost convention on accrual basis except in case of assets for which revaluation is carried out. The financial statements comply in all material respects with the Accounting Standards notified under the Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 of India (the "Act"). The accounting policies have been consistently applied by the Company, except for the change in accounting policy explained below.

The operating cycle in case of projects division comprising of turnkey projects which forms a part of engineering segment is determined for each project separately based on the expected execution period of the contract. In case of the other divisions the company has ascertained its operating cycle as twelve months.

(a)Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Boards of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share dividend recognised as distribution to equity shareholders is Rs. 2 (2010-2011 : Rs. 2)

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

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(b) Aggregate number of share issued for consideration other than cash during the period of five years immediately preceding the reporting date.

The company has issued 15,70,900 shares (2010-2011 : 20,15,700) during the period of five years immediately preceding the reporting date on exercise of options granted under the Employee Stock Option Scheme (ESOS) wherein part consideration was received in form of employee services.

(c)Shares reserved for issued under ESOS

For details of shares allotted under various Employee Stock Option Schemes (ESOS) and shares reserved for issue under the Employees Stock Option Scheme (ESOS) of the company please refer note 29.

(a) Indian rupees loan from bank carries interest @ 13,00%. Indian rupees loan from bank is repayable in 17 quarterly installments of Rs. 35,29,000 each except for Last Installment which is of Rs. 35,36,000. The loan is secured by First Charge by way of mortgage and hypothecation of all movable and immovable properties situated at Vashi, Goa and Ankleshwar, both present and future.

(b) Indian rupees loan from bank taken for a specific project carries interest @ 11.75% to 13.00%. Indian rupees loan from bank is repayable within 20 months from the date of first disbursement or out of excess contract proceeds whichever is earlier. The loan is secured by pari passu first charge on project specific current Assets, both present and future.

(c) Indian rupee vehicle loans from banks carries interest @ 12.00% to 14.60% p.a. The loans are repayable in equal monthly installments along with interest, from the various dates of disbursements. The loans are secured by hypothecation of vehicles.

(d) Finance lease obligation is secured by hypothecation of equipment's taken on lease.

(e) Deposits from Shareholders and Public carry interest @7.00% to 8.00% p.a for deposits repayable after 1 year to 3 years from the respective dates of deposits.

(a) Working Capital Loan from banks is secured by joint hypothecation of Book Debts and Stocks and collateral security by way of first charge on all immovable and movable properties and plant and machinery situated at Hosur and Patancheru and second charge on movable and immovable properties situated at Mumbai (Office Premises), Vashi and Goa. The Working Capital Loan is repayable on demand.

(b) Short Term Loan from Banks carry interest @10.00% to 11.50% p.a. and are repayable within a year.

1. Buildings on Freehold Land Includes Ownership blocks, the cost of which includes:

- Rs. 250 (2010-2011 : Rs. 250) being the value of 5 Shares (unquoted) of Rs. 50 each, fully paid up in Sunrise Co-operative Housing Society Limited.

- Rs. 3,500 (2010-2011 : Rs. 3,500) being the value of 70 Shares (unquoted) of Rs. 50 each, fully paid up in Andheri Usha Milan Co-operative Housing Society Limited.

2. Buildings on Freehold Land Includes Ownership blocks acquired at Mumbai, the Society formation of which is in progress.

Gross Book Value Rs. 62,16,250 (2010-2011 : Rs. 62,16,250)

Net book value Rs. 45,24,854 (2010-2011 : Rs. 46,26,179)

3. Buildings on Freehold Land Includes Ownership blocks comprising of 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur, the title deeds of which are awaited from authorities.

Gross Book Value Rs. 76,882 (2010-2011 : Rs. 76,882)

Net book value Rs. Nil (2010-2011 : Rs. Nil)

4. Capital Work in Progress includes amount of Rs. 25,33,481(2010-2011 : Rs. 25,33,481) paid for acquiring furnished office premises, the ownership of which is under legal dispute for which transfer formalities are in progress.

5. Buildings on Freehold Land includes buildings given on operating lease :

Gross Book Value Rs. Nil (2010-2011 : Rs. 3,34,69,098)

Accumulated depreciation Rs. Nil (2010-2011 : Rs. 77,32,279)

Depreciation for the year Rs. Nil (2010-2011 : Rs. 6,03,764)

Net book value Rs. Nil (2010-2011 : Rs. 2,57,36,819)

6. Office Equipment includes data processing items taken on finance lease :

Gross Book Value Rs. 59,50,081 (2010-2011: Nil)

Depreciation for the year Rs. 2,59,020 (2010-2011: Nil)

Net book value Rs. 56,91,061 (2010-2011: Nil)

7. Fixed assets pertaining to Discontinuing operations includes:

Gross Book Value Rs. 5,05,67,568 (2010-2011: Rs. 3,22,16,454)

Accumulated depreciation Rs. 2,91,92,080 (2010-2011: Rs. 2,62,18,330)

Net book value Rs. 2,13,75,489 (2010-2011: Rs. 59,98,124)

8. EMPLOYEE BENEFITS

A) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded to a separate Trust duly recognized by Income tax authorities.

The following table summarise the components of net benefit expense recognized in the Profit and Loss Account and the funded status and amounts recognized in the Balance Sheet for the Gratuity Plan.

Notes:

a) Amounts recognized as an expense and included in note 23:

(i) Leave Encashment in "Salaries, Wages and Bonus" Rs. 2,07,31,014 (2010-2011 : Rs. 1,80,75,232)

(ii) Gratuity in "Contribution to Provident & Other Funds" Rs. 75,85,876 (2010-2011 : Rs. 62,75,112)

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

B) Defined Contribution Plan:

Amount recognized as an expense and included in the note 23 - "Contribution to Provident and Other Funds" of Profit and Loss Account Rs. 3,52,67,951 (2010-2011 : Rs. 3,53,53,735)

9 EMPLOYEE STOCK OPTION SCHEME (ESOS)

ESOS 2001

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 27th September 2000, the Company has introduced ESOS for its directors and employees. The ESOS Compensation Committee formed for implementation of the scheme, in its meeting held on 20th July 2001, granted 3,84,500 options to eligible directors and employees of the Company at a price of Rs. 12.50 per share which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. Under the scheme, 25% of the granted options shall vest and become exercisable in July every year. Pursuant to this, Fourth 25% of the options vested in July 2005. The vested options were exercisable upto 20th July 2009.

The Employee Stock Compensation Committee in its meeting on 8th August 2002, further granted 536,100 options to directors and other employees at a price of Rs. 19.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First grant, 25% of these options shall vest and become exercisable in August every year. Pursuant to this, the Fourth 25% of the options vested in August 2006.The vested options were exercisable upto 8th August 2010.

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, further granted 300,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First and Second grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, Fourth 25% of the options will vest in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2003

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 25th September 2003, the Employee Stock Compensation Committee in its meeting on 2nd April 2004 implemented the Second Employees Stock Options Scheme (ESOS 2003) and granted 6,50,000 options to directors and other employees at a price of Rs. 19.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of two weeks high and low of the share traded on The Stock Exchange, Mumbai prior to the date of the grant. Under the scheme 25% of these options shall vest and become exercisable in April every year. Pursuant to this, the Second 25% of the options vested in April 2006. Further, pursuant to Shareholders' approval at the Annual General Meeting held on 4th August 2006, the Employee Stock Compensation Committee decided to advance the date of vesting of balance 50% option. Pursuant to this, the Third and Fourth 25% (in all 50%) of the options vested in October 2006. The vested options were exercisable upto 26th October 2010.

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, further granted 3,50,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, the Fourth 25% of the options will vest in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2005

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 29th September 2005, the Employee Stock Compensation Committee at its meeting on 29th March 2006 implemented the Third Employees Stock Options Scheme (ESOS 2005) and granted 5,00,000 options to directors and other employees at a price of Rs. 67.00 per share, which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options were exercisable upto 29th March 2011.

The Employee Stock Compensation Committee in its meeting held on 24th July 2006, further granted 5,00,000 options to directors and others employees at a price of Rs. 54.50 per share, which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. As in the case of the First grant, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 24th July 2011.

ESOS 2008

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 26th September 2008, the Employee Stock Compensation Committee at its meeting held on 13th October 2008 implemented the Fourth Employees Stock Options Scheme (ESOS 2008) and granted 12,00,000 options to directors and other employees at a price of Rs. 58.20 per share which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 13th October 2013.

The method of settlement of the above options is equity settled.

III. Notes:

(a) The Company's operations are organized into three business segments, namely:

Engineering Division - comprising of water treatment plants, spares and services in connection with the plants.

Chemicals - comprising of resins, water treatment chemicals, sugar chemicals and paper chemicals.

Consumer Products - comprising of domestic water purifiers.

(b) The Segment Revenue in the geographical segments considered for disclosure are as follows:

Revenue within India includes sales to customers located within India and earnings in India. Revenue outside India includes sales to customers located outside India and earnings outside India.

10. RELATED PARTY DISCLOSURES (As identified by the Management):

Where control exists

a) Subsidiary Companies

Ion Exchange Enviro Farms Limited

Watercare Investments (India) Limited

Aqua Investments (India) Limited ,

Ion Exchange Asia Pacific Pte. Ltd., Singapore

Ion Exchange Asia Pacific (Thailand) Limited

IEI Environmental Management (M) Sdn. Bhd., Malaysia

Ion Exchange Environment Management (BD) Limited, Bangladesh

Ion Exchange Infrastructure Limited

Ion Exchange LLC, USA

Ion Exchange & Company LLC, Oman

Ion Exchange WTS (Bangladesh) Limited

Ion Exchange Projects and Engineering Limited (w.e.f. 11.04.2011)

Global Composites and Structurals Limited (w.e.f. 29.03.2012)

Others

b) Associates

Ion Exchange Services Limited

Aquanomics Systems Limited

IEI Water-Tech (M) Sdn. Bhd., Malaysia *

Astha Technical Services Limited

Total Water Management Services (I) Limited

Ion Exchange PSS Co. Limited, Thailand *

Ion Exchange Financial Products Pvt. Limited *

c) Joint Venture

Ion Exchange Waterleau Limited

d) Entity having significant influence

IEI Shareholding Trusts

e) Key Management Personnel Mr. Rajesh Sharma - Chairman & Managing Director

Mr. Dinesh Sharma - Executive Director

Mr. Aankur Patni - Executive Director

f) Relatives of Key Mr. Mahabir Patni - Father of Mr. Aankur Patni Management Personnel Mrs. Nirmala Patni - Mother of Mr. Aankur Patni

Mrs. Aruna Sharma - Wife of Mr. Rajesh Sharma

Mrs. Poonam Sharma - Wife of Mr. Dinesh Sharma

Mrs. Nidhi Patni - Wife of Mr. Aankur Patni

Ms. Pallavi Sharma - Daughter of Mr. Rajesh Sharma

11. In early 90s, the Company had given loans to Employees' IEI Shareholding Trusts. The amount outstanding as at 31st March 2012 is Rs. 23,09,53,000 (2010-2011 : Rs. 23,50,56,000). The Company has carried out valuation of the assets held by the Trusts. Considering the valuation, book value of the corpus of the Trusts as on the Balance Sheet date and future opportunities, the Management does not anticipate any ultimate loss arising out of these loans.

12. The Company has an investment of Rs. 54,70,000 (2010-2011 : Rs. 54,70,000) in Equity Shares and 15,00,000 (2010-2011 : 15,00,000) 7% Secured Redeemable Non-Convertible Debentures of Rs. 100 each fully paid up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company, as at 31st March 2012 and it has also granted Loans and Advances aggregating Rs. 6,62,65,730 (2010-2011 : Rs. 4,05,62,592) as at 31st March 2012 to IEEFL. As at 31st March 2012, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital. IEEFL has undertaken various cost reduction programs and it expects better returns in the coming years from its organic farming activities, bio-pesticides and bio-fertilizers marketing. Moreover, IEEFL has adequate assets in the form of developed and undeveloped land and the Redeemable Non-Convertible Debentures are being secured by way of mortgage of office premises. Also, the Supreme Court of India has admitted IEEFL's appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding-up of scheme. In the month of March 2008, the matter was listed for filing reply by SEBI. SEBI did not file their reply and asked for time. The matter was adjourned thereafter. SEBI has since filed their reply and the matter will come up for hearing in due course. IEEFL has been legally advised that it has got a fair chance of successfully contesting the appeal. In view of the foregoing, the Management is of the opinion, that there is no diminution, other than temporary, in value of investment and the advances are fully recoverable. Hence, presently no provision is considered necessary.

13. Capital expenditure incurred on Research and Development during the year is Rs. 36,07,067 (2010-2011 : Rs. 24,57,441). Revenue expenditure of Rs 3.81,42,618 (2010-2011 : Rs. 3,47,39,727) incurred on Research and Development has been expensed to Profit and Loss Account under various expense heads.

14. LEASE

a Office Equipment's includes data processing equipments obtained on finance lease. The lease term is for 4 years and can be renewed at the option of the company. There is no escalation clause in the lease agreement. There are no subleases Future minimum lease payment (MLR) under finance leases together with the present value of the net MLP are as follows

b Certain Office Premises are obtained on operating lease There are escalation clauses in the lease agreement. All the lease agreements are cancellable and there are no restrictions imposed by the lease arrangements. There are no sub-leases

15. CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts (net of advances) remaining to be executed on Capital Account not provided for is Rs. 1,98,81,429 (2010-2011 : Rs. 2,96,97,595).

16, CONTINGENT LIABILITIES

Contingent Liabilities not provided for:

(a) Guarantee given by the Company on behalf of:

i) Subsidiaries - Rs. 30,66,76,925 (2010-2011 : Rs. 29,72,42,500)

ii) Associates - Rs. 7,00,00,000 (2010-2011 : Rs. 7,00,00,000)

iii) Joint Venture-Rs. 8,00,00,000(2010-2011 : Rs. 8,00,00,000)

iv) Others - Rs. 38,88,000(2010-2011 : Rs. 38,88,000)

(b) Demand raised by authorities against which the Company has filed an appeal.

i) Income Tax - Rs. 83,01,220 (2010-2011 : Rs. 1,89,38,294)

ii) Excise Duty - Rs. 16,78,600 (2010-2011 : Rs. 30,52,000)

iii) Service Tax - Rs. 16,74,395 (2010-2011 : Rs. 41,33,445)

iv) Customs Duty (to the extent ascertainable) - Rs. 22,58,117 (2010-2011 : Rs. 22,58,117)

(c) Claims against the Company arising in the course of business not acknowledged as debts (to the extent ascertainable) Rs. 1,94,94,696 (2010-2011 : Rs. 1,88,82,928).

Note: Future cash outflows/uncertainities, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities. 17. The Company has initiated the process of obtaining confirmation from suppliers regarding the registration under the "Micro, Small and Medium Enterprises Development Act, 2006". The suppliers are not registered wherever the confirmation are received and in other cases, the Company is not aware of their registration status and hence information relating to outstanding balance or interest due is not disclosed as it is not determinable

17. During the year 98,250 (2010-2011 : 6,19,650) equity shares were allotted to employees and directors under ESOS 2005 and ESOS 2008 on 27th May 2011 and 28th July 2011. Accordingly, dividend of Rs. 2.00 per share (20%) declared at the Annual General Meeting held on 27th September 2011 was also paid to those shareholders (book closure date being 27th September 2011).

18. Backcharges represents reimbursement of costs incurred by customers on the Company's behalf in the course of contract execution.

19. Book values of certain long term unquoted investments, aggregating to Rs. 14,25,36,619 ÃÂ«re lower than its cost.

Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the Management, the decline in the book value of the aforesaid investments is of temporary nature, requiring no provision.

20. DISCONTINUING OPERATIONS

The Board of Directors of the Company at their meeting held on 22nd February 2011, had accorded their approval for the proposal to sell its Project Division (covering domestic turnkey projects) as a going concern under a ÃSlump Sale' basis to Ion Exchange Projects and Engineering Limited, a wholly owned subsidiary company. On 11th April 2011, the Company has received approval of the shareholders for the transfer of the Project Division (covering domestic turnkey projects) by way of postal ballot. The Company is in the process of completing all the necessary formalities for the above mentioned transfer. The Project Division is being reported as a part of Engineering segment under Segment disclosures as given in note 31.

21. Ion Exchange Asia Pacific Pte. Ltd., subsidiary company and Global Composites and Structural Limited, subsidiary company have during the year allotted 7,61,000 and 9,53,368 shares respectively against the receivables.

22. Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable. The company has reclassified previous years figures to conform to this year's classification.

Mar 31, 2011

1. Employee Stock Option Scheme (ESOS):

ESOS 2001

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 27th September 2000, the Company has introduced ESOS for its directors and employees. The ESOS Compensation Committee formed for implementation of the scheme, in its meeting held on 20th July 2001, granted 3,84,500 options to eligible directors and employees of the Company at a price of Rs. 12.50 per share which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. Under the scheme, 25% of the granted options shall vest and become exercisable in July every year. Pursuant to this, Fourth 25% of the options vested in July 2005.

The vested options are exercisable upto 20th July 2009.

The Employee Stock Compensation Committee in its meeting held on 8th August 2002, further granted 5,36,100 options to directors and other employees at a price of Rs. 19.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First grant, 25% of these options shall vest and become exercisable in August every year. Pursuant to this, the Fourth 25% of the options vested in August 2006. The vested options are exercisable upto 8th August 2010.

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, further granted 3,00,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First and Second grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, Fourth 25% of the options will vest in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2003

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 25th September 2003, the Employee Stock Compensation Committee in its meeting on 2nd April 2004 implemented the Second Employees Stock Options Scheme (ESOS 2003) and granted 6,50,000 options to directors and other employees at a price of Rs. 19.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of two weeks high and low of the share traded on The Stock Exchange, Mumbai prior to the date of the grant. Under the scheme 25% of these options shall vest and become exercisable in April every year. Pursuant to this, the Second 25% of the options vested in April 2006. Further, pursuant to Shareholders' approval at the Annual General Meeting held on 4th August 2006, the Employee Stock Compensation Committee decided to advance the date of vesting of balance 50% option. Pursuant to this, the Third and Fourth 25% (in all 50%) of the options vested in October 2006.

The vested options are exercisable upto 26th October 2010.

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, further granted 3,50,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, the Fourth 25% of the options will vest in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2005

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 29th September 2005, the Employee Stock Compensation Committee at its meeting on 29th March 2006 implemented the Third Employees Stock Options Scheme (ESOS 2005) and granted 5,00,000 options to directors and other employees at a price of Rs. 67.00 per share, which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 29th March 2011.

The Employee Stock Compensation Committee in its meeting held on 24th July 2006, further granted 5,00,000 options to directors and others employees at a price of Rs. 54.50 per share, which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. As in the case of the First grant, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 24th July 2011.

ESOS 2008

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 26th September 2008, the Employee Stock Compensation Committee at its meeting held on 13th October 2008 implemented the Fourth Employees Stock Options Scheme (ESOS 2008) and granted 12,00,000 options to directors and other employees at a price of Rs. 58.20 per share which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 13th October 2013.

2. Related Party Disclosures (As identified by the Management) : Where control exists

a) Subsidiary Companies Ion Exchange Enviro Farms Limited

Watercare Investments (India) Limited

Aqua Investments (India) Limited

Ion Exchange Asia Pacific Pte. Ltd., Singapore

Ion Exchange Asia Pacific (Thailand) Limited

IEI Environmental Management (M) Sdn. Bhd., Malaysia

Ion Exchange Environment Management (BD) Limited, Bangladesh

Ion Exchange Infrastructure Limited

Ion Exchange LLC, USA

Ion Exchange & Company LLC, Oman

Ion Exchange WTS (Bangladesh) Limited

Others

b) Associates Ion Exchange Services Limited

Aquanomics Systems Limited

IEI Water-Tech (M) Sdn. Bhd., Malaysia *

Astha Technical Services Limited

Total Water Management Services (I) Limited

Ion Exchange Financial Products Pvt. Limited *

Global Composites and Structurals Limited

c) Joint Venture Ion Exchange Waterleau Limited

d) Entity having significant influence IEI Shareholding Trusts

e) Key Management Personnel Mr. Rajesh Sharma - Vice Chairman & Managing Director

Mr. Dinesh Sharma - Executive Director

Mr. Aankur Patni - Executive Director

f) Relatives of Key

Management Personnel

Mr. Mahabir Patni - Father of Mr. Aankur Patni

Mrs. Nirmala Patni - Mother of Mr. Aankur Patni

Mrs. Aruna Sharma - Wife of Mr. Rajesh Sharma

Mrs. Poonam Sharma - Wife of Mr. Dinesh Sharma

Mrs. Nidhi Patni - Wife of Mr. Aankur Patni

Ms. Pallavi Sharma - Daughter of Mr. Rajesh Sharma

g) Enterprise owned or significantly influenced by Key Management Personnel or their Relatives

Arkepp and Associates Ion Foundation

* Associate Companies of Subsidiaries

III. Stock Options granted and outstanding to Key Management Personnel during the year : Nil (2009-2010: Nil).

3. In early 90s, the Company had given loans to Employees' IEI Shareholding Trusts. The amount outstanding as at 31st March 2011 is Rs. 23,50,56,000 (2009Ã2010 : Rs. 23,82,77,000). The Company has carried out valuation of the assets held by the Trusts. Considering the valuation, book value of the corpus of the Trusts as on the Balance Sheet date and future opportunities, the Management does not anticipate any ultimate loss arising out of these loans.

4. The Company has an investment of Rs. 54,70,000 in Equity Shares and 15,00,000 7% Secured Redeemable Non-Convertible Debentures of Rs. 100 each fully paid-up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company, as at 31st March 2011 and it has also granted Loans and Advances aggregating Rs. 4,05,62,592 (2009Ã2010 : Rs. 3,31,16,178) as at 31st March 2011 to IEEFL. As at 31st March 2011, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital. IEEFL has undertaken various cost reduction programs and it expects better returns in the coming years from its organic farming activities, bio-pesticides and bio-fertilizers marketing. Moreover, IEEFL has adequate assets in the form of developed and undeveloped land and the Redeemable Non-Convertible Debentures are being secured by way of mortgage of office premises. Also, the Supreme Court of India has admitted IEEFL's appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding-up of scheme. In the month of March 2008, the matter was listed for filing reply by SEBI. SEBI did not file their reply and asked for time. The matter was adjourned thereafter. SEBI has since filed their reply and the matter will come up for hearing in due course. IEEFL has been legally advised that it has got a fair chance of successfully contesting the appeal. In view of the foregoing, the Management is of the opinion, that there is no diminution, other than temporary, in value of investment and the advances are fully recoverable. Hence, presently no provision is considered necessary.

5. Capital expenditure incurred on Research and Development during the year is Rs. 24,57,441 (2009Ã2010 : Rs. 3,16,846). Revenue expenditure of Rs. 3,47,39,727 (2009-2010 : Rs. 2,91,13,882) incurred on Research and Development has been expensed to Profit and Loss Account under various expense heads.

6. Contingent Liabilities not provided for:

(a) Guarantees given by the Company on behalf of :

i) Subsidiaries Ã Rs. 29,72,42,500 (2009Ã 2010 : Rs. 17,70,53,000)

ii) Associate Ã Rs. 7,00,00,000 (2009Ã 2010 : Rs. 5,00,00,000)

iii) Joint Venture Ã Rs. 8,00,00,000 (2009Ã2010 : Rs. 14,00,00,000)

iv) Others Ã Rs. 38,88,000 (2009Ã2010 : Rs. 38,88,000)

(b) Demand raised by authorities against which the Company has filed an appeal :

i) Income Tax Ã Rs. 1,89,38,294 (2009Ã2010 : Rs. 1,89,38,294)

ii) Excise Duty Ã Rs. 30,52,000 (2009Ã2010 : Rs. 30,52,000)

iii) Service Tax Ã Rs. 41,33,445 (2009Ã2010 : Rs. 39,12,061)

iv) Sales Tax Ã Rs. Nil (2009Ã2010 : Rs. 22,39,166)

v) Customs Duty (to the extent ascertainable) Ã Rs. 22,58,117 (2009Ã2010 : Rs. 24,53,117)

(c) Claims against the Company arising in the course of business not acknowledged as debts (to the extent ascertainable) Rs. 1,88,82,928 (2009Ã2010 : Rs. 3,73,95,985).

Note: Future cash outflows/uncertainities, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.

7. Capital Commitment:

Estimated amount of contracts (net of advances) remaining to be executed on Capital Account not provided for is Rs. 2,96,97,595 (2009Ã2010 : Rs. 18,81,094).

8. Sales include services rendered Rs. 45,48,19,744 (2009-2010 : Rs. 36,36,85,284) net of service tax of Rs. 4,46,43,589.

Excise duty on sales amounting to Rs. 19,81,91,028 (2009-2010 : Rs. 13,29,24,375) has been reduced from sales in Profit and Loss Account and Excise duty on increase/decrease in stock amounting to Rs. 48,29,265 (2009-2010 : Rs. 50,38,213) has been considered as expenses/(income) in Schedule 15 of financial statements.

The quantity and value of Raw Materials consumed have been arrived at on basis of opening stocks plus purchases less closing stock. The consumption therefore includes adjustments for materials sold, shortage/ excess and obsolescence.

* It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature; each being less than 10% in value of the total.

9. During the year 6,19,650 (2009-2010 : 13,000) equity shares were allotted to employees and directors under ESOS 2005 and ESOS 2008 on 24th May 2010 and 27th July 2010. Accordingly, dividend of Rs. 1.50 per share (15%) declared at the Annual General Meeting held on 21st September 2010 was also paid to those shareholders (book closure date being 7th September 2010).

10. Backcharges represents reimbursement of costs incurred by customers on the Company's behalf in the course of contract execution.

11. Employee Benefits:

A) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded to a separate Trust duly recognized by Income tax authorities.

The following table summarise the components of net benefit expense recognized in the Profit and Loss Account and the funded status and amounts recognized in the Balance Sheet for the Gratuity Plan.

The Company expects to contribute Rs. 64,75,328 to gratuity in 2011-2012.

The expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

12. The Company has initiated the process of obtaining confirmation from suppliers regarding the registration under the "Micro, Small and Medium Enterprises Development Act, 2006". The suppliers are not registered wherever the confirmation are received and in other cases, the Company is not aware of their registration status and hence information relating to outstanding balance or interest due is not disclosed as it is not determinable.

13. Book values of certain long term unquoted investments, aggregating to Rs. 4,51,01,853 are lower than its cost.

Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the Management, the decline in the book value of the aforesaid investments is of temporary nature, requiring no provision.

14. Discontinuing Operations:

The Board of Directors of the Company at their meeting held on 22nd February 2011, have, subject to the approval of the shareholders, accorded their approval for the proposal to sell its Project Division (covering domestic turnkey projects) as a going concern under a 'Slump Sale' basis to Ion Exchange Projects and Engineering Limited, a wholly owned subsidiary company being incorporated. Subsequent to the above, on 11th April 2011, the Company has received approval of the shareholders for the transfer of the Project Division (covering domestic turnkey projects) by way of postal ballot. The Company is in the process of completing all the necessary formalities for the above mentioned transfer. The Project Division is being reported as a part of Engineering segment under Segment disclosures as given in note 5 of Schedule 17.

15. Ion Exchange & Company LLC, Oman, a subsidiary company, Ion Exchange Infrastructure Limited, a subsidiary company and Ion Exchange Waterleau Limited, a Joint Venture company have during the year allotted 63,000, 21,00,000 and 11,10,000 shares respectively against the advances given by the Company in earlier years.

16. Certain Office Premises are obtained on operating lease. There are escalation clauses in the lease agreement. All the lease agreements are cancellable and there are no restrictions imposed by the lease arrangements. There are no sub-leases.

17. The Company has leased out part of a building on operating lease. The lease term is for five years with an option available to the lessee to cancel the lease. There are no restrictions imposed by the lease agreement.

18. Previous year's figures have been regrouped / rearranged, wherever necessary to conform to this year's classification.

Mar 31, 2010

1. Employee Stock Option Scheme (ESOS):

ESOS 2001

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 27th September 2000, the Company has introduced ESOS for its directors and employees. The ESOS Compensation Committee formed for implementation of the scheme, in its meeting held on 20th July 2001, granted 3,84,500 options to eligible directors and employees of the Company at a price of Rs. 12.50 per share which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. Under the scheme, 25% of the granted options shall vest and become exercisable in July every year. Pursuant to this, Fourth 25% of the options vested in July 2005. The vested options are exercisable upto 20th July 2009.

The Employee Stock Compensation Committee in its meeting on 8th August 2002, further granted 5,36,100 options to directors and other employees at a price of Rs. 19.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First grant, 25% of these options shall vest and become exercisable in August every year. Pursuant to this, the Fourth 25% of the options vested in August 2006. The vested options are exercisable upto 8th August 2010.

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, further granted 3,00,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in the case of First and Second grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, Fourth 25% of the options will vest in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2003

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 25th September 2003, the Employee Stock Compensation Committee in its meeting on 2nd April 2004 implemented the Second Employees Stock Options Scheme (ESOS 2003) and granted 6,50,000 options to directors and other employees at a price of Rs. 19.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of two weeks high and low of the share traded on The Stock Exchange, Mumbai prior to the date of the grant. Under the scheme 25% of these options shall vest and become exercisable in April every year. Pursuant to this, the Second 25% of the options vested in April 2006. Further, pursuant to Shareholders approval at the Annual General Meeting held on 4th August 2006, the Employee Stock Compensation Committee decided to advance the date of vesting of balance 50% option. Pursuant to this, the Third and Fourth 25% (in all 50%) of the options vested in October 2006. The vested options are exercisable upto 26th October 2010.

The Employee Stock Compensation Committee in its meeting held on 5th June 2007, further granted 3,50,000 options to directors and other employees at a price of Rs. 94.00 per share, which constituted a discount of approximately 25% to the price as calculated on the basis of average of weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior to the date of the grant. As in

the case of First grant, 25% of these options shall vest and become exercisable in June every year. Pursuant to this, the Fourth 25% of the options will vest in June 2012. The vested options are exercisable upto 5th June 2016.

ESOS 2005

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 29th September 2005, the Employee Stock Compensation Committee at its meeting on 29th March 2006 implemented the Third Employees Stock Options Scheme (ESOS 2005) and granted 5,00,000 options to directors and other employees at a price of Rs. 67.00 per share, which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 29th March 2011.

The Employee Stock Compensation Committee in its meeting held on 24th July 2006, further granted 5,00,000 options to directors and others employees at a price of Rs. 54.50 per share, which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. As in the case of the First grant, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 24th July 2011.

ESOS 2008

Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 26th September 2008, the Employee Stock Compensation Committee at its meeting held on 13th October 2008 implemented the Fourth Employees Stock Options Scheme (ESOS 2008) and granted 12,00,000 options to directors and other employees at a price of Rs. 58.20 per share which constituted a discount of approximately 25% of the closing market price prior to the date of the grant. Under the scheme, the options shall vest after one year from the date of the grant. The vested options are exercisable upto 13th October 2013.

The method of settlement of the above options is equity settled.

2. Related Party Disclosures (As identified by the Management) : Where control exists a) Subsidiary Companies

Ion Exchange Enviro Farms Limited

Watercare Investments (India) Limited

Aqua Investments (India) Limited

Ion Exchange Asia Pacific Re. Ltd., Singapore

Ion Exchange Asia Pacific (Thailand) Limited

IEI Environmental Management (M) Sdn. Bhd., Malaysia

Ion Exchange Environment Management (BD) Limited, Bangladesh

Ion Exchange Infrastructure Limited

Ion Exchange LLC, USA

Ion Exchange & Company LLC, Oman

Others b) Associates

Ion Exchange Services Limited

Aquanomics Systems Limited

IEI Water-Tech (M) Sdn. Bhd., Malaysia *

Astha Technical Services Limited

Total Water Management Services (I) Limited

Ion Exchange Financial Products Pvt. Limited *

Global Composites and Structurals Limited

c) Joint Venture Ion Exchange Waterleau Limited

d) Entity having significant influence IEI Shareholding Trusts

e) Key Management Personnel Mr. Rajesh Sharma - Vice Chairman & Managing Director

Mr. Dinesh Sharma - Executive Director Mr. Aankur Patni - Executive Director

f) Relatives of Key Mr. Mahabir Patni - Father of Mr. Aankur Patni Management Personnel Mrs. Nirmala Patni - Mother of Mr. Aankur Patni

Mrs. Aruna Sharma - Wife of Mr. Rajesh Sharma

Mrs. Poonam Sharma - Wife of Mr. Dinesh Sharma

Mrs. Nidhi Patni - Wife of Mr. Aankur Patni

Ms. Pallavi Sharma - Daughter of Mr. Rajesh Sharma * Associate Companies of Subsidiaries

3. In early 90s, the Company had given loans to Employees IEI Shareholding Trusts. The amount outstanding as at 31st March 2010 is Rs. 23,82,77,000 (2008-2009 : Rs. 24,01,78,500). The Company has carried out valuation of the assets held by the Trusts. Considering the valuation, book value of the corpus of the Trusts as on the Balance Sheet date and future opportunities, the Management does not anticipate any ultimate loss arising out of these loans.

4. The Company has an investment of Rs. 54,70,000 in Equity Shares and 15,00,000 7% Secured Redeemable Non-Convertible Debentures of Rs. 100 each fully paid up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company, as at 31st March 2010 and it has also granted Loans and Advances aggregating Rs. 3,31,16,178 (2008-2009 : Rs. 16,68,04,270) as at 31st March 2010 to IEEFL. As at 31st March 2010, the accumulated losses of IEEFL have substantially exceeded its paid-up share capital. IEEFL has undertaken various cost reduction programs and it expects better returns in the coming years from its organic farming activities, bio-pesticides and bio-fertilizers marketing. Moreover, IEEFL has adequate assets in the form of developed and undeveloped land and the Redeemable Non-Convertible Debentures are being secured by way of mortgage of office premises. Also, the Supreme Court of India has admitted lEEFLs appeal against the Security Appellate Tribunal Order of refunding monies to investors with return and winding-up of scheme. In the month of March 2008, the matter was listed for filing reply by SEBI. SEBI did not file their reply and asked for time. The matter was adjourned thereafter. IEEFL has been legally advised that it has got a fair chance of successfully contesting the appeal. In view of the foregoing, the Management is of the opinion, that there is no diminution, other than temporary, in value of investment and the advances are fully recoverable. Hence, presently no provision is considered necessary.

5. Capital expenditure incurred on Research and Development during the year is Rs. 3,16,846 (2008-2009 : Rs. 11,42,998). Revenue expenditure of Rs. 2,91,13,882 (2008-2009 : Rs. 2,84,91,588) incurred on Research and Development has been expensed to Profit and Loss Account under various expense heads.

6. Contingent Liabilities not provided for:

(a) Guarantee given by the Company on behalf of:

i) Subsidiary - Rs. 16,95,53,000 (2008- 2009 : Rs. 12,56,77,500)

ii) Associates - Rs. 5,00,00,000 (2008- 2009 : Rs. 5,00,00,000)

iii) Joint Venture - Rs. 14,00,00,000 (2008-2009 : Rs. 35,00,00,000)

iv) Others - Rs. 38,88,000 (2008-2009 : Rs. 38,88,000)

(b) Demand raised by authorities against which the Company has filed an appeal.

i) Income Tax - Rs. 1,89,38,294 (2008-2009 : Rs. 1,89,38,294)

ii) Excise Duty - Rs. 30,52,000 (2008-2009 : Rs. 30,52,000)

iii) Service Tax - Rs. 39,12,061 (2008-2009 : Rs. 41,05,224)

iv) Sales Tax - Rs. 22,39,166 (2008-2009 : Rs. 62,79,459)

v) Customs Duty (to the extent ascertainable) - Rs. 24,53,117 (2008-2009 : Rs. 24,53,117)

(c) Claims against the Company arising in the course of business not acknowledged as debts (to the extent ascertainable) Rs. 3,73,95,985 (2008-2009 : Rs. 4,65,74,595).

Note: Future cash outflows/uncertainities, if any, in respect of above are determinable only on receipt of judgments/decisions pending with various forums/authorities.

7. Capital Commitment:

Estimated amount of contracts (net of advances) remaining to be executed on Capital Account not provided for is Rs. 18,81,094 (2008-2009 : Rs. 27,84,469).

8. Sales include services rendered Rs. 36,36,85,284 (2008-2009 : Rs. 23,51,99,507) net of service tax.

Excise duty on sales amounting to Rs. 13,29,24,375 (2008-2009 : Rs. 18,26,29,891) has been reduced from sales in Profit and Loss Account and Excise duty on increase/decrease in stock amounting to Rs. 50,38,213 (2008-2009 : Rs. 28,01,240) has been considered as (income)/expenses in Schedule 15 of financial statements.

9. During the year 13,000 (2008-2009 : 33,550) equity shares were allotted to employees and directors under ESOS 2005 on 19th June 2009. Accordingly, dividend of Re. 1.00 per share (10%) declared at the Annual General Meeting held on 24th September 2009 was also paid to those shareholders (book closure date being 17th September 2009).

10. Back Charges represents reimbursement of costs incurred by customers on the Companys behalf in the course of contract execution.

11. The Company has initiated the process of obtaining confirmation from suppliers regarding the registration under the " Micro, Small and Medium Enterprises Development Act, 2006". The suppliers are not registered wherever the confirmation are received and in other cases, the Company is not aware of their registration status and hence information relating to outstanding balance or interest due is not disclosed as it is not determinable.

12. Book values of certain long term unquoted investments, aggregating to Rs. 3,20,01,853 are lower than its cost.

Considering the strategic and long term nature of the aforesaid investments, and asset base and business plan of the investee companies; in the opinion of the Management, the decline in the book value of the aforesaid investments is of temporary nature, requiring no provision.

13. During the current year, as per the out of court settlement terms agreed with a customer, the Company has paid an amount of Rs. 1,83,60,173.

14. Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary company, has on 31st March 2010 allotted 15,00,000 7% Secured Redeemable Non-Convertible Debentures of Rs. 100 each fully paid-up against the unsecured loan given by the Company in the earlier years. IEEFL is in the process of issuing the Debenture certificate to the Company and also registering the charge with the Registrar of Companies and other concerned authorities.

27. Certain Office Premises are obtained on operating lease. There is no escalation clause in the lease agreement. There are no restrictions imposed by the lease arrangements. There are no sub-leases.f

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