Note:

i) The amounts shown above represent best possible estimate carried on the basis of the available information. The uncertainties and possible reimbursement are dependent on the outcome of the various case proceedings which have been initiated by the Company or the claimants, as the case may be, and therefore cannot be predicted accurately.

ii) Figures in bracket indicate previous year figures

iii) Also Refer Note 32 below.

1. Income Tax Demands

During the previous year, the Income Tax Department had appealed before the Income Tax Appellate Tribunal (ITAT) against the Order passed by the Commissioner of Income Tax (Appeals) for the Assessment Year 2010-11 relating to the disallowance of sales commission paid to various commission agents. The Company had filed its cross objections challenging the Department’s contentions and it is hopeful of a favorable outcome. The amount involved in this appeal is estimated at Rs. 1,34,53,017. Based on professional advice obtained in the matter, the Company is hopeful of a favorable outcome in the Appeal.

2. The National Green Tribunal, in an appeal filed by a party, granted an ex parte stay, restraining the construction activities pertaining to the expansion and operation of the Plant without valid consent order. The Company strongly objected the averments of the complainant and filed its counter for vacating the stay which was granted. Further, the Company’s petition seeking directions to the authorities concerned for the grant of Consent to Establish (NOC) for the expansion is also pending before the Hon’ble Forum.

3. Power and fuel for the year ended 31 March 2016 includes charge towards the Fuel and Power Purchase Cost Adjustment (FPPCA) amounting to Rs 85,84,890/- (P.Y - Rs. 94,47,120/-) (net of provision no longer required written back during the year Rs. 2,15,12,205 (P.Y - Rs. 1,53,42,129)). The above includes a provision of Rs. 2,32,84,470/- towards FPPCA determined by the management pending receipt of demand notices. Further, the Company has filed a joint appeal along with certain other applicants against the increase in power tariff fixed by the Electricity Department, Pudhucherry, with effect from 1 April 2013, which is pending disposal.

4. The Company has granted an amount of Rs. 26,16,78,010 (including Rs. 11,46,32,838 given during the year) as Interoperate deposit (ICD) to Teamec Chlorates Limited (TCL), which is outstanding as at 31 March 2016. TCL had difficulties in repaying its debts to the Banks / others and its Net worth was eroded as per the audited financial statements for the year ended 31 March 2015. A reference was made to the Board for Industrial and Financial Reconstruction (BIFR) by TCL during the year ended 31 March 2015. Such reference was not accepted by BIFR and subsequently during the year, TCL entered into a One-time settlement (OTS) with its lenders directly and is in the process of settling their dues.

Due to improved business operations, higher cash flows as reported by TCL and based on it’s request, the Company has restructured the outstanding ICDs as under.

i. All the amounts provided as ICDs under various tranches are consolidated and are repayable in 3 years and are subject to interest @ 11.5% per annum with effect from 25 March 2016.

ii. The entire amount of outstanding ICD including the interest receivable thereon is fully guaranteed by TEAM by way of a corporate guarantee.

iii. The amounts are additionally secured by way of mortgage of land owned by Titanium Equipment and Anode Manufacturing Company Limited (TEAM), to the extent of Rs. 10,00,00,000.

iv. TCL has also provided an undertaking that a paripassu security on its assets will be created in favour of the Company on discharge of its dues to the banks.

Considering the above developments, the available security in the form of corporate guarantee and mortgage of land provided by TEAM, the entire amount outstanding from TCL is considered as good for recovery.

5. Provision for current tax for the year has been determined based on the total income of the Company for the year ended 31 March 2016 and in accordance with the Income Tax Act, 1961, duly considering the deduction / exemption proposed to be claimed by the Company in the Return of Income. The tax charge for the current year amounting to Rs. 4,55,15,341/-(PY Rs. 3,22,23,442/-) includes a net adjustment of Rs. 17,58,200/- (P.Y. Rs. 2,13,817/-) towards prior periods based on the reassessment of tax claims made in the past with respect to various matters considering the developments including completion of tax assessments.

6. Cash Credit facilities are secured by exclusive first charge on all current assets of the Company, exclusive first equitable mortgage of factory land and building, second charge on the fixed assets of the Company and pledge of other assets of the Company. The Company has not utilized these Cash Credit facilities during the current period and in the previous year.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

7. During the year, the Company incurred an aggregate amount of Rs. 22,99,655 towards corporate social responsibility in compliance of Section 135 of the Companies Act 2013 read with relevant schedule and rules made there under. The details of the CSR spend are given below: -

Gross amount required to be spent by the Company during the year (Rs.) 49,60,575 Amount spent by the Company during the year on:

8. Employee benefit plans I Defined contribution plans

a. The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 65,66,902 (Year ended 31 March, 2015 Rs. 54,93,334) for Provident Fund contributions, Rs. 15,43,061 (Year ended 31 March, 2015 Rs. 13,58,936) for Superannuation Fund contributions, Rs. 2,94,183 (Year ended 31 March, 2015 Rs. 2,39,034) for Employee State Insurance Scheme contributions and Rs 6,87,680 (Year ended 31 March, 2015 Rs 2,69,201) for Employee Deposit Linked Insurance Scheme in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined benefit plans

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

i. Gratuity (included as part of (Contribution to Provident and other Funds) in Note 27 Employee benefits expense) The following table sets out the funded status of the defined benefit schemes and the amount recognized in the financial statements:

51. Employee Stock Option Scheme

a) The ESOP scheme titled “CAESOS 2015” [Chamfer Alkalis Employees Stock Option Scheme 2015] was approved by the shareholders through postal ballot on 5th March 2016. 4,00,000/- options are covered under the Scheme for 4,00,000/- equity shares.

The Compensation Committee of the Company, had granted 1,68,000/- options under this Scheme to employees of the Company as of 31 March 2016. The shares covered by such options were 1,68,000/-equity shares.

The vesting period of these options range over a period of 2 to 4 years. The options may be exercised within a period of 12 months from the date of vesting.

Weighted average remaining contractual life for options outstanding as at 31 March, 2016 - 4 Years (As at 31 March, 2015 - Nil). Note- The ESOP scheme has been implemented only during the current year 2015-16.

Note- The ESOP scheme has been implemented only during the current year 2015-16.

9. MAT Credit

Provision for Income Tax for the current year has been calculated in accordance with the provisions of the Income Tax Act, 1961.

Taking into consideration the future profitability and the taxable position in the subsequent years, the Company had recognized “MAT Credit Entitlement” to the extent of Rs. 24,37,259/- during the previous year ended 31 March 2015 in accordance with the Guidance Note on “Accounting for Credit Available in respect of Minimum Alternate Tax under Income Tax Act, 1961” issued by the Institute of Chartered Accountants of India.

During the current year ended 31 March 2016, the Company is liable to pay income tax under the normal stream. Hence, the Company has utilized the entire MAT credit entitlement towards its current tax liability in accordance with the aforesaid Guidance Note.

10. Details on derivatives instruments and unheeded foreign currency exposures

(a) No forward exchange contracts were open as at 31 March 2016. The forward exchange contracts, wherever taken, are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables outstanding.