1) On March 25,2022, there was a fire in a section of the Company's plant located at Nandesari. The fire was extinguished internally and the plant was brought to safe mode. All operations were discontinued at the Nandesari plant for carrying out necessary repairs. The plant has resumed opreration from May 12,2022 after completion of repairs and receipt of all statutory and regularory clearances. Adjustment under plant & machinery having net block of INR 3.73 lakhs (Gross Block of INR 8.00 lakhs) relates to assets to be discarded on account of fire.

(March 31,2021 : Adjustments under freehold land having net block of INR 24.92 Lakhs (Gross block of INR 24.92 Lakhs), under Building having net block of INR Nil (Gross Block of INR 238.83 lakhs), under Plant & Machinery having net block of INR Nil (Gross block of INR 300.48 Lakhs), under Furniture & Fixture having net block of INR Nil (Gross Block of INR 19.47 Lakhs), under Vehicles having net block of INR Nil (Gross block of INR 0.28 Lakhs) relates to classification of various assets to Asset held for sale (Refer Note 14)).

2) In earlier years, the Company had incurred certain expenses aggregating to Rs. 2,820.34 lakhs (including applicable taxes) towards engineering studies and other directly and indirectly attributable costs for project expansion and included in capital work in progress as at 31st March 2021. During the year, considering the existing available production capacity, business priorities and the continuing effects of COVID-19 pandemic the continuation of the said project is uncertain hence, the Company has written off capital work in progress of the said project and disclosed the same as Deduction/ Adjustments under CWIP.

3) Refer Note 38 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

4) Capital work-in-progress mainly comprises of cost of engineering services, new plant and machinery and building.

The total cash outflow including interest for leases for the year ended March 31,2022 was INR 1,239.93 Lakhs. (March 31, 2021 - INR 1,289.96 Lakhs)

(iii) Extension and termination options in Lease Contracts

These options are used to maximise operational flexibility in terms of managing the assets used in the Company's operations. Extension and termination options are included in the lease term, only if the Company has the right to excercise these options and reasonably certain to excercise the right.

During the current financial year, the Company has exercised extension and termination option in case of some leases which has resulted into a net increase in recognized lease liabilities of INR 103.99 Lakhs and right-of-use assets of INR 113.96 Lakhs (March 31,2021, net decrease in recognized lease liabilities of INR 64.54 Lakhs and right-of-use assets of INR 46.65 Lakhs)

b) Rights, preferences and restrictions attached to shares Equity Shares

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

*On April 18,2022, INEOS Styrolution APAC Pte Ltd. (Promoter) proposed, through an Offer for Sale ("OFS") to dispose of up to 25,32,330 Equity Shares of the Company, of face Value of Rs.10 each, representing 14.40% of the total paid up equity share capital of the Company, with an option to additionally sell 16,88,220 Equity Shares representing 9.60% of the total paid up equity share capital of the Company. Pursuant to the said OFS, Promoter on April 19, 2022 and April 20, 2022, sold in aggregate, 24,28,040 Equity Shares representing 13.81% of the total paid up equity share capital of the Company.

e) Information on equity shares allotted without receipt of cash or allotted as bonus shares or shares bought back during five years immediately preceding March 31,2022.

No shares are allotted as bonus or allotted without receipt of cash and there has been no buy back of shares during the past five years.

Nature and purpose of reserves Capital reserve

Capital reserve is on account of profit on re-issue of forfeited Shares Securities premium

Securities premium represents the premium on issue of shares. The reserve is available for utilisation in accordance with the provisions of the Act.

Surplus on capital reduction

Surplus on capital reduction is created as per order no. 0/14505/2004 dated June 24, 2004 passed by the Honourable High Court of Gujarat in Company Petition No. 60 of 2004.

General reserve

General reserve represents amounts appropriated out of retained earnings in accordance with the provisions of the Act.

1) External Commercial Borrowing (ECB) loan is availed from a related party at a fixed interest rate of 7.60% which is repayable on August 31,2026 (revised from 8.90% to 7.60% w.e.f. July 1,2020).

2) Secured credit facility limits amounting to INR 25,650 Lakhs (March 31,2021 - INR 43,240 Lakhs) availed from banks are secured by first charge on inventories and trade receivables and quarterly statements of net working capital filed by the Company with banks are in agreement with books of accounts. The Company has utilised INR 10,457 Lakhs (March 31,2021 - INR 11,280 Lakhs) for non-fund based facility.

3) Current borrowing includes interest accrued but not due amounting to INR 19.00 (March 31,2021 - INR 102.60 Lakhs).

3. The Company had installed Wind Turbine Generators (WTG) at Lamba, Dhank and Pransla in Gujarat. The Local Power Station of the Madhya Gujarat Vij Company Limited (MGVCL) grants credit for the power units generated by the WTG. Accordingly, the amount of Power and Fuel consumption disclosed is net of such credit given by MGVCL aggregating to INR Nil (March 31, 2021: INR 198.29 Lakhs). The said windmills were sold by the Company during previous year.

i) Valuation techniques and significant unobservable inputs

The carrying amounts of financial assets and liabilities other than those valued at Level 1 and Level 2 are considered to be the same as their fair values due to the current and short term nature of such balances and no material differences in the values. Difference between fair value of non-current borrowings carried at amortised cost and the carrying value is not considered to be material to the financial statement.

ii) Levels 1,2 and 3

Level 1 : This includes listed equity instruments that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques which maximise 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.

Specific valuation techniques used to value financial instruments include:

• the use of quoted market prices or dealer quotes for similar instruments.

• the fair value of forward foreign exchange contracts are determined using forward exchange rates at the Balance Sheet date.

All of the resulting fair value estimates are included in level 1 and 2.

Note - 35

Financial risk management Risk management framework

Financial Risk Evaluation and Management is an ongoing process within the Organisation. The Company has a robust risk management framework to identify, monitor and minimize risks. As a process, the risk associated with each area are identified and prioritized based on severity, likelihood and effectiveness. Process owners are identified for each risk and metrics are developed for monitoring and reviewing the risk mitigation controls. Risk evaluation and assessments are reviewed by the Chief Financial Officer (CFO) and Managing Director on a quarterly basis. This is constantly monitored by the Board.

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

i) Credit risk

ii) Liquidity risk

iii) Market risk

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact on the financial statements.

i) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument leading to a financial loss. The Company is exposed to credit risk from its operating activities, primarily trade receivables and from its financing activities, including deposits with banks and other financial instruments.

The carrying amount of financial assets represents the maximum credit exposure, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables and other financial assets excluding equity investments.

Trade receivables

Trade receivables of the Company are typically unsecured and derived from sales made to a large number of independent customers. Customer credit risk is managed by the Company based on established policies, procedures and control relating to customer credit risk management. Before accepting any new customer, the Company has appropriate level of control procedures to assess the potential customer’s credit quality. The credit-worthiness of its customers are reviewed based on their financial position, past experience and other relevant factors. Outstanding customer receivables are reviewed periodically. The credit period provided by the Company to its customers generally ranges from 0-60 days.

The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors, the Company's historical experience for customers and forward looking information. Based on the industry practices and the business environment in which the entity operates, management considers that the trade receivables are credit impaired if the payments are more than 180 days past due.

Other financial assets

The Company has mainly cash and cash equivalents, deposits with banks (PSU and high rated private banks) and government authorities, and security deposits for utilities with government bodies and reputed corporate entities, and for leasehold premises. These are periodically confirmed by respective parties.

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 cash flow management system ensures, 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.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments.

The gross outflows of the contractual undiscounted cash flows relating to derivative financial liabilities disclosed in the above table are held for risk management purposes and are not usually settled before contractual maturity.

Financial instruments -Fair values and risk managementiii) Market risk

Market risk is mainly driven by changes in economic and political environment across globe, fluctuation in foreign exchange rates and interest rates movement, which affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and current borrowings. The objective of market risk management is to avoid excessive exposure in foreign currency revenues and costs.

1. Currency risk

The functional currency of the Company is Indian Rupee. The Company is exposed to currency risk on account of payables and receivables in foreign currency. Since there is no material export sales, this is not perceived to be a major risk. Raw materials are mostly imported. The company has a policy to mitigate this risk by taking derivative contracts to protect against any adverse exchange rate fluctuation. This policy is reviewed on a periodic basis.

Company does not use derivative financial instruments for trading or speculative purposes.

2. Interest rate risk

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 variable interest bearing liabilities because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing liabilities will fluctuate because of fluctuations in the interest rates. The Company does not have variable interest rate borrowing.

The Company's fixed rate borrowings were carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Note - 36

Capital Management

The primary objective of the Company’s capital management is to maximise shareholder's value. The Company monitors capital using Debt-Equity ratio, which is total debt divided by total equity.

For the purposes of the Company’s capital management, the Company considers the following components of its balance sheet to be managed as capital:

Total equity as shown in the Balance Sheet includes Share capital, General reserve, Retained earnings, Securities premium and Capital reserve. Total debt includes current debt plus non-current debt (including current maturities of long term debt and lease liabilities).

The above matters are under adjudication and the Company expects the judgment will be in its favor and has therefore, not recognised the provision in relation to these claims. Future cash outflow in respect of above will be determined only on receipt of judgement/decision. The potential undiscounted amount of total payments that the Company could be required to make if there was an adverse decision related to above matters as of the date reporting period ends are disclosed above.

Income tax

The Company has ongoing disputes with income tax authorities relating to various previous years. These disputes mainly includes disallowance of expenses, transfer pricing adjustments and withholding tax matters. The matters are pending with various forums.

Excise duty and service tax (including DEPB matter)DEPB Matter

In respect of imports of raw materials during the period January 2005 to December 2011 for consumption at one of its plant, the Company paid CVD and SAD through DEPB and availed CENVAT credit of the same. In respect of said imports, credit is available only if payments are made through DEPB scrips issued under Exim Policy 2004-09 and not for DEPB scrips issued under Exim Policy 2002-07. The department had contended that the Company had made payments through DEPB scrips issued under Exim Policy 2002-07 and not for DEPB scrips issued under Exim Policy 2004-09, and issued SCNs. The Company on its part has contended that the payment has been made through DEPB scrips issued under Exim Policy 2004-09 in respect of said imports. While the Company is not in a position to present the DEPB scrips, it maintains that the Bill of Entries have been finally assessed by Customs at the Port of Import and they indicated the applicable notification therein.

The Principal Commissioner of Central Excise, Customs and Service Tax adjudicated the matter and disallowed the credit, and imposed interest and penalties. In this respect, the Company had filed a petition in High Court for which the Company received an order in November 2017, whereby the cases was remitted back to the Principal Commissioner. The matter was heard afresh by the Principal Commissioner, and passed an order disallowing credit of INR 1,247.63 lakhs (being amount for which the Company could not present DEPB scrips and was not certain whether the scrips were issued under Exim Policy 2004-09 or not) from total contested amount of INR 7,990.97 lakhs in May 2018. Penalty amounting to INR 124.76 lakhs was imposed by the adjudicating authority. Against this the Company has made appeal to CESTAT. The department has filed an appeal against the order of the Principal Commissioner allowing credit of INR 6,743.35 lakhs (being amount for which Bill of Entries were available / SCN related to period of purchase of raw material after April 1, 2007) to the Company.

Management believes that their contention has strong merits and in its judgement, the outcome of the matter is probable. The Management has accordingly disclosed the amount as a contingent liability.

Service Tax Matter

The Company has ongoing disputes with respect to admissibility of input tax credit claimed by the Company for various previous years and the matters are pending with various forums.

Impact of Judgement on Provident Fund

With reference to the Supreme Court Judgment in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952, the aforesaid matter is not likely to have a significant impact as per the assessment by management and accordingly, no provision has been made in these Financial Statements.

Note - 39

Employee benefit obligations

I Defined Contribution plan

The defined contribution plans operated by the Company are as below :

Provident Fund

Contributions are made to employees provident fund organization in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual or any constructive obligation.

Superannuation Fund

Contributions are made to Life Insurance Corporation of India for eligible employees at the rate of 15% of basic salary as per superannuation scheme of the Company.

NPS Fund

Contributions are made to NPS trust for eligible employees who have opted for the same at the rate of 10% of basic salary as per NPS scheme of the Company.

Employee's State Insurance

Contributions are made to ESI Corporation for all eligible employees at rate of 4.75% of ESI wage as per the definition under the ESI Act.

The contributions recognised as an expense in the statement of profit and loss during the year on account of the above defined contribution plans amounted to INR 294.98 Lakhs (March 31,2021 : INR 315.59 Lakhs).

II Defined benefit plan (i) Funded Gratuity

The employee’s gratuity fund schemes managed by Trusts are defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service to build up the final obligation. The obligation for leave encashment is recognised in the same manner as for gratuity.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks and historical results of return on plan assets.

Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

i) Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. The plan assets are managed by LIC and are subject to market risk. Any shortfall is contributed to the fund by the Company. The Company intends to maintain the above investment in the continuing years.

ii) Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets.

Expected contributions to post-employment benefit plans for the year ending March 31,2022 are INR 44.13 Lakhs.(March 31,2021: INR 158.21 Lakhs).

1 All transactions entered into with related parties as defined under the Companies Act, 2013 and regulation 23 of the Listing Obligation and Disclosure Requirement Regulations 2015, during the financial year were in the ordinary course of business and at contractually agreed transaction prices.

2 Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.

3 All outstanding balances are unsecured and are repayable in cash.

4 Includes interest accrued of INR 19 Lakhs (March 31,2021: INR 102.6 Lakhs) (Refer Note 19).

5 There are no allowances on account for impaired receivables in relation to any outstanding balances, and no expense have been recognised in respect of impaired receivables due from related parties.

(d) Information about geographical areas

The Company does not have geographical distribution of revenue hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.

(e) Information about major customers

None of the entity's external customers account for 10 per cent or more of the Company’s revenue.

Note - 42Movement in Provisions

Provision for contingencies represents estimates made mainly for probable claims arising out of litigations / disputes in respect of certain matters like VAT, Contractual disputes, etc. This includes positions taken on matters under dispute involving judgements and assumptions to determine the possible outcome. The probability and the timing of the outflow with regard to these matters depend on the ultimate settlement /conclusion with the relevant authorities.

Note - 44

Registration of charges or satisfaction with Registrar of Companies (ROC)

The Company had repaid certain loans which were taken against pledge of movable properties on due dates as per the agreed terms in past. The Company had also filed manual forms for satisfaction of these charges as per requirement with ROC-Ahmedabad. However, the satisfaction of the charges has not been updated by MCA while digitizing the manual records. The Company is in process to obtain fresh ‘No dues’ certificates from respective lending institutions to re file the satisfaction of charges with MCA.

Note - 45

Events occurring after the reporting period

The Board of Directors had declared 2nd interim dividend of INR 105 [ @ 1050 %] per equity share of INR 10 each at its meeting held on Oct 26,2022.