1. A. Corporate Information

The Company was incorporated in the year 1990 as a Public Limited Company under the provisions of the Companies Act, 1956 and domiciled in India. The Equity Shares of the Company are listed on Bombay Stock Exchange. The registered office ofthe Company is located at ‘Shantiniketan, 16th floor, 8, Camac Street, Kolkata - 700017, West Bengal, India.

The Company is engaged in the projectfor production of both Anatase and Rutile grade of Titanium Dioxide. Plant of the Company is located at Kilburn Chemicals Limited, Plot No. D/2/CH-170, Dahej-II, Village-Jolwa, District-Bharuch, Pin Code-392130, Gujarat, with an annual production capacity of 15000 tons, which has started commercial production from 22nd March 2018.

Information on other related party relationships of the Company is provided in Note-42.

The financial statements were approved for issue in accordance with a resolution of the Board of Directors on 30th May, 2018.

* Includes deposits of Rs. 166.69 Lakhs (Rs. 165.19 Lakhs as on 31st March, 2017 and Nil as on 1st April, 2016) held as margin money for issuing Bank Guarantee and Rs. Nil (Rs. 800.00 Lakhs as on 31st March, 2017 and Rs. 800.00 Lakhs as on 1st April, 2016) pledged with bank as security against Term Loan.

c) The Company has issued Equity Shares having a face value of Rs. 10/- each. Each holder of the Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the Annual General Meeting.

d) In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in the proportion to the number of Equity Shares held by the shareholders.

*Note

During the year the Company has converted 15,40,000 Convertible Warrants of Rs.10/- each into 15,40,000 Equity Shares of Rs. 10/- each on preferential basis at a premium of Rs 29/- per Equity Share. Equity Shares issued at a price of Rs. 39/- per share (Rs. 10/- against capital and Rs. 29/- against Premium) out of which 25% consideration received at the time of allotment of warrant and balance 75% consideration has been received at the time of conversion of Warrants into Equity Shares. The Company has complied with Regulation 77 of Chapter VII of SEBI (ICDR) Regulations, 2009.

Note:

Secured by first Pari-passu Equitable Mortgage of Immovable properties situated at Dahej in Bharuch district of Gujarat, Office space no. 1,2,5,6,7 & 8 situated at Vasundhara Building, 2/7 Sarat Bosse Road, Kolkata 700020 in the name of Shree Durga Agencies Limited, together with movable properties present and future and hypothecation of Current Assets and personal guarantee of Mr. S.K.Jalan, Managing Director.

The above Consortium Bankers have sanctioned and disbursed Term Loans of Rs. 16,600 Lakhs till 31st March, 2018. As per the revised Sanction letter dated 30th November, 2017 the sanctioned Term Loans are repayable to each banker as under:-

i) Rs. 498 Lakhs payable in 3 equal quarterly installments of Rs. 166 Lakhs each commencing from 3rd quarter of the year 2018-19. Last installment due in the 1st quarter of the year 2019-20.

ii) Rs. 3,984 Lakhs payable in12 equal quarterly installments of Rs. 332 Lakhs each commencing from 2nd quarter of the year 2019-20. Last installment due in the 1st quarter of the year 2022-23.

iii) Rs. 830 Lakhs payable in 2 equal quarterly installments of Rs. 415 Lakhs each commencing from 2nd quarter of the year 2022-23. Last installment due in the 3rd quarter of the year 2022-23.

iv) Rs. 2,988 Lakhs payable in 6 equal quarterly installments of Rs. 498 Lakhs each commencing from 4th quarter of the year 2022-23. Last installment due in the 1st quarter of the year 2024-25.

Note - 2 Contingencies and Commitments

A. Contingent Liabilities not provided for in respect of the following:

(i) Claims against the Company not acknowledged as debts -

- Income Tax Demand disputed in Appeal

- for the Assessment Year 2012-13 of Rs. 625.56 Lakhs (Tax Paid Rs. 125.12 Lakhs)

- for the Assessment Year 2013-14 of Rs. 62.93 Lakhs (Tax Paid Rs. 9.50 Lakhs)

- for the Assessment Year 2014-15 of Rs. 10.02 Lakhs (Tax Paid Rs. 1.50 Lakhs)

(ii) Outstanding Bank Guarantees of Rs. 166.69 lakhs (Previous year Rs. 165.19 lakhs).

(iii) Outstanding Letter of Credit Nil (Previous year Rs. 536.22 lakhs).

The Company has not considered those disputed demands/claims as contingent liabilities, for which, the outflow of resources has been considered as remote.

B. Commitments

a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for [net of advances Rs. 64.86 lakhs Previous year Rs. 512.71 lakhs] is Rs. 308.67 lakhs [Previous year Rs. 4,487.74 lakhs].

b) Export Obligation in Respect of EPCG Licences is Rs. 3,363.97 Lakhs (Previous Year Rs. 3,346.87 Lakhs)(equivalent to US$ 51,61,842.62)

Note - 3 Dues to Micro and Small Enterprises

The Company has not received any information from suppliers regarding their status under Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure, if any, required to be made under the said Act could not be compiled and disclosed.

Note - 4 Segment Reporting

The Company’s Commercial production commenced on 22.03.18. There is only one operating segment, therefore, Ind AS 108 on "Operating Segments” is not applicable to the Company.

Note - 5 Earnings per Share

Basic and Diluted EPS amounts are calculated by dividing the profit or loss for the year attributable to equity holders of the Company by the weighted average number of Equity Shares outstanding during the year.

Note - 6 Employee Benefits

A. Defined Contribution Plans- General Description Provident Fund

During the year, the company has recognised Rs. 22.14 lakhs (31-03-2017 : Rs 2.17 lakhs ) as contribution to Provident Fund which has been disclosed under the head Contribution to Provident Fund and Others in Note No. 34

B. Defined Benefit Plans- General Description Gratuity

Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the eligible salary for every completed year of service subject to maximum of Rs.20 lakhs at the time of separation from the Company.

(viii) Investment details:

The company has not started funding the gratuity liability & has been following pay as you go method for setting the liability.

The management has relied on the overall acturial valuation conducted by the actuary. The Actuarial valuation has been carried out as on 25.05.2018

* Rent paid debited to Pre-Operative Expenditure till 22.03.18. There after from 23.03.18 it is debited to Statement of Profit and Loss.

** Managerial Remuneration debited to Pre-Operative Expenditure till 22.03.18. There after from 23.03.18 it is debited to Statement of Profit and Loss.

*** Interest Expense on Loan Taken debited to Pre-Operative Expenditure till 22.03.18. There after from 23.03.18 it is debited to Statement of Profit and Loss.

Note - 7 Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the share holderers value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and requirements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using debt equity ratio, which is borrowings divided by Equity. The Company’s endeavour is to keep the debt equity ratio around 2:1. The Company also includes accured interest in the borrowings for the purpose of capital management.

Note

For an interest-free loan given to Kilburn Office Automation Limited, it is expected to repay the loan from available funds that will be internally generated from its business. This indicates that Kilburn Office Automation Limited has an obligation to repay this loan even though there is no specific repayment date, thus, it has been appropriately classified as a financial asset in the financial statements of the Company. Since it is not practicable to estimate the timing of repayment of this loan by Kilburn Office Automation Limited, this has been considered as repayable on demand by the company in its Financial Statements. In this scenario, Ind AS 113 states that ‘the fair value of a financial liability with a demand feature is not less than the amount payable on demand, discounted from the first date that the amount could be required to be paid. Assuming that this loan is considered as repayable on demand at any time, no discounting is required on initial recognition/transition date. Accordingly, the loan to Kilburn Office Automation Limited has been measured by the Company at its face value, which is also its fair value.

Note - 8 Financial Instruments and Risk Factors Financial risk management objectives and policies

The Company has set up a new plant at Dahej, Gujarat for which commercial production has started with effect from 22.03.2018. The Company’s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk, interest risk and commodity risk etc.), credit risk and liquidity risk. The Company’s overall risk management policy seeks to minimize potential adverse effects on Company’s financial performance.

i) Market Risk:

Market risk is the risk that the fair value of future cash flow of financial instruments will fluctuate because of change in market prices. Market risk comprises mainly three types of risk: interest rate, currency risk and other price risk such as commodity price risk.

a) Foreign Currency Risk: Foreign Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Since it is a new project only some spare parts imports shall take place for which hedge shall take place depending upon quantum. After taking cognizance of the natural hedge, the Company takes appropriate hedge to mitigate its risk resulting from fluctuation in foreign currency exchange rate(s).

Foreign currency sensitivity: To be covered during full period of operation.

b) Interest rate risk: Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any change in the interest rates environment may impact future rates of borrowing. The Company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiation with the lenders for ensuring the cost effective method of financing.

Interest Rate Sensitivity: Since the project is new such details shall be stated from 2018-19 when full operation begins.”

c) Commodity Price Risk: The Company is affected by the price volatility of certain commodities. Its operating activities require the continuous supply of certain raw materials. To mitigate the commodity price risk, the Company has an approved supplier base to get competitive prices for the commodities and to assess the market to manage the cost without any comprise on quality.

ii) Credit Risk:

Credit risk refers to risk that a counter party will default on its contractual obligations resulting in financial loss to the company. Credit risk arises primarily from financial assets such as trade receivables; inter corporate deposit, derivative financial instruments, other balances with banks, loans and other receivables. The Company does not envisage any such exposure in the near future since it is a new project.

iii) Liquidity Risk:

Liquidity risk is the risk, where 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 ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.

Note - 9 First-time adoption of Ind AS

These financial statements, for the year ended 31st March, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for the year ended on 31st March, 2018, together with the comparative period data as at and for the year ended 31st March, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening Balance Sheet was prepared as at 1st April, 2016, the Company’s date of transition to Ind AS. This note explains exemptions availed by the Company in restating its Indian GAAP financial statements, including the Balance Sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March, 2017.

Exemptions applied:

1. Mandatory exemptions

a) Estimates

The estimates as at 1st April, 2016 and as at 31st March, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

I FVTOCI - unquoted equity shares

I Impairment of financial assets based on expected credit loss model

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at 1st April, 2016, the date of transition to Ind AS and as of 31st March, 2017.

b) De-recognition of financial assets and financial liability

The Company has applied the de-recognition requirements under Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

c) Classification and measurement of Financial Instruments:

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

ii) The Company has designated unquoted equity instruments held as at 1st April, 2016 as fair value through OCI investments.

d) Impairment of financial assets:

At the date of transition to Ind ASs, the Company has determined that assessment of significant increase in credit risk since the initial recognition of a financial instrument would require undue cost or effort, the Company has recognised a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised.

2. Optional exemptions

A. Deemed cost-Previous GAAP carrying amount:

Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of Property, Plant and Equipment and Intangible Assets, as recognised in its Indian GAAP financial as deemed cost at the transition date.

B. Arrangements containing a lease:-

i) Arrangement in the nature of 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 contractor arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

C. Designate of previously recognised financial instrument:

The Company has elected this exemption and opted to:

I Designate financial asset at FVTPL as per Ind AS 109 based on facts and circumstances as on transition date;

I Designate an investment in equity shares as FVOCI, as per Ind AS 109, based on facts and circumstances exist on transition date.

Footnotes to the reconciliation of equity as at 1st April, 2016and 31st March, 2017 and profit or loss for the year ended 31st March, 2017.

1. Financial assets classified at fair value through Profit or loss

(i) Loan given to related parties

For an interest-free loan given to Kilburn Office Automation Limited, it is expected to repay the loan from available funds that will be internally generated from its business. This indicates that Kilburn

Office Automation Limited has an obligation to repay this loan even though there is no specific repayment date, thus, it has been appropriately classified as a financial asset in the financial statements of the Company. Since it is not practicable to estimate the timing of repayment of this loan by Kilburn Office Automation Limited, this has been considered as repayable on demand by the company in its Financial Statements. In this scenario, Ind AS113 states that ‘the fair value of a financial liability with a demand feature is not less than the amount payable on demand, discounted from the first date that the amount could be required to be paid.’ Assuming that this loan is considered as repayable on demand at any time, no discounting is required on initial recognition/transition date. Accordingly, the loan to Kilburn Office Automation Limited has been measured by the Company at its face value, which is also its fair value.”

2 Financial assets classified at fair value through OCI

(i) Long term investment in Equity shares at fair value through OCI:

Under Indian GAAP, the Company has recorded long term investments in unquoted equity shares as investment and measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Company has designated such investments as FVTOCI investments. At the date of transition to Ind AS, difference, if any, between the instruments fair value and Indian GAAP carrying amount has been recognised through a seperate component of equity in the FVTOCI reserve. Similarly, for the year ended 31st March, 2017, fair value gain or loss recognised in OCI.

3 Defined benefit liabilities

Earlier under Indian GAAP the Company did not recognise costs related to its post-employment defined benefit plan on accrual basis. However, after adoption of Ind AS, the Company has recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Ind AS, remeasurements [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 in OCI. Due to this, for the year ended 31st March, 2017, the employee benefit cost has increased and remeasurement gains/ losses on defined benefit plans has been recognized in the OCI.

4 Deferred taxes

Indian 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 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 AS12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in relation to the underlying transaction either in retained earnings or a separate component of equity (OCI).

Note - 10 Other Disclosures a Disclosure on Revenue Grants

EPCG Grant

Grant recognized in respect of duty waiver on procurement of capital goods under EPCG scheme of Central Govt. which allows procurement of capital goods including spares for pre production and post production at zero duty subject to an export obligation of 6 times of the duty saved on capital goods procured. The unamortized grant as on 31.03.2018 is Rs. 545.26 lakhs (31-03-2017:Rs. 303.72 Lakhs, 01.04.2016: NIL). The Company has not yet recognised any amount in the Statement of Profit and Loss as amortisation of revenue grant. The Company expects to meet the export obligations and therefore equivalent deferred grant has not been treated as liability.

b Fair Values

Pursuant to adoption of Indian Accounting Standards, the Investment in ICICI Prudential Flexible Income Plan Premium Growth has been measured at FVTPL and fair valued under Level 1 Category.

c. No provision has been made against carried over balances against Trade Receivables and other Receivables amounting to Rs. 34.52 lakhs (31-03-2017: Rs. 1,176.03 lakhs, 01-04-2016: Rs. 1,173.76 Lakhs) from earlier years considered as good and fully recoverable by the management.

d. Certain carried over balances from earlier years included in Trade Receivables, Trade Payables, other Current Liabilities and Claim Receivables are subject to confirmation/adjustments.

g. The amount of Rs. 4.30 lakhs lying in Unpaid Dividend Account for the year 2009-2010 has been transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under, on 27-11-2017 the due date of which was 28-11-2017.

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

k. Figures have been rounded off to Rupees in Lakhs.