RED HERRING PROSPECTUS

Dated September 12, 2020

Please read section 32 of the Companies Act, 2013
Book Built Issue

CHEMCON SPECIALITY CHEMICALS LIMITED

Our Company was originally incorporated as Gujarat Quinone Private Limited at Vadodara, Gujarat, India, as a private limited company under the Companies Act, 1956, pursuant to a certificate of
incorporation dated December 15, 1988 issued by the RoC. Our Promoters and Promoter Group completed the acquisition of 100% of the Equity Share capital of our Company in 2004 from the shareholders
of our Company at the time. Chemcon Engineers Private Limited” (“CEPL”) was incorporated at Vadodara, Gujarat, India as a private limited company under the Companies Act, 1956, pursuant to a
certificate of incorporation dated April 30, 1996 issued by the RoC. CEPL, a company largely owned and promoted by our Promoters and Promoter Group, merged into our Company pursuant to an order
of the High Court of Gujarat dated May 6, 2004 approving the Scheme of Amalgamation between CEPL and our Company. Thereafter, to reflect the nature of activities of our Company consequent to the
Scheme of Amalgamation, the name of our Company was changed to “Chemcon Speciality Chemicals Private Limited” pursuant to the approval of our Shareholders at an extra-ordinary general meeting
held on July 24, 2004 and the fresh certificate of incorporation on change of name issued by the RoC on July 27, 2004. Subsequently, our Company was converted into a public limited company p ursuant
to the approval of our Shareholders at an extra-ordinary general meeting held on November 28, 2018. Consequently, the name of our Company was changed to “Chemcon Speciality Chemicals Limited”
and a Fresh certificate of incorporation consequent upon conversion to public limited company was issued by the RoC on April 10, 2019. For further details relating to the changes in the registered office
and name of our Company, see “History and Certain Corporate Matters” on page 162.
Registered Office: Block Number 355, Manjusar Kunpad Road, Manjusar Village, Taluka Savli, Vadodara 391 775, Gujarat; Tel: +91 98795 64107
Corporate Office: 9 th Floor, Onyx Business Centre, Akshar Chowk, Old Padra Road, Vadodara 390 020, Gujarat Tel: +91 265 298 1195
Contact Person: Shahilkumar Maheshbhai Kapatel, Company Secretary and Compliance Officer; Tel: + 91 265 298 3754; E-mail: [email protected] ; Website: www.cscpl.com
Corporate Identity Number: U24231GJ1988PLC011652
OUR PROMOTERS: KAMALKUMAR RAJENDRA AGGARWAL, NAVDEEP NARESH GOYAL AND SHUBHARANGANA GOYAL
INITIAL PUBLIC OFFERING OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ₹ 10 EACH (“EQUITY SHARES”) OF CHEMCON SPECIALITY CHEMICALS LIMITED (“OUR
COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF ₹[●] PER EQUITY SHARE (INCLUDING A PREMIUM OF ₹[●] PER EQUITY SHARE) (“ISSUE PRICE”)
AGGREGATING UP TO ₹[●] MILLION. THE ISSUE COMPRISES OF A FRESH ISSUE OF UP TO [●] EQUITY SHARES AGGREGATING UP TO ₹1,650 MILLION (“FRESH ISSUE”)
AND AN OFFER FOR SALE OF UP TO 4,500,000 EQUITY SHARES AGGREGATING UP TO ₹[●] MILLION, COMPRISING OF UP TO 2,250,000 EQUITY SHARES BY
KAMALKUMAR RAJENDRA AGGARWAL AGGREGATING UP TO ₹ [●] MILLION, AND UP TO 2,250,000 EQUITY SHARES BY NARESH VIJAYKUMAR GOYAL AGGREGATING
UP TO ₹[●] MILLION, (TOGETHER, THE “SELLING SHAREHOLDERS”) (THE “OFFER FOR SALE”, AND TOGETHER WITH THE FRESH ISSUE, THE “ISSUE”). THE ISSUE
WILL CONSTITUTE [●] % OF OUR POST-ISSUE PAID-UP EQUITY SHARE CAPITAL.
THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS IN CONSULTATION WITH THE BRLMS AND
WILL BE ADVERTISED IN THE ENGLISH EDITIONS OF FINANCIAL EXPRESS (A WIDELY CIRCULATED ENGLISH NATIONAL DAILY NEWSPAPER), ALL EDITIONS OF
JANSATTA (A WIDELY CIRCULATED HINDI NATIONAL DAILY NEWSPAPER) AND GUJARATI EDITIONS OF FINANCIAL EXPRESS (A WIDELY CIRCULATED GUJARATI
DAILY NEWSPAPER, GUJARATI BEING THE REGIONAL LANGUAGE OF VADODARA WHERE OUR REGISTERED OFFICE IS LOCATED), AT LEAST TWO WORKING DAYS
PRIOR TO THE BID/ISSUE OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED (“BSE”) AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED
(“NSE”, TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR UPLOADING ON THEIR RESPECTIVE WEBSITES.
In case of any revision in the Price Band, the Bid/ Issue Period will be extended by at least three additional Working Days after such revision in the Price Band, subject to the Bid/ Issue Period not
exceeding 10 Working Days. In cases of force majeure, banking strike or similar circumstances, our Company may, for reasons t o be recorded in writing, extend the Bid / Issue Period for a minimum
of three Working Days, subject to the Bid/ Issue Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/ Issue Period, if applicable, shall be widely disseminated by
notification to the Stock Exchanges, by issuing a press release, and also by indicating the change on the respective websites of the BRLMs and at the terminals of the Syndicate Members and by
intimation to Designated Intermediaries and the Sponsor Bank.
This Issue is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”) read with Regulation 31 of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the “SEBI ICDR Regulations”). This Issue is being made through the Book Building Process in accordance with
Regulation 6(1) of the SEBI ICDR Regulations wherein not more than 50% of the Issue shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (the “QIB
Portion”), provided that our Company and the Selling Shareholders in consultation with the BRLMs may allocate up to 60% of the QIB P ortion to Anchor Investors on a discretionary basis. One-third
of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from the domestic Mutual Funds at or above the Anchor Investor Allocation Price. 5%
of the Net QIB Portion shall be available for allocation on a proportionate basis t o Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to
all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the I ssue Price. Further, not less than 15% of the Issue shall be available for
allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation to Retail Individual Bidders in ac cordance with the SEBI ICDR
Regulations, subject to valid Bids being received from them at or above the Issue Price. All Bidders, other than Anchor Inves tors, are mandatorily required to participate in the Issue through the
Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective ASBA Account ,which will be blocked by the Self Certified Syndicate Banks (“SCSBs”). Anchor
Investors are not permitted to participate in the Anchor Investor Portion through the ASBA Process. For details, see “Issue Procedure” beginning on page 296.
RISK IN RELATION TO THE FIRST ISSUE
This being the first public issue of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is ₹ 10. The Issue Price, Floor Price and
Price Band should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or susta ined trading in the
Equity Shares nor regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISK
Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors
are advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their own examin ation of our Company and the
Issue, including the risks involved. The Equity Shares in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the
accuracy or adequacy of the contents of this Red Herring Prospectus. Specific attention of the investors is invited to “ Risk Factors” beginning on page 23.
ISSUER’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus c ontains all information with regard to our Company and the Issue, which
is material in the context of the Issue, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the
opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Red Herring Prospectus as a whole or an y of such information or the
expression of any such opinions or intentions misleading in any material respect. Each of the Selling Shareholders, severally and not jointly, accepts responsibility for and confirms that the statements
made or confirmed by such Selling Shareholder in this Red Herring Prospectus to the extent of information specifically pertaining to them and their respective portion of the Equity Shares offered in the
Offer for Sale and assume responsibility that such statements are true and correct in all material respects and not misleading in any material respect.
LISTING
The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the Stock Exchanges. Our Company has received ‘in-principle’ approvals from the BSE and the NSE for the
listing of the Equity Shares pursuant to letters dated September 9, 2019 and September 13, 2019, respectively. For the purposes of the Issue, the Designated Stock Exchange shall be BSE Limited. A
signed copy of this Red Herring Prospectus and the Prospectus shall be delivered for filing to the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts
and documents available for inspection from the date of this Red Herring Prospectus until the Bid/ Issue Closing Date, see “Material Contracts and Documents for Inspection” beginning on page 341.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE

Intensive Fiscal Services Private Limited Ambit Capital Private Limited Link Intime India Private Limited
Address: 914, 9 th Floor, Raheja Chambers Address: Ambit House, 449 C-101, First Floor, 247 Park
Free Press Journal Marg Senapati Bapat Marg Lal Bahadur Shastri Marg
Nariman Point, Mumbai 400 021 Lower Parel, Mumbai 400 013 Vikhroli (West), Mumbai 400 083
Tel: +91 22 2287 0443/44/45 Tel: +91 22 3043 3000 Tel: +91 22 4918 6200
E-mail: [email protected] E-mail: [email protected] Email: [email protected]
Investor Grievance E-mail: [email protected] Investor grievance E-mail: [email protected] Investor grievance email: [email protected]
Website: www.intensivefiscal.com Website: www.ambit.co Website: www.linkintime.co.in
Contact Person: Harish Khajanchi/Anand Rawal Contact Person: Gaurav Rana/Sandeep Sharma Contact Person: Shanti Gopalkrishnan
SEBI Registration No. INM000011112 SEBI Registration No.: INM000012379 SEBI Registration No.: INR000004058
BID/ISSUE PROGRAMME
BID/ISSUE OPENS ON September 21, 2020*
BID/ISSUE CLOSES ON September 23, 2020**
* Our Company and the Selling Shareholders may, in consultation with the BRLMs, consider participation by Anchor Investors in a ccordance with the SEBI ICDR Regulations. The Anchor Investor Bidding Date
shall be one Working Day prior to the Bid/Issue Opening Date, being September 18, 2020.
** Our Company and the Selling Shareholders may, in consultation with the BRLMs, consider closing the Bid/Issue Period for QIBs one Working Day prior to the Bid/Issue Closing Date in accordance with the SEBI
ICDR Regulations.
 TABLE OF CONTENTS
SECTION I - GENERAL ...................................................................................................................................................... 1
DEFINITIONS AND ABBREVIATIONS..................................................................................................................... 1
CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND
CURRENCY OF PRESENTATION ............................................................................................................................ 14
FORWARD-LOOKING STATEMENTS ................................................................................................................... 16
SECTION II - SUMMARY OF THE OFFER DOCUMENT ....................................................................................... 18
SECTION III - RISK FACTORS...................................................................................................................................... 23
SECTION IV – INTRODUCTION ................................................................................................................................... 51
THE ISSUE ....................................................................................................................................................................... 51
SUMMARY FINANCIAL INFORMATION.............................................................................................................. 53
GENERAL INFORMATION........................................................................................................................................ 57
CAPITAL STRUCTURE ............................................................................................................................................... 65
SECTION V – PARTICULARS OF THE ISSUE........................................................................................................... 75
OBJECTS OF THE ISSUE ............................................................................................................................................ 75
BASIS FOR THE ISSUE PRICE .................................................................................................................................. 86
STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS .................................................................................... 89
SECTION VI - ABOUT OUR COMPANY...................................................................................................................... 92
INDUSTRY OVERVIEW.............................................................................................................................................. 92
OUR BUSINESS............................................................................................................................................................136
KEY REGULATIONS AND POLICIES IN INDIA.................................................................................................158
HISTORY AND CERTAIN CORPORATE MATTERS ........................................................................................162
OUR MANAGEMENT.................................................................................................................................................165
OUR PROMOTERS AND PROMOTER GROUP ..................................................................................................181
GROUP COMPANIES.................................................................................................................................................186
DIVIDEND POLICY ....................................................................................................................................................192
SECTION VII – FINANCIAL INFORMATION .........................................................................................................193
OTHER FINANCIAL INFORMATION...................................................................................................................193
RESTATED FINANCIAL STATEMENTS..............................................................................................................194
CAPITALISATION STATEMENT ...........................................................................................................................242
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF
OPERATIONS...............................................................................................................................................................243
FINANCIAL INDEBTEDNESS..................................................................................................................................273
SECTION VIII – LEGAL AND OTHER INFORMATION.......................................................................................275
OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS ...........................................275
GOVERNMENT AND OTHER APPROVALS........................................................................................................279
OTHER REGULATORY AND STATUTORY DISCLOSURES..........................................................................281
SECTION XI - ISSUE INFORMATION .......................................................................................................................288
TERMS OF THE ISSUE ..............................................................................................................................................288
ISSUE STRUCTURE....................................................................................................................................................292
ISSUE PROCEDURE ...................................................................................................................................................296
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES....................................................311
SECTION X - MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ..................................................312
SECTION XI - OTHER INFORMATION ....................................................................................................................341
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ..............................................................341
DECLARATION................................................................................................................................................................343
 SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

This Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise
indicates or implies, or unless otherwise specified, shall have the meaning as provided below, and references to
any legislation, act, regulation, rules, guidelines or policies shall be to such legislation, act, regulation, rule
guidelines or policy as amended from time to time and any reference to a statutory provision shall include any
subordinate legislation made from time to time under that provision.
The words and expressions used in this Red Herring Prospectus but not defined herein, shall have, to the extent
applicable, the meanings ascribed to such terms under the Companies Act, the SEBI ICDR Regulations, the SCRA,
the Depositories Act or the rules and regulations made thereunder.
Notwithstanding the foregoing, terms in “Main Provisions of the Articles of Association”, “Statement of Possible
Special Tax Benefits”, “Industry Overview”, “Key Regulations and Policies in India”, “Financial Information”
and “Outstanding Litigation and Other Material Developments”, beginning on pages 312, 89, 92, 158, 193 and
275 will have the meaning ascribed to such terms in those respective sections.

General terms

Term Description
“our Company”/ “the Chemcon Speciality Chemicals Limited, a public limited company
Company” / “we”/ “us”/ “our”/ incorporated under the Companies Act, 1956 and having its Registered Office
“the Issuer” at Block Number 355, Manjusar Kunpad Road, Manjusar Village, Taluka
Savli, Vadodara 391 775, Gujarat

Company related terms

Term Description
AGM Annual general meeting of our Shareholders, as convened from time to time
AoA/Articles of Association The articles of association of our Company, as amended
or Articles
Audit Committee Audit committee of our Company, described in “Our Management-Corporate
Governance” on page 173
Auditors/ Statutory Auditors The statutory auditors of our Company, currently being K.C. Mehta & Co.,
Chartered Accountants
Board/ Board of Directors The board of directors of our Company
CEPL Chemcon Engineers Private Limited
Chief Financial Officer/ CFO Chief financial officer of our Company
Company Secretary Company secretary of our Company
Compliance Officer Compliance officer of our Company appointed in accordance with the
requirements of the SEBI Listing Regulations and the SEBI ICDR Regulations
Corporate Office The corporate office of our Company, situated at 9 th Floor, Onyx Business
Centre, Akshar Chowk, Old Padra Road, Vadodara 390 020, Gujarat
CSR Committee/Corporate The corporate social responsibility committee of our Company, described in
Social Responsibility “Our Management-Corporate Governance” on page 177
Committee
Frost & Sullivan Frost & Sullivan (India) Private Limited
Frost & Sullivan Report A report dated June 19, 2019 (further updated by way of reports dated February
25, 2020 and August 24, 2020) titled “Independent Market Report on Global
Pharmaceuticals Intermediates and Oilfield Chemicals Market” prepared by
Frost & Sullivan
Director(s) The director(s) on our Board
Equity Shares The equity shares of our Company of face value of ₹ 10 each
Group Companies The companies as disclosed in “Group Companies” on page 186
Independent Directors Independent directors of our Company
KMP/ Key Managerial Key managerial personnel of our Company in terms of Regulation 2(1) (bb) of
Personnel the SEBI ICDR Regulations and Section 2(51) of the Companies Act, 2013 and

1
 Term Description
as further described in “Our Management-Key Managerial Personnel” on page
179
Manufacturing Facility The manufacturing facility of our Company, located at Block numbers 355,
357,357/1, 358, 359/1, Village: Manjusar, Taluka: Savli, Vadodara, Gujarat
For details, see “Our Business-Our Manufacturing Facility” on page 145
Materiality Policy The policy adopted by our Board on May 1, 2019, for identification of
material: (a) outstanding litigation proceedings; (b) Group Companies; and
(c) creditors, pursuant to the requirements of the SEBI ICDR Regulations and
for the purposes of disclosure in the Draft Red Herring Prospectus, this Red
Herring Prospectus and the Prospectus
MoA/ Memorandum The memorandum of association of our Company, as amended
of Association or Memorandum
Nomination and The nomination and remuneration committee of our Company, described in
Remuneration Committee “Our Management-Corporate Governance” on page 173
Oilwell Completion Chemicals Calcium Bromide (Solution and Powder), Zinc Bromide (Solution) and Sodium
Bromide (Solution and Powder) collectively
OSL/Overseas Synthetics Overseas Synthetics Limited, presently known as One Global Service Provider
Limited Limited
Pharmaceutical Chemicals HMDS (and ancillary chemicals), CMIC and 4 CBC, collectively
Promoter Group Persons and entities constituting the promoter group of our Company, pursuant
to Regulation 2(1) (pp) of the SEBI ICDR Regulations and as disclosed in “Our
Promoters and Promoter Group” on page 181
Promoter(s) The Promoter(s) of our Company, being Kamalkumar Rajendra Aggarwal,
Navdeep Naresh Goyal and Shubharangana Goyal. For details, see “Our
Promoters and Promoter Group” on page 181
Registered Office The registered office of our Company, situated at Block Number 355, Manjusar
Kunpad Road, Manjusar Village, Taluka Savli, Vadodara 391 775, Gujarat
Restated Financial Statements The Restated financial information of our Company, which comprises of the
restated statement of assets and liabilities as at March 31, 2020, March 31,
2019 and March 31, 2018, the restated statement of profit and loss (including
other comprehensive income), restated cash flow statement and restated
statement of changes in equity of our Company for the Fiscals ended March
31, 2020, March 31, 2019 and March 31, 2018, the summary statement of
significant accounting policies and other explanatory information, included
in this Red Herring Prospectus, prepared in terms of the requirements of
Section 26 of the Companies Act, the SEBI ICDR Regulations and the
Guidance Note on Reports in Company Prospectuses (Revised 2019) issued
by the ICAI, as amended from time to time
RoC or Registrar of Companies The Registrar of Companies, Gujarat, Dadra & Nagar Haveli at Ahmedabad.
Scheme of Amalgamation Scheme of amalgamation between CEPL and our Company, as approved by the
High Court of Gujarat pursuant to its order dated May 6, 2004
Selling Shareholders The selling shareholders, participating in the Offer for Sale, namely
Kamalkumar Rajendra Aggarwal and Naresh Vijaykumar Goyal
Shareholders The holders of the Equity Shares of our Company from time to time.
Stakeholders Relationship The stakeholders’ relationship committee of our Company, described in “Our
Committee Management-Corporate Governance” on page 173
Whole-time Directors The whole-time directors of our Company

Issue Related Terms

Term Description
Acknowledgement Slip The slip or document issued by a Designated Intermediary(ies) to a Bidder as
proof of registration of the Bid cum Application Form
“Allot”, “Allotment” or Unless the context otherwise requires, allotment or transfer, as the case may be
“Allotted” of Equity Shares offered pursuant to the Fresh Issue and transfer of the Offered
Sha res by the Selling Shareholders pursuant to the Offer for Sale to the
successful Bidders

2
 Term Description
Allotment Advice Note or advice or intimation of Allotment sent to the Bidders who have been or
are to be Allotted the Equity Shares after the Basis of Allotment has been
approved by the Designated Stock Exchange
Allottee A successful Bidder to whom the Equity Shares are Allotted
Ambit Ambit Capital Private Limited
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion in
accordance with the requirements specified in the SEBI ICDR Regulations and
the Red Herring Prospectus and who has Bid for an amount of at least ₹100
million
Anchor Investor Allocation The price at which Equity Shares will be allocated to Anchor Investors in terms
Price of this Red Herring Prospectus, which will be decided by our Company and the
Selling Shareholders, in consultation with the BRLMs during the Anchor
Investor Bidding Date
Anchor Investor Application The form used by an Anchor Investor to make a Bid in the Anchor Investor
Form Portion and which will be considered as an application for Allotment in terms
of this Red Herring Prospectus and Prospectus
Anchor Investor Bidding Date September 18, 2020, being one Working Day prior to the Bid/Issue Opening
Date, on which Bids by Anchor Investors shall be submitted, prior to and after
which the BRLMs will not accept any Bids from Anchor Investors, and
allocation to Anchor Investors shall be completed
Anchor Investor Issue Price Final price at which the Equity Shares will be issued and Allotted to Anchor
Investors in terms of this Red Herring Prospectus and the Prospectus, which
price will be equal to or higher than the Issue Price but not higher than the Cap
Price. The Anchor Investor Issue Price will be decided by our Company and the
Selling Shareholders, in consultation with the BRLMs
Anchor Investor Portion Up to 60% of the QIB Portion which may be allocated by our Company and the
Selling Shareholders in consultation with the BRLMs, to Anchor Investors on
a discretionary basis, in accordance with the SEBI ICDR Regulations
One-third of the Anchor Investor Portion shall be reserved for domestic Mutual
Funds, subject to valid Bids being received from domestic Mutual Funds at or
above the Anchor Investor Allocation Price
Anchor Investor Pay-In Date With respect to Anchor Investor(s), it shall be the Anchor Investor Bidding
Date, and in the event the Anchor Investor Allocation Price is lower than the
Issue Price, not later than two Working Days after the Bid/ Issue Closing Date
Application Supported by An application, whether physical or electronic, used by ASBA Bidders to make
Blocked Amount or ASBA a Bid and authorize an SCSB to block the Bid Amount in the specified bank
account maintained with such SCSB or to block the Bid Amount using the UPI
Mechanism
ASBA Account A bank account maintained with an SCSB which may be blocked by such SCSB
or the account of the RIBs blocked upon acceptance of UPI Mandate Request
by the RIBs using the UPI Mechanism to the extent of the Bid Amount of the
ASBA Bidder
ASBA Bidders All Bidders except Anchor Investors
ASBA Form An application form, whether physical or electronic, used by ASBA Bidders
which will be considered as the application for Allotment in terms of this Red
Herring Prospectus and the Prospectus
Banker(s) to the Issue Collectively, the Escrow Collection Bank(s), Refund Bank(s), Sponsor Bank
and Public Issue Account Bank(s)
Basis of Allotment Basis on which Equity Shares will be Allotted to successful Bidders under the
Issue, as described in “Issue Procedure” beginning on page 296
Bid An indication to make an offer during the Bid/Issue Period by an ASBA Bidder
pursuant to submission of the ASBA Form, or during the Anchor Investor
Bidding Date by an Anchor Investor pursuant to submission of the Anchor
Investor Application Form, to subscribe to or purchase the Equity Shares of our
Company at a price within the Price Band, including all revisions and
modifications thereto as permitted under the SEBI ICDR Regulations

The term “Bidding” shall be construed accordingly

3
 Term Description
Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form
and payable by the Bidder or blocked in the ASBA Account of the ASBA
Bidders, as the case maybe, upon submission of the Bid in the Issue, as
applicable
Bid cum Application Form The Anchor Investor Application Form or the ASBA Form, as the context
requires
Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter
Bid/Issue Closing Date Except in relation to any Bids received from the Anchor Investors, the dateafter
which the Designated Intermediaries will not accept any Bids, being September
23, 2020, which shall be published in the English editions of Financial Express
(a widely circulated English national daily newspaper), all editions of Jansatta
(a widely circulated Hindi national daily newspaper), and the Gujarati editions
of Financial Express (a widely circulated Gujarati daily newspaper). In case of
any revisions, the extended Bid/Issue Closing Date shall also be notified on the
websites and terminals of the Syndicate Members, as required under the SEBI
ICDR Regulations and communicated to the Designated Intermediaries and the
Sponsor Bank
Bid/Issue Opening Date Except in relation to any Bids received from the Anchor Investors, the date on
which the Designated Intermediaries shall start accepting Bids, being
September 21, 2020, which shall be published in the English editions of
Financial Express (a widely circulated English national daily newspaper), all
editions of Jansatta (a widely circulated Hindi national daily newspaper), and
the Gujarati editions of Financial Express (a widely circulated Gujarati daily
newspaper)
Bid/Issue Period Except in relation to Anchor Investors, the period between the Bid/ Issue
Opening Date and the Bid/Issue Closing Date, inclusive of both days, during
which prospective Bidders can submit their Bids, including any revisions
thereof, in accordance with the SEBI ICDR Regulations. Provided that the
Bidding shall be kept open for a minimum of three Working Days for all
categories of Bidders, other than Anchor Investors

Our Company and the Selling Shareholders may, in consultation with the
BRLMs, consider closing the Bid/Issue Period for the QIB Category one
Working Day prior to the Bid/Issue Closing Date in accordance with the SEBI
ICDR Regulations
Bidder Any prospective investor who makes a Bid pursuant to the terms of this Red
Herring Prospectus and the Bid cum Application Form and unless otherwise
stated or implied, includes an Anchor Investor
Bidding Centers Centers at which at the Designated Intermediaries shall accept the ASBA
Forms, i.e., Designated SCSB Branches for SCSBs, Specified Locations for
Syndicate, Broker Centres for Registered Brokers, Designated RTA Locations
for RTAs a nd Designated CDP Locations for CDPs
Book Building Process Book building process, as provided in Schedule XIII of the SEBI ICDR
Regulations, in terms of which the Issue is being made
Book Running Lead Managers The book running lead managers to the Issue namely, Intensive Fiscal Services
or BRLMs Private Limited and Ambit Capital Private Limited
Broker Centres Broker centres notified by the Stock Exchanges where Bidders can submit the
ASBA Forms to a Registered Broker
The details of such Broker Centres, along with the names and contact details of
the Registered Broker are available on the respective websites of the Stock
Exchanges (www.bseindia.com and www.nseindia.com)
“CAN” or “Confirmation of Notice or intimation of allocation of the Equity Shares sent to Anchor Investors,
Allocation Note” who have been allocated the Equity Shares, on/after the Anchor Investor
Bidding Date
Cap Price The higher end of the Price Band, above which the Issue Price and the Anchor
Investor Issue Price will not be finalised and above which no Bids will be
accepted
Client ID Client identification number maintained with one of the Depositories in relation
to demat account

4
 Term Description
“Collecting Depository A depository participant as defined under the Depositories Act, 1996, registered
Participant” or “CDP” with SEBI and who is eligible to procure Bids at the Designated CDP Locations
as per the list available on the websites of BSE and NSE
“Collecting Registrar and Registrar and share transfer agents registered with SEBI and eligible to procure
Share Transfer Agents” or Bids at the Designated RTA Locations in terms of the 2018 Circular on
“RTAs” Streamlining of Public Issues
Cut-off Price Issue Price, finalised by our Company and the Selling Shareh olders, in
consultation with the BRLMs, which shall be any price within the Price Band
Only Retail Individual Bidders are entitled to Bid at the Cut-off Price. QIBs and
Non-Institutional Bidders are not entitled to Bid at the Cut-off Price
Demographic Details Details of the Bidders including the Bidder’s address, name of the Bidder’s
father/husband, investor status, occupation and bank account details and UPI
ID, where applicable
Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms. The
details of such Designated CDP Locations, along with names and contact details
of the Collecting Depository Participants eligible to accept ASBA Forms are
available on the respective websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com)
Designated Date The date on which funds are transferred from the Escrow Account(s) and the
amounts blocked are transferred from the ASBA Accounts, as the case may be,
to the Public Issue Account(s) or the Refund Account(s), as appropriate, in
terms of this Red Herring Prospectus and the Prospectus, after the finalisation
of the Basis of Allotment in consultation with the Designated Stock Exchange,
following which the Board of Directors may Allot Equity Shares to successful
Bidders in the Issue
Designated Intermediaries Collectively, the Syndicate, sub-syndicate/agents, SCSBs, Registered Brokers,
CDPs and RTAs, who are authorized to collect ASBA Forms from the ASBA
Bidders, in relation to the Issue
Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to
RTAs
The details of such Designated RTA Locations, along with names and contact
details of the RTAs eligible to accept ASBA Forms are available on the
respective websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com)
Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms, a list of
which is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes or
at such other website as may be prescribed by SEBI from time to tim e
Designated Stock Exchange BSE Limited
“Draft Red Herring The draft red herring prospectus dated August 7, 2019, issued in accordance
Prospectus” or “DRHP” with the SEBI ICDR Regulations, which did not contain complete particulars
of the price at which the Equity Shares will be Allotted and the size of the Issue
including any addenda or corrigenda thereto
Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer
or invitation under the Issue and in relation to whom the ASBA Form and this
Red Herring Prospectus will constitute an invitation to subscribe to or to
purchase the Equity Shares
Escrow Account(s) Account(s) opened with the Escrow Collection Bank(s) and in whose favour
the Anchor Investors will transfer money through direct
credit/NEFT/RTGS/NACH in respect of the Bid Amount when submitting a
Bid
Escrow Collection Bank(s) The Bank(s) which are clearing members and registered with SEBI as bankers
to an issue and with whom the Escrow Account(s) will be opened, in this case
being HDFC Bank Limited

5
 Term Description
Escrow and Sponsor Bank Agreement dated August 29, 2020, as amended by the amendment agreement
Agreement dated September 9, 2020, entered into by our Company, the Selling
Shareholders, the Registrar to the Issue, the BRLMs and the Banker(s) to the
Issue for the appointment of the Sponsor Bank in accordance with the 2018
Circular on Streamlining of Public Issues, the collection of the Bid Amounts
from Anchor Investors, transfer of funds to the Public Issue Account(s) and
where applicable, refunds of the amounts collected from Bidders, on the terms
and conditions thereof
First Bidder Bidder whose name shall be mentioned in the Bid cum Application Form or the
Revision Form and in case of joint Bids, whose name shall also appear as the
first holder of the beneficiary account held in joint names
Floor Price The lower end of the Price Band, subject to any revision(s) thereto, at or above
which the Issue Price and the Anchor Investor Issue Price will be finalised and
below which no Bids will be accepted
Fresh Issue The fresh issue component of the Issue comprising of an issuance by our
Company of up to [●] Equity Shares at ₹ [●] per Equity Share (including a
premium of ₹ [●] per Equity Share) aggregating up to ₹ 1,650 million
General Information Document The General Information Document for investing in public issues prepared and
issued in accordance with the SEBI circular no.
SEBI/HO/CFD/DIL1/CIR/P/2020/37 dated March 17, 2020 suitably modified
and updated pursuant to, among others, the circular
(SEBI/HO/CFD/DIL2/CIR/P/2020/50) dated March 30, 2020 issued by SEBI
and as amended from time to time. The General Information Document shall be
available on the websites of the Stock Exchanges and the BRLMs
Intensive Intensive Fiscal Services Private Limited
Issue The initial public offering of the Equity Shares of our Company by way of the
Fresh Issue and the Offer for Sale
Issue Agreement The agreement dated August 7, 2019, as amended by the amendment agreement
dated September 9, 2020, amongst our Company, the Selling Shareholders and
the BRLMs, pursuant to which certain arrangements are agreed to in relation to
the Issue
Issue Price ₹ [●] per Equity Share, being the final price at which Equity Shares will be
Allotted to successful Bidders, other than Anchor Investors. Equity Shares will
be Allotted to Anchor Investors at the Anchor Investor Issue Price in terms of
this Red Herring Prospectus.

The Issue Price will be decided by our Company and the Selling Shareholders,
in consultation with the BRLMs on the Pricing Date, in accordance with the
Book Building Process and in terms of this Red Herring Prospectus
Mobile App(s) The mobile applications listed on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes
&intmId=40 or such other website as may be updated from time to time, which
may be used by RIBs to submit Bids using the UPI Mechanism
Monitoring Agency HDFC Bank Limited
Mutual Fund Portion 5% of the Net QIB Portion, or [●] Equity Shares, which shall be available for
allocation to Mutual Funds only on a proportionate basis, subject to valid Bids
being received at or above the Issue Price
Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of
India (Mutual Funds) Regulations, 1996
Net Proceeds The proceeds from the Fresh Issue less the Issue related expenses applicable to
the Fresh Issue
Net QIB Portion The portion of the QIB Portion less the number of Equity Shares Allotted to the
Anchor Investors
“Non-Institutional Bidder” or All Bidders that are not QIBs or Retail Individual Bidders and who have Bid
“NIBs” for Equity Shares for an amount more than ₹200,000 (but not including NRIs
other than Eligible NRIs)

6
 Term Description
Non-Institutional Portion The portion of the Issue being not less than 15% of the Issue, consisting of [●]
Equity Shares, which shall be available for allocation on a proportionate basis
to Non-Institutional Bidders, subject to valid Bids being received at or above
the Issue Price
Non-Resident A person resident outside India, as defined under FEMA and includes NRIs,
FPIs and FVCIs
Offered Shares The Equity Shares being offered by the Selling Shareholders as part of the Offer
for Sale comprising of an aggregate of up to 4,500,000 Equity Shares divided
into up to 2,250,000 Equity Shares by Kamalkumar Rajendra Aggarwal and up
to 2,250,000 Equity Shares by Naresh Vijaykumar Goyal
Offer for Sale The offer for sale component of the Issue, comprising of an offer for sale of up
to 4,500,000 Equity Shares at ₹ [●] per Equity Share aggregating to ₹ [●]
million comprising of up to 2,250,000 equity shares by Kamalkumar Rajendra
Aggarwal and up to 2,250,000 equity shares by Naresh Vijaykumar Goyal
Price Band Price band of a minimum price of ₹ [●] per Equity Share (Floor Price) and the
maximum price of ₹ [●] per Equity Share (Cap Price) including any revisions
thereof. The Price Band and the minimum Bid Lot for the Issue will be decided
by our Company and the Selling Shareholders in consultation with the BRLMs,
and will be advertised in the English editions of Financial Express (a widely
circulated English national daily newspaper), a ll editions of Jansatta (a widely
circulated Hindi national daily newspaper) and the Gujarati editions of
Financial Express (a widely circulated Gujarati daily newspaper, Gujarati also
being the regional language of Gujarat) at least two Working Days prior to the
Bid/Issue Opening Date, with the relevant financial ratios calculated at the
Floor Price and at the Cap Price, and shall be made available to the Stock
Exchanges for the purpose of uploading on their respective websites
Pricing Date The date on which our Company and the Selling Shareholders in consultation
with the BRLMs, will finalise the Issue Price
Prospectus The Prospectus to be filed with the RoC in accordance with the Companies Act,
2013, and the SEBI ICDR Regulations containing, inter alia, the Issue Price
that is determined at the end of the Book Building Process, the size of the Issue
and certain other information, including any addenda or corrigenda thereto
Public Issue Account(s) Bank account(s) to be opened with the Public Issue Account Bank(s) under
Section 40(3) of the Companies Act, 2013, to receive monies from the Escrow
Account(s) and ASBA Accounts on the Designated Date
Public Issue Account Bank(s) The banks with which the Public Issue Account(s) is opened for collection of
Bid Amounts from Escrow Account(s) and ASBA Accounts on the Designated
Date, in this case being HDFC Bank Limited
“QIB Ca tegory” or “QIB The portion of the Issue (including the Anchor Investor Portion) being not more
Portion” than 50% of the Issue, consisting of [●] Equity Shares which shall be Allotted
to QIBs (including Anchor Investors)
“Qualified Institutional Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI
Buyers” or “QIBs” or “QIB ICDR Regulations
Bidders”
“Red Herring Prospectus” or This red herring prospectus dated September 12, 2020 issued in accordance
“RHP” with Section 32 of the Companies Act, 2013 and the provisions of the SEBI
ICDR Regulations, which does not have complete particulars of the price at
which the Equity Shares will be offered and the size of the Issue including any
addenda or corrigenda thereto
The Bid/Issue Opening Date shall be at least three Working Days after the filing
of this Red Herring Prospectus with the RoC. This Red Herring Prospectus will
become the Prospectus upon filing with the RoC, after the Pricing Date
Refund Account(s) The account(s) opened with the Refund Bank(s), from which refunds, if any, of
the whole or part of the Bid Amount to the Anchor Investors shall be made
Refund Bank(s) The Banker(s) to the Issue with whom the Refund Account(s) will be opened,
in this case being HDFC Bank Limited
Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals,
other than the BRLMs and the Syndicate Members and eligible to procure Bids

7
 Term Description
Registrar Agreement The agreement dated July 31, 2019 as amended by the amendment agreement
dated September 9, 2020, among our Company, the Selling Shareholders and
the Registrar to the Issue in relation to the responsibilities and obligations of
the Registrar to the Issue pertaining to the Issue
“Registrar and Share Transfer Registrar and share transfer agents registered with SEBI and eligible to procure
Agents” or “RTAs” Bids at the Designated RTA Locations as per the lists available on the websites
of BSE and NSE
“Registrar to the Issue” or Link Intime India Private Limited
“Registrar”
“Retail Individual Bidder(s)” Individual Bidders, who have Bid for the Equity Shares for an amount not more
or “RIB(s)” than ₹200,000 in any of the bidding options in the Issue (including HUFs
applying through their Karta and Eligible NRIs and does not include NRIs other
than Eligible NRIs)
Retail Portion The portion of the Issue being not less than 35% of the Issue consisting of [●]
Equity Shares, which shall be available for allocation to Retail Individual
Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids
being received at or above the Issue Price
Revision Form Form used by the Bidders to modify the quantity of the Equity Shares or the
Bid Amount in any of their ASBA Form(s) or any previous Revision Form(s)
QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or
lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at
any stage. Retail Individual Bidders can revise their Bids during the Bid/Issue
Period and withdraw their Bids until Bid/Issue Closing Date
“Self-Certified Syndicate The banks registered with SEBI, offering services:(a) in relation to ASBA
Bank(s)” or “SCSB(s)” (other than using the UPI Mechanism), a list of which is available on the website
of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes
&intmId=34 and
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes
&intmId=35, as applicable or such other website as may be prescribed by SEBI
from time to time; and (b) in relation to ASBA (using the UPI Mechanism), a
list of which is available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes
&intmId=40, or such other website as may be prescribed by SEBI from time to
time
Share Escrow Agent Escrow agent appointed pursuant to the Share Escrow Agreement, namely, Link
Intime (India) Private Limited
Share Escrow Agreement Agreement dated August 29, 2020, as amended by the amendment agreement
dated September 9, 2020, entered into amongst the Selling Shareholders, our
Company and the Share Escrow Agent in connection with the transfer of Equity
Shares under the Issue by such Selling Shareholders and credit of such Equity
Shares to the demat account of the Allottees
Specified Locations Bidding centres where the Syndicate shall accept ASBA Forms from Bidders
Sponsor Bank The Banker to the Issue registered with SEBI, which has been appointed by our
Company to act as a conduit between the Stock Exchanges and the National
Payments Corporation of India in order to push the mandate collect requests
and / or payment instructions of the RIBs, using the UPI Mechanism and carry
out any other responsibilities in terms of the 2018 Circular on Streamlining of
Public Issues, in this case being HDFC Bank Limited
Stock Exchanges Collectively, BSE Limited and National Stock Exchange of India Limited.
Syndicate Agreement Agreement dated August 29, 2020 as amended by the amendment agreement
dated September 9, 2020, entered into among our Company, the Selling
Shareholders, the BRLMs and the Syndicate Members in relation to collection
of Bid cum Application Forms by Syndicate
Syndicate Members Intermediaries registered with SEBI who are permitted to accept bids,
applications and place order with respect to the Issue and carry out activities as
an underwriter, namely, Intensive Fiscal Services Private Limited and Ambit
Capital Private Limited. The term “Syndicate” shall be construed accordingly

8
 Term Description
Systemically Important Non- Systemically important non-banking financial company as defined under
Banking Financial Company Regulation 2(1)(iii) of the SEBI ICDR Regulations
or NBFC-SI
Underwriters [●]
Underwriting Agreement The agreement dated [●], among the Underwriters, our Company and the
Selling Shareholders to be entered into on or after the Pricing Date, but prior to
filing of the Prospectus
UPI ID ID created on Unified Payment Interface (UPI) for single-window mobile
payment system developed by the NPCI
UPI Mandate Request A request (intimating the RIB by way of a notification on the UPI Mobile App
and by way of a SMS directing the RIB to such UPI Mobile App) to the RIB
initiated by the Sponsor Bank to authorise blocking of funds in the relevant
ASBA Account through the UPI Mobile App equivalent to the Bid Amount and
subsequent debit of funds in case of Allotment
UPI Mechanism The mechanism that may be used by a RIB to make a Bid in the Issue in
accordance with the 2018 Circular on Streamlining of Public Issues
Wilful Defaulter Wilful Defaulter as defined under Regulation 2(1)(III) of the SEBI ICDR
Regulations
Working Day All days on which commercial banks in Mumbai are open for business;
provided however, with reference to (a) announcement of Price Band; and (b)
Bid/Issue Period, “Working Day” shall mean all days, excluding all Saturdays,
Sundays and public holidays, on which commercial banks in Mumbai are open
for business; (c) the time period between the Bid/Issue Closing Date and the
listing of the Equity Shares on the Stock Exchanges, “Working Day” shall mean
all trading days of Stock Exchanges, excluding Sundays and bank holidays, as
per the circulars issued by SEBI
2018 Circular on Streamlining The SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November
of Public Issues 1, 2018, SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3,
2019, SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28,
2019, SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26,
2019, SEBI circular no. SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated
November 8, 2019, SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 2020
and any subsequent circulars or notifications issued by SEBI in this regard

Conventional and General Terms and Abbreviations

Term Description
AIF(s) Alternative Investment Funds
Ind AS 24 Indian Accounting Standard 24 issued by the Institute of Chartered Accountants
of India
BSE BSE Limited
CAGR Compounded Annual Growth Rate
CDSL Central Depository Services (India) Limited
CIN Corporate Identity Number
Companies Act, 1956 The erstwhile Companies Act, 1956 along with the relevant rules made
thereunder
Companies Act/ Companies Companies Act, 2013, along with the relevant rules, regulations, clarifications,
Act, 2013 circulars and notifications issued thereunder, as amended
Competition Act Competition Act, 2002
Consolidated FDI Policy The consolidated FDI Policy, issued by the Department of Industrial Policy and
Promotion, Ministry of Commerce and Industry, Government of India, and any
modifications thereto or substitutions thereof, issued from time to time
CrPC The Code of Criminal Procedure, 1973
CSR Corporate Social Responsibility
Deemed Exports Deemed exports refer to those transactions (as specified in the Foreign Trade
Policy April 1, 2015- March 31, 2020 issued by the Department of Commerce,
Ministry of Commerce and Industry, Government of India) in which the good
supplied do not leave the country and the payment of such supplies is received

9
 Term Description
either in Indian rupees or in foreign exchange
Depositories NSDL and CDSL, collectively
Depositories Act The Depositories Act, 1996
DIN Director Identification Number
DIPP The Department for Promotion of Industry and Internal Trade (earlier known
as Department of Industrial Policy and Promotion)
DP ID Depository Participant’s identity number
EBITDA Earnings Before Interest, Tax, Depreciation and Amortization
EPA Environment Protection Act, 1986
EPF Act Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
EPS Earnings per share
ESI Act Employees’ State Insurance Act, 1948
ESIC Employees’ State Insurance Corporation
ESOP Employee stock option plan
Euro Euro, the official currency of the European Union
Explosives Act Explosives Act, 1884
FCNR Account Foreign Currency Non Resident (Bank) account established in accordance with
the FEMA
FDI Foreign direct investment
FEMA The Foreign Exchange Management Act, 1999 read with rules and regulations
thereunder
FEMA Rules Foreign Exchange Management (Non-debt Instruments) Rules, 2019
Financial Year/ Fiscal/ Fiscal The period of 12 months commencing on April 1 of the immediately preceding
Year calendar year and ending on March 31 of that particular calendar year
FPIs Foreign Portfolio Investors, as defined under SEBI FPI Regulations
FVCI Foreign Venture Capital Investors (as defined under the Securities and
Exchange Board of India (Foreign Venture Capital Investors) Regulations,
2000) registered with SEBI
GAAR General Anti-Avoidance Rules
GDP Gross Domestic Product
GoI The Government of India
GST Goods and services tax
HUF(s) Hindu Undivided Family(ies)
IAS Rules Companies (Indian Accounting Standards) Rules, 2015
ICAI Institute of Chartered Accountants of India
ICDS Income Computation and Disclosure Standards
IFRS International Financial Reporting Standards of the International Accounting
Standards Board
IFSC Indian Financial System Code
Income Tax Act Income Tax Act, 1961
Ind AS The Indian Accounting Standards referred to in the Companies (Indian
Accounting Standard) Rules, 2015
Indian GAAP Generally Accepted Accounting Principles in India
INR or Rupee or ₹or Rs. Indian Rupee, the official currency of the Republic of India
IT Information Technology
KYC Know Your Customer
MAT Minimum Alternate Tax
KL Kilolitre
MCA The Ministry of Corporate Affairs, GoI
Mn Million
Mutual Funds Mutual funds registered with the SEBI under the Securities and Exchange Board
of India (Mutual Funds) Regulations, 1996
MT Metric Tonne
Negotiable Instruments Act The Negotiable Instruments Act, 1881
NAV Net Asset Value
NEFT National Electronic Fund Transfer
NR/ Non-resident A person resident outside India, as defined under the FEMA, which includes

10
 Term Description
an NRI
NRI Non-Resident Indian, as defined under the FEMA Rules
NSDL National Securities Depository Limited
NSE The National Stock Exchange of India Limited
OCB Overseas Corporate Body
P/E Ratio Price/Earnings Ratio
PAN Permanent account number
PAT Profit after tax
Payment of Gratuity Act Payment of Gratuity Act, 1972
PRCI Public Relations Council of India
RBI The Reserve Bank of India
Regulation S Regulation S under the U.S. Securities Act
RTGS Real Time Gross Settlement

SCRA Securities Contract (Regulation) Act, 1956

SCRR The Securities Contracts (Regulation) Rules, 1957
SEBI The Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act The Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations The Securities and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012
SEBI FPI Regulations The Securities and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2019
SEBI FVCI Regulations The Securities and Exchange Board of India (Foreign Venture Capital
Investors) Regulations, 2000
SEBI ICDR Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018
SEBI Insider Trading The Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations Regulations, 2015
SEBI Listing Regulations The Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015
STT Securities Transaction Tax.
Takeover Regulations The Securities and Exchange Board of India (Substantial Acquisition of Shares
and Takeovers) Regulations, 2011
Trademarks Act Trademarks Act, 1999
US$/ USD/ US Dollar United States Dollar, the official currency of the United States of America
United States/USA/ U.S./ US United States of America and its territories and possessions, including any state
of the United States of America, Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, Wake Island and the Northern Mariana Islands and the
District of Columbia
U.S. GAAP Generally Accepted Accounting Principles in the United State of America
U.S. Securities Act U.S. Securities Act of 1933
VAT Value Added Tax
VCFs Venture capital funds as defined in and registered with the SEBI under the
Securities and Exchange Board of India (Venture Capital Fund) Regulations,
1996 or the Securities and Exchange Board of India (Alternative Investment
Funds) Regulations, 2012, as the case may be

Technical/ Industry Related Terms

Term Description
ABC Abacavir
AIDS Acquired Immune Deficiency Syndrome
Albemarle Albemarle Corporation
Anshul Specialty Anshul Specialty Molecules Private Limited
API Active pharmaceutical ingredient
ART Antiretroviral therapy
ARVs Antiretrovirals

11
 Term Description
Atul Atul Ltd.
AZT Zidovudine
Bluestar Jiangxi Bluestar Xinghuo Silicones Co., Ltd.
Bn Billion
bNAbs Broadly neutralizing antibodies
CaBr2 Calcium Bromide
CHAI Clinton Health Access Initiative
Chemcon Chemcon Speciality Chemicals Limited
CMIC Chloromethyl Isopropyl Carbonate
Dow Dow Chemical Company
DRV Darunavir
DTG Dolutegravir
EFV Efavirenz
EU Europe
Evonik Evonik Industries AG
FOB Free on Board (or Freight on Board)
FTC Emtricitabine
GA Generic Accessible
HBV Hepatitis B Virus
HBR Hydrobromic Acid
HIV Human Immunodeficiency Virus
HMDS Hexamethyldisilazane / Hexamethyldisilane
HMDSO/HMDO Hexamethyldisiloxane
Huangshi Fuertai Huangshi Fuertai Pharmaceutical Tech Co., Ltd.
ICL Israel Chemicals Ltd.
Inner Mongolia Saintchem Inner Mongolia Saintchem Chemicals Co., Ltd.
INSTI Integrase Strand Transfer Inhibitor
IPA Isopropyl Alcohol
KT Kiloton
LANXESS (Chemtura), LANXESS AG
Germany
LANXESS (Chemtura), USA LANXESS Corporation
lb./gal pound / US Gallon
LMIC Low-and Middle-Income Country
LPV Lopinavir
MCF Methyl Chloroformate
MEA Middle East and Africa
Mn Million
Momentive Momentive Performance Materials Inc.
MPa Mega Pascal
MT Metric Ton
NA North America
NaBr Sodium Bromide
NRTI Nucleoside Reverse Transcriptase Inhibitor
NVP Nevirapine
Paushak Paushak Limited
Pingyuan Xinda Pingyuan Xinda Chemical Co., Ltd.
PPC (Weylchem) Potasse et Produits Chimiques SAS
PrEP Pre-Exposure Prophylaxis
RoW Rest of the World
RTV Ritonavir
Shandong Tianan Shandong Tianan Chemicals Co., Ltd
Shanghai Twisun Shanghai Twisun Bio-pharm Co., Ltd.
Shin-Etsu Shin-Etsu Chemical Co., Ltd.
Sichuan Jiabi Sichuan Jiabi New Material Technology Co., Ltd.
TAF Tenofovir Alafenamide Fumarate
TDF Tenofovir Disoproxil Fumarate

12
 Term Description
TETRA TETRA Technologies, Inc.
TLD TDF+3TC+DTG
TMCS Trimethylchlorosilane
UNAIDS Joint United Nations Programme on HIV/AIDS
US FDA United States Food and Drug Administration
USA The United States of America
Wacker Wacker Chemie AG
WHO World Health Organization
Xinyaqiang Silicon Xinyaqiang Silicon Chemistry Limited Liability Company
XTC 3TC or FTC
ZDV Zidovudine
Zhejiang Sorbo Zhejiang Sorbo Chemical Co., Ltd.
ZnBr2 Zinc Bromide
4 CBC 4-chlorobutyryl chloride
2,5 DHT 2,5-Dihydroxy-1,4-dithiane

The words and expressions used but not defined in this Red Herring Prospectus will have the same meaning as
assigned to such terms under the Companies Act (together with the rules framed thereunder), the Securities and
Exchange Board of India Act, 1992 (together with the regulations made thereunder including the SEBI ICDR
Regulations, SEBI Listing Regulations and the SCRA) and the Depositories Act.

13
 CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND
CURRENCY OF PRESENTATION

Certain Conventions

All references in this Red Herring Prospectus to “India” are to the Republic of India and its territories and
possessions and all references herein to the “Government”, “Indian Government”, “GoI”, “Central Government”
or the “State Government” are to the Government of India, central or state, as applicable.

All references herein to the “US”, the “U.S.” or the “United States” are to the United States of America and its
territories and possessions, including any state of the United States of America, Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands and the District of Columbia.

Page Numbers

Unless indicated otherwise, all references to page numbers in this Red Herring Prospectus are to page numbers of
this Red Herring Prospectus.

Financial Data

Unless stated or the context requires otherwise, the financial information in this Red Herring Prospectus is derived
from our Restated Financial Statements.

Our Restated Financial Statements have been prepared in terms of the requirements of Section 26 of the
Companies Act, the SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses
(Revised 2019) issued by the ICAI, as amended from time to time.

In this Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts
listed are due to rounding off. All figures in decimals have been rounded off to the second decimal and all
percentage figures have been rounded off to two decimal places. In certain instances, (i) the sum or percentage
change of such numbers may not conform exactly to the total figure given; and (ii) the sum of the numbers in a
column or row in certain tables may not conform exactly to the total figure given for that column or row.

Further, any figures sourced from third party industry sources may be rounded off to other than to the second
decimal to conform to their respective sources.

Our Company’s financial year commences on April 1 and ends on March 31 of the next year. Accordingly, all
references to a particular financial year, unless stated otherwise, are to the 12 months period ended on March 31
of that year. Unless stated otherwise, or the context requires otherwise, all references to a “year” in this Red
Herring Prospectus are to a calendar year.

Industry and Market Data

Unless stated otherwise, industry and market data used throughout this Red Herring Prospectus has been obtained
from various government publications and industry sources, such as a report dated June 19, 2019, as updated by
way of reports dated February 25, 2020 and August 24, 2020 and titled “Independent Market Report on Global
Pharmaceuticals Intermediates and Oilfield Chemicals Market” (the “Frost & Sullivan Report”) that has been
prepared by Frost & Sullivan. Industry publications generally state that the information contained in such
publications has been obtained from sources generally believed to be reliable, but their accuracy, adequacy,
completeness or underlying assumptions are not guaranteed and their reliability cannot be assured. Accordingly,
no investment decisions should be made based on such information. Industry sources and publications are also
prepared based on information as of specific dates and may no longer be current or reflect current trends.

Although we believe that the industry and market data used in this Red Herring Prospectus is reliable, it has not
been independently verified by us, the Selling Shareholders, the BRLMs, or any of our or their respective affiliates
or advisors, and none of these parties makes any representation as to the accuracy of this information. The data
used in these sources may have been reclassified by us for the purposes of presentation and may also not be
comparable. Industry sources and publications may also base their information on estimates and assumptions that
may prove to be incorrect. The extent to which the industry and market data presented in this Red Herring
Prospectus is meaningful and depends upon the reader’s familiarity with, and understanding of, the methodologies

14
used in compiling such information. There are no standard data gathering methodologies in the industry in which
our Company conducts business and methodologies and assumptions may vary widely among different market
and industry sources. Such information involves risks, uncertainties and numerous assumptions and is subject to
change based on various factors, including those discussed in “Risk Factors—We have commissioned an industry
report from Frost & Sullivan, which has been used for industry related data in this Red Herring Prospectus and
such data has not been independently verified by us.” on page 41.

Certain measures included in this Red Herring Prospectus, for instance EBITDA and EBITDA margin (the “Non-
GAAP measures”), presented in this Red Herring Prospectus are supplemental measures of our performance and
liquidity that are not required by, or presented in accordance with, Ind AS, IFRS or US GAAP. Furthermore, these
Non-GAAP measures, are not a measurement of our financial performance or liquidity under Indian GAAP, IFRS
or US GAAP and should not be considered as an alternative to net profit/loss, revenue from operations or any
other performance measures derived in accordance with Ind AS, IFRS or US GAAP or as an alternative to cash
flow from operations or as a measure of our liquidity. In addition, Non -GAAP measures used are not a
standardised term, hence a direct comparison of Non-GAAP measures between companies may not be possible.
Other companies may calculate Non-GAAP measures differently from us, limiting its usefulness as a comparative
measure.

In accordance with the SEBI ICDR Regulations, the section “Basis for the Issue Price” on page 86 includes
information relating to our peer group companies. Such information has been derived from publicly available
sources, and neither we nor the BRLMs have independently verified such information.

Unless the context otherwise indicates, any percentage amounts as set forth in “Risk Factors”, “Our Business”
and “Management’s Discussion and Analysis of Financial Conditional and Results of Operations” beginning on
pages 23, 136 and 243 respectively, and elsewhere in this Red Herring Prospectus have been calculated on the
basis of our Restated Financial Statements.

Currency and Units of Presentation

All references to “Rupees” or “ ₹” or “Rs.” are to Indian Rupees, the official currency of the Republic of India.

All references to “U.S.$”, “U.S. Dollar”, “USD” or “U.S. Dollars” are to United States Dollars, the official
currency of the United States of America. All references to “EUR” or “€” are to Euro, the official currency of the
European Union. In this Red Herring Prospectus, our Company has presented certain numerical information. All
figures have been expressed in millions. One million represents ‘10 lakhs’ or 1,000,000. However, where any
figures that may have been sourced from third-party industry sources are expressed in denominations other than
millions, such figures appear in this Red Herring Prospectus expressed in such denominations as provided in their
respective sources.

Time

All references to time in this Red Herring Prospectus are to Indian Standard Time.

Exchange Rates

This Red Herring Prospectus may contain conversions of certain other currency amounts into Indian Rupees that
have been presented solely to comply with the requirements of the SEBI ICDR Regulations. These conversions
should not be construed as a representation that such currency amounts could have been, or can be converted into
Indian Rupees, at any particular rate, or at all.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between
the Rupee and other foreign currencies:
(in ₹)
Exchange Rate as on*
Currency
March 31, 2020 March 31, 2019 March 31, 2018
1 USD 75.39 69.17 65.04
1 EUR 83.05 77.70 80.62
Source: RBI Reference Rate www.fbil.org.in
*In case March 31 of any of the respective years is a public holiday, the previous working day has been considered

15
 FORWARD-LOOKING STATEMENTS

This Red Herring Prospectus contains certain statements which are not statements of historical fact and may be
described as “forward-looking statements”. These forward looking statements include statements which can
generally be identified by words or phrases such as “aim”, “anticipate”, “are likely”, “believe”, “continue”, “can”,
“could”, “expect”, “estimate”, “intend”, “may”, “likely”, “objective”, “plan”, “propose”, “will continue”, “seek
to”, “will achieve”, “will likely”, “will pursue” or other words or phrases of similar import. Similarly, statements
that describe the strategies, objectives, plans or goals of our Company are also forward-looking statements. All
statements regarding our expected financial conditions, results of operations, business plans and prospects are
forward-looking statements. These forward-looking statements include statements as to our business strategy,
plans, revenue and profitability (including, without limitation, any financial or operating projections or forecasts)
and other matters discussed in this Red Herring Prospectus that are not historical facts. However, these are not the
exclusive means of identifying forward-looking statements.

These forward-looking statements are based on our current plans, estimates and expectations and actual results
may differ materially from those suggested by such forward-looking statements. All forward-looking statements
are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from
those contemplated by the relevant forward-looking statement. This may be due to risks or uncertainties associated
with our expectations with respect to, but not limited to, regulatory changes pertaining to the industries we cater
and our ability to respond to them, our ability to successfully implement our strategies, our growth and expansion,
technological changes, our exposure to market risks, general economic and political conditions in India, which
have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation,
deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices,
the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes,
changes in competition in our industry and incidence of any natural calamities and/or acts of violence.

Certain important factors that could cause actual results to differ materially from our expectations include, but are
not limited to, the following:

• An adverse determination in an ongoing SEBI settlement application which has been filed by our Promoters
and certain members of our Promoter Group with respect to certain past non compliances in relation to their
holding in a listed company, which was a member of our Promoter Group;

• The recent outbreak of the novel coronavirus;

• A downturn in the utility of our products to the industries we cater to;

• A reduction in the demand of our products and/or competing products gaining wider market acceptance;

• Loss of one or more of our key customers and/or suppliers;

• An increase in the productivity and overall efficiency of our competitors;

• An adverse change in the regulations governing our products and the products of our customers;

• A significant fall in the global price of our products and/or a significant rise in the global price of our raw
materials; and

• A decrease in the demand for the products of our customers in which our Pharmaceutical Chemicals are used
and/or a downfall in the level of oil and gas exploration, development and production activities.

For a further discussion of factors that could cause our actual results to differ, see “Risk Factors”, “Our Business”
and “Management’s Discussion and Analysis of Financial Position and Results of Operations” on pages 23, 136
and 243 respectively. By their nature, certain market risk disclosures are only estimates and could be materially
different from what actually occurs in the future. As a result, actual future gains or losses could be materially be
different from those that have been estimated. Forward-looking statements reflect our current views as of the date
of this Red Herring Prospectus and are not a guarantee of future performance. These statements are based on our
management’s belief and assumptions, which in turn are based on currently available information. Although we
believe that the assumptions on which such statements are based are reasonable, any such assumptions as well as
statements based on them could prove to be inaccurate.

16
Neither our Company, nor the Selling Shareholders, nor the Syndicate, nor any of their respective affiliates have
any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof
or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In
accordance with the SEBI ICDR Regulations, our Company, the Selling Shareholders and the BRLMs will ensure
that investors in India are informed of material developments pertaining to our Company and the Equity Shares
forming part of the Offer for Sale from the date of this Red Herring Prospectus until the time of the grant of listing
and trading permission by the Stock Exchanges. The Selling Shareholders shall, severally and not jointly, ensure
that investors are informed of material developments in relation to statements and undertakings specifically made
or confirmed by such Selling Shareholder in this Red Herring Prospectus and the Prospectus until the grant of
listing and trading permission by the Stock Exchanges.

17
 SECTION II - SUMMARY OF THE OFFER DOCUMENT

This section is a general summary of certain disclosures included in this Red Herring Prospectus and is not
exhaustive, nor does it purport to contain a summary of all the disclosures in this Red Herring Prospectus or all
details relevant to prospective investors. This summary should be read in conjunction with, and is qualified in its
entirety by, the more detailed information appearing elsewhere in this Red Herring Prospectus, including the
sections titled “Risk Factors”, “Our Business”, “Industry Overview”, “Capital Structure”, “The Issue” and
“Outstanding Litigation and Other Material Developments” beginning on pages 23, 136, 92, 65, 51 and 275
respectively of this Red Herring Prospectus.

Primary business of our Company

We are a manufacturer of specialized chemicals, engaged in the manufacturing and sale of the Pharmaceutical
Chemicals and the Oilwell Completion Chemicals. We supply our products to domestic customers and as well as
customers outside India. We were the only manufacturer of HMDS in India and were the third largest
manufacturer of HMDS worldwide in terms of production in the calendar year 2019 (source: Frost & Sullivan
Report). We were the largest manufacturer of CMIC in India and the second largest manufacturer of CMIC
worldwide, in terms of production and capacity in calendar year 2019 (source: Frost & Sullivan Report).

Primary business of the industry in which our Company operates

Pharmaceutical intermediates are the chemical compounds that form the building blocks used in production of
API. The global market of chemicals used as pharma intermediates was valued at about USD 27 Bn in 2019 and
is expected to grow at a CAGR of 4% between 2020 and 2023. (source: Frost & Sullivan Report).

The global market of Drilling and Completion Fluids is growing rapidly due to increased oil & gas exploration
activities around the world. The global clear brine fluids market was valued at about USD 860 Mn in 2019 and is
anticipated to grow at a CAGR of slightly above 5% between 2020 and 2023. (source: Frost & Sullivan Report).

Name of Promoters

As on the date of this Red Herring Prospectus, Kamalkumar Rajendra Aggarwal, Navdeep Naresh Goyal and
Shubharangana Goyal are our Promoters. For further details, see “Our Promoters and Promoter Group” at page
181.

The Issue

Issue1 Up to [●] Equity Shares for cash at price of ₹ [●] per Equity Share (including a
premium of [●] per Equity Share), aggregating up to [●] million
of which
Fresh Issue1 [●] Equity Shares aggregating up to ₹1,650 million
Offer for Sale 2 2,250,000 Equity Shares each by Kamalkumar Rajendra Aggarwal and Naresh
Vijaykumar Goyal
1
The Issue has been authorized by a resolution of our Board dated June 14, 2019 and the Fresh Issue has been authorized by
a special resolution of our Shareholders, dated June 14, 2019. The final size of the Offer for Sale was noted by our Board
at its meeting held on September 9, 2020.
2
The Equity Shares being offered by the Selling Shareholders a re eligible for being offered for sale pursuant to the Offer for
Sale in terms of the SEBI ICDR Regulations. Kamalkumar Rajendra Aggarwal has consented to participate in the Offer for
Sale pursuant to his consent letter dated July 18, 2019, as superseded by his consent letter dated September 9, 2020 and has
consented to offer up to 2,250,000 Equity Shares in the Offer for Sale. Naresh Vijaykumar Goyal has consented to participate
in the Offer for Sale pursuant to his consent letter dated July 18, 2019, as superseded by his consent letter dated September
9, 2020 and has consented to offer up to 2,250,000 Equity Shares in the Offer for Sale.

For further details, see “The Issue” and “Issue Structure” beginning on pages 51 and 292, respectively.

Objects of the Issue

Our Company proposes to utilise the Net Proceeds towards funding the following objects:

18
 (in ₹ million)
Objects Amount
Capital expenditure towards expansion of the Manufacturing Facility 410.33
To meet working capital requirements 900.00
General corporate purposes* [●]
Net Proceeds* [●]
* To be finalised upon determination of the Issue Price. The amount utilised for general corporate purposes shall not exceed
25% of the Gross Proceeds of the Fresh Issue.

Aggregate pre-Issue Shareholding of our Promoters, the members of our Promoter Group (other than our
Promoters) and the Selling Shareholders

Sr. % of total pre-Issue paid

Name of Shareholder No. of Equity Shares
No. up Equity Share capital
Promoters
1. Kamalkumar Rajendra Aggarwal 11,927,080 37.53
2. Navdeep Naresh Goyal and Shubharangana Goyal 6,233,500 19.62
(joint holding)*
3. Navdeep Naresh Goyal 2,374,666 7.47
4. Shubharangana Goyal 1,978,888 6.23
Total (A) 22,514,134 70.85
Other members of the Promoter Group
1. Naresh Vijaykumar Goyal 5,285,826 16.63
2. Rajveer Aggarwal 2,532,800 7.97
3. Minal Kamal Aggarwal 1,440,000 4.53
4. Parul Gupta 5,000 0.02
Total (B) 9,263,626 29.15
Total of Promoter and Promoter Group (A) + (B) 31,777,760 100.00
Selling Shareholders
1. Kamalkumar Rajendra Aggarwal 11,927,080 37.53
2. Naresh Vijaykumar Goyal 5,285,826 16.63
Total 17,212,906 54.16
*Navdeep Naresh Goyal is the first holder and Shubharangana Goyal the second holder, with respect to such Equity Shares.

For further details, see “Capital Structure” at page 65.

Summary of Selected Financial Information

The following information has been derived from our Restated Financial Statements as at the end of and for the
last three Fiscals:
(₹ in million, except per share data)
As at March 31, 2020 As at March 31, As at March 31, 2018
and for the Fiscal 2019 and for the and for the Fiscal
Particulars
ended March 31, Fiscal ended ended March 31,
2020 March 31, 2019 2018
Share capital 317.78 317.78 79.44
Net worth* 1,427.10 957.74 536.22
Revenue from operations 2,620.52 3,033.41 1,576.42
Profit after tax 488.53 430.41 263.81
Earnings per Equity Share (basic 13.54 8.30 $
15.37
and diluted)
Net asset value (per Equity Share) 44.91 30.14 16.87 **$
Total borrowings@ 445.11 331.09 168.92
*'Net worth' means the aggregate value of the paid -up share capital of our Company and all reserves created out of profits
and securities premium account, net of pre-issue expenses, as per the restated statement of assets and liabilities of our
Company in the Restated Financial Statements.
** Net asset value (per Equity Share) means Net Worth as restated divided by Number of equity shares outstanding at the end
of the year after giving retrospective effect of bonus issue of Equity Shares on November 3, 201 8.
$ For the purposes of calculation of net asset value per share and earnings per share, the per share data, has been adjusted
retrospectively to give effect to the bonus issuance of Equity Shares on November 3, 2018.

19
@ Total borrowings consist of Non-Current borrowings (including current maturities of long term borrowings) and Current
borrowings as per our Restated Financial Statements.

For further details, see “Restated Financial Statements” beginning on page 194.

Auditor Qualifications or Adverse Remarks

There have been no qualifications by our Auditors which have not been given effect to, in the Restated Financial
Statements.

Outstanding Litigation

A summary of outstanding litigation proceedings as on the date of this Red Herring Prospectus as disclo sed in the
section titled “Outstanding Litigation and Other Material Developments” in terms of the SEBI ICDR Regulations
and the Materiality Policy is provided below:
(in ₹ million)
Type of Proceedings Number of cases Amount
Cases against our Company
Claims related to direct and indirect taxes 2 2.69
Total 2 2.69
Cases against our Promoters
Statutory/regulatory proceedings 1* -
Total 1* -
Cases against our Directors
Statutory/regulatory proceedings 1* -
Total 1* -
*Pertains to one settlement application filed with SEBI by our Promoters, Kamalkumar Rajendra Aggarwal, Shubharangana Goyal and
Navdeep Naresh Goyal and certain members of our Promoter Group, namely, Naresh Vijaykumar Goyal and Minal Kamal Aggarwal.
Kamalkumar Rajendra Aggarwal is also our Managing Director and Chairman.

For further details of the outstanding litigation proceedings, see “Outstanding Litigation and Other Material
Developments” beginning on page 275.

Risk Factors
Investors should see “Risk Factors” beginning on page 23 to have an informed view before making an investment
decision.

Contingent Liabilities and Capital Commitments

A summary of our contingent liabilities and capital commitments as on March 31, 2020, is set out below:
(in ₹ million)
Particulars Amount demanded/disputed
Claims against the Company/ disputed demands not acknowledged as debt:
(i) Excise 0.35
(ii) GST 2.34
Letters of credit issued for the purchase of raw materials 50.03
Capital Commitments 6.13

For further details, see “Restated Financial Statements-Annexure VI- Note 30: Commitments and Contingent
Liabilities” at page 225.

Related Party Transactions

We have entered into related party transactions with related parties. A summary of the related party transactions
entered into by our Company during Fiscal 2020, Fiscal 2019 and Fiscal 2018, is detailed below:

20
 (in ₹ million)
Nature of transaction Fiscal 2020 Fiscal 2019 Fiscal 2018
Remuneration to key management personnel 56.53 171.43 127.91
Director Sitting Fees 0.55 0.00 0.00
Rent to key management personnel 0.18 0.18 0.19
Unsecured loan repaid to Directors 17.45 0.00 0.00
Unsecured loan repaid to relative of key management 0.00 0.00
19.65
personnel
Unsecured loan from Directors 0.00 0.00 17.45
Unsecured loan from relative of key management 10.00 9.65
0.00
personnel
Rent to Relative of key management personnel 0.54 0.54 0.54
Purchase of Consumable & Stores 1.45 0.91 1.23
Purchase of Fixed Assets 9.74 9.46 7.54
Purchase of Raw Material 0.61 1.13 4.74
Repairs & Maintenance of Plant & Machinery 1.50 0.00 0.00
Job work Charges Paid 16.51 80.77 7.08
Lifting Charges Paid 0.41 0.83 1.18
Sale of Fixed Assets 7.41 2.81 0.00
Sales commission Received 1.43 1.08 0.49
Revenue from Operation 3.18 2.75 0.54

For further details, see “Restated Financial Statements- Annexure VI - Note 35: Related Party Disclosures” at
page 229.

Financing Arrangements

There have been no financing arrangements whereby our Promoters, members of the Promoter Group, our
Directors and their relatives have financed the purchase by any other person of securities of our Company during
a period of six months immediately preceding the date of this Red Herring Prospectus.

Weighted average price at which the equity shares of our Company were acquired by each of our Promoters
and the Selling Shareholders, in the one year preceding the date of this Red Herring Prospectus

Neither our Promoters nor any of the Selling Shareholders acquired any Equity Shares in the one year preceding
the date of this Red Herring Prospectus.

Average Cost of Acquisition

The average cost of acquisition of Equity Shares by our Promoters and Selling Shareholders as at the date of this
Red Herring Prospectus is:

Average cost of acquisition

Name of the Promoter/ Selling Shareholders Number of Equity Shares
per Equity Share (in ₹)#
Kamalkumar Rajendra Aggarwal 11,927,080 0.33
Navdeep Naresh Goyal and Shubharangana 6,233,500 -
Goyal (joint holding)*
Navdeep Naresh Goyal* 2,374,666 -
Shubharangana Goyal* 1,978,888 -
Naresh Vijaykumar Goyal 5,285,826 0.57
#As certified by M/s Shah Mehta and Bakshi, Chartered Accountants, by way of their certificate dated August 6, 2019.
* All the Equity Shares were acquired pursuant to either gift, transfer or by way of a bonus issue.

For further details, of the average cost of acquisition our Promoters, see “Capital Structure-Build-up of our
Promoters’ shareholding in our Company” at page 70.

Details of pre-Issue Placement

Our Company does not contemplate any issuance or placement of Equity Shares from the date of this Red Herring
Prospectus till the listing of the Equity Shares.

21
Issue of Equity Shares for consideration other than cash in the last one year

Our Company has not issued any Equity Shares for consideration other than cash in the one year preceding the
date of this Red Herring Prospectus.

Split or Consolidation of Equity Shares in the last one year

Our Company has not undertaken a split or consolidation of the Equity Shares in the one year preceding the date
of this Red Herring Prospectus.

22
 SECTION III - RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all of the information
in this Red Herring Prospectus, including the risks and uncertainties described below, before making an
investment in the Equity Shares. The risks and uncertainties described in this section are not the only risks that
we currently face. Additional risks and uncertainties not presently known to us or that we currently believe to be
immaterial may also have an adverse impact on our business, results of operations, cash flows and financial
condition. Further, the financial and other related implications of the risks described in this section, have been
disclosed to the extent quantifiable as on the date of this Red Herring Prospectus.

If any or a combination of the following risks, or other risks that are not currently known or are currently deemed
immaterial, actually occur, our business, results of operations, cash flows and financial condition may be
adversely affected, the price of the Equity Shares could decline, and you may lose all or part of your investment.

In making an investment decision, as prospective investors, you must rely on your own examination of us and the
terms of the Issue, including the merits and the risks involved. You should consult your tax, financial, legal
advisors about the particular consequences of investing in the Issue. To obtain a complete understanding of our
business, you should read this section in conjunction with the sections titled “Industry Overview”, “Our
Business”, “Restated Financial Statements” and “Management’s Discussion and Analysis of Financial Position
and Results of Operations” beginning on pages 92, 136, 194 and 243 respectively, of this Red Herring Prospectus,
as well as the other financial and statistical information contained in this Red Herring Prospectus.

This Red Herring Prospectus also contains forward-looking statements that involve risks, assumptions, estimates
and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking
statements as a result of various factors, including the considerations described in this section and elsewhere in
this Red Herring Prospectus. See “Forward Looking Statements” on page 16 of this Red Herring Prospectus.

Unless otherwise expressly stated or the context otherwise requires, the financial information used in this section
is derived from the Restated Financial Statements. See “Restated Financial Statements” on page 194.

Internal Risk Factors

1. Our Promoters and certain members of our Promoter Group have filed an application for settlement with
SEBI with respect to certain past non compliances with respect to their holding in a listed company, which
was a member of our Promoter Group, which if determined adversely may have a negative impact on our
operations, reputation and prospects.

Our Promoters, Kamalkumar Rajendra Aggarwal, Shubharangana Goyal and Navdeep Naresh Goyal and
certain members of the Promoter Group, namely, Naresh Vijaykumar Goyal and Minal Kamal Aggarwal
(“OSL PG Shareholders”), have filed a settlement application dated March 10, 2019 with SEBI
(“Settlement Application”) in relation to their inadvertent failure to make certain disclosures required under
Regulation 29 of the Takeover Regulations and Regulation 7 of the SEBI Insider Trading Regulations in
relation to their holdings in Overseas Synthetics Limited (“OSL”), a company listed on BSE Limited, which
was a member of the Promoter Group at the time the Company had filed its Draft Red Herring Prospectus.
The said non-compliances by the OSL PG Shareholders took place over a period of five calendar years, from
2014 to 2018. While there will be no financial implication to the Company as a result of the outcome of the
Settlement Application, irrespective of whether such outcome is against the OSL PG Shareholders. As on the
date of this Red Herring Prospectus, the Settlement Application is pending with SEBI.

Further, the OSL PG Shareholders had entered into a share purchase agreement d ated June 24, 2019 (the
“OSL SPA”) with certain shareholders of OSL (the “OSL Acquirers”) for the sale of their collective
shareholding of 20.37% of the share capital of OSL to the OSL Acquirers. On completion of open offer and
transfer of their collective shareholding in compliance with Takeover Regulations, consequently upon receipt
of a letter dated January 20, 2020 from the OSL PG Shareholders to OSL, OSL has intimated BSE Limited
on January 21, 2020 of the request of the OSL PG Shareholders to be de-classified as promoters of OSL. The
board of directors of OSL have on July 30, 2020, have approved the reclassification of the OSL PG
Shareholders. The approval of such reclassification of the OSL PG Shareholders is pending for approval from
the shareholders of OSL.

23
2. Naresh Vijaykumar Goyal, a member of our Promoter Group, has filed an appeal in relation to a criminal
proceeding filed against him, which if determined adversely may have a negative impact on our operations,
reputation and prospects.

Pursuant to a criminal complaint (“Complaint”) filed by the Central Bureau of Investigation (Jaipur)
(“CBI”), the CBI Special Court, Jaipur (“CBI Court”), vide an order dated December 24, 2018 (“CBI Court
Order”), has convicted and sentenced inter alia a member of our Promoter Group, Naresh Vijaykumar Goyal
(in his capacity as a director of Super Scientific Works Private Limited) to (i) rigorous imprisonment for two
years with a fine of ₹10,000 for commission of offences under Section 120-B of the Indian Penal Code, 1860;
and (ii) rigorous imprisonment for three years and fine of ₹ 20,000 each for commission of offences under
Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988.

The said Complaint was filed by CBI in relation to an alleged criminal consp iracy entered into by certain
officers of Hindustan Salts Limited (“HSL”), Hemant K. Goel (as a director of Goel Scientific Glass Works
Limited, “GSGWL”), and Naresh Vijaykumar Goyal (as a director of SSWPL) to (i) illegally award a tender
and work order (“Tender”) for the installation of a bromine plant at Kharaghoda to GSGWL and (ii) GSGWL
illegally sub-contracting its obligations under the Tender to SSWPL.

Naresh Vijaykumar Goyal has subsequently filed an appeal (“Appeal”) against the CBI Court Order before
the High Court of Rajasthan, challenging the CBI Court Order. The Rajasthan High Court (“High Court”)
has suspended the sentence imposed on Naresh Vijaykumar Goyal, pending settlement of the Appeal pursuant
to an order dated January 9, 2019. The Appeal is currently pending. A failure of the Appeal by Naresh
Vijaykumar Goyal may have an adverse effect on our operations, reputation and prospects. Additionally,
Naresh Vijaykumar Goyal is not actively involved in the operations of the Company.

3. The recent outbreak of the novel coronavirus could have a significant effect on our operations, and could
negatively impact our business, revenues, financial condition and results of operations.

An outbreak of a novel strain of coronavirus disease 19 (“COVID-19”), was recognized by the World Health
Organization (“WHO”) as a public health emergency of international concern on January 30, 2020 and as a
pandemic on March 11, 2020. The outbreak of COVID-19 has significantly and adversely impacted economic
activity and has contributed to significant volatility and negative p ressure in financial markets, and it is
possible that the outbreak of COVID-19 will cause a prolonged global economic crisis, recession or
depression, despite monetary and fiscal interventions by governments and central banks globally.

In response to the COVID-19 outbreak, the governments of many countries, including India have taken
preventive or protective actions, such as imposing country-wide lockdowns, restrictions on travel and business
operations and advising or requiring individuals to limit their time outside of their homes. Temporary closures
of businesses had been ordered and numerous other businesses have temporarily closed voluntarily. Further,
individuals' ability to travel has been curtailed through mandated travel restrictions and may be further limited.
Although some restrictions have been eased, it is not yet clear when the lockdown conditions will be fully
lifted in India and the countries where our customers and suppliers are located.

However, since some of the chemicals manufactured by us find application in the pharmaceuticals industry,
our Pharmaceutical Chemicals were categorized as ‘essential goods’ and our Manufacturing Facility was only
temporarily shut during the pandemic from March 24, 2020 till March 31, 2020. We resumed manufacturing
our Pharmaceutical Chemicals on April 1, 2020. We have implemented greater safety procedures and
requirements at our Manufacturing Facility. Due to limited availability of labour, logistics and supply chain
constraints, our Manufacturing Facility was initially operating at sub-optimal capacity utilization in the current
Fiscal.

We have centralised manufacturing operations based in Manjusar, Gujarat and supply our products globally
as well as to different parts of India, while also sourcing our raw materials from outside India as well as
different parts of India. We have continued to source raw materials from suppliers and have been able to
continue to supply our Pharmaceutical Chemicals to customers in India and abroad. However, the restrictions
on the movement of individuals and goods in India as well as the countries where our customers or suppliers
operate, may have an adverse impact on our ability to continue to purchase raw materials and supply our
products (including from suppliers and customers outside India). We cannot assure you that we will be able to
continue to purchase raw materials from our current suppliers and sell our products to our existing customers,
in the short-term future, which may have an adverse impact on our revenue from operations.

24
 For details of the impact of the COVID-19 pandemic on oil exploration and consequently the Oilwell
Completion Chemicals, see “The commercial success of our Oilwell Completion Chemicals is dependent on
the level of oil and gas exploration, development and production activities. Factors affecting the level of oil
and gas exploration, development and production activities, could have a material adverse effect on our
business, financial condition and results of operations.” on page 27.

If we do not respond appropriately to the pandemic, or if customers do not perceive our response to be
adequate, we could suffer damage to our reputation, which could adversely affect our business in the future.
The COVID-19 pandemic may cause additional disruptions to operations if our employees or staff become
sick, are quarantined, or are otherwise limited in their ability to travel or work. To contain the spread of the
virus, we may be required to implement staggered shifts and other social distancing efforts at Manufacturing
Facility, which could result in labour shortages and decreased productivity. This may negatively affect our
ability to meet consumer demand and may increase our costs of production and sales. All of the foregoing
developments may have a significant effect on our results of operations and on our financial results. We cannot
assure you that we will be able to generate sufficient revenue to meet our working capital requirements.

Our Statutory Auditors have included an emphasis of matter in our audited financial statements for Fiscal
2020, with respect to the disruption to business around the world and uncertainty to the global economy as a
result of the COVID-19 pandemic. See “Restated Financial Statements- Note 44. Impact of COVID-19
outbreak” on page 235. The opinion of our Statutory Auditors is not modified as a result of such emphasis of
matter.

We cannot predict the degree to, or the time period over, which our business will be affected by the COVID-
19 outbreak. For example, this pandemic could necessitate further lockdowns, resulting in significant
additional effects on our revenue, financial condition and results of operations. There are numerous
uncertainties associated with the COVID-19 outbreak, including the number of individuals who will become
infected, availability of a vaccine or a cure that mitigates the effect of the virus, the extent of the protective
and preventative measures imposed by governments and whether the virus' impact will be seasonal, among
others. Consequently, there may be adverse effects of this pandemic on our short-term business operations and
our financial results may be impacted.

4. Our Company has obtained an exemption from SEBI from classifying certain persons as members of the
Promoter Group.

Our Company had filed an application dated August 7, 2019 with SEBI under Regulation 300(1)(c) of the
SEBI ICDR Regulations, seeking an exemption from classifying Sudesh Goyal and Suresh Goyal (brothers
of the spouse of Shubharangana Goyal) and body corporates in which Sudesh Goyal or Suresh Goyal hold
20% or more of the equity share capital (together, the “PG Persons”), as members of the Promoter Group
(“Exemption”). Despite multiple written requests from the Company to the PG Persons to furnish the
information and confirmations required from them and entities in which they were interested in, in furtherance
to the SEBI ICDR Regulations, the Company did not receive any response from the PG Persons. Accordingly,
the Company filed the Exemption with SEBI. By way of a letter bea ring reference number
CFD/WRO/SKD/DD/220/1/2020, dated January 28, 2020, SEBI granted the Exemption to the Company.

5. Our business includes the manufacturing, marketing and supply of specialised chemicals largely used in
the pharmaceuticals and oilfield industries. Any decrease in the utility of our products for such industries,
may have an adverse impact on our business, growth and results of operations.

Our Company is engaged in the business of manufacturing, marketing and supplying of the Pharmaceutical
Chemicals and the Oilwell Completion Chemicals. Our Pharmaceuticals Chemicals and the Oilwell
Completion Chemicals are targeted to and largely marketed a nd supplied to industries operating in the
pharmaceuticals and the oilfield industry respectively. Our Pharmaceuticals Chemicals business contributed
63.75%, 63.14% and 62.18% of our revenue from operations in the Fiscals 2020, 2019 and 2018, respectively,
while our Oilwell Completion Chemicals business contributed 33.47%, 35.30% and 35.63% of our revenue
from operations in the Fiscals 2020, 2019 and 2018, respectively. For further details in relation to (i) the
break-up of the total revenue from operations earned by the Company from the sale of the Pharmaceutical
Chemicals and the Oilwell Completion Chemicals during the Fiscals 2020, 2019 and 2018; and (ii) domestic
and export sales (including Deemed Exports) of the Company from the sale of Pharmaceutical Chemicals and
the Oilwell Completion Chemicals, as a percentage of the total revenue from operations of the Company

25
 during the Fiscals 2020, 2019 and 2018, see “Our Business- Our Products-A. Pharmaceutical Chemicals”
and “Our Business-Our Products-B. Oilwell Completion Chemicals” on pages 141 and 142, respectively.

Any reduction in the utility of our products in general or to such industries including due to the emergence of
cost effective and more efficient alternatives and the shift of the practice in the se industries towards
developing our products in-house, may have an adverse impact on the demand for our products and
consequently, may have a material adverse impact on our business, results of operations, cash flows and
financial condition. Further, there can be no assurance that the lack of demand from any one of these industries
can be offset by sales to other industries in which our products find application.

6. We have a limited product portfolio and our business may be adversely affected if any of our products do
not continue to perform as expected or if competing products gain wider market acceptance. Further, if
our competitors are able to improve the efficiency of their manufacturing processes and thereby offer their
products at lower prices, our revenues and profitability may decline.

As on the date of this Red Herring Prospectus, our product portfolio is limited to our Pharmaceutical
Chemicals, mainly HMDS and CMIC and our Oilwell Completion Chemicals, namely Calcium Bromide
(solution and powder), Zinc Bromide (solution) and Sodium Bromide (solution and powder). In the Fiscal
2020, 2019 and 2018, our Pharmaceutical Chemicals collectively contributed ₹ 1,670.53 million, ₹ 1,915.33
million, and ₹ 980.22 million, respectively, amounting to 63.75%, 63.1 4% and 62.18% of our total revenue
from operations, respectively. Within our Pharmaceutical Chemicals, HMDS (including ancillary products)
in Fiscals 2020, 2019 and 2018, contributed ₹ 1,312.42 million, ₹ 1,304.46 million and ₹ 652.11 million,
respectively, amounting to 50.08%, 43.00% and 41.37%, respectively of our total revenue from operations,
while CMIC contributed ₹ 338.55 million, ₹ 475.39 million and ₹ 326.88 million, respectively, amounting to
12.92%, 15.67% and 20.74%, respectively, of our total revenue from operations. Further, in Fiscal 2020, 2019
and 2018, our Oilwell Completion Chemicals collectively contributed ₹ 877.18 million, ₹ 1,070.89 million
and ₹ 561.75 million, respectively, amounting to 33.47%, 35.30% and 35.63%, respectively of our total
revenue from operations.

A reduction in the demand for any of our products may have a materially adverse effect on our operations.
The demand for our products may decline due to the emergence or increase in competition, as the case may
be, regulatory action, pricing pressures and/or fluctuations of demand and supply. If our competitors are able
to improve the efficiency of their manufacturing process or their distribution or raw materials sourcing
process and thereby offer their products at lower price, our Company may be unable to adequately react by
reducing our gross margin to retain customers by offering our products at lower prices or losing customers to
competitors offering similar products at prices lower than us.

Similarly, in the event of any breakthrough in the development of products, our products may become
obsolete or be substituted by such alternatives. For instance, the Oilwell Completion Chemicals are utilised
as completion fluids in the oil and gas exploration process but should more cost-effective and/or efficient
alternatives be available in the market, the demand for the Oilwell Completion Chemicals may be adversely
impacted.

We have commenced the manufacturing of 4 CBC and executed our first sale of 4 CBC in July 2020.
However, due to the COVID-19 pandemic and the related travel restrictions, our potential customers are
currently unable to visit our Manufacturing Facility to inspect our product and grant their approval for the
purchase of 2,5 DHT produced by us. We cannot assure you that such potential customers will approve our
product or that they will purchase 2,5 DHT from us. Further, we cannot assure you that we will be able to
build a customer base for our 2,5 DHT and 4 CBC and compete with other suppliers of such products.

Our failure to effectively react to these situations or to successfully introduce new products or new
applications for our existing products could adversely affect our business, prospects, results of operations and
financial condition.

26
7. We derive a significant portion of our revenue from a few customers and the loss of one or more such
customers, the deterioration of their financial condition or prospects, or a reduction in their demand for
our products may adversely affect our business, results of operations, financial condition and cash flows.

While we typically have long term relationships with our customers, we do not have long term agreements
with them. The success of our business is accordingly significantly dependent on us main taining good
relationships with our customers and suppliers.

While our Company has a number of customers, we are dependent on a limited number of customers for a
significant portion of our revenue. In the Fiscals 2020, 2019 and 2018 and 59.35%, 45.94% and 60.01%,
respectively, of our revenue from operations were derived from our top five customers (in the respective
periods). Further, in the, Fiscals 2020, 2019 and 2018, 95.39%, 90.78% and 97.23%, respectively, of our
revenue from Oilwell Completion Chemicals (in the respective periods) were derived from our top five
customers for our Oilwell Completion Chemicals, while 57.22%, 53.68% and 64.68% of our revenue from
our Pharmaceutical Chemicals were derived from our top five customers of our Pharmaceutical Chemicals
(in the respective periods).

The actual sales by our Company may differ from the estimates of our management due to the absence of
long term agreements. The loss of one or more of these significant customers or a reduction in the amount of
business we obtain from them could have an adverse effect on our business, results of operations, financial
condition and cash flows. We cannot assure you that we will be able to maintain historic levels of business
and/or negotiate and execute long term contracts on terms that are commercially viable with our significant
customers or that we will be able to significantly reduce customer concentration in the future.

8. Super Scientific Works Private Limited (“SSWPL”), an entity qualifying as a Promoter Group entity of
the Company, has lodged a formal complaint with SEBI against Naresh Vijaykumar Goyal, a Promoter
Group member of the Company

SSWPL has, by a letter dated May 14, 2019 (“Complaint”), lodged a formal complaint with SEBI, against
Naresh Vijaykumar Goyal, a member of the Promoter Group of the Company. The Complaint inter alia
alleged, that (i) during his tenure as director of SSWPL, Naresh Vijaykumar Goyal caused losses to SSWPL
by misusing his position in SSWPL for personal gain; and (ii) as on the date of the Complaint, a large number
of business disputes remained unresolved between SSWPL and Naresh Vijaykumar Goyal.

In accordance with applicable laws, the BRLMs responded to SSWPL by way of a letter dated September 16,
2019 (“Response Letter”), stating paragraph wise responses to the allegations levied by the Complaint. No
response was received to the Response Letter. Thereafter, the BRLMs by way of a letter dated January 9,
2020 (“Request Letter”), requested SSWPL to intimate them of any further concerns either with respect to
the Company or Naresh Vijaykumar Goyal, pursuant to the receipt of the Response Letter. However, no
response has been received in response to the Request Letter until the date of this RHP. The dispute are in
nature of a family dispute and shall have no relationship or bearing on the Company or its ability to conduct
its business or undertake a public issue of its equity shares or its other members/ shareholders.

9. The commercial success of our Oilwell Completion Chemicals is dependent on the level of oil and gas
exploration, development and production activities. Factors affecting the level of oil and gas exploration,
development and production activities, could have a material adverse effect on our business, financial
condition and results of operations.

The Oilwell Completion Chemicals manufactured and supplied by us are used as completion fluids in the
oilfields industry. Accordingly, the commercial success of our Oilwell Completion Chemicals is dependent
upon the level of oil and gas exploration, development and production activities. The oil and gas exploration
and production industry is historically a cyclical industry characterized by significant changes in the levels
of exploration and development activities. Furthermore, there can be no assurance that the oil and gas
companies will be able to obtain the financing necessary to explore, develop or produce new prospects,
resulting in reduced demand for our Oilwell Completion Chemicals.

Additionally, the exploration, development and production activities in the oil and gas industry are influenced
by the following factors:

• overall level of global economic growth and activity;

27
 • actual and perceived changes in the supply and demand for oil and gas;
• political instability or armed conflict in oil and gas producing regions;
• operational constraints, including timely access to resources, availability of adequate infrastructure
facilities and lack of technological know-how;
• fiscal and macroeconomic factors, as oil and gas exploration projects are highly capital intensive;
• regulatory and political interferences, in terms of receiving the required permissions, licenses,
clearances have always remained a matter of concern for the entire upstream industry;
• geological factors are now emerging as major constraints affecting the drilling activities especially with
increasing use of unconventional methods of exploration which not only involves higher capital
requirements but also has the possibility of variance between the actual and estimated reserves; and
• also, rising concern towards environmental issues in case of unconventional drilling activities.

According to Frost & Sullivan, the oil and gas industry is experiencing its third price collapse in a decade and
globally there is a wide scale destruction of demand associated with COVID-19. Global level travel bans and
grounding of international flights has resulted in substantial reduction in consumption of aviation turbine fuel
across the globe and demand for fuels except LPG and domestic natural gas has also recorded a tremendous
drop (source: Frost & Sullivan). Further, offshore oil production has been widely impacted due to the
coronavirus outbreak and many oil and gas companies have reduced offshore workers to prevent the spread
of COVID-19 (source: Frost & Sullivan). Further, many companies have also reduced their operations and
cut-down on explorations, many oil exploration companies’ have demobilised their technical staff and shut
down many refineries due to the spread of Covid-19 and several new projects have been stalled across the
globe to curtail spreading of pandemic (source: Frost & Sullivan). According to Frost & Sullivan, the above
has resulted in lower oil exploration and consequently impacted the demand for Oilwell Completion
Chemicals.

Our Oilwell Completion Chemicals business contributed 33.47%, 35.30% and 35.63% of our revenue from
operation in the Fiscals 2020, 2019 and 2018, respectively. As a result of our dependence on the oil
exploration industry, our sales volumes, profitability and liquidity are closely tied to the demand for oil and
gas in India and globally and a slowdown in the oil exploration industry may result in a reduction in the sales
of our Oilwell Completion Chemicals, which could materially and adversely affect our business, financial
condition and results of operations. The reduced demand for oil and gas in Fiscal 2021 has resulted in a
reduced demand for our Oilwell Completion Chemicals. Accordingly, as on the date of this Red Herring
Prospectus, we are yet to resume manufacturing new batches of Oilwell Completion Chemicals since the
country-wide lockdown was lifted.

A reduction in exploration, development and production activities, or in the budgeted expenditure of oil and
gas companies, will cause a decline in the demand for Oilwell Completion Chemicals. Any downturn in the
demand of our Oilwell Completion Chemicals, including due to the reduction in the level of oil and gas
exploration, development and production activities, may have a material adverse effect on our business,
financial condition a nd results of operations.

10. The RBI had initiated certain proceedings against Rudra Fincorp Private Limited, an entity forming part
of the Promoter Group of our Company

The RBI had initiated certain proceedings against Rudra Fincorp Private Limited, an entity forming part of
the Promoter Group of the Company, for failing to carry out its operations from the registered office, as per
the records maintained by the RBI.

11. The commercial success of our Pharmaceutical Chemicals depends to a large extent on the success of our
customers’ products with end consumers. If the demand for the products in which our products are used
declines, this could have a material adverse effect on our business, financial condition and results of
operations.

The Pharmaceuticals Chemicals manufactured and supplied by us are primarily utilised for the manufacture
of certain pharmaceuticals and related products. For instance, HMDS is inter alia used as Methyl Silane
Alkylation (such as Amikacin, Penicillin, Cephalosporins and kinds of Penicillin derivatives), in the
preparation of β3-AR agonists used in anti-stress formulations and manufacture of certain antibiotics and
anti-viral drugs, while CMIC is inter alia utilised to manufacture Tenofovir, a drug for combatting HIV and
AIDS and in the synthesis of certain anti-viral drugs. For details of the uses of the Pharmaceutical Chemicals,
see “Our Business- Our Products” and “Industry Overview” on pages 141 and 92 respectively.

28
 The commercial success of our Pharmaceutical Chemicals business depends on the demand for the products
for which such chemicals are utilised. Any downturn in the demand of such products, including due to the
development of alternative products without our Pharmaceutical Chemicals as ingredients, may conversely
result in a reduction in the demand for the Pharmaceuticals Chemicals and have a material adverse effect on
our business, financial condition and results of operations.

12. Any disturbance in or shutdown of our Manufacturing Facility may have a material adverse effect on our
entire manufacturing operations and consequently, our business, financial condition and our results of
operations.

Our manufacturing operations are based out of our Manufacturing Facility located in Manjusar, near
Vadodara in Gujarat. Our Manufacturing Facility, comprising of our individual operational plants, is located
on one plot of land, which is owned by the Company.

As on the date of this Red Herring Prospectus, the Manufacturing Facility comprises of seven individual
operational plants, which are dedicated towards the manufacture of specific products. However, the plants
dedicated to the manufacture of CMIC are versatile in nature and can also be utilised towards the manufacture
of HMDS and ancillary products, with minor modifications, while the plant “P-7” is a multipurpose plant and
besides HMDS, it can also be utilized for manufacturing certain other pharmaceutical products being
manufactured by our Company. For further details, see “Our Business-Our Manufacturing Facility” on page
145. Our Company proposes to utilise a portion of the proceeds from the Fresh Issue towards the
establishment of two additional plants within the Manufacturing Facility. Accordingly, our manufacturing
operations are and shall for the foreseeable future continue to be concentrated in one location for all of our
products.

Our manufacturing operations and consequently our business is dependent upon our ability to manage the
Manufacturing Facility, which is subject to operating risks, including those beyond our control, such as the
breakdown and failure of equipment or industrial accidents, localised social unrest and natural disasters. In
the event there are any disruptions at our Manufacturing Facility, due to natural or man-made disasters,
workforce disruptions, regulatory approval delays, fire, failure of machinery, lack of access to assured supply
of electrical power and water at reasonable costs or any significant social, political or economic disturbances,
our ability to manufacture our products may be adversely affected.

In addition to the loss as a result of such fire or industrial accident, any shutdown of our Manufacturing
Facility could result in us being unable to meet with our commitments, which will have an adverse effect on
our business, results of operation and financial condition. For instance, on January 9, 2018, we experienced
a fire accident at the Manufacturing Facility, destroying one plant and also damaging certain equipment, raw
material, packing material, stores and consumables. According to management estimates the fire accident
resulted in an aggregate loss of ₹21.92 million including the fire debris removal expenses and expenses for
repair of a damaged factory shed. As on the date of this Red Herring Prospectus, while, our Company believes
that assets are fully secured through insurance, our claim made with our insurance company is pending.
Further, our Manufacturing Facility was closed and as a result our manufacturing operations were suspended
for two days. Separately, our Manufacturing Facility was temporarily shut down during the COVID-19
pandemic from March 24, 2020 till March 31, 2020. There have been no other instances of fire, social unrest,
man-made disasters, work force disruptions, regulatory approval delays or lack of assured supply of electrical
power and water etc which has been faced by the Company, in the three years preceding the date of this Red
Herring Prospectus or in the three years preceding the date of the Draft Red Herring Prospectus.

Disruptions in and around our Manufacturing Facility could delay production or require us to shut down the
Manufacturing Facility. Any contravention of or non-compliance with the terms of various regulatory
approvals applicable to the Manufacturing Facility may also require us to cease or limit production until such
non-compliance is remedied to the satisfaction of relevant regulatory authorities. We cannot assure you that
we will not experience work disruptions in the future resulting from any dispute with our employees or other
problems associated with our employees and the labour involved in our Manufacturing Facility, which may
hinder our regular operating activities and lead to disruptions in our operations, which could adversely affect
our business, prospects, financial condition, cash flows and results of operations.

29
13. Any shortfall in the supply of our raw materials or an increase in our raw material costs, or other input
costs, may adversely affect the pricing and supply of our products and have an adverse effect on our
business, results of operations and financial condition.

The success of our operations depends on, among other things, our ability to source raw materials at
competitive prices. Raw materials are subject to supply disruptions and price volatility caused by various
factors such as commodity market fluctuations, the quality and availability of raw materials, currency
fluctuations, consumer demand, changes in domestic as well as international government policies and
regulatory sanctions.

Certain of our key raw materials have witnessed volatility in their prices. For instance, the global price of
TMCS, a key raw material in the manufacturing of HMDS, fell from $3.6 per kg to $1.1 per kg between first
quarter of calendar year 2013 and fourth quarter of calendar year 2014, rose to $10.3 per kg by the third
quarter of calendar year 2018 and subsequently fell to approximately $2.4 per kg in the fourth quarter of
calendar year 2019 (source: Frost & Sullivan Report). Likewise, the price of MCF, a key raw material in the
manufacturing of CMIC, has witnessed numerous rises and falls between calendar years 2013 and 2019, with
the global price, ranging from approximately $1.9 per kg to approximately $3.1 per kg in such period (source:
Frost & Sullivan Report).

We seek to source our raw materials from reputed suppliers and typically seek quotations from multiple
suppliers. We do not have long-term contracts with our suppliers. We typically purchase raw materials on a
purchase order basis. Consequently, we may be required to regularly negotiate prices with our suppliers in
case of significant fluctuations in raw material prices or foreign currency fluctuations. The absence of long
term supplier contracts subjects us to risks such as price volatility, unavailability of certain raw materials in
the short term and failure to source critical raw materials in time, which would result in a delay in
manufacturing of the final product. Further, we cannot assure you that we will be able to enter into new
arrangements with suppliers on terms acceptable to us, which could have an adverse effect on our ability to
source raw materials in a commercially viable and timely manner, if at all, which may impact our business
and profitability. Our suppliers may also be unable to provide us with sufficient quantity of raw materials, at
prices acceptable to us, for us to meet the demand for our products. While, we typically sell our products to
our customers on a purchase order basis, given that we have long term relationships with many of our
customers, our ability to pass on increases in the costs of raw materials and other inputs to our customers may
be limited. We are also subject to the risk that one or more of our existing suppliers may discontinue their
operations, which may adversely affect our ability to source raw materials at a competitive price.

While we seek to purchase our raw materials from multiple suppliers on a purchase order basis, we purchase
a significant portion of our raw materials from a few suppliers. In Fiscals 2020, 2019 and 2018, our top five
suppliers of raw materials constituted 43.61%, 66.22% and 45.25%, of the raw materials purchased by us.
For details of the geographical location of our top five suppliers in the Fiscals 2020, 2019 and 2018, see “Our
Business- Raw Materials” on page 147.

If we are unable to purchase the raw materials from such suppliers for any reason including due to cessation
of operations by such suppliers, disputes with such suppliers, or if there is a substantial increase in the prices
charged by such suppliers, there can be no assurance that we will be able to identify alternative suppliers for
our raw materials at similar cost and other terms of purchase.

Further, we purchase certain of our key raw materials from suppliers based in China. Our ability to purchase
such raw materials from our suppliers in China, may be hampered due to inter alia supply chain issues, change
in government policies (including anti-dumping measures) and international geo-political situations or any
other circumstances which are beyond our reasonable control. We may not be able to find suitable alternative
suppliers providing the raw materials at similar or acceptable prices and other terms of purchase. For details
of expenditure incurred by our Company in the Fiscals 2020, 2019 and 2018 towards the procurement of raw
materials from China as a percentage of the total expenditure of the Company towards procurement of raw
materials, see “Our Business- Raw Materials” on page 147.

Any increase in raw material prices may result in corresponding increases in our product costs. A failure to
maintain our required supply of raw materials, and any inability on our part to find alternate sources for the
procurement of such raw materials, on acceptable terms, could adversely affect our ability to deliver our
products to our customers in an efficient, reliable and timely manner, and consequently adversely affect our
business, results of operations and financial condition.

30
 We are heavily dependent on the import of raw material from China, a failure to maintain our required supply
of raw materials, and any inability on our part to find alternate sources for the procurement of such raw
materials, on acceptable terms, could adversely affect our ability to deliver our products to our customers in
an efficient, reliable and timely manner, and consequently adversely affect our business, results of operations
and financial condition.

14. Any adverse change in regulations governing our products and the products of our customers, may
adversely impact our business, prospectus and results of operations.

Regulatory requirements with respect to our products and the products of our customers are subject to change.
An adverse change in the regulations governing the development of our products and their usage by our
customers, including the development of licensing requirements and technical standards and specifications
or the imposition of onerous requirements, may have an adverse impact on our operations. Our Company
may be required to alter our manufacturing and/or distribution process and target markets and incur capital
expenditure to achieve compliance with such new regulatory requirements applicable to us and our customers.
We cannot assure you that we will be able to comply with the regulatory requirements. If we fail to comply
with new statutory or regulatory requirements, there could be a delay in the submission or grant of approval
for manufacturing and marketing new products or we may be required to withdraw existing products from
the market.

Moreover, if we fail to comply with the various conditions attached to such approvals, licenses, registrations
and permissions once received, the relevant regulatory body may suspend, curtail or revoke our ability to
market such products and/or we may be deemed to be in breach of our arrangements with our customers.
Consequently, there is an inherent risk that we may inadvertently fail to comply with such regulations, which
could lead to enforced shutdowns and other sanctions imposed by the relevant authorities, as well as the
withholding or delay in receipt of regulatory approvals for our new products, which may adversely impact
our business, results of operations and financial condition.

15. If our product development efforts do not succeed, we may not be able to improve our existing products
and/or introduce new products, which could adversely affect our results of operations, growth and
prospects.

In order to remain competitive, we are required to review the performance of our existing products and the
manufacturing process and take necessary actions to improve functionality and/or efficiency and also identify
new applications for our existing products and new potential products, in compliance with applicable
regulatory standards. To accomplish this, we commit substantial effort, funds and other resources. Our
ongoing investments towards product development could result in higher costs without a proportionate
increase in revenues. However, we cannot assure you that the product development initiatives taken by our
Company would succeed or result in an improvement in either our current products or manufacturing process
which may affect our ability to compete with our competitors and have an adverse effect on our operations.

We have commenced the manufacturing of 4 CBC and executed our first sale of 4 CBC in July 2020.
However, due to the COVID-19 pandemic and the related travel restrictions, our potential customers are
currently unable to visit our Manufacturing Facility to inspect our product and grant their approval for the
purchase of 2,5 DHT produced by us. We cannot assure you that such potential customers will approve our
product or that they will purchase 2,5 DHT from us. Further, we cannot assure you that we will be able to
build a customer base for our 2,5 DHT and 4 CBC and compete with other suppliers of such products.

Our product development initiatives with respect to developing new uses for existing products or new
products may not result in the development of cost-effective or economically viable solutions, thereby
affecting our operations, growth and prospects.

16. Our profitability largely depends upon the global prices of our products. There is no assurance that the
prices may sustain or further increase in the future. Any significant fall in global prices of Company’s
products may have a material adverse effect on our business, results of operations and financial condition.

We are dependent on the global prices for our products. There has been volatility in the global prices of
certain of our products. For instance, the global price of HMDS have increased from $3.5 per kg in the first
quarter of calendar year 2017 to $18.5 per kg in the third quarter of calendar year 2018 and subsequently fell
to approximately $8.2 per kg in the fourth quarter of calendar year 2019 (Source: Frost & Sullivan Report).

31
 Similarly, the global price of CMIC have increased from $6.0 per kg in the third quarter of calendar year
2017 to $8.1 per kg in the first quarter of calendar year 2018 and subsequently fell to approximately $7.1 per
kg in the fourth quarter of calendar year 2019 (Source: Frost & Sullivan Report).

Our ability to maintain as well as expand our international operations is dependent on us providing our
products at prices competitive with international as well as local manufacturers. Since we manufacture all our
products at the Manufacturing Facility, we may be unable to provide the products at competitive prices as
against suppliers able to implement more cost-effective distribution facilities and local suppliers.
Accordingly, we may be more exposed to the volatility to the global prices of our products as against
competitors whose manufacturing operations are less centralised. Our inability to price our products at the
applicable prices in the international markets, may affect the demand for our products and consequently have
a material adverse effect on our results of operations and financial condition.

17. We may face several risks associated with the proposed expansion in our Manufacturing Facility, which
could hamper our growth, prospects, cash flows and business and financial condition.

We intend to utilize a portion of the Net Proceeds of the Fresh Issue for financing the proposed expansion of
our Manufacturing Facility. For additional details in respect of the foregoing, see “Objects of the Issue” on
page 75.

In establishing the new plants at our Manufacturing Facility, we may encounter cost overruns or delays for
various reasons, including, but not limited to, our financial condition, changes in business strategy and
external factors such as market conditions, competitive environment and interest or exchange rate
fluctuations, changes in design and configuration of the Projects, increase in input costs of construction
materials and labour costs, incremental preoperative expenses, taxes and duties, start-up costs, interest and
finance charges, EPC and non-EPC costs, working capital margin, environment and ecology costs and other
external factors including current situation of COVID-19 pandemic , which may not be within the control of
our management. If any of the plants that we propose to set up at our Manufacturing Facility, are not
completed in a timely manner, or at all or performance of external agencies may not meet the required
specifications or performance parameters due to which our business, prospects and results of operations may
be adversely affected. Further, the budgeted cost may prove insufficient to meet the requirements of the
proposed capital expenditure due to, among other things, cost escalation, which could drain our internal cash
flows or compel us to raise additional capital, which may not be available on terms favourable to us or at all.

We cannot assure that we will be able to complete the aforementioned expansion of our manufacturing facility
in accordance with the proposed schedule of implementation and any delay in setting up such plants in a
timely manner, or at all, could have an adverse impact on our growth, prospects, cash flows and business and
financial condition.

18. The global scope of our operations exposes us to risks of doing business in foreign countries, including
the constantly changing economic, regulatory, social and political conditions in the jurisdictions in which
we operate and seek to operate, which could adversely affect our business, financial condition and results
of operations.

We sell our products in countries such as United States of America, Italy, South Korea, Germany, People’s
Republic of China, Japan, United Arab Emirates, Serbia, Russia, Spain, Thailand and Malaysia. In Fiscal
2020, 39.78% of our revenue from operations was from exports (including Deemed Exports), respectively.

The percentage of revenue earned from major countries to which products are exported for the Fiscals 2020,
2019 and 2018 are as below:

Sr.
Name of country % of revenue from operations earned*
No.
For the Fiscal 2020
1. United Arab Emirates 26.43%
2. Thailand 2.80%
3. Serbia 2.21%
4. China 1.45%
5. Russia 0.95%
6. Japan 0.79%

32
 Sr.
Name of country % of revenue from operations earned*
No.
7. United States of America 0.74%
8. Italy 0.36%
9. Malaysia 0.03%
10. South Korea (0.10)%**
For the Fiscal 2019
1. United Arab Emirates 8.18%
2. Azerbaijan 4.10%
3. Russia 2.94%
4. United States of America 2.49%
5. Japan 1.58%
6. China 0.96%
7. Brunei 0.52%
8. Serbia 0.49%
9. South Korea 0.38%
10. Malaysia 0.04%
11. Singapore 0.03%
For the Fiscal 2018
1. Azerbaijan 11.61%
2. United Arab Emirates 10.16%
3. United States of America 1.91%
4. Qatar 1.67%
5. China 0.79%
6. Japan 0.75%
7. Serbia 0.35%
8. Algeria 0.32%
9. United Kingdom 0.25%
* Does not include deemed exports.
** Represents Sales return

We seek to maintain and expand our international sales operations. Our business is therefore subject to diverse
and constantly changing economic, regulatory, social and political conditions in the jurisdictions in which we
operate and seek to operate.

Operating in the international markets exposes us to a number of risks globally, including, without limitation
compliance with local laws and regulations, which can be onerous and costly as the magnitude and complexity
of, and continual amendments to, those laws and regulations are difficult to predict and the liabilities, costs,
obligations and requirements associated with these laws and regulations can be substantial. Our failure to
comply with and adapt to changing international regulations and/or trends may result in us failing to maintain
and/or expand our international sales operations, which could adversely affect our business, financial
condition and results of operations.

19. We are yet to place orders for a majority of the equipment to be procured in relation to the proposed
expansion in our Manufacturing Facility. In the event of any delay in placing the orders, or in the event
the vendors are not able to provide the equipment in a timely manner, or at all, may result in time and cost
over-runs and our business, prospects and results of operations may be adversely affected.

We intend to utilize a portion of the Net Proceeds of the Fresh Issue for financing the proposed expansion of
our Manufacturing Facility. While we have procured quotation from vendors for various equipments to be
procured in relation to the proposed expansion, we have not placed any firm orders for equipment for any
equipments required by us for our proposed expansion. For details in respect of the foregoing, see “ Objects
of the Issue- Details of the Objects of the Fresh Issue-Capital expenditure towards expansion of
Manufacturing Facility” on page 76. None of the vendors listed out in the chapter “Objects of the Issue” are
related to the Promoters and/ or the Directors of the Company.

In the event of any delay in placing the orders, or an escalation in the cost of acquisition of the equipments
or in the event the vendors are not able to provide the equipment in a timely manner, or at all, we may
encounter time and cost overruns in setting up of the plants that we propose to set up at our Manufacturing

33
 Facility resulting in cost escalation for the proposed project, which could affect our internal cash flows or
compel us to raise additional capital, which may not be available on terms favourable to us or at all. Any
delay in completing the aforementioned expansion of our manufacturing facility in accordance with the
proposed schedule of implementation, or at all, could have an adverse impact on our growth, prospects, cash
flows and business and financial condition.

20. Volatility in exchange rate fluctuations may adversely affect our results of operations.

In Fiscal 2020, 39.78% of our revenue from operations was from exports (including Deemed Exports), while
40.19% of the raw materials purchased by us, were purchased from outside India. The net revenue recognised
on account of exchange rate fluctuation for the Fiscal 2020, 2019 and Fiscal 2018 was ₹ 31.45 million, ₹
18.38 million, ₹ 5.84 million, respectively, representing 1.20%, 0.61% and 0.37% of the total revenue from
operations respectively.

Some of our other expenditures such as sales commission and expenditure on exhibitions are also
denominated in foreign currencies. A tabular representation of the amount and percentage of sales
commissions to the total revenue from operations of the Company Fiscals 2020, 2019 and 2018, is as follows:

Sr. Sales Commission expense % of total revenue

Period/Fiscal
No. (₹ million) from operations
1. Fiscal 2020 2.83 0.11
2. Fiscal 2019 2.64 0.09
3. Fiscal 2018 1.35 0.09

Consequently, we are exposed to exchange rate fluctuations between the Indian Rupee and certain foreign
currencies. Significant currency exchange rate fluctuations could have an adverse effect on our results of
operations.

The exchange rate between the Indian Rupee and the foreign currencies has fluctuated considerably in recent
years and may further fluctuate in the future. We anticipate that a significant portion of our revenue from
operations and raw materials purchased will continue to be in foreign currencies. Any volatility or fluctuation
of foreign currencies against the Indian Rupee may result in reduction of our revenue and consequently have
an adverse effect on our business and result of operations.

21. Some of the raw materials that we use as well as our finished products are corrosive and flammable and
require expert handling and storage. While we take adequate care and follow all relevant safety measures,
there is a risk of fire and other accidents, at our Manufacturing Facility and warehouses. Any accidents
may result in loss of property of our Company and/or disruption in the manufacturing processes which
may have a material adverse effect on our results of operations, cash flows and financial condition.

Certain of the raw materials that we use as well as our finished goods are corrosive and flammable and require
expert handling and storage, failing which we may be exposed to fires or other industrial accidents. While
our Company believes that it has necessary controls and processes in place, any failure of such systems,
mishandling of hazardous chemicals or any adverse incident related to the use of these chemicals or otherwise
during the manufacturing process or storage of products and certain raw materials, may cause industrial
accidents, fire, loss of human life, damage to our and third-party property and, or, environmental damage. If
any industrial accident, loss of human life or environmental damage were to occur we could be subject to
significant penalties, other actionable claims and, in some instances, criminal prosecution. In addition to
adversely affecting our reputation, any such accidents, may result in a loss of property of our Company and/or
disruption in our manufacturing operations entirely, which may have a material adverse effect on our results
of operations and financial condition.

In addition to the loss as a result of such fire or industrial accident, any shutdown of our Manufacturing
Facility could result in us being unable to meet with our commitments, which will have an adverse effect on
our business, results of operation and financial condition. For instance, on January 9, 2018, we experienced
a fire accident at the Manufacturing Facility, destroying one plant and also damaging certain equipment, raw
material, packing material, stores and consumables. According to management estimates the fire accident
resulted in an aggregate loss of ₹21.92 million including the fire debris removal expenses and expenses for
repair of a damaged factory shed. While, our Company believes that our assets are fully secured through
insurance, our claim made with our insurance company is pending as on the date of this Red Herring

34
 Prospectus. Further, our Manufacturing Facility was closed and as a result our manufacturing operations were
suspended for two days.

Further, any fire or industrial accident, any shutdown of our Manufacturing Facility or any environmental
damages could increase the regulatory scrutiny and result in enhanced compliance requirements including on
use of materials and effluent treatment which would, amongst others, increase the cost of our operations.

We cannot assure you that despite our best efforts we will not face similar situations at our Manufacturing
Facility which may result in significant loss to our Company and/or a disruption of our manufacturing
operations. The loss incurred by our Company may or may not be recoverable through insurance maintained
by us. Such loss and/or disruption of our manufacturing operations may have a material adverse effect on our
operations, cash flows and financial condition.

22. Our business may expose us to potential product liability claims and recalls, which could adversely affect
our results operation, goodwill and the marketability of our products.

We may be exposed to potential product liability claims, and the severity and timing of such claims are
unpredictable. We face the risk of loss resulting from, and the adverse publicity associated with, product
liability lawsuits, whether or not such claims are valid. We may also be subject to claims resulting from
manufacturing defects or negligence in storage or handling which may lead to the deterioration of our
products. Product liability claims, regardless of their merits or the ultimate success of the defense against
them, are expensive. Even unsuccessful product liability claims would likely require us to incur substantial
amounts on litigation and require our management’s time and focus. Accordingly, such product liability
claims, may adversely affect our results of operation, goodwill and the marketability of our Products.

There have been no product liability claims which have been made against the Company in the three years
preceding the date of this Red Herring Prospectus or in the three years preceding the date of the Draft Red
Herring Prospectus. Further, no product liability claims which have been made against the Company in the
three years preceding the date of this Red Herring Prospectus or in the three years preceding the date of the
Draft Red Herring Prospectus by its top 5 customers.

23. We have significant power, water and fuel requirements and any disruption to power, water or fuel sources
could increase our production costs and adversely affect our results of operations.

We require substantial power, water and fuel for our Manufacturing Facility, and energy costs represent a
significant portion of the production costs for our operations. If energy or water costs were to rise, or if
electricity or water supplies or supply arrangements were disrupted, our profitability could decline.

We primarily source of our electricity requirements for our Manufacturing Facility from the Madhya Gujarat
Vij Company Limited (“MGVCL”) and as a secondary back-up we have our own captive diesel power
generator. If power supply from MGVCL is not available for any reason, we will need to rely on our captive
diesel power generator, which may result in, increased costs associated with generation of power.

In addition, we source most of our water requirements from a borewell, but there is no assurance that we will
be able to obtain a sufficient supply of water from such borewell or from any other source. For instance, our
Company has applied for a No objection and consent to abstract ground water issued by the Central Ground
Water Authority, Ministry of Water Resources, River Development and Ganga Rejuvenation, to enable our
Company to gain access to water for its operations, which is pending for approval. Fo r details, see
Government & Other Approvals-Material approvals which have expired for which renewal applications have
been made”, on page 280. We may accordingly have to find alternative sources for ground water, which may
not be as economically feasible.

Therefore, we are subject to price risk and if sufficient water cannot be obtained from our borewell for any
reason, our production may be disrupted and profitability could be adversely affected.

24. Certain documents filed by us with the RoC and certain corporate records and other documents, are not
traceable. While we have conducted a search with the RoC, in respect of the unavailability of such forms
and other records, we cannot assure you that such forms or records will be available at all or any time in
the future.

35
 Our Company is unable to trace certain corporate records and regulatory filings made by us, including, those
in relation to allotments made by our Company, reclassification of share capital and transfers made by our
Shareholders, for the period commencing from incorporation till the acquisition of our Company by our
Promoters and Promoter Group in 2004 and a change in the registered office of our Company prior to such
acquisition. We have also, through a practicing company secretary, conducted a search at the offices of the
RoC to trace these records and filings. However, such practicing company secretary was unable to locate
these documents at the office of the RoC. In light of this, we have relied on alternative corporate records and
documents available with us for such matters, including the shareholders’ register, annual reports and annual
returns filed with RoC.

We cannot assure you that the corporate records which we have not been able to locate will be available in
the future or that the information gathered through other available documents is correct. Further, we cannot
assure you that the filings were done at all or in timely manner and that we shall not be subject to penalties
on this account. Additionally, while no disputes have arisen in connection with these corporate records and
other documents as on the date of this Red Herring Prospectus, we cannot assure you that no dispute shall
arise in the future.

25. We have contingent liabilities and capital commitments which have not been provided for in our balance
sheet. Further, there are two taxation proceedings involving us, where we have paid the amount claimed
against us under protest.

As on March 31, 2020, we had certain contingent liabilities and capital commitments that had not been
provided for in accordance with Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets” as
provided below:
(in ₹ million)
Particulars Amount demanded/disputed
Claims against the Company/ disputed demands not acknowledged as
debt:
(i) Excise 0.35
(ii) GST 2.34
Letters of credit issued for the purchase of raw materials 50.03
Capital Commitments 6.13

Any or all of these contingent liabilities may become actual liabilities.

In the event that any of our contingent liabilities become liabilities, our business, financial condition and
results of operations may be adversely affected. Furthermore, there can be no assurance that we will not incur
similar or increased levels of contingent liabilities in the current Fiscal or in the future.

We are subject to routine tax assessments from relevant taxation authorities. As on the date of this Red Herring
Prospectus, there are two pending taxation proceedings involving us:

(in ₹ million)
Particulars Number of proceedings Amount involved*
Taxation proceeding involving our Company 2 2.69
*To the extent quantifiable.

We have paid the amounts claimed under the above mentioned proceedings under protest.

26. We are dependent on third party transportation and logistics service providers. Any increase in the charges
of these entities could adversely affect our business, results of o perations and financial conditions.
Disruptions of logistics could impair our ability to procure raw materials and/or deliver our products on
time, which could materially and adversely affect our business, financial condition and results of
operations.

Pursuant to certain of our arrangements with our customers, based on customer preferences, we are required
to pay the freight costs for the products we sell. In addition, we may have to pay for transportation costs in
relation to the delivery of some of the raw materials and other inputs to our Manufacturing Facility. We do
not own any vehicles for the transportation of our products and/or raw materials, we therefore rely on third
party transportation and logistics providers for delivery of our raw materials and products. Further in light of

36
 the COVID-19 pandemic there may be delay in transportation and delivery of our products to customers and
supply of raw materials from our suppliers. However, we do not have any long term contractual arrangements
with such third party transportation and logistics providers. None of our Promoters or Directors are related to
any of our third-party transportation service providers or logistics providers for the delivery of our raw
materials and products.

Given the centralised nature of our manufacturing operations, the services provided by third party
transportation and logistics providers is critical for distribution of our products from our Manufacturing
Facility to our customers and for the receipt of raw materials and inputs at the Manufacturing Facility. Freight
(inward and outward) represented 1.60%, 1.14% and 1.98% of our total expenses in Fiscals 2020, 2019 and
2018 respectively. We are subject to the risk of increases in freight costs. If we cannot fully offset any
increases in freight costs, through increases in the prices for our products, we would experience lower
margins.

While we believe we have adequately insured ourselves against the risk involved in maritime transport, our
Company may be responsible for the transport of our products and accordingly be exposed to the risk of theft,
accidents and/or loss of our products in transit. While there have been no material instances of theft/ accident/
loss thus far, we cannot assure you that such incidents will not occur in future. Any such acts could result in
serious liability claims (for which we may not be adequately insured) which may, in addition to resulting in
pecuniary liability also entail personal liability and accordingly this could have an adverse effect on our
financial condition and results of operations.

27. We benefit from certain export benefits from the Government of India, which if withdrawn or modified
may have a significant impact on our results operations

As on the date of this Red Herring Prospectus, our Company receives certain export benefits from the
Government of India.

Details in relation to the types of export benefits availed by the Company in the last three Fiscals, along with
details of amount of such export benefit, as are below:
(in ₹ million)
Sr. No. Fiscal Particulars of export benefit Amount of benefit
1. 2020 Duty drawbacks and MEIS certificate 7.93
2. 2019 Duty drawbacks and MEIS certificate 4.64
3. 2018 Duty drawbacks and MEIS certificate 3.38

Such export benefits enable the duty free import of inputs required for the production of products which are
to be exported. The withdrawal or modification of such export benefits may have an adverse effect on the
cost of our imported raw materials, thereby having a significant impact on our results of operations.

28. We are subject to environmental, health and safety regulations, which may increase our compliance costs.
Further, we require certain approvals and licenses in the ordinary course of business, and the failure to
obtain or retain them in a timely manner may materially adversely affect our operations.

We are required to comply with Indian central, state and local laws, governing the protection of the
environment, as well as occupational health and safety, including laws regulating the generation, storage,
handling, use and transportation of waste materials, the emission and discharge of waste materials into soil,
air or water, and the health and safety of our employees. For details on the regulations and policies applicable
to us, see “Key Regulations and Policies in India” on page 158.

Our Manufacturing Facility is used for the manufacturing of chemicals which is a hazardous process, utilising
hazardous and inflammable raw materials. As a result, we are subject to a variety of environmental laws and
health and safety laws and regulations dealing with occupational health and safety. Additionally, the
government or the relevant regulatory bodies may require us to shut down our Manufacturing Facility or
specific plants within the Manufacturing Facility, which in turn could lead to product shortages that delay or
prevent us from fulfilling our obligations to customers. Increased requirements of environmental, health and
safety laws and regulations, increasingly strict enforcement thereof by governmental authorities, and claims
for damages to property or injury to persons resulting from the environmental, health or safety impacts of our
Company’s operations or past contamination, could prevent or restrict some of our Company’s operations,

37
 require the expenditure of significant funds to bring our Company into compliance, involve the imposition of
clean up requirements and give rise to civil or criminal liability.

We are also required to maintain certain statutory and regulatory approvals, licenses, registrations and
permissions, and applications need to be made at the appropriate stages for our business to operate. While as
on the date of this Red Herring Prospectus, our Company has obtained or made applications to obtain all
material approvals required for our business operations, we will be required to periodically renew certain
material approvals and may also be subject to additional regulatory requirements based on regulatory
developments and/or our business operations. The rejection of any such application for grant of material
approvals, may have an adverse effect on our ability to undertake our business operations. Further, there can
be no assurance that such approvals, if granted, would be so granted in a timely manner. Delay in us being
granted material approvals would delay our ability to perform the regulated activity and accordingly hamper
our operations.

Further, Government approvals, licenses, clearances and consents, are often also subject to numerous
conditions, some of which are onerous and may require significant expenditure. If we fail to comply, or a
regulator claims that we have not complied, with these conditions, we may not be able to continue with work
or operate our Manufacturing Facility. For further information on various approvals or licenses required in
connection with our operations, see “Government and Other Approvals” on page 279. Additionally, for
further details in relation to the material approvals required by the Company for its operations, and which are
pending as on the date of this Red Herring Prospectus, see “Government & Other Approvals-Material
approvals which have expired for which renewal applications have been made”, on page 280.

29. Restrictions imposed in the secured credit facilities and our other outstanding indebtedness may limit our
ability to operate our business and to finance our future operations or capital needs.

As of June 30, 2020, our total outstanding borrowings was ₹469.35 million. For further details, please see
“Financial Indebtedness” on page 273.

Our financing agreements governing our borrowings include conditions and restrictive covenants that require
us to obtain consents, no-objections or waivers from lenders prior to carrying out specified activities or
entering into certain transactions. Such restrictive covenants, among other things, require us to obtain the
approval of the relevant lender for availing any additional borrowing, disposing any fixed assets, effecting
any change in our shareholding pattern, ownership and/or management, undertaking any further capex except
being funded by the Company’s own resources, effecting any material changes in the management of the
business and diversifying into non-core areas (i.e. other than our current business). We cannot assure you that
we will be able to obtain approvals to undertake any of these activities as and when required or to comply
with such covenants or other covenants in the future. Our Company has obtained the necessary consents
required under the relevant financing documentation for undertaking the Issue.

Under some of our credit facilities, our lenders are entitled to terminate the credit facility in the event of any
default committed by us, or even otherwise at their discretion without any prior notice, under other loan
facilities. In case we default in any of our outstanding borrowings, we may not be able to declare or issue
dividends, without the approval of our lenders.

30. Our performance depends to a large extent on the efforts and abilities of our Promoters and Key
Managerial Personnel. The loss of or diminution in the services of one or more of our Promoters or Key
Managerial Personnel could have a material adverse effect on our business, financial condition and results
of operations.

We are dependent on the services of our Promoters and Key Managerial Personnel, and our ability to attract,
train, motivate and retain skilled employees and other professionals will enable us to manage and expand our
business operations. The loss of or diminution in the services of one or more of our Promoters and Key
Managerial Personnel could have a material adverse effect on our business, financial condition and results of
operations.

Our performance depends to a large extent on the efforts and abilities of our Promoters and Key Managerial
Personnel. We have long-term association with our Key Managerial Personnel. For details in relation to the
experience of our Promoters and Key Managerial Personnel, see “Our Promoters and Promoter Group” and
“Our Management” on pages 181 and 165, respectively. Further, for details in relation to the names of the

38
 officers of the Company who are well versed with the operations of the Company, including technology,
financial and investments aspects of the Company, see “Our Management-Management Organization
Chart”, on page 179. Our future success will to a large extent depend on our ability to retain our Key
Managerial Personnel. We do not have any key man insurance. If we are unable to hire additional personnel
or retain existing qualified personnel, in particular our Key Managerial Personnel and persons with requisite
skills, our operations and our ability to expand our business may be impaired. Further, we may be unable to
hire and retain enough skilled and experienced employees to replace those who leave. Failure to hire or retain
Key Managerial Personnel and skilled and experienced employees could have a material adverse effect on
our business, financial condition and results of operations.

31. Information relating to the current and historical installed capacity of each of the plants in our
Manufacturing Facility included in this Red Herring Prospectus are based on various assumptions and
estimates

Information relating to the current and historical installed capacity of each of the plants currently in our
Manufacturing Facility and the estimated installed capacities of the additional plants proposed to be installed
at the Manufacturing Facility are based on certain technical assumptions. Such assumptions include
assumptions for arriving at production capacity like number of shifts and the duration of each shift.
Prospective investors should not place undue reliance on the historical installed capacity information and
estimated installed capacity for the plants currently in the Manufacturing Facility, and the estimated installed
capacities of additional proposed plants.

The current and historical installed capacity of each of the plants of our Manufacturing Facility and the
estimated installed capacities of the additional plants proposed to be installed at the Manufacturing Facility
have been examined and verified by N.G. Vithalani, Chartered Engineer, who has, vide certificates both dated
August 26, 2020, confirmed such details. The said N.G. Vithalani, Chartered Engineer, is not related to the
Promoters or Directors and was not related to the Promoters or Directors as on the date of this Red Herring
Prospectus and the Draft Red Herring Prospectus.

The said certificates have been included in list of documents for inspection at Company’s Registered Office.
See “Material Contracts and Documents for Inspection” on page 341.

32. We may face competition in our business from both domestic and international competitors, such
competition may have an adverse impact on our business, growth and development.

We were the only manufacturer of HMDS in India in the calendar year 2019, 2018 and 2017 and were the
third largest manufacturer of HMDS worldwide in calendar year 2019, eight largest in calendar year 2018
and seventh largest in calendar year 2017 in terms of production (source: Frost & Sullivan Report). We were
the largest manufacturer of CMIC in India and the second largest manufacturer of CMIC worldwide in
calendar year 2019, 2018 and 2017 in terms of production (source: Frost & Sullivan Report). Further, we
were the only manufacturer of Zinc Bromide and the largest manufacturer of Calcium Bromide in India, in
terms of production in calendar year 2019 (source: Frost & Sullivan Report).

However, we are required to compete both in the domestic and international markets. We may be unable to
compete with the prices and products offered by our competitors (local as well as international). We may
have to compete with new players in India and abroad who enter the market and are able to offer competing
products. Our competitors may have access greater financial, manufacturing, research and development,
marketing, distribution and other resources and more experience in obtaining the relevant regulatory
approvals. Increasing competition may result in pricing pressures and decreasing profit margins or lost market
share or failure to improve our market position, any of which could substantially harm our business and results
of operations. We cannot assure you that we shall be able to compete with our existing as well as future
competitors as well as the price and services offered by them. In addition, our customers may enter into
contract manufacturing arrangements with third parties, for products that they are presently purchasing from
us. Our failure to successfully face existing and future competition may have an adverse impact on our
business, growth and development.

33. Our inability to manage growth could disrupt our business and reduce our profitability. Any inability on
our part to manage our growth or implement our strategies effectively could have a material adverse effect
on our business, results of operations and financial condition.

39
 Our growth strategies are subject to and involve risks and difficulties, many of which are beyond our control
and, accordingly, there can be no assurance that we will be able to implement our strategy or growth plans or
complete them within the budgeted cost and timelines. Our Company intends to leverage its capabilities to
explore growth opportunities in other products and geographical markets.

Further, on account of changes in market conditions, industry dynamics, technological improvements,

changes in regulatory or trading policies or changes therein and any other relevant factors, our growth strategy
and plans may undergo changes or modifications, and such changes or modifications may be substantial, and
may even include limiting or foregoing growth opportunities if the situation so demands. Additionally, there
can be no assurance that debt or equity financing or our internal accruals will be available or sufficient to
meet the funding of our growth plans. Any inability on our part to manage our growth or implement our
strategies effectively could have a material adverse effect on our business, results of operations and financial
condition.

34. We rely on contractors for the recruitment of contract labourers for non-core tasks and are therefore
exposed to execution risks and liability towards labourers under applicable Indian laws.

We engage independent contractors through whom we engage contract labourers for performance of certain
functions at our Manufacturing Facility for the performance of non-core tasks. Although we do not engage
these labourers directly, we are responsible for any wage and statutory payments to be made to such labourers
in the event of default by such independent contractors. Any requirement to fund their wage requirements
may have an adverse impact on our results of operations and our financial conditions. In addition, we may be
liable for or exposed to litigations, sanctions, penalties or losses arising from accidents or damages caused by
our workers or contractors. None of the Promoters or Directors are related or were related to the agencies
from whom the Company avails its contract labour employees as on the date of this Red Herring Prospectus
and the Draft Red Herring Prospectus.

For details in relation to the number of employees engaged by the Company on a permanent basis and on
contract basis in the last three financial years as well as details in relation to the attrition rate faced by it in
the last three years, see “Our Business - Human Resources” on page 154.

35. Our operations could be adversely affected by strikes, work stoppages, demands for increased wages or
any other kind of employee dispute.

While, we have never had a labour strike and none of our full-time employees are in a union and we believe
we enjoy a good relationship with our workforce, there can be no assurance that we may not experience
disruptions in our operations due to disputes or other problems with our work force such as work stoppages,
labour strikes, increased wage demands or any other kind of employee dispute that could adversely affect our
business and results of operations. These actions are impossible for us to predict or control and any such event
could adversely affect our business, results of operations and financial condition.

36. Our insurance coverage may not be sufficient or adequate to protect us against all material hazards, which
may adversely affect our business, results of operations, financial condition and cash flows.

We have obtained public liability insurance in complia nce with requirements under the Public Liability
Insurance Act, 1991, as amended, as well as industrial all risk insurance (including material damage and
business interruption insurance) with respect to our Manufacturing Facility, covering inter alia buildings,
plant and machinery, furniture and stock located therein and a marine cargo open policy with respect to our
key products and raw materials. Further, we have also obtained standard fire and special perils policies with
respect to our Corporate Office, our sales and marketing office in Mohali and one external leased warehouse
in Manjusar, Gujarat, a fire floater policy with respect to four external leased warehouses, a commercial care
package policy with respect to our sales and marketing office in Hyderabad and a money insurance policy
covering our Corporate Office and Manufacturing Facility.As on March 31, 2020, 100% of our total assets
have been insured and we had not incurred any monetary loss for product/items for which the Company had
either not ta ken any insurance coverage or which the insurance coverage was very negligible While we
believe that the insurance coverage which we maintain is in keeping with industry standards and would be
reasonably adequate to cover the normal risks associated with the operation of our businesses, we cannot
assure you that any claim under the insurance policies maintained by us will be honoured fully, in part or on
time, or that we have taken out sufficient insurance to cover all our losses. In addition, our insurance coverage
expires from time to time. We apply for the renewal of our insurance coverage in the normal course of our

40
 business, but we cannot assure you that such renewals will be granted in a timely manner, at acceptable cost
or at all.

There are many events including current situation of COVID-19 pandemic or any such events that could
significantly impact our operations, or expose us to third-party liabilities, for which we may not be adequately
insured. There can be no assurance that any claim under the insurance policies maintained by us will be
honored fully, in part, or on time. To the extent that we suffer any loss or damage that is not covered by
insurance or exceeds our insurance coverage, our business, financial condition and results of operations could
be adversely affected. Further, an insurance claim once made could lead to an increase in our insurance
premium, result in higher deductibles and also require us to spend towards addressing certain covenants
specified by the insurance companies. For further details on our insurance arrangements, see “Our Business
– Insurance” on page 156.

37. We have in the past entered into related party transactions and may continue to do so in the future.

We have entered, and are likely to continue to enter, into tra nsactions with related parties, including our
Promoters, members of our Promoter Group and our Group Companies on an arm’s length basis. For more
information on our prior related party transactions in the Fiscals 2020, 2019 and 2018 and outstanding
balances with related parties at the end of such periods, see “Restated Financial Statements- Annexure VI-
Note 35: Related Party Disclosures” on page 229 of this Red Herring Prospectus.

We believe that all of our related party transactions are in compliance with applicable law. Further, the
transactions into which we have entered and any future transactions into which we may enter into with our
related parties have involved or could potentially involve conflicts of interest. The Companies Act, 2013 and
the SEBI Listing Regulations provide for compliance requirements, such as obtaining prior approval from
the audit committee, board of directors and shareholders for certain related party transactions. There can be
no assurance that such transactions would be approved. There can also be no assurance that we would be able
to maintain existing terms, or in case of any future transactions with related parties. While we hav e entered
into transactions with related parties on an arm’s length basis, we cannot assure you that any related party
transactions in future, individually or in the aggregate, will not be negatively perceived or have an adverse
effect on our results of operations and financial condition.

38. We have commissioned an industry report from Frost & Sullivan, which has been used for industry related
data in this Red Herring Prospectus and such data has not been independently verified by us.

The information in this section and the sections entitled “Summary of the Offer Document”, “Our Business”,
“Management’s Discussion and Analysis of Financial Position and Results of Operations” and “Industry
Overview” on pages 18, 136, 243 and 92 respectively, of this Red Herring Prospectus includes information
that is derived from the Frost & Sullivan Report prepared by Frost & Sullivan that we commissioned in
connection with the Issue for the purpose of confirming our understanding of the industry. Neither we, nor
any of the Book Running Lead Managers, their associates or affiliates or any other person connected with the
Issue have verified the information included in the Frost & Sullivan Report prepared by Frost & Sullivan.
Frost & Sullivan has advised that while the Frost & Sullivan Report has been prepared through research,
involving discussing the status of the industry with leading industry participants and experts and compiling
inputs from publicly available sources, including official publications and reports, quantitative market
information being primarily based on such interviews and desk -based secondary research is subject to
fluctuations. Investors are advised not to unduly rely on the industry related information provided in this Red
Herring Prospectus when making their investment decision and such industry related information contained
in this Red Herring Prospectus should not be construed as advice relating to business, financial, legal, taxation
or investment matters.

The Promoters or Directors are not and were not related to Frost & Sullivan as on the date of this Red Herring
Prospectus and the Draft Red Herring Prospectus.

39. Our Promoters, Directors and Key Managerial Personnel are interested in our Company’s performance
in addition to their remuneration and reimbursement of expenses.

Certain of our Promoters, Directors and Key Managerial Personnel may be regarded as having an interest in
our Company other than reimbursement of expenses incurred and normal remuneration or benefits. Further,
in addition to transactions disclosed at “Restated Financial Statements - Annexure VI - Note 35: Related Party

41
 Disclosures” on page 229, our Promoters may also be deemed to be interested to the extent of Equity Shares
held by them, as well as to the extent of any dividends, bonuses or other distributions on such Equity Shares.

We cannot assure you that our Promoters, Directors and our Key Managerial Personnel, if they are also our
shareholders, will exercise their rights as shareholders to the benefit and best interest of our Company. For
further details, see “Capital Structure” and “Our Promoters and Promoter Group”, and “Our Management”
on pages 65, 181 and 165 respectively.

40. We have availed certain borrowings which may be recalled by our lenders at any time.

We have currently availed certain borrowings which may be recalled by the lender at any time, during the
tenor of the loan with or without the existence of an event of default. In the event that the lender seeks a
repayment of the loan, we would need to find alternative sources of financing, which may not be available on
commercially reasonable terms, or at all. If we are unable to procure such financing, we may not have
adequate working capital to undertake new initiatives or complete our ongoing strategies. As a result, any
such demand may materially and adversely affect our business, cash flows, financial condition and results of
operations. However, in the last three Fiscals, there have been no instances wherein the relevant lenders of
the Company have recalled any amount of the relevant borrowing.

Outlined below are details in relation to the borrowings of the Company in terms of: (a) amount outstanding
as at the end of the previous three Fiscals, and (b) details of the percentage of such outstanding borrowings
as a percentage of the net worth of the Company for the relevant financial period:

Sr. No. As of Outstanding borrowings (in ₹ millions)** % of Net Worth***

1. March 31, 2020 445.11 31.19
2. March 31, 2019 331.09 34.57
3. March 31, 2018 168.93 31.50
** Borrowings include Non-Current Borrowings and Current Borrowings of the Company as per Restated Financial statements. Further,
Non-Current borrowings include current maturities of long term borrowings.
*** Net worth means the aggregate value of the paid up share capital of the Company and all reserves created out of profits and
securities premium account, net of pre-Issue expenses, as per Restated Statement of Assets and Liabilities of the Company.

Further, details in relation to the secured and unsecured borrowings of the Company for the previous three
Fiscals, are as below:
(in ₹ millions)
Sr. No. As of Secured borrowings* Unsecured borrowings
1. March 31, 2020 445.05 0.06
2. March 31, 2019 293.99 37.10
3. March 31, 2018 141.83 27.10
* Secured Borrowings include Non-Current Borrowings and Current Borrowings of the Company as per Restated Financial Statements.
Further, Non-Current borrowings include current maturities of long term borrowings.

41. Certain of our warehouses and offices are on leased premises. Our failure to continue to use such premises
may have an adverse impact on our operations.

Our five leased warehouses in Manjusar and our sales and marketing offices in Hyderabad and Mohali are
currently held by us on short-term leases. The lease period for three of the five leased warehouses is for five
years starting from August 20, 2019, December 24, 2019 and June 12, 2020, respectively, while the lease
period for the other two warehouses is for two years starting from June 1, 2019. Further, our sales and
marketing offices in Hyderabad and Mohali have been taken by us on lease for a period of three years from
June 1, 2020 and November 1, 2018 respectively. None of our Promoters or Directors are related to any of
the persons from whom our Company has leased the premises underlying our warehouses and sales and
marketing offices. We cannot assure you that we will be able to retain possession of such premises on the
same or similar terms or at all or find alternative locations on favorable terms or at all.

42
External Risks

42. Changing laws, rules and regulations and legal uncertainties, including ad verse interpretation or
application of tax laws and regulations, may materially and adversely affect our business, prospects, future
financial performance, the trading price of the Equity Shares, financial condition and results of
operations.

Our business, prospects, financial condition and results of operations could be materially and adversely
affected by changes in law, or interpretations of existing laws, rules and regulations, or the promulgation of
new laws, rules and regulations in India and other countries, applicable to us and our business, including
potentially adverse tax consequences, such as or implementation of potential tariffs and other barriers to trade.

Governmental and regulatory bodies in India and other countries may enact new regulations or policies, which
may require us to obtain approvals and licenses from applicable governments and other regulatory bodies or
impose onerous requirements and conditions in relation to the sale and the usage of our products. Any such
changes and the related legal uncertainties with respect to the implementation of new regulations or owing to
the overlap of different legal regimes may have a material adverse effect on our business, prospects, financial
condition and results of operations. New compliance requirements could increase our costs or otherwise
adversely affect our business, financial condition and results of operations.

For example, in India, as of July 1, 2017, a national goods and service tax (“GST”) replaced taxes levied by
central and state governments with a unified tax regime in respect of certain goods and services for the whole
of India. However, given the recent introduction of the GST in India, there is no well-established practice
regarding the implementation of, and compliance with, GST. Further, as GST is implemented, we cannot
assure you that we will not be required to comply with additional procedures or obtain additional approvals
and licenses from the government and other regulatory bodies or that they will not impose onerous
requirements and conditions on our operations. As the taxation system in India will see significant changes
as a result of GST, its consequent effects cannot be determined at present and we cannot assure you that such
effects will not have a material adverse effect our business, future financial performance and the trading price
of the Equity Shares.

The application of GST and other applicable laws, rules and regulations to our business or to our equipment
suppliers, now or in the future, may be subject to interpretation by relevant authorities, and, if amended or
notified, could result in increased tax payments to us (prospectively or retrospectively) or to our equipment
suppliers (thereby increasing their costs and the rates they charge us for their services), which could affect
our business, prospects, financial condition and results of operations.

The Finance Act, 2020 (“Finance Act”), has, amongst others things, provided a number of amendments to
the direct and indirect tax regime, including, without limitation, a simplified alternate direct tax regime and
that dividend distribution tax (“DDT”), will not be payable in respect of dividends declared, distributed or
paid by a domestic company after March 31, 2020, and accordingly, such dividends would not be exempt in
the hands of the shareholders, both resident as well as non-resident and likely be subject to tax deduction at
source. The Company may or may not grant the benefit of a tax treaty (where applicable) to a non -resident
shareholder for the purposes of deducting tax at source from such dividend. Investors should consult their
own tax advisors about the consequences of investing or trading in the Equity Shares. Further, there is a risk
that the Indian Income Tax Department may assess our tax liability to be materially different from the
provision that we have carried in our books for the past periods.

Further, a draft of the Personal Data Protection Bill, 2019 has been introduced before the Lok Sabha on
December 11, 2019, which is currently being referred to a joint parliamentary committee by the Parliament.
We may incur increased costs and other burdens relating to compliance with such new requirements, which
may also require significant management time and other resources, and any failure to comply may adversely
affect our business, results of operations and prospects. Uncertainty in the applicability, interpretation or
implementation of any amendment to, or change in, governing law, regulation or policy, including by reason
of an absence, or a limited body, of administrative or judicial precedent may be time consuming as well as
costly for us to resolve and may impact the viability of our current businesses or restrict our ability to grow
our businesses in the future.

43
43. Political, social, legal and economic changes that could affect the economic conditions in India.

Our Company is incorporated in India and its assets are located in India. Consequently, our performance and
the market price of the Equity Shares may be affected by interest rates, government policies, taxation, social
and ethnic instability and other political and economic developments affecting India.

Factors that may adversely affect the Indian economy, and hence our results of operations, may include:

• the macroeconomic climate, including any increase in Indian interest rates or inflation;
• any exchange rate fluctuations, the imposition of currency controls and restrictions on the right to convert
or repatriate currency or assets;
• any scarcity of credit or other financing in India, resulting in an adverse effect on economic conditions
in India and scarcity of financing for our expansions;
• prevailing income conditions among Indian customers and Indian corporations;
• epidemic or any other public health in India or in countries in the region or globally, including in India’s
various neighbouring countries;
• volatility in, and actual or perceived trends in trading activity on, India’s principal stock exchanges;
• changes in India’s tax, trade, fiscal or monetary policies;
• political instability, riots, terrorism or military conflict in India or in countries in the region or globally,
including in India’s various neighbouring countries;
• occurrence of natural or man-made disasters;
• prevailing regional or globa l economic conditions, including in India’s principal export markets;
• other significant regulatory or economic developments in or affecting India or its consumption sector;
• international business practices that may conflict with other customs or legal requirements to which we
are subject, including anti-bribery and anti-corruption laws;
• protectionist and other adverse public policies, including local content requirements, import/export
tariffs, increased regulations or capital investment requirements;
• logistical and communications challenges;
• downgrading of India’s sovereign debt rating by rating agencies; and
• being subject to the jurisdiction of foreign courts, including uncertainty of judicial processes and
difficulty enforcing contractual agreements or judgments in foreign legal systems or incurring additional
costs to do so.

Any slowdown or perceived slowdown in the Indian economy, or in specific sectors of the Indian economy,
could adversely affect our business, results of operations and financial condition and the price of the Equity
Shares.

44. Financial instability in other countries may cause increased volatility in Indian financial markets and may
have a material adverse effect on our business and the trading price of the Equity Shares.

The Indian economy is influenced by economic and market conditions in other countries, including, but not
limited to, the conditions in the United States, Europe and certain economies in Asia. Financial turmoil in
Asia and elsewhere in the world in recent years has affected the Indian economy. Any worldwide financial
instability may cause increased volatility in the Indian financial markets and, directly or indirectly, materially
and adversely affect the Indian economy and financial sector and its business.

Although economic conditions vary across markets, loss of investor confidence in one emerging economy
may cause increased volatility across other economies, including India. Financial instability in other parts of
the world could have a global influence and thereby impact the Indian economy. Financial disruptions in the
future could materially and adversely affect our business, prospects, financial condition and results of
operations.

The global credit and equity markets have experienced substantial dislocations, liquidity disruptions and
market corrections. In Europe, the exit of the United Kingdom from the European Union, and any prolonged
period of uncertainty which results, could have a significant negative impact on international markets. These
could include further falls in stock exchange indices and/or greater volatility of markets in general due to the
increased uncertainty. These and other related events could have a significant impact on the global credit and
financial markets as a whole, and could result in reduced liquidity, greater volatility, widening of credit
spreads and a lack of price transparency in the global credit and financial markets.

44
 There are also concerns that a tightening of monetary policy in emerging markets and some developed
markets will lead to a moderation in global growth. In particular, as China is one of India’s major trading
partners, there are rising concerns regarding the United States limiting trade and/or imposing a tariff on
imports from China and of a possible slowdown in the Chinese economy. Such factors might also result in a
slowdown in India’s export growth momentum and could materially and adversely affect our operating results
and financial performance.

In response to such developments, legislators and financial regulators in the United States and other
jurisdictions, including India, have implemented a number of policy measures designed to add stability to the
financial markets. However, the overall long-term impact of these and other legislative and regulatory efforts
on the global financial markets is uncertain, and they may not have had the intended stabilizing effects. Any
significant financial disruption in the future could have a material adverse effect on our cost of funding, loan
portfolio, business, future financial performance and the trading price of the Equity Shares. Adverse economic
developments overseas in countries where we have operations could have a material adverse effect on our
business and the trading price of the Equity Shares.

45. If inflation rises in India, increased costs may result in a decline in profits.

Inflation rates in India have been volatile in recent years, and such volatility may continue. Increasing
inflation in India could cause a rise in the costs of rent, wages, raw materials and other expenses. If we are
unable to increase our revenues sufficiently to offset our increased costs due to inflation, it could have a
material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

46. Significant differences exist between Indian Accounting Standards (“IndAS”) and other accounting
principles, such as the generally accepted accounting principles in the US (“US GAAP”) a nd International
Financial Reporting Standards (“IFRS”), which may be material to an investor’s assessment of our
financial condition.

The financial statements included in this Red Herring Prospectus have been prepared in accordance with
IndAS, as applicable, in the relevant period of reporting. We have not attempted to quantify the impact of US
GAAP or IFRS on the financial data included in this Red Herring Prospectus, nor do we provide a
reconciliation of our financial statements to those of US GAAP or IFRS. US GAAP and IFRS differ in
significant respects from IndAS. Accordingly, the degree to which the IndAS financial statements, which are
restated as per the SEBI ICDR Regulations included in this Red Herring Prospectus, will provide meaningful
information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any
reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this
Red Herring Prospectus should be limited a ccordingly.

47. Government regulation of foreign ownership of Indian securities may have a material adverse effect on
the price of the Equity Shares.

Foreign ownership of Indian securities is subject to regulation by the Government of India (“ GoI”). In
accordance with foreign exchange regulations currently in effect in India, under certain circumstances, the
Reserve Bank of India (“RBI”) must approve the sale of the Equity Shares from a non-resident of India to a
resident of India or vice-versa if the sale does not meet certain requirements specified by the RBI.
Additionally, any person who seeks to convert Indian Rupee proceeds from any such sale into foreign
currency and repatriate that foreign currency from India is required to obtain a no-objection or a tax clearance
certificate from the Indian income tax authorities. As provided in the foreign exchange controls currently in
effect in India, the RBI has provided that the price at which the Equity Shares are transferred will be calculated
in accordance with internationally accepted pricing methodology for the valuation of shares at an arm’s length
basis, and a higher (or lower, as applicable) price per share may not be permitted. We cannot assure you that
any required approval from the RBI or any other government agency can be obtained on terms favourable to
a non-resident investor in a timely manner or at all. Because of possible delays in obtaining requisite
approvals, investors in the Equity Shares may be prevented from realizing gains during periods of price
increase and/or limiting losses during periods of price decline. This may have a material adverse effect on the
price of the Equity Shares.

In terms of Press Note 3 of 2020, dated April 17, 2020, issued by the Department for Promotion of Industry
and Internal Trade (“DPIIT”), the foreign direct investment policy has been recently amended to state that
all investments under the foreign direct investment route by entities of a country which shares land border

45
 with India or where the beneficial owner of a n investment into India is situated in or is a citizen of any such
country will require prior approval of the GoI. Further, in the event of transfer of ownership of any existing
or future foreign direct investment in an entity in India, directly or indirectly, resulting in the beneficial
ownership falling within the aforesaid restriction/ purview, such subsequent change in the beneficial
ownership will also require approval of the GoI. Furthermore, on April 22, 2020, the Ministry of Finance,
GoI has also made similar amendment to the FEMA Rules. While the term “beneficial owner” is defined
under the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 and the General Financial
Rules, 2017, neither the foreign direct investment policy nor the FEMA Rules provide a definition of the term
“beneficial owner”. The interpretation of “beneficial owner” and enforcement of this regulatory change
involves certain uncertainties, which may have an adverse effect on our ability to raise foreign capital.
Further, there is uncertainty regarding the timeline within which the said approval from the GoI may be
obtained, if at all.

48. Natural disasters, fires, epidemics, pandemics, acts of war, terrorist attacks, civil unrest and other events
could materially and adversely affect our business.

Natural disasters (such as typhoons, flooding and earthquakes), epidemics, pandemics such as COVID-19,
acts of war, terrorist attacks and other events, many of which are beyond our control, may lead to economic
instability, in India or globally, which may in turn materially and adversely affect our business, financial
condition and results of operations.

Our operations may be adversely affected by fires, natural disasters and/or severe weather, which can result
in damage to our property or inventory and generally reduce our productivity and may require us to evacuate
personnel and suspend operations.

Any terrorist attacks or civil unrest as well as other adverse social, economic and political events in India
could have a negative effect on us. Such incidents could also create a greater perception that investment in
Indian companies involves a higher degree of risk and could have an adverse effect on our business and the
price of the Equity Shares.

A number of countries in Asia, including India, as well as countries in other parts of the world, are susceptible
to contagious diseases and, for example, have had confirmed cases of diseases such as the highly pathogenic
H7N9, H5N1 and H1N1 strains of influenza in birds and swine and more recently, the COVID-19 virus.
Certain countries in Southeast Asia have reported cases of bird-to-human transmission of avian and swine
influenza, resulting in numerous human deaths. A worsening of the current outbreak of COVID-19 virus or
future outbreaks of COVID-19 virus, avian or swine influenza or a similar contagious disease could adversely
affect the Indian economy and economic activity in the region. As a result, any present or future outbreak of
avian or swine influenza or other contagious disease could have a material adverse effect on our business and
the trading price of the Equity Shares.

Risks Related to the Issue

49. Our Promoter and Promoter Group will be able to exercise significant influence and control over our
Company after the Issue and may have interests that are different from those of our other shareholders.

As of the date of this Red Herring Prospectus, our Promoters and the other members of our Promoter Group
cumulatively hold 100% of our issued, subscribed and paid-up Equity Share capital. Upon completion of the
Issue, our Promoters and the members of the Promoter Group will collectively continue to exercise control
over us, which will allow them to vote together on certain matters in our general meetings. Accordingly, the
interests of our Promoters in their capacity as our Shareholders may conflict with your interests and the
interests of our other shareholders.

50. We cannot assure payment of dividends on the Equity Shares in the future.

While any declarations of dividends will be at the discretion of our Board and subject to Shareholder approval
as set out in the chapter entitled “Dividend Policy” on page 192 of this Red Herring Prospectus, the amount
of future dividend payments by us, if any, will depend upon our future earnings, financial condition, cash
flow, working capital requirements, capital expenditures, applicable Indian legal restrictio ns and other
factors. We may decide to retain all of our earnings to finance the development and expansion of its business
and therefore, we may not declare dividends on the Equity Shares. Additionally, in the future, we may be

46
 restricted by the terms of our loan agreements to make any dividend payments unless otherwise agreed with
our lenders.

51. Any variation in the utilisation of the Net Proceeds raised pursuant to the Fresh Issue would be subject to
certain compliance requirements, including prior shareholders’ approval

Our Company intends to use Net Proceeds raised pursuant to the Fresh Issue in the manner set out in the
section titled “Objects of the Issue” on page 75.

In accordance with Section 27 of the Companies Act, 2013, we cannot undertake any v ariation in the
utilisation of the Net Proceeds as disclosed in this Red Herring Prospectus without obtaining the approval of
shareholders of our Company through a special resolution. In the event of any such circumstances that require
us to undertake variation in the disclosed utilisation of the Net Proceeds, we may not be able to obtain the
approval of the shareholders of our Company in a timely manner, or at all. Any delay or inability in obtaining
such approval of the shareholders of our Company may adversely affect our business or operations.

In light of these factors, we may not be able to undertake variation of objects of the Issue to use any unutilized
proceeds of the Issue, if any, even if such variation is in the interest of our Company. This may restrict our
Company’s ability to respond to any change in our business or financial condition by re -deploying the
unutilized portion of Net Proceeds, if any, which may adversely affect our business and results of operations.

52. The proceeds from the Offer for Sale component of the Issue shall be received directly by the Selling
Shareholders.

This Issue includes the Offer for Sale by the Selling Shareholders. The proceeds from the Offer for Sale
component of the Issue will be paid directly to the Selling Shareholders. We will not receive any of the
proceeds from the Offer for Sale and will accordingly not have direct access to such funds.

53. After the Issue, the price of our Equity Shares may be highly volatile, o r an active trading market for our
Equity Shares may not develop.

The price of our Equity Shares on the Stock Exchanges may fluctuate after the Issue as a result of several
factors, including: volatility in the Indian and global securities market; our operations and performance;
performance of our competitors; adverse media reports about us or our products generally; changes in the
estimates of our performance or recommendations by financial analysts; significant developments in India’s
economic liberalization and deregulation policies; and significant developments in India’s fiscal regulations.
There has been no public market for our Equity Shares prior to the Issue and the price of the Equity Shares
may fluctuate after the Issue.

If the stock price of the Equity Shares fluctuates after the Issue, investors could lose a significant part of their
investment. As of the date of this Red Herring Prospectus, there is no market for the Equity Shares. Following
the Issue, the Equity Shares are expected to trade on the Stock Exchanges. We cannot assure you that active
trading in the Equity Shares will develop after the Issue or, if such trading develops, that it will continue.
Investors might not be able to sell the Equity Shares rapidly at the quoted price if there is no active trading in
the Equity Shares.

54. Investors may be subject to Indian taxes arising out of income on the sale of the Equity Shares.

Under current Indian tax laws, unless specifically exempted, capital gains arising from the sale of equity
shares held as investments in an Indian company are generally taxable in India. Any capital gain realized on
the sale of listed equity shares on a Stock Exchange held for more than 12 months immediately preceding the
date of transfer will be subject to long term capital gains in India at the specified rates depending on certain
factors, such as whether the sale is undertaken on or off the Stock Exchanges, the quantum of gains and any
available treaty relief. Accordingly, you may be subject to payment of long term capital gains tax in India, in
addition to payment of Securities Transaction Tax (“STT”), on the sale of any Equity Shares held for more
than 12 months immediately preceding the date of transfer. STT will be levied on and collected by a domestic
stock exchange on which the Equity Shares are sold.

Further, any capital gains realized on the sale of listed equity shares held for a period of 12 months or less
immediately preceding the date of transfer will be subject to short term capital gains tax in India.

47
 Capital gains arising from the sale of the Equity Shares will not be chargeable to tax in India in cases where
relief from such taxation in India is provided under a treaty between India and the country of which the seller
is resident and the seller is entitled to avail benefits thereunder. Generally, Indian tax treaties do not limit
India’s ability to impose tax on capital gains. As a result, residents of other countries may be liable for tax in
India as well as in their own jurisdiction on a gain upon the sale of the Equity Shares.

Similarly, any business income realized from the transfer of Equity Shares held as trading assets is taxable at
the applicable tax rates subject to any treaty relief, if applicable, to a non -resident seller.
Additionally, in terms of the Finance Act, 2018, which has been notified on March 29, 2018 with effect from
April 1, 2018, the tax payable by an assessee on the capital gains arising from transfer of long term capital
asset (introduced as section 112A of the Income-Tax Act, 1961) shall be calculated on such long-term capital
gains at the rate of 10%, where the long-term capital gains exceed ₹100,000, subject to certain exceptions in
case of a resident individuals and HUF.

Further, the Finance Act, 2019 has made various amendments in the taxation laws and has also clarified that,
in the absence of a specific provision under an agreement, the liability to pay stamp duty in case of sale of
securities through stock exchanges will be on the buyer, while in other cases of transfer for consideration
through a depository, the onus will be on the transferor. The stamp duty for transfer of securities other than
debentures, on a delivery basis is specified at 0.015% and on a non -delivery basis is specified at 0.003% of
the consideration amount. These amendments have been notified on December 10, 2019 and have come into
effect from July 1, 2020.

The Finance Act, 2020 has also provided a number of amendments to the direct and indirect tax regime,
including, without limitation, a simplified alternate direct tax regime and that DDT will not be payable in
respect of dividends declared, distributed or paid by a domestic company after March 31, 2020, and
accordingly, such dividends would not be exempt in the hands of the shareholders, both resident as well as
non-resident. The Company would be required to deduct tax at source from dividend credited, paid or
distributed to its shareholders.

The Company may or may not grant the benefit of a tax treaty (where applicable) to a non-resident shareholder
for the purposes of deducting tax at source pursuant to any corporate action including dividends.

55. The Issue Price of our Equity Shares may not be indicative of the market price of our Equity Shares after
the Issue.

The Issue Price will be determined pursuant to the Book Building Process and may not be indicative of prices
that will prevail in the open market following the Issue. The market price of the Equity Shares may be
influenced by many factors, some of which are beyond our control, including:

• the failure of security analysts to cover the Equity Shares after this Issue, or changes in the estimates of
our performance by analysts;
• the activities of competitors and suppliers;
• future sales of the Equity Shares by us or our shareholders;
• investor perception of us and the industry in which we operate;
• our quarterly or annual earnings or those of our competitors;
• developments affecting fiscal, industrial or environmental regulations;
• the public’s reaction to our press releases and adverse media reports; and
• general economic conditions.

As a result of these factors, investors may not be able to resell their Equity Shares at or above the Issue Price.
In addition, the stock market often experiences price and volume fluctuations that are unrelated or
disproportionate to the operating performance of a particular company. These broad market fluctuations and
industry factors may materially reduce the market price of the Equity Shares, regardless of our performance.
There can be no assurance that the investor will be able to resell their Equity Shares at or above the Issue
Price.

56. Investors may have difficulty enforcing foreign judgments against us or our management.

We are a limited liability company incorporated under the laws of India. The majority of our Directors are
residents of India. A substantial portion of our assets and the assets of our Directors resident in India are

48
 located in India. As a result, it may be difficult for investors to effect service of process upon us or such
persons outside India or to enforce judgments obtained against us or such parties outside India.

Recognition and enforcement of foreign judgments is provided for under Section 13 of the Code of Civil
Procedure, 1908 (“CPC”) on a statutory basis. Section 13 of the CPC provides that foreign judgments shall
be conclusive regarding any matter directly adjudicated upon, except: (i) where the judgment has not been
pronounced by a court of competent jurisdiction; (ii) where the judgment has not been given on the merits of
the case; (iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect
view of international law or a refusal to recognize the law of India in cases to which such law is applicable;
(iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where
the judgment has been obtained by fraud; and (vi) where the judgment sustains a claim founded on a breach
of any law then in force in India. Under the CPC, a court in India shall, upon the p roduction of any document
purporting to be a certified copy of a foreign judgment, presume that the judgment was pronounced by a court
of competent jurisdiction, unless the contrary appears on record. However, under the CPC, such presumption
may be displaced by proving that the court did not have jurisdiction.

India is not a party to any international treaty in relation to the recognition or enforcement of foreign
judgments. Section 44A of the CPC provides that where a foreign judgment has been rendered by a superior
court, within the meaning of that Section, in any country or territory outside of India which the GoI has by
notification declared to be in a reciprocating territory, it may be enforced in India by proceedings in execution
as if the judgment had been rendered by the relevant court in India. However, Section 44A of the CPC is
applicable only to monetary decrees not being of the same nature as amounts payable in respect of taxes,
other charges of a like nature or of a fine or other penalties. The United Kingdom, United Arab Emirates,
Singapore and Hong Kong have been declared by the Government of India to be reciprocating countries for
the purposes of Section 44A of the CPC.

Further, there may be considerable delays in the disposal of suits by Indian courts. It is unlikely that a court
in India would award damages on the same basis as a foreign court if an action was brought in India.
Furthermore, it is unlikely that an Indian court would enforce a foreign judgment if that court were of the
view that the amount of damages awarded was excessive or inconsistent with public policy or Indian practice.
It is uncertain as to whether an Indian court would enforce foreign judgments that would contravene or violate
Indian law. However, a party seeking to enforce a foreign judgment in India is required to obtain approval
from the RBI under the Foreign Exchange Management Act, 2000 (“FEMA”) to execute such a judgment or
to repatriate any amount recovered.

57. QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of
quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid, and Retail Individual
Investors are not permitted to withdraw their Bids after closure of the Issue.

Pursuant to the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are required to pay the Bid
Amount on submission of the Bid and are not permitted to withdraw or lower their Bids (in terms of quantity
of Equity Shares or the Bid Amount) at any stage after submitting a Bid. Retail Individual Investors can revise
their Bids during the Bid/Issue Period and withdraw their Bids until closure of the Issue.

Therefore, QIBs and Non-Institutional Investors would not be able to withdraw or lower their Bids,
notwithstanding adverse changes in international or national monetary policy, financial, political or economic
conditions, our business, results of operations or financial condition, or otherwise, between the dates of the
submission of their Bids and the Allotment.

While we are required to complete Allotment pursuant to the Issue within six Working Days from the
Bid/Issue Closing Date or such other period as may be prescribed, events affecting the Bidders’ decision to
invest in the Equity Shares, including material adverse changes in international or national monetary policy,
financial, political or economic conditions, our business, results of operations or financial condition may arise
between the date of submission of the Bid and Allotment. We may complete the Allotment of the Equity
Shares even if such events occur, and such events limit the Bidders’ ability to sell the Equity Shares Allotted
pursuant to the Issue or cause the trading price of the Equity Shares to decline on listing.

49
58. Any future issuance of Equity Shares may dilute your shareholding and sales of the Equity Shares by any
of our Promoters or other major shareholders may adversely affect the trading price of the Equity Shares.

We may be required to finance our growth, whether organic or inorganic, through future equity offerings.
Any future equity issuances by us, including a primary offering, may lead to the dilution of investors’
shareholdings in us. Any future issuances of Equity Shares (including under any emplo yee benefit scheme)
or the disposal of Equity Shares by any of our Promoters or the perception that such issuance or sales may
occur, including to comply with the minimum public shareholding norms applicable to listed companies in
India may adversely affect the trading price of the Equity Shares, which may lead to other adverse
consequences including difficulty in raising capital through offering of the Equity Shares or incurring
additional debt. There can be no assurance that we will not issue further Equity Shares or that shareholders
will not dispose of Equity Shares. Any future issuances could also dilute the value of your investment in the
Equity Shares. In addition, any perception by investors that such issuances or sales might occur may also
affect the market price of the Equity Shares.

59. Since our Equity Shares are quoted in Indian rupees in India, foreign investors may be subject to potential
losses arising out of exchange rate risk on the Indian rupee and risks associated with the conversion of
Indian rupee proceeds into foreign currency.

Foreign investors are subject to currency fluctuation risk and convertibility risk since our Equity Shares are
quoted in Indian rupees on the Indian Stock Exchanges on which they are listed. Dividends on our Equity
Shares will also be paid in Indian rupees. Investors that seek to convert the Indian rupee proceeds of a sale of
equity shares into foreign currency and export the foreign currency, will need to obtain the approval of the
RBI for each such transaction. Holders of Indian rupees in India may also generally not purchase foreign
currency without general or special approval from RBI.

60. Any downgrading of India's debt rating by an international rating agency could adversely affect our
business and the price of our Equity Shares.

Any adverse revisions to India's credit ratings for domestic and international debt by international rating
agencies may adversely affect our business, our future financial performance, our shareholders' funds and
the price of our Equity Shares.

50
 SECTION IV – INTRODUCTION

THE ISSUE

The following table summarizes details of the Issue:

Issue of Equity Shares(1) Up to [●] Equity Shares, aggregating up to ₹[●] million

of which:
Fresh Issue(1) Up to [●] Equity Shares, aggregating up to ₹1,650 million
Offer for Sale (2) Up to 4,500,000 Equity Shares, aggregating up to ₹[●]
million

The Issue comprises of:

A) QIB Portion (3)(4) Not more than [●] Equity Shares
of which:
(i) Anchor Investor Portion Up to [●] Equity Shares
(ii) Balance available for allocation to QIBs [●] Equity Shares
other than Anchor Investors (assuming
Anchor Investor Portion is fully subscribed)
of which:
(a) Available for allocation to Mutual Funds [●] Equity Shares
only (5% of the Net QIB Portion)
(b) Balance for all QIBs including Mutual [●] Equity Shares
Funds
B) Non-Institutional Portion Not less than [●] Equity Shares
C) Retail Portion (5) Not less than [●] Equity Shares

Pre and post Issue Equity Shares

Equity Shares outstanding prior to the Issue (as at 31,777,760 Equity Shares
the date of this Red Herring Prospectus)

Equity Shares outstanding after the Issue [●] Equity Shares

Use of Net Proceeds See “Objects of the Issue” on page 75. Our Company will not
receive any proceeds from the Offer for Sale.

Notes:
(1) The Issue has been authorized by a resolution of our Board dated June 14, 2019 and the Fresh Issue has been authorized
by a special resolution of our Shareholders, dated June 14, 2019. The final size of the Offer for Sale was noted by our
Board at its meeting held on September 9, 2020.

(2) The Equity Shares being offered by the Selling Shareholders are eligible for being offered for sale as part of the Off er for
Sale in terms of the SEBI ICDR Regulations. Kamalkumar Rajendra Aggarwal has consented to participate in the Offer
for Sale pursuant to his consent letter dated July 18, 2019, as superseded by his consent letter dated September 9, 2020
and has consented to offer up to 2,250,000 Equity Shares in the Offer for Sale. Naresh Vijaykumar Goyal has consented
to participate in the Offer for Sale pursuant to his consent letter dated July 18, 2019, as superseded by his consent letter
dated September 9, 2020 and has consented to offer up to 2,250,000 Equity Shares in the Offer for Sale.

(3) Our Company and the Selling Shareholders may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion
to Anchor Investors on a discretionary basis. The QIB Portion will accordingly be reduced for the Equity Shares allocated
to Anchor Investors. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to
valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of
under-subscription in the Anchor Investor Portion, the remaining Equity Shares shall be added to the QIB Portion. 5%
of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder
of the Net QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor
Investors), including Mutual Funds, subject to valid Bids being received at or above the Issue Price. In the event the
aggregate demand from Mutual Funds is less than as specified above, the balance Equity Shares available for Allotment
in the Mutual Fund Portion will be added to the QIB Portion and allocated proportionately to the QIB Bidders (other
than Anchor Investors) in proportion to their Bids. For details, see “Issue Procedure” beginning on page 296.

(4) Under-subscription, if any, in the QIB Portion would not be allowed to be met with spill-over from other categories or a
combination of categories. Subject to valid Bids being received at or above the Issue Price, undersubscription, if any, in

51
 any category except the QIB Portion, would be allowed to be met with spill over from any oth er category or combination
of categories, as applicable, at the discretion of our Company and the Selling Shareholders, in consultation with the
BRLMs and the Designated Stock Exchange. In the event of an undersubscription in the Issue, subject to receipt of
minimum subscription for 90% of the Fresh Issue and complying with Rule 19(2)(b) of the SCRR, our Company and the
BRLMs shall first ensure Allotment of Equity Shares offered pursuant to the Fresh Issue, followed by Allotment of Equity
Shares offered by the Selling Shareholders (on a proportionate basis).

(5) Allocation to all categories, except Anchor Investors, if any and Retail Individual Bidders, shall be made on a
proportionate basis. The allocation to each Retail Individual Bidder shall not be less th an the minimum Bid Lot, subject
to availability of Equity Shares in the Retail Portion and the remaining available Equity Shares, if any, shall be allocated
on a proportionate basis. Allocation to Anchor Investors shall be on a discretionary basis. For det ails, see “Issue
Procedure” on page 296.

For details, including in relation to grounds for rejection of Bids, refer to “Issue Structure “and “Issue Procedure”
on page 292 and 296 respectively. For details of the terms of the Issue, see “Terms of the Issue” on page 288.

52
 SUMMARY FINANCIAL INFORMATION

The following tables set forth the summary financial information derived from our Restated Financial Statements.
The summary financial information presented below has been prepared in accordance with Ind AS for the Fiscals
2020, 2019 and 2018 and restated in accordance with the SEBI ICDR Regulations and are presented in the section
“Restated Financial Statements” on page 194. The summary financial information presented below may differ in
certain significant respects from generally accepted accounting principles in other countries, including IFRS.
The summary financial information presented below should be read in conjunction with our Restated
Financial Statements, the notes and annexures thereto and the section “Management’s Discussion and Analysis
of Financial Position and Results of Operations” on page 243.

[The remainder of this page has intentionally been left blank]

53
Restated Summary Statement of Assets and Liabilities
(in ₹ million)
As at March 31, As at March 31, As at March 31,
Particulars
2020 2019 2018
I. ASSETS
Non-current assets
a. Property, plant and equipment 474.20 395.42 296.41
b. Capital work-in-progress 37.42 6.70 -
c. Right-Of-Use Asset 13.32 - -
d. Intangible assets 0.20 0.26 -
e. Financial assets
(i) Other financial assets 4.78 5.15 2.33
f. Other non-current assets 2.40 11.89 17.11
Total non-current assets 532.32 419.42 315.84

Current assets
a. Inventories 480.75 459.14 210.36
b. Financial assets
(i) Trade receivables 889.47 641.18 295.56
(ii) Cash and cash equivalents 10.74 6.84 9.28
(iii) Bank Balances Other than (ii) above 130.28 109.06 5.62
(iv) Other financial assets 14.01 14.41 14.79
c. Other current assets 200.34 80.27 119.20
Total current assets 1,725.60 1,310.91 654.81

Total assets 2,257.92 1,730.33 970.65

II. EQUITY AND LIABILITIES

Equity
a) Equity share capital 317.78 317.78 79.44
b) Other equity 1,145.92 652.52 456.78
Total equity 1,463.69 970.30 536.22

Liabilities
Non-current liabilities
a. Financial liabilities
(i) Borrowings 145.99 24.66 24.95
(ii) Lease Liabilities 8.22 - -
b. Non-current provisions 0.56 4.92 7.21
c. Deferred tax liabilities (net) 22.57 24.34 16.20
Total non-current liabilities 177.34 53.92 48.36

Current liabilities
a. Financial liabilities
(i) Borrowings 286.75 297.38 136.12
(ii) Trade payables
- Total outstanding dues of micro enterprises and 25.28 34.09
38.72
small enterprises
- Total outstanding dues of creditors other than 263.44 138.68
218.50
micro enterprises and small enterprises
(iii) Other financial liabilities 45.01 112.03 27.20
(iv) Lease liabilities 4.11 - -
b. Other current liabilities 23.77 6.71 11.68
c. Short Term Provisions 0.03 1.29 38.29
Total current liabilities 616.89 706.12 386.06
Total equity and liabilities 2,257.92 1,730.33 970.65

54
Restated Summary Statements of Profit and Loss (including other comprehensive income)
(in ₹ million)
For the year For the year For the year
Particulars ended March ended March ended March
31, 2020 31, 2019 31, 2018
Income
I. Revenue from operations 2,620.52 3,033.41 1,576.42
II. Other income 39.65 19.86 7.49
III. Total income (I+II) 2,660.17 3,053.26 1,583.91

IV. Expenses
Cost of Materials Consumed 1,533.71 1,947.39 793.82
Changes in inventories of finished goods and (44.64) (98.23) (20.67)
work-in-progress
Excise Duty 0.00 - 4.86
Employee Benefit expenses 140.50 241.12 188.04
Finance costs 46.84 40.02 30.36
Depreciation and Amortisation expenses 46.20 28.64 22.59
Other expenses 288.33 282.29 159.40
Total expenses (IV) 2,010.94 2,441.23 1,178.40

V. Profit before tax (III-IV) 649.22 612.03 405.51

VI. Tax expense:

a) Current tax
- Current tax 163.80 174.60 141.64
- Taxes for earlier years 0.31 0.69 0.87
b) Deferred tax charge/(credit) (3.41) 6.33 (0.81)
Total Tax Expenses 160.70 181.62 141.70

VII. Profit/(Loss) after tax (V-VI) 488.53 430.41 263.81

VIII. Other comprehensive income

Items that will not be reclassified subsequently to

Profit and Loss
Remeasurement of Gains/(Losses) on defined 6.50 5.48 2.71
benefit Plans
Deferred tax (1.64) (1.81) (0.90)
Other Comprehensive Income (expense)/ 4.87 3.67 1.81
income, Net of Tax (VIII)

IX. Total Comprehensive Income for the 493.40 434.08 265.62

Year/Period (VII+VIII)

X. Earnings per equity share

Basic [in ₹] 15.37 13.54 8.30
Diluted [in ₹] 15.37 13.54 8.30

55
Restated Summary Statement of Cash Flows
(in ₹ million)
For the year ended For the year ended For the year ended
Particulars
March 31, 2020 March 31, 2019 March 31, 2018
Cash flow from Operating Activities
Net Profit Before Tax 649.22 612.03 405.51
Adjustment for:
Depreciation and Amortization expense 42.93 28.64 22.59
Depreciation on Right of use assets 3.26
(Profit)/ Loss on assets sold 0.56 0.51 (0.55)
Finance Cost 46.84 40.02 30.36
Interest received from Banks/ Others (7.98) (1.48) (1.10)
Operating Profit before Working Capital 734.84 679.72 456.81
Changes
Adjustment for:
Change in Trade receivables (248.28) (345.63) (71.68)
Change in Other Non-current financial assets 0.38 (2.83) (0.08)
Change in Other current financial assets 0.40 0.37 (8.63)
Change in Other assets (104.66) 58.86 (81.06)
Change in Inventories (21.61) (248.78) (119.95)
Change in Trade payables (31.50) 115.95 85.09
Change in Other financial liabilities (70.33) 83.62 (22.20)
Change in Other current liabilities and (2.18) 17.32
17.95
provisions
Cash generated from Operations 277.17 339.12 255.62
Less : Income tax paid/ (Refund) (net) 172.15 228.54 114.29
Net Cash generated from Operating 110.58 141.33
105.02
Activities (A)
Cash flow from Investing Activities
Purchase of Property, Plant & Equipment, (165.62) (142.73) (80.68)
Investment Property & Intangibles, including
Right-of-use assets
Term deposits with maturity 3 to 12 months (21.22) (103.44) (0.40)
Sale proceeds of Property, Plant & Equipment 12.69 7.60 1.66
Interest received from Banks/ Others 7.98 1.48 1.10
Net Cash used in Investing Activities (B) (166.17) (237.09) (78.33)
Cashflow from Financing Activities
Finance cost (43.83) (38.10) (24.14)
Proceeds/(Repayment) of Short term 161.26 (35.09)
(10.63)
Borrowings
Proceeds of Long term Borrowings 139.59 9.83 12.45
(Repayment) of Long term Borrowings (14.94) (8.92) (10.31)
Payments of interest portion of lease liabilities (0.89) - -
Payments of principal portion of lease - -
(4.26)
liabilities
Net Cash used in Financing Activities (C) 65.05 124.07 (57.08)
Net (Decrease)/ Increase in Cash & Cash 3.90 (2.44) 5.92
Equivalents (A) + (B) + (C)
Cash & Cash Equivalents at the beginning of 6.84 9.28 3.35
the period/ year
Cash & Cash Equivalents at the end of the 10.74 6.84 9.28
period/year

56
 GENERAL INFORMATION

Our Company was originally incorporated as Gujarat Quinone Private Limited at Vadodara, Gujarat, India, as a
private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated
December 15, 1988 issued by the RoC. Our Promoters and Promoter Group completed the acquisition of 100%
of the Equity Share capital of our Company in 2004 from the shareholders of our Company at the time.

Chemcon Engineers Private Limited” (“CEPL”) was incorporated at Vadodara, Gujarat, India as a private
limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated April 30, 1996
issued by the RoC. CEPL, a company largely owned and promoted by our Promoters and Promoter Group,
merged into our Company pursuant to an order of the High Court of Gujarat dated May 6, 2004 approving the
Scheme of Amalgamation between CEPL and our Company. Thereafter, to reflect the nature of activities of our
Company consequent to the Scheme of Amalgamation, the name of our Company was changed to “Chemcon
Speciality Chemicals Private Limited” pursuant to the approval of our Shareholders at an extra-ordinary general
meeting held on July 24, 2004 and the fresh certificate of incorporation on change of name issued by the RoC
on July 27, 2004.

Subsequently, our Company was converted into a public limited company pursuant to the approval of our
Shareholders at an extra-ordinary general meeting held on November 28, 2018. Consequently, the name of our
Company was changed to “Chemcon Speciality Chemicals Limited” and a Fresh certificate of incorporation
consequent upon conversion to public limited company was issued by the RoC on April 10, 2019.

For further details relating to the changes in the registered office and name of our Company, see “History and
Certain Corporate Matters” on page 162.

Registered Office of our Company

The address and certain other details of our Registered Office is as follows:

Chemcon Speciality Chemicals Limited

Block Number 355, Manjusar Kunpad Road
Manjusar Village, Taluka Savli
Vadodara 391 775, Gujarat
Telephone: +91 98795 64107
Website: www.cscpl.com

For details of the changes in our Registered Office, see “History and Certain Corporate Matters-Changes in the
registered office” at page 162.

Corporate Office of our Company

The address and certain other details of our Corporate Office is as follows:

Chemcon Speciality Chemicals Limited

9 th Floor, Onyx Business Centre
Akshar Chowk, Old Padra Road
Vadodara – 390 020, Gujarat
Telephone: +91 265 298 1195

Company Registration Number and Corporate Identity Number

The registration number and corporate identity number of our Company are as follows:

a. Registration number: 011652

b. Corporate identity number: U24231GJ1988PLC011652

The Registrar of Companies

Our Company is registered with the Registrar of Companies, Gujarat, Dadra & Nagar Haveli at Ahmedabad,
which is situated at the following address:

57
ROC Bhavan, Opposite Rupal Park Society
Behind Ankur Bus Stop
Naranpura, Ahmedabad – 380 013, Gujarat
Telephone: +91 79 2743 8531

Filing

A copy of the Draft Red Herring Prospectus has been filed through the SEBI Intermediary Portal at
https://siportal.sebi.gov.in, in accordance with SEBI circular bearing reference
SEBI/HO/CFD/DIL1/CIR/P/2018/011 dated January 19, 2018 and with SEBI at SEBI Western Regional Office,
Near Suryarath Building, Panchvati, Off. C.G. Road, Ahmedabad, 380 009, Gujarat, India.

This Red Herring Prospectus has been filed with SEBI through the SEBI Intermediary Portal at
https://siportal.sebi.gov.in, in accordance with SEBI circular bearing reference
SEBI/HO/CFD/DIL1/CIR/P/2018/011 dated January 19, 2018. This Red Herring Prospectus has been filed with
the Stock Exchanges through electronic mail.

This Red Herring Prospectus, along with the documents, has been filed with the RoC, in accordance with Section
32 of the Companies Act, and a copy of the Prospectus required to be filed under Section 26 of the Companies
Act, will be filed with the RoC through the electronic portal at
http://www.mca.gov.in/mcafoportal/loginvalidateuser.do.

Board of Directors

The following table sets out the brief details of our Board as on the date of this Red Herring Prospectus:

Name and designation on the

DIN Address
Board
Kamalkumar Rajendra Aggarwal 00139199 13-A, Shivashray Society, near Rameshwar Temple, Vasna
(Chairman and Managing Director) Road, Vadodara 390 020, Gujarat
Navdeep Naresh Goyal 02604876 B/30 Shivashray Housing Society, Saiyed Vasna Road,
(Deputy Managing Director) Vadodara 390 007, Gujarat
Rajveer Aggarwal 07883896 13-A, Shivashray Society, near Rameshwar Temple, Vasna
(Whole-time Director) Road, Vadodara 390 020, Gujarat
Rajesh Chimanlal Gandhi 03296784 G-1, Dwarika Flat (behind Surya Nagar Garba Ground),
(Whole-time Director and Chief Waghodia Road, Vadodara 390 019, Gujarat
Financial Officer)
Himanshu Purohit 03296807 204, Suryadarshan Complex (near Taksh Complex), Vasna
(Whole-time Director) Road, Vadodara Racecourse, Vadodara 390 007, Gujarat
Lalit Chaudhary 00651372 31, Vitthal Nagar Society, Opposite Mental Hospital,
(Independent Director) Karelibaug, Vadodara 390 018, Gujarat
Bharat Shah 08281811 Arunodaya, Chittekhan Gali, Gendigate Road, Vadodara
(Independent Director) 390 017, Gujarat
Neelu Shah 08283933 38, Spun Ville Lane No. 4, Arunoday Society (near
(Independent Director) Crossword Circle), Alkapuri, Racecourse, Vadodara 390
007, Gujarat
Devendra Rajkumar Mangla 08421613 301/A, Perl Nautilas Tower (A), Near Sabri School, Vasana
(Independent Director) Road, Vadodara 390 007, Gujarat
Samir Chandrakant Patel 00086774 24-25, Earth Bunglow, Akshar Chowk, Vadodara 390 015,
(Independent Director) Gujarat

For further details of our Board of Directors, see “Our Management-Board of Directors” on page 165.

Company Secretary and Compliance Officer

Shahilkumar Maheshbhai Kapatel is the Company Secretary and Compliance Officer our Company. His contact
details are as follows:

58
Shahilkumar Maheshbhai Kapatel
Near Gayatri Temple, Pragna Pole
Kheda District, At-Matar - 387 530,
Gujarat
Telephone: +91 265 298 3754
E-mail: [email protected]

Investor Grievances

Bidders can contact the Company Secretary and Compliance Officer and/or the Registrar to the Issue in
case of any pre- Issue or post- Issue related problems such as non-receipt of letters of Allotment, non-credit
of Allotted Equity Shares in the respective beneficiary account, non-receipt of refund orders or non-receipt
of funds by electronic mode, etc. For all Issue related queries and for redressal of complaints, Bidders may
also write to the BRLMs, in the manner provided below.

All Issue related grievances, other than by Anchor Investors, may be addressed to the Registrar to the Issue, with
a copy to the relevant Designated Intermediary, with whom the ASBA Form was submitted, quoting the full name
of the sole or first Bidder, ASBA Form number, Bidders’ DP ID, Client ID, PAN, address of the Bidder, number
of Equity Shares applied for, date of ASBA Form, name and address of the relevant Designated Intermediary,
where the Bid was submitted and ASBA Account number (for Bidders other than RIBs using the UPI Mechanism)
in which the amount equivalent to the Bid Amount was blocked or the UPI ID in case of RIBs using the UPI
Mechanism. Further, the Bidder shall enclose the Acknowledgement Slip or provide the acknowledgement
number received from the Designated Intermediaries in addition to the documents/information mentioned
hereinabove.

In terms of SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/22, dated February 15, 2018, any ASBA Bidder
whose Bid has not been considered for Allotment, due to failure on the part of any SCSB, shall have the option
to seek redressal of the same by the concerned SCSB within three months of the date of listing of the Equity
Shares. SCSBs are required to resolve these complaints within 15 days, failing which the concerned SCSB would
have to pay interest at the rate of 15% per annum for any delay beyond this period of 15 days.

All grievances of the Anchor Investors may be addressed to the Registrar to the Issue, giving full details such as
the name of the sole or first Bidder, Bid cum Application Form number, Bidders’ DP ID, Client ID, PAN, date of
the Bid cum Application Form, address of the Bidder, number of the Equity Shares applied for, name and address
of the relevant Designated Intermediary, unique transaction reference number, the name of the relevant bank, Bid
Amount paid on submission of the Bid cum Application Form and the name and address of the BRLM where the
Bid cum Application Form was submitted by the Anchor Investor.

All grievances relating to Bids submitted with Registered Brokers, may be addressed to the Stock Exchanges,
with a copy to the Registrar to the Issue. Further, Bidders shall also enclose a copy of the Acknowledgment Slip
received from the Designated Intermediaries in addition to the information mentioned hereinabove.

Book Running Lead Managers and Syndicate Members

Intensive Fiscal Services Private Limited Ambit Capital Private Limited

914, 9 th Floor, Ambit House
Raheja Chambers 449, Senapati Bapat Marg
Free Press Journal Marg Lower Parel
Nariman Point Mumbai 400 013, Maharashtra, India.
Mumbai 400 021, Maharashtra, India Telephone: +91 22 3043 3000
Telephone: + 91 22 2287 0443/44/45 Email: [email protected]
Email: [email protected] Investor Grievance Email:
Investor Grievance Email: [email protected] [email protected]
Website: www.intensivefiscal.com Website: www.ambit.co
Contact person: Harish Khajanchi/Anand Rawal Contact Person: Gaurav Rana/Sandeep Sharma
SEBI Registration No.: INM000011112 SEBI Registration No.: INM000012379

59
Statement of inter-se allocation of responsibilities among the Book Running Lead Managers

The responsibilities and coordination by the BRLMs for various activities in the Issue are as follows:

Sr.
Activity Responsibility Co-ordinator
No.
1. Capital Structuring with relative components and formalities Intensive, Ambit Intensive
such as type of instruments, etc.
2. Due diligence of Company's operations / management / business Intensive, Ambit Intensive
plans / legal etc. Drafting and design of Draft Red Herring
Prospectus, Red Herring Prospectus including memorandum
containing salient features of the Prospectus. The BRLMs shall
ensure compliance with stipulated requirements and completion
of prescribed formalities with the Stock Exchanges, RoC and
SEBI including finalization of Prospectus and RoC filing, follow
up and coordination till final approval from all regulatory
authorities. Coordination for all agreements.
3. Drafting and approval of all statutory advertisement Intensive, Ambit Intensive
4. Drafting and approval of all publicity material other than Intensive, Ambit Ambit
statutory advertisement including media monitoring, corporate
advertisement, brochure etc. and coordination for media
compliance report
5. Appointment of other intermediaries viz., Registrar's, Printers, Intensive, Ambit Intensive
Advertising Agency, Monitoring Agency and Banker(s) to the
Issue
6. Preparation of road show presentation and FAQs Intensive, Ambit Ambit
7. International institutional marketing strategy Intensive, Ambit Ambit
• Finalize the list and division of investors for one to one
meetings, in consultation with the Company, and
• Finalizing the International road show schedule and investor
meeting schedules
8. Domestic institutions / banks / mutual funds marketing strategy Intensive, Ambit Ambit
• Finalize the list and division of investors for one to one
meetings, institutional allocation in consultation with the
Company.
• Finalizing the list and division of investors for one to one
meetings, and
• Finalizing investor meeting schedules
9. • Non-Institutional and retail marketing of the Issue, which will Intensive, Ambit Ambit
cover, inter alia,
• Formulating marketing strategies, preparation of publicity
budget
• Finalize Media and PR strategy
• Finalizing centers for holding conferences for press/media,
investors and brokers;
• Finalising brokers for the Issue;
• Finalising collection centres; and
• Follow-up on distribution of publicity and Issuer material
including form, prospectus and deciding on the quantum and
distribution of the publicity and Issue material including offer
documents, application forms and abridged prospectus
10. Co-ordination with Stock Exchanges for Book Building Intensive, Ambit Intensive
software, bidding terminals and mock trading
11. Finalization of pricing, in consultation with the Company Intensive, Ambit Ambit
12. Post-issue activities, which shall involve managing Anchor book Intensive, Ambit Intensive
related activities and submission of letters to regulators post
completion of Anchor issue, management of escrow accounts,
essential follow-up steps including follow-up with Banker(s) to
the issue and Self Certified Syndicate Banks to get quick

60
 Sr.
Activity Responsibility Co-ordinator
No.
estimates of subscription and advising the Issuer about the
closure of the Issue, finalization of basis of allotment after
weeding out the technical rejections. Coordination with various
agencies connected with the post-issue activity such as registrars
to the issue, Banker(s) to the issue, Self-Certified Syndicate
Banks and underwriters etc., listing of instruments, demat credit
and refunds/ unblocking of funds announcement of allocation
and dispatch of refunds to Bidders, etc., payment of the
applicable STT. Coordination with SEBI and Stock Exchanges
for refund of 1% security deposit.

Legal Counsel to the Issue

Khaitan & Co
One World Centre
10 th & 13 th Floor, Tower 1C
841 Senapati Bapat Marg
Mumbai 400 013, Maharashtra, India
Telephone: +91 22 6636 5000

Special International Legal Counsel to the BRLMs with respect to Selling Restrictions
Duane Morris & Selvam LLP
16 Collyer Quay, Floor 17
Singapore 049318
Telephone: +65 6311 0030

Registrar to the Issue

Link Intime India Private Limited

C-101, 1 st floor, 247 Park
86 Lal Bahadur Shastri Marg
Vikhroli (West)
Mumbai 400 083, Maharashtra, India
Telephone: +91 22 4918 6200
E-mail: [email protected]
Investor grievance e-mail: [email protected]
Website: www.linkintime.co.in
Contact Person: Shanti Gopalkrishnan
SEBI Registration No.: INR000004058

Banker(s) to the Issue and Monitoring Agency

Escrow Collection Bank/ Public Issue Account Bank/ Refund Bank/ Sponsor Bank/Monitoring Agency

HDFC Bank Limited

FIG-OPS Department, Lodha
I Think Techno Campus O-3 Level
Next to Kanjurmarg Railway Station, Kanjurmarg (East)
Mumbai-400042, Maharashtra, India
Telephone: +91 22 3075 2927/28/2914
E-mail:
[email protected]/[email protected]/[email protected]/Neerav
[email protected]
Website: www.hdfcbank.com
Contact Person: Tushar Gavankar/Siddharth Jadhav/Prasanna Uchil/Neerav Desai
SEBI Registration No.: INBI00000063

Designated Intermediaries

61
Self-Certified Syndicate Banks

The list of SCSBs notified by SEBI for the ASBA process is available on the SEBI website at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes, or at such o ther website as may be
prescribed by SEBI from time to time. A list of the Designated SCSB Branches with which an ASBA Bidder
(other than an RIB using the UPI Mechanism), not Bidding through Syndicate/Sub Syndicate or through a
Registered Broker, may submit the ASBA Forms, is available at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34, and at such other
websites as may be prescribed by SEBI from time to time.

Further, the branches of the SCSBs where the Designated Intermediaries could submit the ASBA Form(s) of
Bidders (other than RIBs) is provided on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35 which may be
updated from time to time or at such other website as may be prescribed by SEBI from tim e to time.

Self-Certified Syndicate Banks eligible as Issuer Banks for UPI

The list of SCSBs through which Bids can be submitted by RIBs using the UPI Mechanism, including details such
as the eligible Mobile Apps and UPI handle which can be used for such Bids, is available on the website of the
SEBI at https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40, which may
be updated from time to time or at such other website as may be prescribed by SEBI from time to time.

Syndicate SCSB Branches

In relation to Bids (other than Bids by Anchor Investors and RIBs) submitted under the ASBA process to a member
of the Syndicate, the list of branches of the SCSBs at the Specified Locations named by the respective SCSBs to
receive deposits of Bid cum Application Forms from the Syndicate Members is available on the website of the
SEBI at https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35, which may
be updated from time to time or any such other website as may be prescribed by SEBI from time to time. For more
information on such branches collecting Bid cum Application Forms from the Syndicate at Specified Locations,
see the website of the SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35 or any such other
website as may be prescribed by SEBI from time to time.

Registered Brokers

The list of the Registered Brokers eligible to accept ASBA Forms from Bidders (other than RIBs), including
details such as postal address, telephone number and e-mail address, is provided on the websites of the BSE and
the NSE at http://www.bseindia.com/Markets/PublicIssues/brokercentres_new.aspx? and
https://www.nseindia.com/products/content/equities/ipos/ipo_mem_terminal.htm, respectively, as updated from
time to time.

Registrar and Share Transfer Agents

The list of the RTAs eligible to accept ASBA Forms from Bidders (other than RIBs) at the Designated RTA
Locations, including details such as address, telephone number and e-mail address, is provided on the websites of
Stock Exchanges at http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx? and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as updated from time
to time.

Collecting Depository Participants

The list of the CDPs eligible to accept ASBA Forms from Bidders (other than RIBs) at the Designated CDP
Locations, including details such as name and contact details, is provided on the websites of BSE at
http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx? And on the website of NSE at
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, as updated from time to time.

Auditors to our Company

K.C. Mehta & Co., Chartered Accountants

62
2 nd Floor, Meghdhanush
Race Course Circle
Vadodara 390 007, Gujarat
E-mail: [email protected]
Telephone: +91 0265 2440 400
Firm registration number: 106237W
Peer review no.: 010702

Except as mentioned below, there has been no change in our statutory auditors in the three years preceding the
date of this Red Herring Prospectus:

Name of statutory auditor Date of change Reason

M/s Shah Mehta and Bakshi, Chartered June 14, 2019 Completion of the term as statutory
Accountants auditors of our Company in
2nd Floor, Prasanna House compliance with Section 139(2) of
Associated Society the Companies Act, 2013
Opposite Radha Krishna Park
Near Akota Stadium, Akota
Vadodara 390 020, Gujarat
E-mail: [email protected]
Firm registration number: 103824W
Peer review no. 011692
K.C. Mehta & Co., Chartered Accountants June 14, 2019 Appointment as Statutory Auditors of
2 nd Floor, Meghdhanush our Company
Race Course Circle
Vadodara 390 007, Gujarat
E-mail: [email protected]
Firm registration number: 106237W
Peer review no.: 010702

Banker to our Company

HDFC Bank Limited
HDFC Bank House
Senapati Bapat Marg, Lower Parel (West)
Mumbai 400 018, Maharashtra, India
Telephone: +91 079 6600 1271
Email: [email protected]; [email protected]
Website: www.hdfcbank.com
Contact person: Shrey Kant; Parth Savla
Grading of the Issue
No credit agency registered with SEBI has been appointed for obtaining grading for the Issue.
Appraising Entity
No appraising entity has been appointed in relation to the Issue.
Credit Rating
As the Issue is of Equity Shares, credit rating is not required.
Debenture Trustee
As the Issue is of Equity Shares, the appointment of trustees not required.
Book Building Process
Book building, in the context of the Issue, refers to the process of collection of Bids from investors on the basis
of this Red Herring Prospectus and the Bid cum Application Forms. The Price Band will be decided by our
Company and the Selling Shareholders, in consultation with the BRLMs, and if not disclosed in this Red Herring
Prospectus, will be advertised in the English editions of Financial Express (a widely circulated English national

63
daily newspaper), all editions of Jansatta (a Hindi national daily newspaper) and the Gujarati editions of Financial
Express (a widely circulated Gujarati newspaper, Gujarati being the regional language of Vadodara where our
Registered Office is located), at least two Working Days prior to the Bid/Issue Opening Date and shall be made
available to the Stock Exchanges for the purposes of uploading on their respective websites. The Issue Price shall
be determined by our Company and the Selling Shareholders, in consultation with the BRLMs after the Bid/Issue
Closing Date.
All investors, other than Retail Individual Bidders and Anchor Investors, shall only participate through the ASBA
process by providing the details of their respective ASBA Account in which the corresponding Bid Amount will
be blocked by the SCSBs. Retail Individual Bidders shall participate through the ASBA process by providing the
details of their respective ASBA Account in which the corresponding Bid Amount will be blocked by the SCSBs
or using the UPI Mechanism. Anchor Investors are not permitted to participate in the Issue through the ASBA
process.
In accordance with the SEBI ICDR Regulations, QIBs and Non -Institutional Bidders are not permitted to
withdraw or lower the size of their Bids (in terms of the quantity of the Equity Shares or the Bid Amount) at any
stage. Retail Individual Bidders can revise their Bids during the Bid/ Issue Period and withdraw their Bids until
the Bid/ Issue Closing Date. Further, Anchor Investors cannot withdraw their Bids after the Anchor Investor
Bidding Date. Allocation to QIBs (other than Anchor Investors) and Non-Institutional Buyers will be on a
proportionate basis while allocation to Anchor Investors will be on a discretionary basis. For further details, see
“Terms of the Issue” and “Issue Procedure” beginning on pages 288 and 296, respectively.

The process of Book Building under the SEBI ICDR Regulations and the Bidding Process are subject to
change from time to time and the investors are advised to make their own judgment about investment
through this process prior to submitting a Bid in the Issue.

Bidders should note that the Issue is also subject to obtaining (i) final approval of the RoC after the
Prospectus is filed with the RoC and (ii) final listing and trading approvals from the Stock Exchanges,
which our Company shall apply for after Allotment.

For further details on the method and procedure for Bidding, see “Issue Procedure” beginning on page 296.

Underwriting Agreement

After the determination of the Issue Price and allocation of Equity Shares but prior to the filing of the Prospectus
with the RoC, our Company and the Selling Shareholders will enter into an Underwriting Agreement with the
Underwriters for the Equity Shares proposed to be offered through the Issue. Pursuant to the terms of the
Underwriting Agreement, the obligations of the Underwriters will be several and will be subject to certain
conditions to closing, as specified therein. The Underwriting Agreement is dated [●]. The Underwriters have
indicated their intention to underwrite the following number of Equity Shares:

(in ₹ million)
Name, address, telephone and e-mail of the Indicative Number of Amount
Underwriters Equity Shares to be Underwritten Underwritten
[●] [●] [●]
[●] [●] [●]
(This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC).

The abovementioned underwriting commitment is indicative and will be finalized after determination of the Issue
Price and Basis of Allotment and will be subject to the provisions of the SEBI ICDR Regulations. In the opinion
of our Board of Directors, the resources of the Underwriters are sufficient to enable them to discharge their
respective underwriting obligations in full. The Underwriters are registered with the SEBI under Section 12(1) of
the SEBI Act or registered as brokers with the Stock Exchange(s). Our Board, at its meeting held on [●], has
accepted and entered into the Underwriting Agreement mentioned above on behalf of our Company. Allocation
among the Underwriters may not necessarily be in proportion to their underwriting commitments.
Notwithstanding the above table, the Underwriters shall be severally responsible for ensuring payment with
respect to Equity Shares allocated to investors procured by them.

64
 CAPITAL STRUCTURE

The Equity Share capital of our Company as on the date of this Red Herring Prospectus is set forth below:
(In ₹ except share data)
Aggregate value Aggregate value at
at face value Issue Price*
A AUTHORIZED SHARE CAPITAL
50,000,000 Equity Shares of face value of ₹10 each 500,000,000 -

B ISSUED, SUBSCRIBED AND PAID-UP CAPITAL BEFORE

THE ISSUE
31,777,760 Equity Shares of face value ₹ 10 each 317,777,600 -

C PRESENT ISSUE IN TERMS OF THIS RED HERRING PROSPECTUS

Issue of up to [●] Equity Shares (1)(2) [●] [●]
of which
Fresh Issue of up to [●] Equity Shares (1) [●] Up to 1,650,000,000
Offer for Sale of up to 4,500,000 Equity Shares (2) Up to 45,000,000 [●]
which includes:
Up to 2,250,000 Equity Shares by Kamalkumar Rajendra Aggarwal Up to 22,500,000 [●]
Up to 2,250,000 Equity Shares by Naresh Vijaykumar Goyal Up to 22,500,000 [●]

D ISSUED, SUBSCRIBED AND PAID-UP CAPITAL AFTER THE ISSUE

[●] Equity Shares of face value of ₹ 10 each [●] [●]

E SECURITIES PREMIUM ACCOUNT

Before the Issue Nil
After the Issue [●]*
* To be updated upon finalization of the Issue Price.
(1) The Issue has been authorized by a resolution of our Board dated June 14, 2019. Subsequent to such Board approval, an
AGM was held at shorter notice on June 14, 2019 in terms of Section 101 of the Companies Act, 2013, after obtaining the
requisite approval of not less than 95% of the shareholders eligible to vote at the said AGM, in order to authorise the Fresh
Issue through a special resolution. Being a closely held Company with 7 shareholders, all Shareholders agreed to the
convening of the meeting with shorter notice.
(2) The Equity Shares being offered by the Selling Shareholders are eligible for being offered for sale as part of the Offer for
Sale in terms of the SEBI ICDR Regulations. Kamalkumar Rajendra Aggarwal has consented to participate i n the Offer for
Sale pursuant to his consent letter dated July 18, 2019, as superseded by his consent letter dated September 9, 2020 and has
consented to offer up to 2,250,000 Equity Shares in the Offer for Sale. Naresh Vijaykumar Goyal has consented to pa rticipate
in the Offer for Sale pursuant to his consent letter dated July 18, 2019, as superseded by his consent letter dated September
9, 2020 and has consented to offer up to 2,250,000 Equity Shares in the Offer for Sale.
For details of authorizations received for the Offer for Sale, see “Other Regulatory and Statutory Disclosures”
beginning on page 281.

Changes in the authorised share capital of our Company

For details of the changes to the authorised share capital of our Company in the past 10 years, see “History and
Certain Corporate Matters-Amendments to our Memorandum of Association” on page 163.

Notes to the Capital Structure

1. Equity Share Capital History of our Company

The following table sets forth the history of the Equity Share capital of our Company.

Date of Allotment/ No. of Cumulative

Face Issue price
Date of Reason/ Nature of Equity No. of Form of
Value per Equity
Shareholder’s Allotment Shares Equity consideration
(₹) Share (₹)
Resolution Allotted Shares
December 15, 1988 Initial subscription to the 20 20 10 10 Cash
MOA(1)

65
Date of Allotment/ No. of Cumulative
Face Issue price
Date of Reason/ Nature of
Equity No. of Form of
Value per Equity
Shareholder’s Allotment Shares Equity consideration
(₹) Share (₹)
Resolution Allotted Shares
December 7, 1990 Preferential allotment (2) 120,000* 120,020 10 10 Cash
December 20, 1990 Preferential allotment (3) 234,000* 354,020 10 10 Cash
November 22, 1993 Preferential allotment (4) 1,140,000* 1,494,020 10 10 Cash
March 25, 1994 Preferential allotment (5) 260,000* 1,754,020 10 10 Cash
August 15, 1994 Preferential allotment (6) 145,980* 1,900,000 10 10 Cash
August 31, 1996 Preferential allotment (7) 2,000,000* 3,900,000 10 10 Cash
January 21, 2004 Preferential allotment (8) 1,545,000 5,445,000 10 10 Cash
August 2, 2004 Allotment pursuant to 2,399,440 7,844,440 10 - Other than
Scheme of Amalgamation (9) Cash
March 30, 2010 Preferential allotment (10) 100,000 7,944,440 10 10 Cash
November 3, 2018 Bonus issue in the ratio of 23,833,320 31,777,760 10 Not -
three Equity Shares for every Applicable
one Equity Share held (11)
(1)
Allotment of 10 Class B Equity Shares each to Minaben Jadeja and Mayurdhvaj Jadeja pursuant to their subscription to
the MoA.
(2) Allotment of 100 Class B Equity Shares to Mayurdhvaj Jadeja, 48,000 Class B Equity Shares to Jersey Indenting Agency
Co. Limited and 71,900 Class B Equity Shares to Mukesh R. Patel.
(3)
Allotment of 400 Class B Equity Shares to Mayurdhvaj Jadeja, 45,000 Class A Equity Shares to C. K. Patel, 5,000 Class
B Equity Shares to C. K. Patel (as the first holder) jointly with Maniben Charitable Foundation (a s the second holder),
50,000 Class A Equity Shares to Mukesh R. Patel, 40,100 Class B Equity Shares to Mukesh R. Patel and 93,500 Class B
Equity Shares to Jersey Indenting Agency Co. Limited.
(4)
Allotment of 140,000 Class B Equity Shares to Mukesh R. Patel an d 1,000,000 Class B Equity Shares to C.K. Patel.
(5) Allotment of 260,000 Class B Equity Shares to C. K. Patel.
(6)
Allotment of 10,000 Class C Equity Shares to C. K. Patel and 135,980 Class B Equity Shares to C.K. Patel.
(7) Allotment of 2,000,000 Equity Shares to C. K. Patel.
(8) Allotment of 90,000 Equity Shares to Maniben C. Patel, 125,000 Equity Shares to Shailesh C. Patel, 235,000 Equity Shares
to Minaxiben B. Patel and 1,095,000 Equity Shares to C. K. Patel.
(9) Allotment of 160 Equity Shares each to S.R. Shastry, S.C Bishnoi, Kamlesh Bish noi, Sandeep Bishnoi, G.K Jain and
Niranjan Pannalal Shah (proprietor of Dip Metal), 8,000 Equity Shares to Gyanchand Mangla, 168,000 Equity Shares to
Naresh Vijaykumar Goyal, 201,760 Equity Shares to Kamalkumar Rajendra Aggarwal, 360,000 Equity Shares to Minal
Kamal Aggarwal, 408,000 Equity Shares to Vijaykumar Goyal, 620,000 Equity Shares to Nareshkumar Vijaykumar Goyal
HUF and 632,720 Equity Shares to Aggarwal Kamal R HUF.
(10)
Allotment of 100,000 Equity Shares to Kamalkumar Rajendra Aggarwal.
(11) Allotment of 408,000 Equity Shares each to Navdeep Naresh Goyal, Parul Gupta and Shubharangana Goyal, 1,080,000
Equity Shares to Minal Kamal Aggarwal, 1,861,440 Equity Shares to Nareshkumar Vijaykumar Goyal HUF, 1,899,600
Equity Shares to Aggarwal Kamal R. HUF, 8,822,97 0 Equity Shares to Naresh Vijaykumar Goyal and 8,945,310 Equity
Shares to Kamalkumar Rajendra Aggarwal.

* The class A, class B and class C Equity Shares of our Company, were re-classified in Fiscal 1997 into a single class of
Equity Shares (“Re-classification”). Our Company has been unable to trace corporate records and statutory filings evincing
the Re-classification as well as allotments of Equity Shares made by our Company since incorporation (other than the initial
subscription to our Memorandum of Association) till August 31, 1996 except our statutory register of members for details in
relation to such allotments and the Re-classification. For further details, see “Risk Factors- Certain documents filed by us
with the RoC and certain corporate records and other documents, are not traceable. While we have conducted a search with
the RoC, in respect of the unavailability of such forms and other records, we cannot assure you that such forms or records
will be available at all or any time in the future”, on page 35 .

2. Equity Shares issued for consideration other than cash and bonus issue
Except as set forth below, our Company has not issued any Equity Shares for consideration other than cash and
through bonus issue:

Issue price
Date of Nature of No. of Equity Face Form of Benefits accrued
per Equity
Allotment Allotment Shares Allotted Value (₹) consideration to our Company
Share (₹)
August 2, Allotment pursuant 2,399,440 10 - Other than Amalgamation of
2004 to Scheme of Cash CEPL into our
Amalgamation (1) Company

66
 Issue price
Date of Nature of No. of Equity Face Form of Benefits accrued
per Equity
Allotment Allotment Shares Allotted Value (₹) consideration to our Company
Share (₹)
November Bonus issue in the 23,833,320 10 Not Bonus issue Not Applicable
3, 2018 ratio of three Equity Applicable
Shares for every one
Equity Share held (2)
(1)
160 Equity Shares each to S.R Shastry, S.C Bishnoi, Kamlesh Bishnoi, Sandeep Bishnoi, G.K Jain and Niranjan Pannalal
Shah (proprietor of Dip Metal), 8,000 Equity Shares to Gyanchand Mangla, 168,000 Equity Shares to Naresh Vijaykumar
Goyal, 201,760 Equity Shares to Kamalkumar Rajendra Aggarwal, 360,000 Equity Shares to Minal Kamal Aggarwal,
408,000 Equity Shares to Vijaykumar Goyal, 620,000 Equity Shares to Nareshkumar Vijaykumar Goyal HUF and 632,720
Equity Shares to Aggarwal Kamal R. HUF.
(2)
Allotment of 408,000 Equity Shares each to Navdeep Naresh Goyal, Parul Gupta and Shubharangana Goyal, 1,080,000
Equity Shares to Minal Kamal Aggarwal, 1,861,440 Equity Shares to Nareshkumar Vijaykumar Goyal HUF, 1,899,600
Equity Shares to Aggarwal Kamal R. HUF, 8,822,970 Equity Shares to Naresh Vijaykumar Goyal and 8,945,310 Equity
Shares to Kamalkumar Rajendra Aggarwal.

3. Our Company has not issued any Equity Shares or preference shares out of its revaluation reserves at any
time since incorporation.

4. As on the date of this Red Herring Prospectus, our Company does not have outstanding preference shares.

5. Except as disclosed above, our Company has not issued or allotted any Equity Shares pursuant to schemes of
amalgamation approved under Sections 391-394 of the Companies Act, 1956 or Sections 230-232 of the
Companies Act, 2013.

6. All transactions in Equity Shares by our Promoters and members of our Promoter group between the date of
filing of this Red Herring Prospectus and the date of closing of the Issue shall be reported to the Stock
Exchanges within 24 hours of such transactions.

7. Our Company has not issued any Equity Shares at a price which may be lower than the Issue Price, during a
period of one year preceding the date of this Red Herring Prospectus.

67
 8. Shareholding Pattern of our Company
The table below presents the shareholding pattern of our Company as on the date of this Red Herring Prospectus.

Category Category of Number Number of Number Number of Total Shareholding Number of Voting Rights held in each Number of Shareholding , as a Number of Number of Number of
(I) shareholder of share fully paid up of Partly shares number of as a % of total class of securities shares % assuming full Locked in Shares pledged equity shares
(II) holders equity shares paid-up underlying shares held number of (IX) Underlying conversion of shares or otherwise held in
(III) held equity Depository (VII) shares Outstanding convertible (XII) encumbered dematerialize
(IV) shares Receipts =(IV)+(V)+ (calculated as convertible securities (as a (XIII) d form
held (VI) (VI) per SCRR, Number of Voting Rights securities percentage of (XIV)
Total as As a % As a %
(V) 1957) (including diluted share
Class e.g.: Class a % of Numb of total Numb of total
(VIII) As a % Warrants) capital)
Equity e.g.: Total (A+B+ er (a) Shares er (a) Shares
of (A+B+C2) (X) (XI)= (VII)+(X) As
Shares Others C) held (b) held (b)
a % of (A+B+C2)
(A) Promoter 7* 31,777,760* 0 0 31,777,760 100 31,777,760 0 31,777,760 100 0 0 0 0 0 0 31,777,760
and
Promoter
Group
(B) Public 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
(C) Non 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Promoter-
Non Public
(C1) Shares 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
underlying
DRs
(C2) Shares held 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
by
Employee
Trusts
Total 7 31,777,760 0 0 31,777,760 100 31,777,760 0 31,777,760 100 0 0 0 0 0 0 31,777,760
* Includes 6,233,500 Equity Shares which are jointly held by Navdeep Naresh Goyal and Shubharangana Goyal.

68
9. Other details of Shareholding of our Company

(a) As on the date of the filing of this Red Herring Prospectus, our Company has 7 (seven) Shareholders.

(b) Set forth below is a list of Shareholders holding 1% or more of the paid-up Share Capital of our Company,
on a fully diluted basis, as on the date of filing of this Red Herring Prospectus:

Sr. Percentage of the pre-Issue

Name of the Shareholder No. of Equity Shares
No. Equity Share Capital (%)
1. Kamalkumar Rajendra Aggarwal 11,927,080 37.53
2. Navdeep Naresh Goyal and 6,233,500 19.62
Shubharangana Goyal (joint holding)
3. Naresh Vijaykumar Goyal 5,285,826 16.63
4. Navdeep Naresh Goyal 2,374,666 7.47
5. Rajveer Aggarwal 2,532,800 7.97
6. Shubharangana Goyal 1,978,888 6.23
7. Minal Kamal Aggarwal 1,440,000 4.53
Total 31,772,760 99.98

(c) Set forth below is a list of Shareholders holding 1% or more of the paid-up Share Capital of our Company,
on a fully diluted basis, as of 10 days prior to the date of filing of this Red Herring Prospectus.

Sr. Percentage of the pre-Issue

Name of the Shareholder No. of Equity Shares
No. Equity Share Capital (%)
1. Kamalkumar Rajendra Aggarwal 11,927,080 37.53
2. Navdeep Naresh Goyal and 6,233,500 19.62
Shubharangana Goyal (joint holding)
3. Naresh Vijaykumar Goyal 5,285,826 16.63
4. Navdeep Naresh Goyal 2,374,666 7.47
5. Rajveer Aggarwal 2,532,800 7.97
6. Shubharangana Goyal 1,978,888 6.23
7. Minal Kamal Aggarwal 1,440,000 4.53
Total 31,772,760 99.98

(d) Set forth below is a list of Shareholders holding 1% or more of the paid-up Share Capital of our Company,
on a fully diluted basis, as of one year prior to the date of filing of this Red Herring Prospectus.

Sr. Percentage of the pre-Issue

Name of the Shareholder No. of Equity Shares
No. Equity Share Capital (%)
1. Kamalkumar Rajendra Aggarwal 11,927,080 37.53
2. Navdeep Naresh Goyal and 6,233,500 19.62
Shubharangana Goyal (joint holding)
3. Naresh Vijaykumar Goyal 5,285,826 16.63
4. Navdeep Naresh Goyal 2,374,666 7.47
5. Rajveer Aggarwal 2,532,800 7.97
6. Shubharangana Goyal 1,978,888 6.23
7. Minal Kamal Aggarwal 1,440,000 4.53
Total 31,772,760 99.98

(e) Set forth below is a list of Shareholders holding 1% or more of the paid-up Share Capital of our Company,
on a fully diluted basis, as of two years prior to the date of filing of this Red Herring Prospectus.

Sr. Percentage of the pre-Issue

Name of the Shareholder No. of Equity Shares
No. Equity Share Capital (%)
1. Kamalkumar Rajendra Aggarwal 2,981,770 37.53
2. Naresh Vijaykumar Goyal 2,940,990 37.02
3. Aggarwal Kamal R. HUF 633,200 7.97
4. Nareshkumar Vijaykumar Goyal-HUF 620,480 7.81
5. Minal Kamal Aggarwal 360,000 4.53

69
 Sr. Percentage of the pre-Issue
Name of the Shareholder No. of Equity Shares
No. Equity Share Capital (%)
6. Shubharangana Goyal 136,000 1.71
7. Parul Gupta 136,000 1.71
8. Navdeep Naresh Goyal 136,000 1.71
Total 7,944,440 100.00

10. Our Company presently does not intend or propose to alter its capital structure for a period of six months
from the Bid/Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares, or
by way of further issue of Equity Shares (including issue of securities convertible into or exchangeable,
directly or indirectly for Equity Shares), whether on a preferential basis, or by way of issue of bonus Equity
Shares, or on a rights basis, or by way of further public issue of Equity Shares, or otherwise. However, if our
Company enters into acquisitions, joint ventures or other arrangements, our Company may, subject to
necessary approvals, consider raising additional capital to fund such activity or use Equity Shares as currency
for acquisitions or participation in such joint ventures.

11. Details of Shareholding of our Promoters and members of the Promoter Group in the Company

• As on the date of this Red Herring Prospectus, our Promoters hold 22,514,134 Equity Shares, equivalent
to 70.85% of the issued, subscribed and paid-up Equity Share capital of our Company, as set forth in the
table below.

Pre-Issue Equity Share Post-Issue Equity Share

Sr. Capital Capital*
Name of the Shareholder
No. No. of Equity % of total No. of Equity % of total
Shares Shareholding Shares Shareholding
1. Kamalkumar Rajendra Aggarwal 11,927,080 37.53 [●] [●]
2. Navdeep Naresh Goyal and 6,233,500 19.62 [●] [●]
Shubharangana Goyal (joint holding)
3. Navdeep Naresh Goyal 2,374,666 7.47 [●] [●]
4. Shubharangana Goyal 1,978,888 6.23 [●] [●]
Total 22,514,134 70.85 [●] [●]
* Subject to finalisation of Basis of Allotment

• All Equity Shares held by our Promoters are in dematerialized form as on the date of this Red Herring
Prospectus.
• Build-up of the Promoters’ shareholding in our Company
The build-up of the Equity Shareholding of our Promoters since incorporation of our Company is set
forth in the table below.

% of current
Date of Face value Issue Price/
No. of outstanding
Name of Nature of Allotment/ per Equity Transfer Price
Equity Equity Shares
Promoter transaction Transfer / Share per Equity
Shares of the
Transmission (₹) Share (₹)
Company
Kamalkumar Transfer of Equity January 21, 568,510 1.79% 10 1 (1)
Rajendra Shares from Shailesh 2004
Aggarwal Chandubhai Patel, C.K
Patel Foundation Trust
and Mukesh Patel
Transfer of Equity May 20, 2004 2,107,500 6.63% 10 1 (1)
Shares from C.K Patel*
Allotment pursuant to August 2, 201,760 0.63% 10 -(2)
the Scheme of 2004
Amalgamation
Preferential allotment March 30, 100,000 0.31% 10 10 (3)
2010
Transfer of Equity February 2, 4,000 0.01% 10 10 (1)

70
 % of current
Date of Face value Issue Price/
No. of outstanding
Name of Nature of Allotment/ per Equity Transfer Price
Equity Equity Shares
Promoter transaction Transfer / Share per Equity
Shares of the
Transmission (₹) Share (₹)
Company
Shares from 2015
Gyanchand Mangla
Bonus issue in the November 3, 8,945,310 28.15% 10 Nil
ratio of three Equity 2018
Shares for every one
Equity Share held
Number of Equity Shares held by Kamalkumar Rajendra Aggarwal 11,927,080
Navdeep Transfer of Equity February 17, 136,000 0.43% 10 Nil(4)
Naresh Goyal Shares from 2010
Vijaykumar Goyal
(grandfather)
Bonus issue in the November 3, 408,000 1.28% 10 Nil
ratio of three Equity 2018
Shares for every one
Equity Share held
Transfer of Equity May 13, 2019 244,634 0.77% 10 Nil(4)
Shares from Naresh
Vijaykumar Goyal
(father)
Transfer of Equity May 21, 2019 539,000 1.70% 10 Nil(4)
Shares from Parul
Gupta (sister)
Transfer of Equity May 22, 2019 1,047,032 3.29% 10 Nil(5)
Shares from the
Nareshkumar
Vijaykumar Goyal
HUF (member of the
HUF)
Total number of Equity Shares held by Navdeep Naresh Goyal as the sole 2,374,666
holder
Transfer of Equity May 13, 2019 6,233,500 19.62% 10 Nil(4)
Shares from Naresh
Vijaykumar Goyal
(father) jointly to
Navdeep Naresh
Goyal and
Shubharangana
Goyal**
Total number Equity Shares held by Navdeep Naresh Goyal as the first 6,233,500
holder jointly with Shubharangana Goyal
Shubharanga Transfer of Equity February 17, 136,000 0.43% 10 Nil(4)
na Goyal Shares from 2010
Vijaykumar Goyal
(father in law)
Bonus issue in the November 3, 408,000 1.28% 10 Nil
ratio of three Equity 2018
Shares for every one
Equity Share held
Transfer of Equity May 22, 2019 1,434,888 4.52% 10 Nil(5)
Shares from the
Nareshkumar
Vijaykumar Goyal
HUF (member of
HUF)

71
 % of current
Date of Face value Issue Price/
No. of
outstanding
Name of Nature of Allotment/ per Equity Transfer Price
Equity
Equity Shares
Promoter transaction Transfer / Share per Equity
Shares
of the
Transmission (₹) Share (₹)
Company
Total number of Equity Shares held by Shubharangana Goyal as the sole 1,978,888
holder
Transfer of Equity May 13, 2019 6,233,500 19.62% 10 Nil(4)
Shares from Naresh
Vijaykumar Goyal
(husband) jointly to
Navdeep Naresh
Goyal and
Shubharangana
Goyal**
Total number of Equity Shares held by Shubharangana Goyal as the second 6,233,500
holder jointly with Navdeep Naresh Goyal
*C.K. Patel was the first holder of such Equity Shares, while Maniben Patel Charitable Foundation Trust was the second
holder of such Equity Shares.
** Navdeep Naresh Goyal is the first holder and Shubharangana Goyal is the second holder of such Equity Sh ares.
(1) The price paid for acquisition of the Equity Shares by the Promoters.
(2)
Allotment in terms of the swap ratio of the scheme of amalgamation approved by the High Court of Gujarat vide
order dated May 6, 2004
(3)
The issue price in the preferential issue by our Company.
(4) Such Equity Shares were acquired for no consideration, in the form of gift.
(5) Such Equity Shares were acquired for no consideration, pursuant to dissolution of HUF.

• All the Equity Shares held by our Promoters were fully paid-up on the respective dates of allotment of
such Equity Shares. Further, none of the Equity Shares held by our Promoters are pledged.
• The details of the Shareholding of the members of the Promoter Group (other than our Promoters) as on
the date of filing of this Red Herring Prospectus are set forth in the table below.
Pre-Issue Post-Issue*
Sr.
Name of the Shareholder No. of Equity % of total No. of Equity % of total
No.
Shares Shareholding Shares Shareholding
1. Naresh Vijaykumar Goyal 5,285,826 16.63 [●] [●]
2. Minal Kamal Aggarwal 1,440,000 4.53 [●] [●]
3. Rajveer Aggarwal 2,532,800 7.97 [●] [●]
4. Parul Gupta 5,000 0.02 [●] [●]
Total 9,263,626 29.15 [●] [●]
* Subject to finalisation of Basis of Allotment.

• None of the members of the Promoter Group, the Promoters, or the Directors and their relatives have
purchased or sold any securities of our Company during the period of six months immediately preceding
the date of this Red Herring Prospectus.
• There have been no financing arrangements whereby our Promoters, members of the Promoter Group,
our Directors and their relatives have financed the purchase by any other person of securities of our
Company during a period of six months immediately preceding the date of the Draft Red Herring
Prospectus and this Red Herring Prospectus.
12. Details of Promoters’ contribution and lock-in for three years

(i) Pursuant to Regulations 14 and 16 of the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted
post-Issue Equity Share capital of our Company held by the Promoters shall be locked in for a period of three
years as minimum promoters’ contribution from the date of Allotment (“Promoters’ Contribution”), and
the Promoters’ shareholding in excess of 20% of the fully diluted post-Issue Equity Share capital shall be
locked in for a period of one year from the date of Allotment.
(ii) Details of the Equity Shares to be locked-in for three years from the date of Allotment as Promoters’
Contribution are set forth in the table below.

72
 Date of Issue/ Percentage Date up to
No. of
allotment No. of Face acquisition of the post- which the
Name of the Nature of Equity
of the Equity Value price per Issue paid- Equity Shares
Promoter transaction Shares
Equity Shares** (₹) Equity Share up capital are subject to
locked-in*
Shares (₹) (%) lock-in
Kamalkumar [●] [●] [●] [●] [●] [●] [●] [●]
Rajendra
Aggarwal
Navdeep [●] [●] [●] [●] [●] [●] [●] [●]
Naresh Goyal
Shubharangana [●] [●] [●] [●] [●] [●] [●] [●]
Goyal
Total [●] [●]
* Subject to finalisation of Basis of Allotment.
** All the Equity Shares were fully paid-up on the respective dates of allotment or acquisition, as the case may be, of such
Equity Shares.

(iii) Our Promoters have given consent to include such number of Equity Shares held by them as may constitute
20% of the fully diluted post-Issue Equity Share capital of our Company as Promoters’ Contribution. Our
Promoters have agreed not to sell, transfer, charge, pledge or otherwise encumber in any manner, the
Promoters’ Contribution from the date of filing this Red Herring Prospectus, until the expiry of the lock-in
period specified above, or for such other time as required under SEBI ICDR Regulations, except as may be
permitted, in accordance with the SEBI ICDR Regulations.

(iv) Our Company undertakes that the Equity Shares that are being locked-in are not and will not be ineligible for
computation of Promoters’ Contribution in terms of Regulation 15 of the SEBI ICDR Regulations. In this
connection, we confirm the following:

• The Equity Shares offered for Promoters’ Contribution do not include equity shares acquired in the three
immediately preceding years (a) for consideration other than cash involving revaluation of assets or
capitalisation of intangible assets; or (b) resulting from a bonus issue of Equity Shares out of revaluation
reserves or unrealised profits of our Company or from a bonus issuance of equity shares against Equity
Shares, which are otherwise ineligible for computation of Promoters’ Contribution;
• The Promoters’ Contribution does not include any Equity Shares acquired during the immediately
preceding one year at a price lower than the price at which the Equity Shares are being offered to the
public in the Issue;
• Our Company has not been formed by the conversion of a partnership firm or a limited liability
partnership firm into a company and hence, no Equity Shares have been issued in the one year
immediately preceding the date of this Red Herring Prospectus pursuant to conversion from a partnership
firm; and
• The Equity Shares forming part of the Promoter’s Contribution are not subject to any pledge.

13. Details of Equity Shares locked- in for one year

In addition to the 20% of the fully diluted post-Issue shareholding of our Company held by the Promoters
and locked in for three years as specified above and Equity Shares offered by the Selling Shareholders as part
of the Offer for Sale, the entire pre-Issue Equity Share capital of our Company will be locked-in for a period
of one year from the date of Allotment, including any unsubscribed portion of the Offer for Sale, in
accordance with Regulations 16(b) and 17 of the SEBI ICDR Regulations.

14. Lock-in of Equity Shares Allotted to Anchor Investors

Any Equity Shares Allotted to Anchor Investors in the Anchor Investor Portion shall be locked in for a period
of 30 days from the date of Allotment.

15. Recording on non-transferability of Equity Shares locked-in

As required under Regulation 20 of the SEBI ICDR Regulations, our Company shall ensure that the details
of the Equity Shares locked-in are recorded by the relevant Depository.

73
16. Other requirements in respect of lock-in

Pursuant to Regulation 21 of the SEBI ICDR Regulations, Equity Shares held by our Promoters and locked-
in, as mentioned above, may be pledged as collateral security for a loan with a scheduled commercial bank,
a public financial institution, Systemically Important Non-Banking Financial Company or a deposit accepting
housing finance company, subject to the following:

(a) With respect to the Equity Shares locked-in for one year from the date of Allotment, such pledge of the
Equity Shares must be one of the terms of the sanction of the loan.
(b) With respect to the Equity Shares locked-in as Minimum Promoter’s Contribution for three years from
the date of Allotment, the loan must have been granted to our Company for the purpose of financing one
or more of the objects of the Issue, which is not applicable in the context of this Issue.

However, the relevant lock-in period shall continue post the invocation of the pledge referenced above, and
the relevant transferee shall not be eligible to transfer to the Equity Shares till the relevant lock-in period has
expired in terms of the SEBI ICDR Regulations.

In terms of Regulation 22 of the SEBI ICDR Regulations, Equity Shares held by our Promoters and locked-
in, may be transferred to any member of our Promoter Group or a new promoter, subject to continuation of
lock-in applicable with the transferee for the remaining period and compliance with provisions of the
Takeover Regulations.

Further, in terms of Regulation 22 of the SEBI ICDR Regulations, Equity Shares held by persons other than
our Promoters prior to the Issue and locked-in for a period of one year, may be transferred to any other person
holding Equity Shares which are locked in along with the Equity Shares proposed to be transferred, subject
to the continuation of the lock in with the transferee and compliance with the provisions of the Takeover
Regulations.

17. Our Company, the Selling Shareholders, the Promoters, the Directors and the BRLMs have no existing
buyback arrangements and or any other similar arrangements for the purchase of Equity Shares being offered
through the Issue.

18. Except Kamalkumar Rajendra Aggarwal, Navdeep Naresh Goyal and Rajveer Aggarwal, none of the
Directors or Key Managerial Personnel of our Company hold any Equity Shares in our Company. For details,
see “Our Management-Shareholding of Directors in our Company” on page 171 .

19. All Equity Shares issued pursuant to the Issue shall be fully paid-up at the time of Allotment and there are no
partly paid-up Equity Shares as on the date of this Red Herring Prospectus.

20. As on the date of this Red Herring Prospectus, the BRLMs and their respective associates do not hold any
Equity Shares of our Company. The BRLMs and their affiliates may engage in the transactions with and
perform services for our Company in the ordinary course of business or may in the future engage in
commercial banking and investment banking transactions with our Company for which they may in thefuture
receive customary compensation.

21. Except for one of our Promoters, Kamalkumar Rajendra Aggarwal and one of the members of our Promoter
Group, Naresh Vijaykumar Goyal, who are offering Equity Shares in the Offer for Sale, none of our other
Promoters or members of our Promoter Group will participate in the Issue.

22. There are no outstanding warrants, options or rights to convert debentures, loans or other convertible
instruments into Equity Shares as on the date of this Red Herring Prospectus.

23. Employee Stock Option Plan

As on the date of this Red Herring Prospectus, our Company does not have any active employee stock option
plan.

74
 SECTION V – PARTICULARS OF THE ISSUE

OBJECTS OF THE ISSUE

The Issue comprises the Offer for Sale and the Fresh Issue.

Offer for Sale

Our Company will not receive any proceeds from the Offer for Sale. The Selling Shareholder will be entitled to
their respective portion of the proceeds of the Offer for Sale, net of their respective portion of the Issue related
expenses.

Fresh Issue

Our Company proposes to utilise the Net Proceeds from the Fresh Issue towards funding the following objects
(collectively, referred to herein as the “Objects”) :

1. Capital expenditure towards expansion of our Manufacturing Facility (“Project”);

2. To meet working capital requirements; and
3. General corporate purposes

In addition, our Company expects to receive the benefits of listing of the Equity Shares on the Stock Exchanges
and enhancement of our Company’s brand name and creation of a public market for our Equity Shares in India.

The main objects clause and objects incidental and ancillary to the main objects as set out in the Memorandum of
Association enables our Company to undertake its existing activities and the activities for which funds are being
raised by our Company through the Fresh Issue.

Net Proceeds

The details of the proceeds of the Fresh Issue are summarised in the table below:
(in ₹ million)
Particulars1 Amount
Gross Proceeds from the Fresh Issue [●]
(Less) Fresh Issue related expenses [●]
Net Proceeds [●]
1 To be finalised upon determination of the Issue Price and updated in the Prospectus at the time of filing with the RoC.

Utilization of Net Proceeds and Schedule of Implementation and Deployment

The Net Proceeds are currently expected to be deployed in accordance with the schedule set forth below:
(in ₹ million)
Particulars Total Amount alreadyAmount which Estimated Utilisation of
Estimated incurred as on will be Net Proceeds
Cost July 31, 2020 financed from
Fiscal 2021 Fiscal 2022
Net Proceeds
1
Capital expenditure towards 410.33 - 410.33 410.33 -
expansion of Manufacturing Facility
To meet working capital 900.00 - 900.00 400.00 500.00
requirements
General corporate purposes2 [●] - [●] [●] [●]
Total [●] - [●] [●] [●]
1 Total
estimated cost as per certificate dated August 26, 2020, issued by N.G. Vithalani, Chartered Engineer.
2 To
be finalised upon determination of Issue Price. The amount shall not exceed 25% of the Gross Proceeds of the Fresh Issue

Given the dynamic nature of our business, we may have to revise our funding requirements and deployment on
account of a variety of factors such as our financial condition, business strategy and external factors such as market
conditions, competitive environment and interest or exchange rate fluctuations, changes in design and
configuration of the Projects, increase in input costs of construction materials and labour costs, incremental
preoperative expenses, taxes and duties, start-up costs, interest and finance charges, EPC and non-EPC costs,

75
working capital margin, environment and ecology costs and other external factors which may not be within the
control of our management. This may entail rescheduling or revising the planned expenditure and funding
requirements, including the expenditure for a particular purpose, at the discretion of our management. Subject to
applicable law, if the actual utilisation towards any of the Objects is lower than the proposed deployment such
balance will be used for general corporate purposes to the extent that the total amount to be utilized towards
general corporate purposes will not exceed 25% of the gross proceeds from the Fresh Issue in accordance with
Regulation 7(2) of the SEBI ICDR Regulations. In case of a shortfall in raising requisite capital from the Net
Proceeds or an increase in the total estimated costs of the Objects, business considerations may require us to
explore a range of options including utilising our internal accruals and seeking additional debt from existing and
future lenders. We believe that such alternate arrangements would be available to fund any such shortfalls. Further,
in case of variations in the actual utilization of funds earmarked for the purposes set forth above, increased fund
requirements for a particular purpose may be financed by surplus funds, if any, a vailable in respect of the other
purposes for which funds are being raised in this Issue. To the extent our Company is unable to utilise any portion
of the Net Proceeds towards the aforementioned objects, per the estimated scheduled of deployment specified
above, our Company shall deploy the Net Proceeds in subsequent Fiscals towards the aforementioned objects.

The above fund requirements are based on our current business plan, internal management estimates and have not
been appraised by any bank or financial institution and are based on valid quotations received from vendors and
suppliers, which are subject to change in the future. These are based on current conditions and are subject to
revisions in light of changes in external circumstances or costs, or our financial condition, business or strategy.
For further details of factors that may affect these estimates, see “Risk Factors” on page 23.

Details of the Objects of the Fresh Issue

1. Capital expenditure towards expansion of Manufacturing Facility

As part of our strategy to expand our manufacturing operations and production capacity, we propose to set up two
new plants and one laboratory, at our existing Manufacturing Facility at Manjusar, Vadodara. For further details
see “Our Business – Our Strategies” on page 140.

As of July 31, 2020, our total volumetric reactor capacity at the Manufacturing Facility was 374.85 KL. Our
Company intends to build two additional plants with a total volumetric reactor capacity of 251.00 KL and one
laboratory, out of the Net Proceeds of this Issue.

We already have arrangements for regular power and water supply at our manufacturing facility together with
provision for back-up electric power including using a diesel generator set. Further, the land on which the plants,
and laboratories is proposed to be built, is part of our Manufacturing Facility and owned by our Company.

Means of finance

The total funds required for the Project are approximately ₹ 410.33 million.
(in ₹ million)
Particulars Amount
Total estimated project cost (A) 410.33 (1)
(less) Expenses already incurred as of July 31, 2020 (B) -
Balance amount to be incurred (C) = (A-B) 410.33
Amount to be funded from Net Proceeds (D) 410.33
Funding required excluding the Net Proceeds (E) = (C– D) NA
Stated means of finance excluding the Net Proceeds (F) = 75% of (C-D) NA
Debt facility (G) NA
Equity funding (H) NA
Total amount tied up (G+H) NA
(1) Total
estimated cost as per certificate dated August 26, 2020, issued by N.G. Vithalani, Chartered Engineer.

A brief description of the project cost is set out below:

Project Cost

The cost of setting up of the proposed plants and laboratory includes expenditure towards site development, civil
and electrical works, plant and machinery, preliminary and preoperative expenses.

76
Our Company intends to hire specialised contractors to execute and complete the civil work in relation to the
Project. Further, our Company shall be purchasing TOR steel, structure steel and other construction materials such
as cement, metal, sand, admixtures etc. for civil works as per requirement.

We have not placed orders for any of the plant and machineries required for the proposed expansion. We have
procured quotations from vendors and will be placing the orders with vendors based on the competitive cost and
proposed delivery schedule of the equipment.

The vendors for the equipments supply have been shortlisted on the basis of the reputation of the vendors, the
historical performance of the equipment supplied by them and other factors such as electrical energy consumption,
maintenance cost during operation stages, after sales services and support capability of the supplier to assist us
during installation and provision of post-sale services.

We shall place orders for the plant and machineries as per the schedule of implementation. Majority of the
machineries have a longer delivery schedule and accordingly we have to place orders for the same in advance to
avoid any time and cost over-runs in implementation of the project. For further details see “Risk Factors - We are
yet to place orders for a majority of the equipment to be procured in relation to the proposed expansion in our
Manufacturing Facility. In the event of any delay in placing the orders, or in the event the vendors are not able
to provide the equipment in a timely manner, or at all, may result in time and cost over-runs and our business,
prospects and results of operations may be adversely affected.” on page 33.

The total estimated cost of setting up of these plants and laboratory is as follows:
(in ₹ million)
Sr. No. Particulars Total Cost1
1. Plant 8 92.27
2. Plant 9 79.83
3. Development Lab 28.12
4. Common Utilities 210.11
Total 410.33
1 Total estimated cost as per the certificate dated August 26, 2020, issued by N.G. Vithalani, Chartered Engineer.

1. Plant 8
(₹ million except the units to be purchased)
Sr. Particulars Units to be Per Unit Total Quotation Date of Validity of
No. purchased Price Cost reference quotation quotation
Equipments and Machinery
1. MSGL Reactor 6.3 KL 4 2.00 8.00 Suryamani Glass August 19, February 19,
Steel Equipments 2020 2021
Private Limited
2. MSGL Reactor 8 KL 4 2.30 9.20 Suryamani Glass August 19, February 19,
Steel Equipments 2020 2021
Private Limited
3. SS 316 Reactor 10 KL 4 2.00 8.00 Ambica Industrial August 20, August 20,
Engineers 2020 2021
4. SS 316 Reactor 8 KL 4 1.80 7.20 Ambica Industrial August 20, August 20,
Engineers 2020 2021
5. SS 316 Storage Tank - 3 0.80 2.40 Ambica Industrial August 20, August 20,
10 KL Engineers 2020 2021
6. SS 316 Storage Tank - 3 1.10 3.30 Ambica Industrial August 20, August 20,
12 KL Engineers 2020 2021
7. SS 316 Received Day 6 0.40 2.40 Ambica Industrial August 21, August 21,
Tank - 4 KL Engineers 2020 2021
8. HDPE Wound Spiral. - 20 5 0.25 1.25 Jet Fibre India August 20, March 31,
KL Private Limited 2020 2021
9. HDPE Wound Spiral. - 3 0.08 0.24 Jet Fibre India August 20, March 31,
3 KL Private Limited 2020 2021
10. MS Storage Tank - 20 3 0.45 1.35 Ambica Industrial August 21, August 21,
KL Engineers 2020 2021

77
Sr. Particulars Units to be Per Unit Total Quotation Date of Validity of
No. purchased Price Cost reference quotation quotation
11. SS 316 Condenssor – 3 0.60 1.80 Ambica Industrial August 20, August 20,
20 SQM Engineers 2020 2021
12. Graphite Condenser - 3 0.48 1.44 Graphicarb August 21, February 21,
12 SQM Products 2020 2021
13. Graphite Absorber – 20 2 0.90 1.80 Graphicarb August 21, February 21,
SQM Products 2020 2021
14. MSGL ANF Dryer 4 2 6.00 12.00 Suryamani Glass August 19, February 19,
KL Steel Equipments 2020 2021
Private Limited
15. Contingency @5% 3.02
Civil Work
16. Cost of Civil Work and 14,000 0.002 26.25 Bhakti August 20, February 20,
Building sq ft Construction 2020 2021
17. Contingency @10% of 2.63
Civil Works
TOTAL – A 92.27*
* Total estimated cost as per the certificate dated August 26, 2020, issued by N.G. Vithalani, Chartered Engineer.

2. Plant 9
(₹ million except the units to be purchased)
Sr. Particulars Units to be Per Unit Total Quotation Date of Validity of
No. purchased Price Cost reference quotation quotation
Equipments and Machinery
1. MSGL Reactor 6.3 KL 6 2.00 12.00 Suryamani Glass August 19, February 19,
Steel Equipments 2020 2021
Private Limited
2. MSGL Reactor 8 KL 6 2.30 13.80 Suryamani Glass August 19, February 19,
Steel Equipments 2020 2021
Private Limited
3. SS 316 Reactor 10 KL 2 2.00 4.00 Ambica Industrial August 20, August 20,
Engineers 2020 2021
4. SS 316 Reactor 8 KL 2 1.80 3.60 Ambica Industrial August 20, August 20,
Engineers 2020 2021
5. SS 316 Storage Tank - 3 0.80 2.40 Ambica Industrial August 20, August 20,
10 KL Engineers 2020 2021
6. SS 316 Storage Tank - 3 1.10 3.30 Ambica Industrial August 20, August 20,
12 KL Engineers 2020 2021
7. SS 316 Received Day 6 0.40 2.40 Ambica Industrial August 21, August 21,
Tank - 4 KL Engineers 2020 2021
8. HDPE Wound Spiral. - 5 0.25 1.25 Jet Fibre India August 20, March 31,
20 KL Private Limited 2020 2021
9. HDPE Wound Spiral. - 3 0.08 0.24 Jet Fibre India August 20, March 31,
3 KL Private Limited 2020 2021
10. MS Brine Storage 2 0.25 0.50 Ambica Industrial August 21, August 21,
Tank - 10 KL Engineers 2020 2021
11. SS 316 Condenssor – 3 0.60 1.80 Ambica Industrial August 20, August 20,
20 SQM Engineers 2020 2021
12. Graphite Condenser - 3 0.48 1.44 Graphicarb August 21, February 21,
12 SQM Products 2020 2021
13. Graphite Absorber – 20 2 0.90 1.80 Graphicarb August 21, February 21,
SQM Products 2020 2021
14. Contingency @5% 2.43
Civil Work
15. Cost of Civil Work and 14,000 0.002 26.25 Bhakti August 20, February 20,
Building sq ft Construction 2020 2021
16. Contingency @10% of 2.63
Civil Works

78
Sr. Particulars Units to be Per Unit Total Quotation Date of Validity of
No. purchased Price Cost reference quotation quotation
TOTAL – B 79.83*
* Total estimated cost as per the certificate dated August 26, 2020, issued by N.G. Vithalani, Chartered Engineer.
3. Development Laboratory
(₹ million except the units to be purchased)
Sr. Particulars Units to be Per Unit Total Quotation Date of Validity of
No. purchased Price Cost reference quotation quotation
Equipments
1. Development Laboratory 2 Set 3.09 6.17 Aakar Scientific August 21, August 21,
Furniture Private Limited 2020 2021
2. Development Laboratory 1 Lot 0.53 0.53 Swastik Industries August 18, August 18,
Glass-ware 2020 2021
3. Development Laboratory 1 Lot 5.38 5.38 Swastik Industries August 18, August 18,
Equipment 2020 2021
4. Laboratory Instruments 1 Lot 2.28 2.28 Analab Scientific August 21, February 21,
Instruments 2020 2021
Private Limited
5. Laboratory Instruments 1 Lot 6.55 6.55 Analab Scientific August 21, February 21,
Instruments 2020 2021
Private Limited
6. Laboratory Instruments 1 Lot 1.97 1.97 Analab Scientific August 21, February 21,
Instruments 2020 2021
Private Limited
7. Laboratory Instruments 1 Lot 0.33 0.33 Analab Scientific August 21, February 21,
Instruments 2020 2021
Private Limited
8. Laboratory Instruments 1 Lot 3.56 3.56 Analab Scientific August 21, February 21,
Instruments 2020 2021
Private Limited
9. Contingency @5% 1.34
TOTAL – C 28.12
* Total estimated cost as per the certificate dated August 26, 2020, issued by N.G. Vithalani, Chartered Engineer.

4. Common Utility
(₹ million except the units to be purchased)
Sr. Particulars# Units to be Per Unit Total Quotation Date of Validity of
No. purchased Price Cost reference quotation quotation
Equipments, Plant and Machinery
1. Multiple Effect 1 23.65 23.65 Chem Process August 19, November 19,
Evaporation Plant- Systems Private 2020 2020
75KL/Day Limited
2. Multiple Effect 1 22.70 22.70 Chem Process August 19, November
Evaporation Plant – 2.5 Systems Private 2020 19, 2020
KL/ Hrs for NH4CL Limited
3. MEE Plant Structure – 7,000 0.001 7.00 Bhakti August 20, February 20,
7,000 sq. ft. sq ft Construction 2020 2021
4. MEE Tank Farm - 2,500 0.0008 4.00 Bhakti August 20, February 20,
Civil sq ft x 2 Construction 2020 2021
5. Cooling Tower with 4 0.80 3.20 Sysmac Cooling August 19, August 19,
Pumps - 400 TR Tower Private 2020 2021
Limited
6. Brine Chilling Plant 4 2.00 8.00 Snowcool Systems August 21, February 21,
with Pumps-35 TR India Private 2020 2021
Limited
7. Steam Boiler (15 Ton/ 1 43.98 43.98 Triveni Boiler August 19, February 19,
Hrs) Private Limited 2020 2021
8. Pipes & Fittings 1 49.07 49.07 Mahaveer August 20, February 20,
Enterprise 2020 2021

79
 Sr. Particulars# Units to be Per Unit Total Quotation Date of Validity of
No. purchased Price Cost reference quotation quotation
9. Electrification & 1 24.50 24.50 Mars Power August 20, February 20,
Instrumentation Engineers 2020 2021
10. Insulation 1 12.50 12.50 Rudra Engineering August 20, August 20,
2020 2021
11. Internal RCC Road 3,000 0.002 0.60 Bhakti August 20, February 20,
Construction sq ft Construction 2020 2021
12. Fire & Safety Design 1 10.91 10.91 Quotation yet to August 24, February 24,
and Equipment receive 2020 2021
TOTAL – D 210.11
* Total estimated cost as per the certificate dated August 26, 2020, issued by N.G. Vithalani, Chartered Engineer.

Other Expenses

Further, any additional costs incurred towards applicable taxes, freight charges, installation charges, exchange
rate fluctuations, etc. in relation to any of the Objects or any preliminary and pre-operative expense, will be met
from internal accruals of our Company.

The quotations received from vendors in relation to the above-mentioned objects of the Issue are valid as on the
date of this Red Herring Prospectus. However, we have not entered into any definitive agreements with these
vendors and there can be no assurance that the same vendor(s) would be engaged to eventually supply the
machinery and equipment or we will get the machinery at the same costs. The quantity of machinery and
equipment to be purchased is based on management estimates. We do not intend to purchase any second-hand
machinery or equipment.

2. Working Capital Requirements

Our Company requires additional working capital for funding its working capital requirements in the Fiscal 2021
and Fiscal 2022. The funding of the working capital requirements of our Company will lead to a consequent
increase in our profitability.

Basis of estimation of working capital requirement

Our Company requires additional working capital for funding its working capital requirements in the Fiscal 2021
and Fiscal 2022. The funding of the working capital requirements of our Company will lead to a consequent
increase in our profitability.

Basis of estimation of working capital requirement

The details of our Company’s working capital as at March 31, 2019 and March 31, 2020 and source of funding of
the same are provided in the table below:
(in ₹ million)
Sr. Particulars Amount Holding Period Amount Holding Period
No. (As at March (no of days) in (As of March (no of days) in
31, 2019)* Fiscal 2019 31, 2020)* Fiscal 2020
I Current Assets
1. Inventories 459.14 480.75
(a) Raw Material including 319.92 60 296.89 71
consumables
(b) Work-in-progress 84.63 16 49.09 12
(c) Finished goods 54.59 10 134.77 32
2. Trade receivables 641.18 77 889.47 124
3. Bank balances other than cash & 109.06 130.28
cash equivalents
4. Other Financial Assets# 14.41 14.01
5. Other Current Assets 80.27 200.34
Total Current Assets (A) 1,304.07 1,714.86

80
 Sr. Particulars Amount Holding Period Amount Holding Period
No. (As at March (no of days) in (As of March (no of days) in
31, 2019)* Fiscal 2019 31, 2020)* Fiscal 2020
II Current Liabilities
1. Trade Payables 288.72 54 257.22 61
2. Other Financial Liabilities 112.03 49.12
3. Other Current Liabilities 6.71 23.77
4. Short Term Provisions 1.29 0.03
Total Current Liabilities (B) 408.75 330.14

III Working Capital 895.33 1,384.72

Requirements (A-B)

IV Means of Finance
Working capital funding from 297.38 286.75
banks
Internal Accruals 597.95 1,097.97
Total Means of Finance 895.33 1,384.72
* Pursuant to the certificate dated August 26, 2020, issued by M/s Shah Mehta and Bakshi, Chartered Accountants.
#
Other Financial Assets exclude Cash and Cash Equivalents amount of ₹ 6.84 million in Fiscal 2019 and ₹ 10.74 million in
Fiscal 2020.

For details with respect to working capital funding availed by our Company as of June 30, 2020 from banks, see
“Financial Indebtedness” on page 273.

The details of our Company’s expected working capital requirements for th e Fiscal 2021 and Fiscal 2022 and
funding of the same are as provided in the table below:
(₹ in million)
Projected Holding Period Projected Holding Period
Sr.
Particulars amount as on (no of days) in amount as on (no of days) in
No.
March 31, 2021* Fiscal 2021* March 31, 2022* Fiscal 2022*
I Current Assets
1 Inventories 528.23 710.42
(a) Raw Material including 328.71 68 423.57 57
consumables
(b) Work-in-progress 62.60 13 102.25 14
(c) Finished Goods 136.92 28 184.60 25
2 Trade Receivables 967.82 117 1,215.56 98
3 Bank Balances other than Cash 245.43 345.43
& Cash Equivalents
4 Other Financial Assets 61.03 76.28
5 Other Current Assets 276.08 366.81
Total Current Assets (I) 2,078.58 2,714.50

II Current Liabilities
1 Trade Payables 242.17 50 345.50 47
2 Other Financial Liabilities 13.15 17.09
3 Other Current Liabilities 15.18 19.46
4 Short Term Provisions 0.03 0.04
Total Current Liabilities (II) 270.53 382.09

III Total Working Capital 1,808.05 2,332.41

Requirements (I - II)

IV Funding pattern
1 Working capital funding from 300.00 300.00
banks
2 Net Proceeds from Fresh Issue 400.00 900.00
3 Internal Accruals 1,108.05 1,132.41

81
 Projected Holding Period Projected Holding Period
Sr.
Particulars amount as on (no of days) in amount as on (no of days) in
No.
March 31, 2021* Fiscal 2021* March 31, 2022* Fiscal 2022*
Total 1,808.05 2,332.41
*Pursuant to the certificate dated August 26, 2020, issued by M/s Shah Mehta and Bakshi, Chartered Accountants.

(₹ in million)
Particulars Estimated amount for
Fiscal 2021* Fiscal 2022*
Incremental Working Capital Requirement 423.33 524.36
Funding Pattern
Working Capital funding from banks 13.25 0.00
Internal Accruals 10.08 24.36
Net Proceeds from the Fresh Issue 400.00 500.00
Total 423.33 524.36
* Pursuant to the certificate dated August 26, 2020, issued by M/s Shah Mehta and Bakshi, Chartered Accountants

Assumptions for working capital requirements*

Sr. No. Particulars Assumptions

1. Inventories Raw material:

We procure raw materials essential for manufacturing its products from domestic
and international vendors. 51.13% and 40.19% of our cost of raw materials in
Fiscal 2019 and Fiscal 2020 were on imported raw materials. Our Company had
maintained raw material inventory of 60 days and 71 days of its cost of material
consumed in Fiscal 2019 and Fiscal 2020, respectively. This is required to ensure
uninterrupted production. Accordingly, we have assumed raw material inventory
of 68 days and 57 days of cost of material consumed f or Fiscal 2021 and Fiscal
2022, respectively.

Work in Progress:

Historically, work in progress has been 16 days and 12 days for Fiscal 2019 and
Fiscal 2020, respectively. With expected increase in business, we have assumed
work in progress inventory of 13 days and 14 days of cost of material consumed
for Fiscals 2021 and 2022.

Finished Goods:

Historically, our Company has maintained lower level of finished goods, of 10

days in Fiscal 2019 and 32 days in Fiscal 2020. In order to ensure timely
availability of products to our customer, our Company would need to maintain a
higher levels of finished goods inventory. Accordingly, we have assumed
finished goods inventory of 28 days and 25 days of cost of material consumed for
Fiscal 2021 and Fiscal 2022, respectively.
2. Trade Receivable This is based on the average standard payment terms across our customers. Our
Company’s general credit terms vary across geographies and type of customer,
and our assumptions are based on past trends. We had trade receivables of 77
days and 124 days of revenue from operations at the end of Fiscal 2019 and Fiscal
2020, respectively. We endeavour to on-board new customers in domestic as well
as international geographies which amongst other things, may require us to
provide better credit terms to our customers. Accordingly, we have assumed trade
receivables of 117 days and 98 days of revenue from operations at the end of
Fiscal 2021 and Fiscal 2022, respectively.
3. Trade Payables This is based on the average standard payment terms of our vendors. Our trade
payables predominantly comprises of payables towards purchase of raw materials
and packaging materials. Trade payable days were 54 days and 61 days of cost of
material consumed for Fiscal 2019 and Fiscal 2020, respectively. Accordingly,

82
Sr. No. Particulars Assumptions
we have assumed trade payables to be 50 days and 47 days of cost of material
consumed in Fiscal 2021 and Fiscal 2022, respectively.
4. Other Financial Other current assets and financial assets includes advances to vendors, balance
and Current Assets with revenue authorities including advance income tax, Income tax refund, TDS
receivable, GST receivable insurance claim receivables, prepaid expenses and
other short-term loans to staff and others advance for capital goods and raw
material. Such Current and Financial assets is expected to grow in line with the
growth in our business.
5. Bank Balances Bank balances other than cash and bank balances includes fixed deposits are held
Other than Cash as margin money and lien marked against fund based and non-based working
and Bank Balances capital facility. We import majority of our raw material, for which letter of credit
favouring vendors has to be issued. For such credit limits we have to collateralise
fixed deposits with our bank. With the increase in business we will need to
maintain higher value of fixed deposits with banks.
6. Other Current Other Current Liabilities includes salary and wages payable, statutory dues,
Liabilities advances from customer and other expenses payable, Such Other Current
liabilities is expected to grow in line with the growth in our business.
* Pursuant to the certificate dated August 26, 2020, issued by M/s Shah Mehta and Bakshi, Chartered Accountants.

3. General Corporate Purposes

We will have flexibility in utilizing the balance Net Proceeds, if any, for general corporate purposes, subject to
such utilisation not exceeding 25% of the Gross Proceeds in accordance with Regulation 7(2) of the SEBI ICDR
Regulations, including but not restricted towards strategic initiatives and acquisitions, funding initial stages of
equity contribution towards our projects, working capital requirements, part or full debt repayment, strengthening
of our marketing capabilities and towards repayment and pre-payment penalty on loans as may be applicable. The
quantum of utilisation of funds toward the aforementioned purposes will be determined by our Board based on
the amount actually available under the head “General Corporate Purposes” and the corporate requirements of our
Company.

In case of variations in the actual utilization of funds designated for the purposes set forth above, increased fund
requirements for a particular purpose may be financed by surplus funds, if any which are not applied to the other
purposes set out above.

In addition to the above, our Company may utilize the Net Proceeds towards other expenditure (in the ordinary
course of business) considered expedient and approved periodically by the Board. Our management, in response
to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from
time to time and consequently our funding requirement and deployment of funds may also change. This may also
include rescheduling the proposed utilization of Net Proceeds and increasing or decreasing expenditure for a
particular object i.e., the utilization of Net Proceeds.

Interim use of Net Proceeds

Pending utilization of the Net Proceeds for the purposes described above, our Company undertakes to de posit the
Net Proceeds only in one or more scheduled commercial banks included in the Second Schedule of the Reserve
Bank of India Act, 1934, as amended, as may be approved by our Board.

In accordance with Section 27 of the Companies Act, 2013, our Company confirms that it shall not use the Net
Proceeds for buying, trading or otherwise dealing in shares of any other listed company or for any investment in
the equity markets.

Bridge Financing Facilities

Our Company has not raised any bridge loans from any bank or financial institution as on the date of this Red
Herring Prospectus, which are proposed to be repaid from the Net Proceeds. However, depending upon business
requirements, our Company may consider raising bridge financing facilities, including through secured or
unsecured loans or any short-term instrument like non-convertible debentures, commercial papers etc. pending
receipt of the Issue Proceeds.

83
Issue Expenses

The total expenses of the Issue are estimated to be approximately ₹ [●] million. The Issue expenses includes listing
fees, fees payable to the BRLMs, underwriting fees, selling commission, legal counsel, advisors to the Issue ,
Registrar to the Issue, Banker(s) to the Issue including processing fee to the SCSBs for processing ASBA Forms
submitted by ASBA Bidders procured by the Syndicate and submitted to SCSBs, brokerage and selling
commission payable to Registered Brokers, RTAs and CDPs, printing and stationery expenses, advertising and
marketing expenses and all other incidental expenses for listing the Equity Shares on the Stock Exchanges.

The fees and expenses relating to the Issue shall be shared, upon successful completion of the Issue, in the
proportion mutually agreed among our Company and the Selling Shareholders. Further the share of expenses of
the Selling Shareholders shall be shared in proportion to the respective Equity Shares offered by each of them in
the Issue in accordance with Applicable Law. The Selling Shareholders shall reimburse our Company for all
expenses incurred by our Company in relation to the Offer for Sale on each of their behalf. The break-up for the
estimated Issue expenses are as follows:

Activity Amount 1 As a % of total As a % of

(₹ in million) estimated Issue Issue size 1
related expenses 1
Fees payable to the BRLMs (including underwriting [●] [●] [●]
commission)
Brokerage and selling commission payable to Syndicate [●] [●] [●]
Members, SCSBs, Registered Brokers, RTAs and CDPs, as
applicable2
Processing fees to the SCSBs and to the Sponsor Bank for [●] [●] [●]
ASBA Forms procured by Registered Brokers, RTAs or CDPs3
Fees payable to Registrar to the Issue [●] [●] [●]
Printing and distribution expenses [●] [●] [●]
Advertising and marketing expenses [●] [●] [●]
Others: [●] [●] [●]
(i) Listing fees;
(ii) SEBI, BSE and NSE processing fees;
(iii) Book-building software fees
(iv) Other regulatory expenses
(v) Fees payable to legal counsel; and
(vi) Miscellaneous
Total estimated Issue expenses [●] [●] [●]
(1) The Issueexpenses include goods and services tax, where applicable. Issue expenses will be incorporated in the Prospectus
at the time of filing of the Prospectus. Issue expenses are estimates and are subject to change.
(2) Selling
commission payable to the Syndicate Members, SCSBs, RTAs and CDPs on the amounts received against the Equity
Shares Allotted (i.e. product of the Equity Shares Allotted and the Offer Price) would be as follows:

Portion for Retail Individual Bidders 0.35% (plus applicable goods and services tax)
Portion for Non-Institutional Bidders 0.20% (plus applicable goods and services tax)

Further, bidding charges of ₹ 10 (plus applicable goods and services tax) shall be per valid ASBA Form collected by the
Syndicate, RTAs and CDPs (excluding applications made by Retail Individual Investors using the UPI Mechanism). The
terminal from which the Bid has been uploaded will be taken into account in order to determine the total bidding charges.
No additional bidding charges shall be payable to SCSBs on the Bid cum Application Forms directly procured by them.
Selling commission payable to the Registered Brokers on the portion for Retail Individual Investors and Non -Institutional
Investors, which are directly procured by the Registered Brokers and submitted to SCSB for processing, shall be ₹ 10 per
valid Bid cum Application Form (plus applicable good s and services tax).

(3) Processing
fees payable to the SCSBs for Bid cum Application Forms which are procured by the Registered Brokers / RTAs
/ CDPs and submitted to the SCSB for blocking shall be ₹ 10 per valid Bid cum Application Form (plus applicable taxes).

Processing fees for applications made by Retail Individual Investors using the UPI Mechanism would be as follows:

RTAs / CDPs/ Registered Brokers ₹ 30 per valid Bid cum Application Form (plus applicable taxes)
Sponsor Bank ₹ 8 per valid Bid cum Application Form (plus applicable taxes)

84
 The Sponsor Bank shall be responsible for making payments to third parties such
as the remitter bank, the NPCI and such other parties as required in connection
with the performance of its duties under applicable SEBI circulars, agreements
and other Applicable Laws.

The Issue expenses shall be payable in accordance with the arrangements or agreements entered into by our
Company with the respective Designated Intermediary.

Monitoring Utilization of Funds

Our Company has appointed HDFC Bank Limited as the Monitoring Agency for monitoring the utilization of Net
Proceeds of the Fresh Issue. Our Board and the Monitoring Agency will monitor the utilization of Net Proceeds
and submit its report to us in terms of Regulation 41 of the SEBI ICDR Regulations.

Pursuant to the Listing Regulations, our Company shall on a quarterly basis disclose to the Audit Committee the
uses and application of the Net Proceeds. Additionally, the Audit Committee shall review the report submitted by
the Monitoring Agency and make recommendations to our Board for further action, if appropriate. Our Company
shall, on an annual basis, prepare a statement of funds utilised for purposes other than those stated in this Red
Herring Prospectus and place it before the Audit Committee. Such disclosure shall be made only till such time
that all the Net Proceeds have been utilised in full. The statement shall be certified by the statutory auditors of our
Company. Furthermore, in accordance with Regulation 32 of the Listing Regulations, our Company shall furnish
to the Stock Exchanges on a quarterly basis, a statement including deviations, if any, in the utilization of the Net
Proceeds of the Issue from the objects of the Issue as stated above. The information will a lso be published in
newspapers simultaneously with the interim or annual financial results and explanation for such variation (if any)
will be included in our Director’s report, after placing the same before the Audit Committee. We will disclose the
utilization of the Net Proceeds under a separate head along with details in our balance sheet(s) until such time as
the Net Proceeds remain unutilized clearly specifying the purpose for which such Net Proceeds have been utilized.
In the event that we are unable to utilize the entire amount that we have currently estimated for use out of the Net
Proceeds in a Financial Year, we will utilize such unutilized amount in the next Financial Year.

Variation in Objects

In accordance with Sections 13(8) and 27 of the Companies Act, 2013 and the SEBI ICDR Regulations, our
Company shall not vary the objects of the Fresh Issue without our Company being authorised to do so by the
Shareholders by way of a special resolution through a postal ballot. In addition, the notice issued to the
Shareholders in relation to the passing of such special resolution (“Postal Ballot Notice”) shall specify the
prescribed details as required under the Companies Act. The Postal Ballot Notice shall simultaneously be
published in the newspapers, one in English and one in Gujarati the vernacular language of the jurisdiction where
our Registered and Corporate Office is situated. Our Promoters will be required to provide an exit opportunity to
such Shareholders who do not agree to the above stated proposal, at a price as prescribed by SEBI, in this regard.

Other Confirmations

No part of the Net Proceeds will be paid by our Company as consideration to our Promoters, our Directors, our
Key Managerial Personnel or Group Companies except in the normal course of business and in compliance with
applicable law.

There are no existing or anticipated transactions in relation to the utilization of the Net Proceeds with the
Promoters, Directors, Key Managerial Personnel or Group Companies.

85
 BASIS FOR THE ISSUE PRICE

The Price Band, Floor Price and Issue Price will be determined by our Company and the Selling Share holders, in
consultation with the BRLMs, on the basis of assessment of market demand for the Equity Shares offered through
the Book Building Process and on the basis of the quantitative and qualitative factors described below. Investors
should also refer to “Our Business”, “Risk Factors”, “Restated Financial Statements” and “Management’s
Discussion and Analysis of Financial Position and Results of Operations” on pages 136, 23, 194 and 243
respectively, to have an informed view before making an investment decision.

Qualitative factors

Some of the qualitative factors which form the basis for computing the Issue Price are:

(a) We are a leading manufacturer globally of the Pharmaceutical Chemicals and we are a leading manufacturer
in India of the Oilwell Completion Chemicals (Source: Frost & Sullivan Report);

(b) Diversified customer base coupled with long standing relationships;

(c) The specialty chemicals industry in which we operate has high entry barriers;

(d) Consistent financial performance with a strong financial position;

(e) Manufacturing facility with dedicated plants for each of our products; and

(f) Experienced senior management.

For further details, see “Our Business –Our Strengths” on page 137.

Quantitative factors

The information presented below relating to our Company is based on the Restated Financial Statements.

Some of the quantitative factors which may form the basis for calculating the Issue Price are as follows:

I. Basic and diluted earnings per share (“EPS”)

Fiscal/Period Ended Basic and Diluted EPS ( ₹) Weight

2020 15.37 3
2019 13.54 2
2018 8.30 1
Weighted Average 13.59 -

Basic earnings per share (₹) = Net Profit as restated attributable the Shareholders of our Company divided
by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share (₹) = Net profit as restated attributable to the Shareholders of our Company
divided by the weighted average number of diluted Equity Shares outstanding during the year.

Notes:

1. Basic and diluted earnings per Equity Share are computed in accordance with Indian Accounting Standard 33
‘Earnings per Share’, notified accounting standard by the Companies (Indian Accounting Standards) Rules of 2015
(as amended).
2. Weighted average number of Equity Shares is the number of Equity Shares outstanding at the beginning of the period
adjusted by the number of Equity Shares issued during the period multiplied by the time weighting factor. The time
weighting factor is the number of days for which the specific shares are outstanding as a proportion of total number
of days during the period.
3. The earnings per share figure for the year ended March 31, 2018 have been adjusted to give effect to the allotment of
the bonus shares, as required by Ind AS-33.
4. The above statement should be read with significant accounting policies and notes on Restated Financial Sta tements
as appearing in the Restated Financial Statements .

86
II. Price/Earning (“P/E”) ratio in relation to Price Band of ₹[●] to ₹[●] per Equity Share:

P/E at the lower end of the Price P/E at the higher end of the
Particulars
Band (number of times) Price Band (number of times)
Based on basic EPS for Fiscal 2020 [●] [●]
Based on diluted EPS for Fiscal 2020 [●] [●]

Industry Peer Group P/E ratio

Particulars Industry P/E (number of times) (for Fiscal 2020)

Highest 43.71
Lowest 19.04
Average 31.30
Note:
The industry high and low has been considered from the industry peer set provided later in this chapter. The industry
composite has been calculated as the arithmetic average of P/E for industry peer set disclosed in this section. All the
financial information for listed industry peers mentioned above is sourced from the standalone audited financial
statements of the relevant companies for Fiscal 2020, as available on website of stock exchanges. P/E ratio is calculated
as closing share price (July 31, 2020 - BSE) / Diluted EPS for year ended March 31, 2020. Diluted Earnings per share
mentioned in the above table are as reported by the respective companies in the relevant annual reports/results for Fiscal
2020/Q4FY20

III. Return on Net Worth (“RoNW”)

As per Restated Financial Statements:

Fiscal/Period Ended RoNW (%) Weight

2020 34.23 3
2019 44.94 2
2018 49.20 1
Weighted Average 40.30 -

Return on net worth (%) = Net Profit as restated, attributable to the Shareholders of our company, divided by
Net Worth as restated, including Share Capital and Reserves & Surplus, as restated at the end of the year.

Net Worth means the aggregate value of the paid-up share capital of our Company and all reserves created
out of profits and securities premium account, net of pre-issue expenses, as per the restated statement of assets
and liabilities of our Company in the Restated Financial Statements.

IV. Net asset value per Equity Share (face value of ₹ 10 each)

I. Restated Net Asset Value per Equity Share as per the Restated Financial Statements as on March 31,
2020: ₹ 44.91.

II. After the Issue*:

(a) At the Floor Price: ₹ [●]

(b) At the Cap Price: ₹ [●]

III. Issue Price*: ₹ [●]

*To be updated in the Prospectus.

Note:

Net asset value per Equity Share = Net Worth as restated, including Share Capital and Reserves & Surplus, as
restated at the end of the year divided by total number of Equity Shares outstanding at the end of year.

87
 V. Comparison with listed industry peers

Following is the comparison with our peer companies listed in India:

For the year ended March 31, 2020

Sr. Face Revenue from Basic Diluted P/E (based Return on NAV per
Name of the Company
No. value operations(1) EPS EPS on Diluted net worth Equity
(₹) (in ₹ million) (₹) (₹) EPS)(2) (3)
Share (₹)(4)
1. Chemcon Speciality 10 2,620.52 15.37 15.37 N/A 34.23% 44.91
Chemicals Limited
Peer Group
2. Aarti Industries Limited 5 39,944.10 30.04 30.04 32.96 18.04% 166.55
3. Vinati Organics Limited 1 10,288.74 32.48 32.48 30.11 26.09% 124.48
4. Sudarshan Chemical 2 15,182.68 21.50 21.50 19.04 23.51% 91.37
Industries Limited
5. Atul Limited 10 39,056.60 215.82 215.82 23.39 20.85% 1,035.13
6. Paushak Limited 10 1,379.05 113.27 113.27 31.23 15.36% 737.29
7. Fine Organic Industries 5 10,262.23 54.31 54.31 38.67 26.40% 205.73
Limited
8. Neogen Chemicals Limited 10 3,061.22 12.33 12.33 43.71 18.36% 67.17
Source: All the financial information for listed industry peers mentioned above is sourced from the standalone audited
financial statements/results of the relevant companies for Fiscal 2020, as available on website of stock exchanges. The
financial information related to our Company are based on the Restated Financial Statements.

Notes:
1. Excludes other income
2. P/E ratio is calculated as closing share price ( July 31,2020 / Diluted EPS for year ended March 31, 2020. Diluted Earnings
per share mentioned in the above table are as reported by the respective companies in the relevant annual reports/results
for Fiscal 2020.
3. Return on net worth (%) = Net profit/(loss) after tax available for the equity shareholders / Net worth at the end of the year.
4. Net asset value per share (in ₹) = Net worth at the end of the year / Total number of equity shares outstanding at the end of
the year

Investors should read the above mentioned information along with “Risk Factors”, “Our Business”, “Management
Discussion and Analysis of Financial Position and Results of Operations” and “Financial Information” on pages
23, 136, 243 and 193 respectively, to have a more informed view. The trading price of the Equity Shares could
decline due to the factors mentioned in the “Risk Factors” and you may lose all or part of your investments.

88
 STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS

To

The Board of Directors

Chemcon Speciality Chemicals Limited
Block Number 355
Manjusar Kunpad Road
Manjusar Village, Taluka Savli
Vadodara 391 775
Gujarat, India

Dear Sir(s)/Madam(s),

Sub: Statement of possible Special tax benefit ('the Statement') available to Chemcon Speciality Chemicals
Limited (the “Company”) and the shareholders of the Company prepared to comply with the
requirements of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended (the 'SEBI ICDR Regulations').

1. We, hereby confirm that the enclosed Annexure ‘A’ prepared by Chemcon Speciality Chemicals Limited
(‘Company’) and initialled by us and the Company for identification purpose (the “Statement”), provides the
possible special tax benefits available to the Company and to its shareholders under the Income Tax Act,
1961 (read with the rules, circulars and notifications issued in connection thereto), as amended by the Finance
Act, 2020, i.e. applicable for the Financial Year 2020-21 relevant to the assessment year 2021-22, presently
in force in India and under indirect taxation laws presently in force in India. Several of these benefits are
dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant statutory
provisions. Hence, the ability of the Company and/or its shareholders to derive the tax benefits is dependent
upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the
Company may or may not choose to fulfil.

2. The benefits discussed in the enclosed Annexure covers only special tax benefits available to the Company
and its shareholders and do not cover any general tax benefits available to the Company. The benefits
discussed in the enclosed Statement are not exhaustive. The Statement is only intended to provide general
information to the investors and is neither designed nor intended to be a substitute for professional tax advice.
In view of the individual nature of the tax consequences and changing tax laws, each investor is advised to
consult his or her own tax consultant with respect to the specific tax implications arising out of their
participation in the Issue.

3. We do not express any opinion or provide any assurance as to whether:

(i) the Company or its shareholders will continue to obtain these benefits in the future; or

(ii) the conditions prescribed for availing of the benefits where applicable, have been/would be met with.

4. The contents of the enclosed Statement are based on information, explanations and representations obtained
from the Company and on the basis of our understanding of the business activities and operations of the
Company.

5. We have conducted our examination in accordance with the ‘Guidance Note on Reports or Certificates for
Special Purposes’ issued by the Institute of Chartered Accountants of India (‘ICAI’) which requires that we
comply with ethical requirements of the Code of Ethics issued by the ICAI. We hereby confirm that while
providing this certificate we have complied with the Code of Ethics issued by the ICAI.

89
6. We hereby consent to the extracts of this certificate and the Statement being used in the Red Herring
Prospectus and Prospectus to be filed by the Company in connection with the Issue and other Issue related
materials.

Yours faithfully

For K. C. Mehta & Co.

Chartered Accountants
Firm’s Registration No.106237W

Vishal Doshi
Partner
Membership No. 101533
UDIN: 20101533AAAADL7767
Place: Vadodara
Date: August 26, 2020

90
 ANNEXURE ‘A’

STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND TO ITS

SHAREHOLDERS UNDER APPLICABLE DIRECT AND INDIRECT TAXATION LAWS.

1. SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY

No Special Tax benefits available to the Company

There are no possible special tax benefits available to the company under Income Tax Act, 1961 read with
the relevant Income Tax Rules, 1962, the Customs Tariff Act, 1975, the Central Goods and Services Tax Act,
2017, the Integrated Goods and Services Tax Act, 2017, the Union Territory Goods and Services Tax Act,
2017, respective State Goods and Services Tax Act, 2017 and Goods and Services Tax (Compensation to
States) Act, 2017 read with the relevant Central Goods and Services Tax Rules, 2017, Integrated Goods and
Services Tax Rules, 2017, Union Territory Goods and Services Tax Rules, State Goods and Services Tax
Rules, 2017 and notifications issued under these Acts and Rules and the foreign trade policy.

2. SPECIAL TAX BENEFITS TO THE SHAREHOLDERS

No Special Tax benefits available to the Shareholders

The shareholders of the Company are also not eligible to any special tax benefits under the provisions of the
Income Tax Act, 1961 read with the relevant Income Tax Rules, 1962, the Customs Tariff Act, 1975 and / or
Central Goods and Services Tax Act, 2017, Integrated Goods and Services Tax Act, 2017, Union Territory
Goods and Services Tax Act, 2017, respective State Goods and Services Tax Act, 2017 and Goods and
Services Tax (Compensation to States) Act, 2017 read with the relevant Central Goods and Services Tax
Rules, 2017, Integrated Goods and Services Tax Rules, 2017, Union Territory Goods and Services Tax Rules,
State Goods and Services Tax Rules, 2017 and notifications issued under these Acts and Rules and the foreign
trade policy.

Notes:

1. We have not considered the general tax benefits available to the Company, or shareholders of the Company.
2. The above is as per the prevalent Tax Laws as on date.
3. The above Statement of possible special tax benefits sets out the provisions of Tax Laws in a summary manner o nly and
is not a complete analysis or listing of all the existing and potential tax consequences of the purchase, ownership and
disposal of Equity Shares.
4. This Statement does not discuss any tax consequences in any country outside India of an investment in the Equity Shares.
The subscribers of the Equity Shares in the country other than India are urged to consult their own professional advisers
regarding possible income-tax consequences that apply to them.
5. This Annexure is intended only to provide general information to the investors and is neither designed nor intended to be
a substitute for professional tax advice. In view of the individual nature of tax consequences, each investor is advised to
consult his/her own tax advisor with respect to specific tax arising out of their participation in the Proposed IPO.
6. No assurance is provided that the revenue authorities/courts will concur with the views expressed herein. Our views are
based on the existing provisions of law and its interpretation, which are subject to changes from time to time. We do not
assume responsibility to update the views consequent to such changes.

91
 SECTION VI - ABOUT OUR COMPANY

INDUSTRY OVERVIEW

The information in this section is derived from the report titled “INDEPENDENT MARKET REPORT on Global
Pharmaceutical Intermediates and Oilfield Chemicals Market” prepared by Frost & Sullivan in June 2019 and
updated in February 2020 and August 2020 (“Frost & Sullivan Report”). We commissioned the Frost & Sullivan
Report in connection with the Issue for the purpose of confirming our understanding of the industry. Neither we,
nor any of the Book Running Lead Managers, any of their associates or affiliates or any other person connected
with the Issue have independently verified the information included in the Frost & Sullivan Report.

Further, the Frost & Sullivan Report includes data and statistics as of specific dates and may no longer be current
or reflect current trends. Frost & Sullivan has advised that while the Frost & Sullivan Report has been prepared
through research, involving discussing the status of the industry with leading industry participants and experts and
compiling inputs from publicly available sources, including official publications and reports, the quantitative
market information being primarily based on such interviews and desk-based secondary research is subject to
fluctuations. The industry related information provided in this section does not purport to contain all the information
relevant to the recipient. You are advised not to unduly rely on the industry related information provided in this
chapter when making your investment decision and industry related information contained in this section should
not be construed as advice relating to business, financial, legal, taxation or investment matters.

Global and India Macroeconomic Review

Global Economic Overview - Gross Domestic Product (GDP) Growth

The global economic growth has eased and is projected to plateau at 3.6% in near future, with some downside risks
such as financial market stress, escalating trade protectionism and heightened geopolitical tensions. The growth in
the advanced economies is expected to remain stable due to the effects of US fiscal stimulus staying constant.
However, the emerging market and developing economies are expected to have a fair growth on account of strong
growth in commodity importers, with the projected rebound in commodity exporters in future.

Real GDP Growth (%) 2012- 2023P

9.0 8.2
8.0
8.0 7.4
7.2 7.1
7.0 6.4 6.5
6.2
5.5 5.6 5.8
6.0 5.4
5.1 4.9
4.7 4.6 4.8 4.6 4.8
5.0 5.4 4.3 4.5 4.4
3.7
4.0
3.0 3.6 3.8 3.6 3.6 3.6 3.6
3.5 3.5 3.4 3.4 3.3
3.0
2.0
2.3 2.4 2.2
2.1
1.0 1.7 1.7 1.6 1.6 1.6 1.6
1.2 1.4
0.0
2012 2013 2014 2015 2016 2017 2018 2019E 2020P 2021P 2022P 2023P
World Advanced Economies Emerging markets & developing economies India

Source: World Economic Outlook, International Monetary Fund Estimate-October 2019, Moody’s Outlook, Frost & Sullivan
Analysis

Moreover, the longer-term potential of the global economic growth have downside risks from the extended period
of weak investment and low productivity growth that has followed the global financial crisis.

92
Macroeconomic Overview of India - Gross Domestic Product (GDP) Growth and Outlook

The market-friendly policies that safeguarded the country from the subdued global economy; improved
macroeconomic fundamentals and robust capital inflow strengthened the economic growth from 5.5% in 2012 to
8.2% in 2016. However, in 2017 the GDP declined to 7.2% from 8.2% in 2016 due to the external vulnerabilities
such as global slowdown, impact of demonetization and the transitory effect of goods and services tax (GST)
implementation.

Further, the economic growth continued to slip downwards in 2018 and 2019 to 7.0% and 5.6% respectively, as a
result of the lingering effect of demonetization and other political reforms. Growth has remained relatively weak as
a prolonged deleveraging cycle and on-going stress among non-banking financial institutions (NBFIs), which has
constrained the financial system's overall provision of credit, weigh on consumption and investment. The significant
slowdown in financial sector credit growth from NBFI liquidity constraints and asset quality issues among public
sector banks has exacerbated prolonged weakness in private investment and a material decline in consumption, due
in part to financial stress among rural households and weak job creation

The medium term growth outlook is expected to improve and record a growth of 6.5% during 2023P, on account of
strong macroeconomic fundamentals including moderate inflation, implementation of key structural reforms and
improved fiscal and monetary policies.

Meanwhile, the recent moves by the government to improve balance sheets of state-owned banks, in part through
an augmented re-capitalization plan worth INR 2,110 Bn for public sector banks spread over two years, is expected
to support the capital shortages of the public sector banks that have hindered the bank’s lending capacity and the
overall positive business environment are further expected to support the growth outlook for India.

Real GDP Value (INR 000’Bn) and Growth %, India, 2012 to 2023P

200 8.0 8.2 9.0

7.4 7.2 8.0
7.1
6.4 6.2 6.5 7.0
150 5.6 5.8
5.5 5.4 6.0
5.0
100
169 175 4.0
151 157 163
132 141 3.0
114 123
50 92 98 105 2.0
1.0
0 0.0
2012 2013 2014 2015 2016 2017 2018 2019E 2020P 2021P 2022P 2023P
GDP ( at Constant Prices) GDP Growth (%)

Source: Moody’s Outlook, (Nov 2019) Moody’s press release 2020, International Monetary Fund Estimate-October 2019, Frost
& Sullivan Analysis

GDP per Capita

The GDP per capita at constant prices in India has remained low until 2012 during the economic downturn.
Thereafter, growth has gradually picked up for GDP per capita to reach INR 94,617 in 2016 where the growth
reached 6.8%. However, it slumped during 2017 and 2018 as a result of demonetization which resulted in cash
shortages and implementation of GST.

2019 experienced the seven year lowest GDP per capita growth at 4.7%. The previous low was in 2012 recorded
4.1%. Further to this, with the economy getting back on track as the business sentiments are improving, the GDP
per capita is also expected to get back on track with an estimated YoY growth of 5.6% in 2019E and will plateau at
6.0% at 2023P

93
GDP per Capita Value (INR) and Growth %, India, 2012 to 2023P

160,000 8.0
6.6 6.8
140,000 7.0
6.0 6.0 6.0 6.0
5.8 5.6
120,000 5.4 6.0
5.0
4.7
100,000 5.0
4.1

139,232
80,000 4.0

131,296
123,815
116,756
110,519
105,512
100,083
60,000 3.0

94,617
88,622
83,140
78,422
74,685

40,000 2.0
20,000 1.0
0 0.0
2012 2013 2014 2015 2016 2017 2018 2019E 2020P 2021P 2022P 2023P
GDP per capita ( at Constant Prices) GDP per capita Growth (%)

Source: World Economic Outlook, International Monetary Fund Estimates-October 2019, Frost & Sullivan Analysis

Consumer Price Inflation

Consumer Price Inflation % in India, 2012 to 2023P

12.0
10.0
9.4
10.0
8.0
5.8
6.0 4.9 4.5
3.6 4.1 4.1 4.0 4.0
3.4 3.4
4.0
2.0
0.0
2012 2013 2014 2015 2016 2017 2018 2019E 2020P 2021P 2022P 2023P
Source: World Economic Outlook, International Monetary Fund Estimates-October 2019, Frost & Sullivan Analysis

After years of nearly double-digit inflation, average consumer price inflation has slumped to about 3.4% in 2019.
Lower commodity prices, supply-side reforms and a moderately tight monetary policy have all aided in bringing
inflation to an acceptable level, despite two consecutive years of sub -par monsoons. Illustratively, consumer price
index (CPI) inflation in India eased to 3.4% in 2019 from a high of 10.0% in 2012 and is expected to remain around
4.0% over the medium term on the back of good harvest and favourable monsoons.

The RBI has shifted to a flexible inflation target, which seems to be having been working well in controlling and
getting down the inflation and stabilization of inflation expectations.

Demographic Overview of India

Population Growth

With a population of 1.35 Bn in 2019, India has the second largest population in the world. The population is
estimated to grow at a CAGR of 1.32% during 2019-2023P replacing China and making it the most populous country
in the world.

94
The country has a relatively young demographic profile, with an average median age of 26.7 years; it is one of the
lowest globally as compared to 37.2 years in the US, 45.8 years in Japan and 36.3 years in China ( Print Week). The
median population age in India is estimated to be 28.2 years by 2020, making it the youngest country in the world.

India Population in Billion, Historical and Projected, 2012-2023P

1.42
1.41
1.39
1.37
1.35
1.33
1.32
1.30
1.28
1.27
1.25
1.23

2012 2013 2014 2015 2016 2017 2018 2019E 2020P 2021P 2022P 2023P

Source: World Bank: Health Nutrition and Population Statistics: Population estimates and projections, International Monetary
Fund Estimates-October 2019

Demographic dividend

Demographic dividend is considered to be an important factor for economic growth as the working age population
is usually more productive. India is set to witness a considerable increase in working population over the next
decade. The median age in India will be 28.2 years by 2020 and 31.4 years by 2030.

The Indian economy has a potential to grow at a rapid rate as the working age population (15 -59 years) comprises
almost 64% of the total Indian population in 2019. Moreover, the youth (15-34 years) make up majority of the
working-age population.

The demographic dividend can accelerate the development of the nation if implemented with effective policies. And
if utilized properly, the demographic dividend of India would further push up the economic growth rate by 2%.

Age Group Classification of the India Population, 2011-2023P

7.8% 10.0% 10.9%

26.2% 29.1% 29.9%
34.8% 34.7% 34.1%

31.2% 26.2% 25.1%

2011 2019E 2023P

0-14 Years 15-34 Years 35-59Years >=60 Years
Source: World Bank: Health Nutrition and Population Statistics: Population estimates and projections

Meanwhile the Indian Government is serious about utilizing the potential of demographic dividen d and has
introduced National Skill Development Corporation (NSDC) which will be contributing significantly (about 30%)
to the overall target of skilling/up skilling 500 Mn people in India by 2022, by encouraging private sector initiatives
in skill development programmes and providing funds.

95
Industrial Chemicals Market Overview

Chemicals used as pharma intermediates - Market Overview

Global Market Overview

Pharmaceutical intermediates are the chemical compounds that form the building blocks used in production of active
pharmaceutical ingredient (API). The global market of chemicals used as pharma intermediates was valued at
about USD 27 Bn in 2019 and is expected to grow at a CAGR of 4% between 2020 and 2023.

Pharmaceutical Value Chain

Chemicals /
Bulk Drugs / APIs Formulations
Intermediates

Source: CRISIL Research, Frost & Sullivan Analysis

The major factors that will the drive the requirement of pharmaceutical drugs over the forecast period are the
increase in burden of diseases and geriatric population. Patent expiration is also one of the key factors that will drive
the growth of the generics drug market. The greater production of APIs is expected to enhance the demand of
chemicals used as pharma intermediates.

North America is the biggest and most attractive market and benefits from the presence of major pharmaceutical
companies and better infrastructure. It is anticipated to dominate the global market of chemicals used as pharma
intermediates over the forecast period.

Europe is expected to be the second largest expanding region over the forecast period due to the rise in research and
development activities coupled with high investments on research and development activities by myriad key players.
Enhanced demand for advanced pharmaceutical products will also support the growth of market of chemicals used
as pharma intermediates.

Asia Pacific is anticipated to be the fastest growing market of chemicals used as pharma intermediates due to
presence of large number of contract manufacturing organizations in the region.

Some of the major market players of the chemicals used as pharma intermediates include Vertellus Holdings LLC,
A.R. Life Sciences Private Limited, Dishman Group, Midas Pharma GmbH, Lianhetech, Codexis, Inc., Chemcon
Specialty Chemicals Pvt. Ltd, Cycle Pharma, Aceto Corporation, Dextra Laboratories Ltd., BASF SE, Sanofi
Winthrop Industrie S.A., ZCL Chemicals Ltd. and Easter Chemical Corporation among others.

India Market Overview

Domestic consumption for chemicals used as pharma intermediates is dependent upon bulk drugs manufacturing
(domestic consumption as well as captive consumption by integrated players). Majority of large bulk drug players
are forward integrated through presence in formulations as well. However, backward integration for large players
through intermediates manufacturing is limited.

The players in chemicals used as pharma intermediates domain mostly have footprints in specialty chemicals, which
are supplied to pharmaceutical sector in addition to other sectors. CRISIL Research estimates that domestic
consumption of chemicals used as pharma intermediates remained at INR ~322 Bn (~USD 4.9 Bn) in fiscal 2019,
growing at ~7% CAGR since fiscal 2013. During the same period, bulk drugs production (including exports) also
grew at ~7% CAGR.

Imports of Chemicals used as pharma intermediates to India

The share of imports in domestic consumption has dropped f rom ~65% in fiscal 2013 to ~58% in fiscal 2019. The
drop in imports is majorly due to expiry of patents and withdrawal of customs duty exemption on drugs and
intermediates in fiscal 2017. The imports of bulk drugs and intermediates are dominated by China. Large

96
manufacturing units of China have economies of scale, supplying to several countries at a lower cost. The
API/intermediates industry gets support from the government through export subsidy. Moreover, the cost of
electricity is cheaper in China, which helps to maintain a cost advantage particularly in fermentation based products
which have higher electricity requirements. However, an analysis of chemical exports from China shows that there
has been a decline in exports from China in the past 2-3 years. Tougher regulations on the pollution causing
industries have impacted the chemicals sector in China adversely.

Exports of Chemicals used as pharma intermediates from India

Exports (in Value) grew at ~10.1% CAGR between fiscals 2013 and 2019. Indian intermediates players’ export
competitiveness can be attributed to their greater expertise in specialised intermediates as compared with traditional
intermediates. Indian players, with better process chemistry skills, have relative advantage in custom synthesis,
intermediates for drug discovery and contract manufacturing.

Outlook for Indian Market of Chemicals used as pharma intermediates

India Overall Market of Chemicals used as pharma intermediates (INR Bn)

823
CAGR: 8.5% CAGR: 8.3%
599
328
5.4%
368 Export
10.3%
265
147 Domestic Consumption
10.4% 495
7.1% 334
221

FY13 FY19 FY23

Source: CRISIL Research, Frost & Sullivan Analysis

India market of Chemicals used as pharma intermediates includes domestic consumption and exports

The overall market of chemicals used as pharma intermediates is anticipated to grow at 7 -9% CAGR over the 5 year
forecast period. Opportunities for growth of domestic manufacturers are:

• Government initiatives as bulk drugs parks focussing on streamlining the pharmaceutical industry
• Programs such as Jan Aushadhi Scheme: Private players can participate in such schemes through competitive
tenders and use their operational GMP compliant sites to supply medicines
• Shut down of Chinese chemical plants due to environmental concerns

Oil Well Completion Chemicals Markets Overview

The global market of Drilling and Completion Fluids is growing rapidly due to increased oil & gas exploration
activities around the world. The high demand for crude oil, along with the maturing of onshore oil and gas wells is
fostering the growth of Drilling and Completion Fluids market. Moreover, factors such as continuous development
of offshore reserves and rising deep water production are likely to influence the growth of the global Drilling and
Completion Fluids market positively. The global clear brine fluids market was valued at about USD 860 Mn in
2019 and is anticipated to grow at a CAGR of slightly above 5% between 2020 and 2023.

The global clear brine fluids market can be segmented on the basis of products into potassium chloride, calcium
chloride, sodium chloride, potassium bromide, sodium bromide, calcium bromide and others. Oil & gas sector is
expected to be the most dominating end-user of the global clear brine fluids market and is expected to keep this
trend over the estimated period.

North America accounts for ~65% of the total clear brine fluids market and is expected to witness a significant
growth in the forecast period. The government is increasing its energy security which will enhance the business
growth for the market of the region.

97
The Asia Pacific accounts for ~15% of total clear brine fluids market and is likely to witness robust growth for clear
brine fluids due to the presence of a number of shale reservoirs in the region. Also, the occurrence of various drilling
activities in countries like India and China are boosting the growth of the clear brine fluids market.

The Middle East & Africa is a major region for the oil & gas industry. The region has large oil & gas reserves in
regions like Libya, Syria, Egypt and others. The large presence of oil & gas reserves has augmented the growth of
the market in the region. Latin America is expected to witness a moderate growth over the years to come owing to
the emerging markets especially in countries such as Brazil, Argentina etc. in the region.

Some of the major players operating in the global clear brine fluids market are Israel Chemicals Ltd., Albemarle
Corporation, Chemtura Corporation (acquired by LANXESS), TETRA etc.

Impact of Covid-19

Covid-19 impact on Oil Well Completion Chemicals

The oil and gas industry is experiencing its third price collapse in a decade. This time it is a combination of supply
shock with an unprecedented demand drop. Globally there is a wide scale destruction of demand associated with
COVID-19. In April 2020, for the first time in history, oil recorded negative prices. US oil benchmark West Texas
Intermediate (WTI) recorded prices of negative ~USD 38. On the other side Brent Crude remains more stable and
reached a multiyear low of USD 18 in the month of April. EIA expects monthly Brent spot prices will average USD
43 per barrel during the second half of 2020 and rise to an average of USD 50 per barrel in 2021.

Global level travel bans and grounding of international flights resulted in substantial reduction in consumption of
aviation turbine fuel (ATF) across the globe. Demand for fuels except LPG and domestic natural gas has also
recorded tremendous drop. Since the beginning of the Coronavirus pandemic, there has been a loss of 1/3rd global
demand. Following the major downfall in demand, the refiners are forced to cut down their throughput to an extent
of 25-30%.

With crude oil prices at their lowest levels in nearly two decades, oil companies are safeguarding themselves by
resorting to production cuts. Companies in US, Colombia, etc. have cut production and reduce exploration as crude
prices stay at lower levels and production costs remain high. OPEC+ (OPEC and its oil-producing allies) has pledged
to reduce production May onwards. August 2020 is the third month in a row which follows production cut by 7.7
million barrels a day from August. OPEC+ plans to maintain production cuts of 7.7 million bpd through the end of
December 2020.

Offshore oil production has been widely impacted due to the coronavirus outbreak. Many O&G companies have
reduced offshore workers to prevent the spread of COVID-19. Equinor, Repsol Sinopec Resources UK (RSRUK),
Taqa, and China National Offshore Oil Corp. (CNOOC), have declared plans to reduce the number of workers to
help prevent coronavirus reaching its offshore operations. Many companies have also reduced their operations and
cut-down on explorations. Many oil exploration companies’ have demobilised their technical staff and shut down
operations due to the spread of Covid-19. Several new projects have been stalled across the globe to curtail spreading
of pandemic.

This has resulted in lower oil exploration and thereby impacting demand for Oil Well Completion Chemicals. The
exploration activities are expected to bounce back in a phased manner beginning second half 2020 resulting in a
better market outlook for oil well completion chemicals manufacturers.

The Indian O&G industry has also been impacted by Covid-19 to some extent. India is highly imports-dependent,
with oil imports at ~85% and gas imports at ~55% of their respective annual demands. Moreover, O&G imports
contributed to ~25% of India’s import bill in FY’19. However India does have wide base of production and
contributes ~5% of the global oil demand. Therefore the impact of COVID-19 has also been experienced in the
Indian O&G production to some extent. Though the industry has done reasonably well th us far as compared to
global counterparts but some new projects were stalled owing to Covid-19 which had impacted the oil well drilling
during the Covid-19 lockdown period. However, the Oil PSUs to restart projects in a phased manner as lockdown
restrictions ease and thereby creating demand for oil well drilling chemicals in India.

98
Covid-19 impact on CMIC and Chemicals used in Anti Viral Drugs Market

CMIC is mainly used in pharmaceutical industry as a key intermediate for anti-AIDS and anti-hepatitis B drug
Tenofovir. There are also many chemicals which are used for manufacturing of Anti-Retroviral (ARV). During the
pandemic situation also, the consumption of Anti-viral medicines have grown in general, resulting in a favourable
situation for raw material producers of these drugs including companies manufacturing CMIC and other chemicals
used in manufacturing of Anti Viral Drugs.

A new analysis by UNAIDS has revealed the potential impacts that the COVID-19 pandemic could have in low-
and middle-income countries around the world on supplies of the generic antiretroviral medicines used to treat HIV.
As per WHO, Seventy-three countries have warned that they are at risk of stock-outs of antiretroviral (ARV)
medicines as a result of the COVID-19 pandemic. The UNAIDS survey discovered that the lockdowns and border
closures imposed to stop COVID-19 are impacting both the production of medicines and their distribution,
potentially leading to increases in their cost and to supply issues, including stock -outs over the next two months.
Covid-19 has led to temporary disruption in the production and supply owing to difficulty in procuring certain APIs.
However this is expected to be corrected once the lockdown across the world is relaxed. Covid -19 is not expected
to have drastic impact on HIV or Hepatits drugs.

In India, During Feb 2020, the Drugs Controller General of India (DCGI) has approved the "restricted use" of a
combination of two HIV drugs - lopinavir (LPV) and ritonavir (RTV) for treating those affected by Covid-19. This
combination along with other drugs had been also used in clinical trials in China and Thailand for treating Covid-
19 affected patients. However, the use of LPV and RTV for the treatment of COVID-19 has not yet been established.
Globally, many studies indicated that these drugs did not significantly accelerate clinical improvement, reduce
mortality, or diminish throat viral RNA detectability in patients with serious Covid-19. Owing to all this factors and
current restricted use will not have significant demand surge for LPV and RTV for Covid-19 treatment.

Covid-19 impact on HMDS

HMDS is widely used in manufacturing of antibiotics such as penicillin, cephalosporins and other types of penicillin
derivatives.

SARS-CoV-2 is a respiratory virus responsible for Covid-19. Viral respiratory infections often lead to bacterial
pneumonia. Globally, antibiotics are used on a large scale to cure Covid-19 patient for bacterial infections generated
out of Covid-19 virus. During the course of study it was reported that addition of azithromycin to
hydroxychloroquine resulted superior viral clearance. Azithromycin alone has immunomodulating and anti-
inflammatory properties that could theoretically prevent or limit secondary worsening. However azithromycin
combined with amoxicillin/clavulanate will be superior to obtain viral clearance in Covid -19 patients with
pneumonia. Amoxicillin is used to treat a wide variety of bacterial infections. This medication is a penicillin -type
antibiotic.

Globally, azithromycin combined with amoxicillin is widely used for treatment of Covid-19. In India doctors are
treating the Sars-Cov-2 virus with a combination of three-drug - anti-viral, anti-bacterial and anti-malarial. The
doctors are using anti-bacterial drugs like Azithromycin and Amoxicillin Clavulanate. Covid has led to growth in
consumption of Amoxicillin and other derivatives of penicillin-type antibiotic

In March, A government committee in India identified various essential drugs including key antibiotics such as
amoxicillin, moxifloxacin, doxycycline and rifampicin were at risk of being out of stock, as majority of its raw
materials coming from China had been disrupted because of Covid-19 outbreak. This had resulted restricting export
of certain APIs and formulation. India has high dependence on China for Imports of HMDS to manufacture vital
antibiotics resulting on a strong impact on the industry. Local supply of HMDS will be crucial in Pandemic and
times ahead.

On flipside, increased use of antibiotics in combatting the pandemic will strengthen bacterial resistance which will
further impact the burden of disease and deaths during the pandemic and beyond. Number of countries are
monitoring and reporting on antibiotic resistance which indicates a worrying number of bacterial infections are
increasingly resistant to the medicines. Increased use of antibiotics during the pandemic is creating an alarming state
resulting in doctors and experts asking for clear guidelines to prevent overuse of these drugs in order to prevent
strengthening bacterial resistance. This could limit consumption of Amoxicillin over the long run, but however it is
expected to have good growth rates indicating a good market scenario for HMDS.

99
HMDS also finds wide application in semiconductor processing. The semiconductor industry is among the many
sectors that have had to adjust their production as COVID-19 impacts demand for major semiconductor end
applications. The demand for semiconductors is expected to be lower in 2020 by nearly 10 – 15% on a Y-o-Y basis.
China accounts for than the half of worldwide semiconductor consumption. China being the epicentre for Covid-
19, it experienced lockdown since the onset of 2020. Many critical electronics manufacturing hubs were temporarily
idled to limit spread of covid-19. Owing to this there was reduction in production of semiconductors. The
consumption across the globe had also reduced owing to reduced income and decreased disposable income. All this
had larger impact on the production of semiconductor and thereby having an impact on the consumption of HMDS.

HMDS MARKET OVERVIEW

Product Description and Usage/End-Use Industry

Product Overview

HMDS or hexamethyldisilazane (also known as bis(trimethylsilyl)amine) is an organosilicon compound with the

molecular formula [(CH 3)3Si]2NH. The molecule is a derivative of ammonia with trimethylsilyl groups in place of
two hydrogen atoms. This colourless liquid is a reagent and a precursor to bases that are popular in organic synthesis
and organometallic chemistry.

HMDS, a weak trimethylsilyl donor, was the first reagent used to prepare TMS derivatives. It is most often used in
silylating mixtures. HMDS has the desirable property of reacting more selectively, in some instances, than other
reagents. It is a popular choice for silylating acids, alcohols, amines and phenols. HMDS can be used alone, but
derivatization usually will proceed faster with a catalyst. HMDS also is useful for conditioning glassware or silica.

HMDS has a relatively low boiling point (124-127°C). It can be used without solvent, but its silylating power can
be increased by various (mostly acidic) catalysts. The only reaction by-product, ammonia, can leave the reaction
mixture as the reaction goes to completion. TMS derivatives are thermally stable but more susceptible to hydrolysis
than their parent compounds. Hexamethyldisilazane reacts with many carbonyl containing organic compounds to
generate gaseous ammonia. It may be incompatible with isocyanates, halogenated organics, peroxides, phenols
(acidic), epoxides, anhydrides and acid halides. Flammable gaseous hydrogen may be generated in combination
with strong reducing agents, such as hydrides.

Manufacturing Process of HMDS

The process directly synthesizes hexamethyldisilazane by using trimethylchlorosilane and liquid ammonia as raw
materials. The method simplifies the production process, improves the product yield, improves the product quality,
reduces the production cost and completes the synthesis reaction in a one-step process without solvent and ensures
the reaction is completely complete. In the process technology, on the one hand, the strong agitation form is adopted
so that the reaction is completely completed in a better flow state. On the other hand, overcoming the product's easy
hydrolysis characteristics, the product hydrolysis requires certain conditions to be carried out, using water washing
and special solvents to remove salts.

Manufacturing Process of HMDS

Water

Chlorotrimethylsilane Reaction Kettle Rectification HMDS

Liquid Ammonia Saline Solution Ammonium

Chloride

100
Applications of HMDS

Application Description
Pharmaceutical Hexamethyldisilane mainly used as methyl silane alkylation (such as amikacin, penicillin,
cephalosporins and kinds of penicillin derivatives), hydroxyl protectants of antibiotics.
Hexamethyldisilazane is used in the preparation of 5-azacytidine, an antineoplastic drug. Also,
it used in preparation of β3-AR agonists used in anti-stress formulations.

Semiconductor It is used as surface treatment agent of diatomite, white carbon black, titanium and blond
additives of photoresist in the semiconductor industry.

Organic Synthesis Hexamethyldisilazane is primarily used as a precursor to many bases common in organic
synthesis and organometallic chemistry.

Others Hexamethyldisilazane also has applications in photolithography, electron microscopy and

pyrolysis-gas chromatography-mass spectrometry. HMDS (Hexamethyldisilazane) can
greatly increase the application range of GC and improve the chromatographic results of
silanization of sugars and related substances

HMDS Market size (historical) by key geographies

The Global HMDS market in 2019 was valued at 243 USD Mn with a demand of ~25.4 KT.

Particulars 2013 2014 2015 2016 2017 2018 2019

Capacity (MT) 32,790 32,790 33,790 37,290 35,490 34,890 35,700
Production (MT) 20,513 21,382 22,360 22,990 23,437 23,800 25,390
CIF Price (USD/MT) 7,013 4,785 4,407 4,608 5,270 14,505 9,559
Value* (USD Mn) 144 102 99 106 124 345 243
*Market valuation done at CIF Prices

• China currently accounts for 50% of Global HMDS capacity, thereby paving the way for it being the largest
exporter of HMDS in world. However, the utilization rate of China is considerably low as compared with other
regions/countries. This could be a potential success factor for Chemcon considering the regulatory changes that
have been imposed in China.

• Geographically, China accounted for the largest production share of HMDS (41.3%), followed by North
America (20.9%), Europe (17.5%), Japan (9.9%), India (10.4%) in 2019.

• North America and Europe are the major consumers of HMDS, together accounting for more than 60% of
global HMDS demand.

(a) HMDS Capacity

HMDS Global Capacity (MT) and Utilization Rate (%) Trend, 2013 -2019

40,000 33,790 37,290 35,490 34,890 35,700 100%

32,790 32,790
30,000 80%
71.1% 60%
20,000 62.6% 65.2% 66.2% 61.7% 66.0% 68.2%
40%
10,000 20%
0 0%
2013 2014 2015 2016 2017 2018 2019
Capacity Operating Rate
Source: Frost & Sullivan Analysis

101
Global HMDS Capacity (MT) Split by Region/Country

Region/Country 2013 2014 2015 2016 2017 2018 2019

China 11,890 11,890 12,890 16,390 17,590 17,590 17,800
North America 10,000 10,000 10,000 10,000 7,000 7,000 7,000
Europe 5,500 5,500 5,500 5,500 5,500 5,500 5,500
Japan 3,000 3,000 3,000 3,000 3,000 3,000 3,000
India 2,400 2,400 2,400 2,400 2,400 1,800 2,400
Total 32,790 32,790 33,790 37,290 35,490 34,890 35,700

Global HMDS Key Manufacturers Capacity Market Share, 2014

Global
Others Momentive, Wacker,
10.64% 9.15% 9.15%
Dow
15.25% Chemcon, Shin-Etsu,
55.81% 7.32% 9.15%
Xinyaqian Bluestar,
g Silicon 6.10% Evonik,
18.30% Zhejiang 7.62%
Sorbo,
7.32%

Source: Frost & Sullivan Analysis

Global HMDS Key Manufacturers Capacity Market Share, 2019

Chemcon
Zhejiang
Global , 6.7%
Sorbo,
Others, 10.1%
14.6% Bluestar,
Dow, 5.6%
14.0% Wacker,
54% 8.4%
Xinyaqian Evonik,
g Silicon , 7.0% Sichuan Shin-
16.8% Jiabi, Etsu,
8.1% 8.4%

Source: Frost & Sullivan Analysis

Xinyaqiang Silicon has the largest capacity of HMDS in the world accounting for ~17% of the total global HMDS
capacity. Momentive shut down its HMDS production in 2017, thereby reducing the total global capacity and
increasing the global HMDS capacity utilization rate.

Global HMDS Capacity (MT) Split by Manufacturer:

Company Country 2013 2014 2015 2016 2017 2018 2019

Xinyaqiang Silicon China 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Dow USA 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Zhejiang Sorbo China 2,400 2,400 2,400 2,400 3,600 3,600 3,600

102
 Company Country 2013 2014 2015 2016 2017 2018 2019

Wacker Germany 3,000 3,000 3,000 3,000 3,000 3,000 3,000

Shin-Etsu Japan 3,000 3,000 3,000 3,000 3,000 3,000 3,000
Sichuan Jiabi China -- -- -- 3,000 3,000 3,000 3,000
Evonik Germany 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Bluestar China 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Chemcon India 2,400 2,400 2,400 2,400 2,400 1,800* 2,400
Momentive USA 3,000 3,000 3,000 3,000 -- -- --
Global Others 3,490 3,490 4,490 4,990 4,990 4,990 5,200
Total 32,790 32,790 33,790 37,290 35,490 34,890 35,700
*Temporary reduction in Capacity due to fire:

(b) HMDS Production

Global HMDS Production (MT) Split by Region/Country:

Region/Country 2013 2014 2015 2016 2017 2018 2019

China 6,743 7,508 8,533 9,133 9,899 10,380 10,480
North America 6,355 6,196 5,784 5,624 5,167 5,212 5,302
Europe 3,851 3,961 4,110 4,257 4,336 4,388 4,443
Japan 2,059 2,124 2,176 2,386 2,450 2,485 2,516
India 1,505 1,593 1,757 1,590 1,585 1,334 2,649
Total 20,513 21,382 22,360 22,990 23,437 23,800 25,390

Xinyaqiang Silicon, Dow, Shin-Etsu, Wacker, Chemcon are the major international players in the market of HMDS
industry. The reason why these companies dominate the market is their technical know-how, their long-term
presence in the market, the relationships they have developed with downstream users over a long period of time and
the brand recognition they enjoy.

HMDS Key Manufacturers Production

Global Momentive
Others , 7.95%
8.11% Wacker,
10.12%

Dow Chemcon,
17.15% 7.45% Shin-Etsu,
57.86% 9.93%
Bluestar,
Xinyaqia 5.93% Zhejiang
ng Evonik,
Sorbo,
Silicon 8.41%
8.07%
16.89%

Source: Frost & Sullivan Analysis

103
Global HMDS Key Manufacturers Production Market Share, 2019
Sichuan
Global Jiabi,
Others, 3.0%
7.1%
Shin-Etsu,
Dow, 9.9%
17.1% Chemcon
, 10.4%
Wacker,
54% Bluestar, 9.8%
Xinyaqiang 5.9%
Silicon , 19.5% Zhejiang
Evonik, Sorbo,
7.7% 9.6%

Source: Frost & Sullivan Analysis

Global HMDS Production (MT) Split by Manufacturer

Company Country 2013 2014 2015 2016 2017 2018 2019

Xinyaqiang Silicon China 3,395 3,611 4,355 4,639 4,778 4,922 4,941
Dow USA 3,496 3,667 3,854 4,081 4,287 4,330 4,338
Chemcon India 1,505 1,593 1,757 1,590 1,585 1,334 2,649
Shin-Etsu Japan 2,059 2,124 2,176 2,386 2,450 2,485 2,516
Wacker Germany 2,104 2,163 2,280 2,370 2,419 2,449 2,480
Evonik Germany 1,747 1,798 1,830 1,887 1,917 1,939 1,963
Zhejiang Sorbo China 1,322 1,726 1,960 2,012 2,370 2,431 2,434
Bluestar China 1,135 1,268 1,298 1,403 1,458 1,471 1,490
Sichuan Jiabi China -- -- -- 162 364 629 771
Momentive USA 2,054 1,700 1,084 677 -- -- --
Global Others 1,696 1,733 1,766 1,784 1,809 1,808 1,808
Total 20,513 21,382 22,360 22,990 23,437 23,800 25,390

(c) Regional/Country HMDS Demand [Production + Imports – Exports]

Global HMDS Demand (MT) Split by Region/Country, 2013-2019

2013-19
25.4 CAGR
23.0 23.5 23.8
22.4 10.5%
20.6 21.3 4.0
2.5 2.6 2.4 2.8%
2.4
2.2 2.3 2.4 2.5 2.6 2.6
2.2 2.4%
2.2 2.2 3.0 3.0
2.8 2.9 3.0
2.6 2.6
5.4 5.7 5.8 5.8 5.8 2.2%
5.1 5.3
0.7 0.7 5.8%
0.5 0.6 0.6 0.7
0.5
2.5%
8.0 8.4 9.0 8.9 8.9 9.3 9.3

2013 2014 2015 2016 2017 2018 2019

North America ROW Europe China Japan India

Source: Frost & Sullivan Analysis

104
HMDS Market size by End Use Industry

(a) Key End-Use Applications and Demand Drivers

Pharmaceutical Industry: Hexamethyldisilazane is mainly used as methyl silane alkylation (such as amikacin,
penicillin, cephalosporins and kinds of penicillin derivatives), hydroxyl protectants of antibiotics, preparation o f 5-
azacytidine, an antineoplastic drug, preparation of β3-AR agonists used in anti-stress formulations.

• Antibiotic Drugs:

Most of the antibiotic drugs are cheap, off-patent generic medicines which are easily and widely affordable,
especially among the low income and lower-middle-income countries. In addition, the generic industries play a
major role in the cost reduction of pharmaceutical drugs, which increase the overall higher availability and
consumption, worldwide.

Asia-Pacific has observed a trend of increasing antibiotic consumption in countries, such as China and India, having
diversified patient population where there is a continuous rise in demand for generic antibiotics. The third and fourth
generation broad-spectrum antibiotics, under cephalosporins are consumed heavily in several countries across
Southeast Asian countries. These countries are rich with preparations on preclinical and early phase drug candidates
in their research laboratories. In countries like Singapore, the government has recently announced a national
strategic plan to tackle the antimicrobial resistance. In India, a 5-year strategy for antibiotic resistance was initiated
by the Chennai Declaration group. The campaigns and strategic plans are among the national level programs, which
raises the awareness in the society and helps private organizations, as well as multinational players to expand in
developing countries. Thus, Asia -Pacific countries are expected to generate high opportunities for the growth of the
antibiotics market.

The global antibiotics market was valued at about USD 44.8 Bn in 2019, which is estimated to register a CAGR of
4.5%, over the forecast period, 2020 to 2023. Cephalosporins have the largest market share among all antibiotics at
~26% in 2019.

Drug - End Use of HMDS Drug Description / Application

Cefprozil Second-generation cephalosporin antibiotic - used to treat bronchitis, ear
infections, skin infections and other bacterial infections
Cefadroxil Antibiotic of the cephalosporin type, effective in Gram-positive and Gram-
negative bacterial infections
Cefaclor Second-generation cephalosporin antibiotic - used to treat certain bacterial
infections such as pneumonia and infections of the ear, lung, skin, throat and
urinary tract

• Anti-viral Drugs:

The global market for antiviral drugs was worth USD 61.9 Bn in 2019 and is projected to reach a valuation of USD
79.3 Bn by 2023. The market is estimated to register a ~6.39% CAGR between 2019 and 2023. The global
market for antiviral drugs is expected to gain traction from developed economies, especially from North America.
The rising focus of the players on technological advancements and innovations in this field are projected to support
the growth of the overall market in the next few years. Several emerging economies, such as China, Japan and India
are estimated to offer potential growth opportunities for the market players, thus accelerating the growth of the
overall market in the next few years. In addition to this, the rising government support is predicted to enhance the
growth of the market in the next few years.

Drug - End Use of HMDS Drug Description / Application

Sofosbuvir Direct Acting Antiviral (DAA) medication used as part of combination therapy
to treat chronic Hepatitis C
Lamivudine Antiretroviral medication used to prevent and treat HIV/AIDS. It is also used to
treat chronic hepatitis B when other options are not possible. It is effective against
both HIV-1 and HIV-2
Emtricitabine Nucleoside Reverse Transcriptase Inhibitor (NRTI) for the treatment of HIV
infection in adults
Efavirenz Antiretroviral medication used to treat and prevent HIV/AIDS

105
 Drug - End Use of HMDS Drug Description / Application
Gemcitabine Chemotherapy medication used to treat a number of types of cancer

Semiconductor Electronics Industry: HMDS is used heavily in the semiconductor electronics industry as CVD
(Chemical Vapor Deposition) /ALD (Atomic Layer Deposition) precursors and photoresist adhesion promoters
mainly for ultra-low K dielectrics, low temperature oxides and litho spacers. With the use of HMDS, companies
have been able to enable powerful yet small chips inside computers, tablets and smartphones to work better on a
consistent basis.

Rubber Industry: Used in vinyl silicone rubber in order to improve the tearing strength.

(b) Global and India HMDS Demand Split by Application:

Pharmaceuticals accounts for ~67% of HMDS Global demand. Due to the easy availability of drugs in the region
and high healthcare expenditure from both the private and public sector, North America is predicted to contribute
largely to the drugs market globally. Apart from that, established players are entering China and India due to high
prevalence making the market attractive.
Global HMDS Demand Split by Application (Volume - ‘000 MT), 2013-2023P

2019-2023P CAGR: 3.8%

2013-2019 CAGR: 3.6%
29.5 2013-19
27.4 28.4 CAGR
25.4 26.4
23.0 23.5 23.9
21.4 22.3
20.6
3.5%
19.0 19.6 20.2
16.0 17.1 18.2
14.5 15.1 15.4 15.7
13.9
3.9
3.9%
2.8 2.9 3.1 3.2 3.2 3.4 3.5 3.6 3.7
2.7 4.1%
2.6 2.7 2.8 3.0 3.0 3.1 3.3 3.3 3.4 3.5 3.6
1.4 1.4 1.5 1.5 1.6 1.6 1.6 1.4 1.4 1.6 1.8 2.3%
2013 2014 2015 2016 2017 2018 2019 2020P 2021P 2022P 2023P

Others Rubber Semiconductor Pharamceuticals

Source: Frost & Sullivan Analysis

India HMDS Demand Split by Application (Volume - ‘000 MT), 2013-2023P

2019-2023P CAGR: 10.6%

2013-2019 CAGR: 10.5% 2013-19
6.0 CAGR
5.4
4.9
4.0 4.4
10.8%
2.2 2.3 2.3 2.6 2.6 2.4
5.1 5.6
4.1 4.6
3.7
2.0 2.1 2.1 2.4 2.4 2.2
0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.4 7.0%
2013 2014 2015 2016 2017 2018 2019 2020P 2021P 2022P 2023P

Others (Semiconductor, Rubber, etc.) Pharamceuticals

Source: Frost & Sullivan Analysis

106
HMDS Market Projected growth (4 years) by key geographies

(a) HMDS Capacity Outlook

HMDS Global Capacity (MT) and Utilization Rate (%) Trend, 2019-2023P

50,000 100%
38,000 39,500 39,500
40,000 35,700 35,700 80%
30,000 71.1% 73.8% 72.0% 71.9% 74.6% 60%
20,000 40%
10,000 20%
0 0%
2019 2020P 2021P 2022P 2023P
Capacity Operating Rate
Source: Frost & Sullivan Analysis
Global Capacity utilization rate in 2019 was at ~71%.

Going forward, HMDS producing regions are expected to focus on ramping up their production to cater to the
increase in global HMDS demand. China will continue to be the major exporter whereas North Am erica and Europe
will continue to be the leading consumer markets for HMDS. India is expected to rise as a new exporter in the global
market following challenging situation faced by China leading to India becoming a new preferred origin for the
products.

(b) Regional/Country HMDS Demand [Production + Imports – Exports]

The HMDS Global Demand is expected to grow at a CAGR of 3.8% through the projected 4 year period. The growth
in demand will be driven majorly by the increased customer spending in healthcare segment and growth in use of
semiconductors in electronics industry.

Global HMDS Demand Split (‘000 MT) by Region/Country, 2019-2023P

2019-2023P CAGR: 3.8% 2019-23

CAGR
28.4 29.5
26.4 27.4 10.6%
25.4
5.4 6.0 2.6%
4.4 4.9
4.0 4.1%
2.7 2.8 2.9
2.6 2.6
3.2 3.3 3.4 3.5 2.5%
3.0
5.8 6.0 6.2 6.3 6.4
3.4%
0.7 0.7 0.7 0.8 0.8

9.3 9.5 9.6 9.7 9.9 1.6%

2019 2020F 2021F 2022F 2023F

North America ROW Europe China Japan India

Source: Frost & Sullivan Analysis

Currently, India is a net importer of HMDS. About 40% of India’s current domestic demand is catered by
imports majorly from China (97%) and Germany (3%).

107
HMDS India Market (MT), 2019

4,500 1,622 -262

4,009
4,000

3,500

3,000
2,649
2,500

2,000

1,500
Production Imports Exports Domestic Demand
Source: Frost & Sullivan Analysis

India is expected to witness a demand growth of 10.6% (2019-23) CAGR fuelled by increase of end use customers
and growing population base who can afford quality healthcare.

HMDS India Market (MT) Outlook

HMDS India Market HMDS India Market

CAGR 2013-2019: 10.5% CAGR 2019-2023: 10.6%

India Demand India Demand India Demand

2,167 MT (2013) 4,009 MT (2019) 6,000 MT (2023P) =
Domestic Addressable
Market for Chemcon
Chemcon
Chemcon
Production,
Production,
1,505 MT
2,649 MT
(2013)
(2019)

Source: Frost & Sullivan Analysis

India imported 1,622 MT of HMDS in 2019 with a net demand of 4,009 MT indicating import as a per cent of net
demand to be around 40%. Chemcon is the only HMDS manufacturer in India. Hence, by substituting imports and
catering to India’s growing HMDS market, Chemcon has immense opportunity in India Additionally other
countries of the world are dependent on China for their HMDS requirement, however with changing
environment regulations and widespread coronavirus the trade from the country is low giving opportunity
to Chemcon to target China’s export customer base. All these factors provide an opportunity to Chemcon to
grow at a CAGR of 15-20% between 2019 and 2023 including great opportunity for exports.

Impact of China and the recent regulatory changes in China

Environmental challenges have become a top concern among Chinese government and legislative organizations.
Since the new China Environment Protection Law (EPL) came into effect on January 1 st, 2015, the Ministry of
Ecology and Environment (MEE) has taken measures to uphold the EPL’s basic principles of ensuring public health
and enforcing information disclosure. Local governments have followed suit by formulating or updating their own
environmental regulations.

In China, companies have experienced the steady tightening of environmental regulatory requirements over the past
3-5 years. This is expected to last until 2020 to ensure the 13th Five-Year Plan targets are met. To remain compliant,

108
companies should upgrade their environmental systems accordingly. Companies with professional environmental
management systems, teams and resources will more easily adapt and cope with regulatory changes as well as win
future projects.
A series of changes in environmental protection policies have led to a sharp rise in raw material prices. It is
foreseeable that this situation would not improve for a long time. This may influence China HMDS industry.
Chemcon’s production technology in India is absolutely mature. In addition, the US-China dispute may influence
China’s HMDS exports to the US and may indirectly help India boost its exports. Chemcon has already sta rted
supplies to US based on opportunity created due US-China disputes.
Apart from competition, China is also one of the major suppliers for some of the key raw materials for manufacturing
Chemcon’s products. The company imports Trimethyl Chlorosilane (TMCS) and Methyl Chloroformate in huge
quantities. A freeze on logistics and imports from China would lead to raw material constraints affecting production
of Chemcon and other global players creating a pressure on the market.
Quarterly Price trend of HMDS and Trimethylchlorosilane (TMCS – Key Raw Material)

TMCS, being the key raw material for manufacture of HMDS, influences the HMDS price. The approximate cost
for manufacture of HMDS ($/kg) = 1.5 * TMCS Price ($/kg) + 2.5 $/kg (Conversion Cost)

HMDS and TMCS Price (CIF) Trend, $/kg, 2013-2019

20.0 12.0
18.0
16.0 10.0
14.0 8.0
12.0
10.0 6.0
8.0
6.0 4.0
4.0 2.0
2.0
0.0 0.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19
HMDS [LHS] 7.0 7.0 7.0 7.0 5.3 5.1 4.6 4.1 4.3 4.3 4.5 4.6 4.2 4.7 4.9 4.6 3.5 4.0 4.6 9.1 10. 16. 18. 12. 12. 10. 8.9 8.2
TMCS [RHS] 3.6 3.6 2.9 2.6 1.9 1.8 1.4 1.1 1.1 1.3 1.8 1.8 1.8 1.5 1.4 1.4 1.3 1.5 1.6 1.9 6.2 8.9 10. 5.4 5.4 3.4 2.7 2.4

HMDS [LHS] TMCS [RHS]

Source: Frost & Sullivan Analysis

CMIC MARKET OVERREVIEW

Product Description and Usage / End-Use Industry

Product Overview

The CMIC (chloromethyl isopropyl carbonate), is also known as chloromethyl (1-methylethyl) carbonate. It belongs
to the product category of chemicals used as pharma intermediates.

Chloromethyl isopropyl carbonate is an antiviral drug intermediate product, which is a key intermediate for anti-
AIDS and anti-hepatitis B drug Tenofovir. The downstream product of chloromethyl isopropyl carbonate, Tenofovir
is a nucleotide antiviral drug developed by Gilead Corporation of the United States.

In 2001, it was approved by the US FDA for the treatment of human immunodeficiency virus (HIV) infection.
Because of its precise therapeutic effect, good applicability and appropriate dosage, it is the first-line anti-HIV drug
recommended by multiple treatment guidelines. Tenofovir and its combination preparations have become the largest
sales of anti-AIDS drugs.

In April and August 2008, the European Union and the US FDA approved Tenofovir for the treatment of hepatitis
B (hepatitis B) based on a large number of clinical trial results and were praised by experts as one of the best anti-
hepatitis B drugs.

109
Manufacturing Process of CMIC

Reaction Equation in Manufacturing Process of CMIC

Reaction Equation in Manufacturing Process of CMIC

Applications of CMIC

Application Description
Chemicals used as CMIC is mainly used in pharmaceutical industry as a key intermediate for anti-AIDS
pharma intermediates anti-hepatitis B drug Tenofovir.
Others In addition to above applications, CMIC can also be used in synthesis of other antiviral
drugs.

CMIC Market size (historical) by key geographies

The Global CMIC market in 2019 was valued at 27.2 USD Mn with the global demand of ~3.9 KT.

Particulars 2013 2014 2015 2016 2017 2018 2019

Capacity (MT) 4,590 5,090 6,830 6,780 6,330 6,280 6,880
Production (MT) 1,700 2,205 2,938 2,985 3,353 3,880 3,927
CIF Price (USD/MT) 8,640 8,365 7,585 6,868 6,336 7,903 6,933
Value* (USD Mn) 15 18 22 21 21 31 27.2
*Market valuation done at CIF Prices

• Chemcon is one of the leading players in the market of CMIC industry. Other major players are Shanghai
Twisun, Inner Mongolia Saintchem, Anshul Specialty, Huangshi Fuertai and Paushak.
• India and China are the only countries that produce CMIC. In 2019, India and China accounted for 36% and
64% of the global production share respectively.
• China is the leading exporter of CMIC, catering majorly to Indian and North American markets.
• India, the largest consumer of CMIC in the world, accounts for ~65% of the global CMIC demand. The market
for chemicals used as pharma intermediates in India is expanding day by day. This is mainly due to the fact that
people are now turning towards specialty chemicals for the manufacturing of products like medications. In the
last few yea rs, India has seen a huge growth in production of chemicals used as pharma intermediates like
Chloromethyl Isopropyl Carbonate. In Gujarat alone, the demand for specialty chemicals is huge and companies
like CHEMCON are manufacturing these intermediates on a large scale to meet the demand.

110
(a) CMIC Capacity
CMIC Global Capacity (MT) and Utilization Rate (%) Trend, 2013-2019

8,000 6,880 100%

6,830 6,780
6,330 6,280
6,000
80%
5,090
4,590
60%
4,000 61.8%
53.0% 57.1% 40%
43.3% 43.0% 44.0%
2,000 37.0% 20%
0 0%
2013 2014 2015 2016 2017 2018 2019
Capacity Operating Rate
Source: Frost & Sullivan Analysis

CMIC Global Capacity (MT) Split by Region / Country

Region/Country 2013 2014 2015 2016 2017 2018 2019

China 3,200 3,700 5,200 5,150 4,100 4,050 4,050
India 1,390 1,390 1,630 1,630 2,230 2,230 2,830
Total 4,590 5,090 6,830 6,780 6,330 6,280 6,880

CMIC Global Key Manufacturers Capacity Market Share, 2014

Paushak
Atul 4.72%
4.72%
Shandong Tianan Shanghai Twisun
9.82% 39.29%

Inner Mongolia
Saintchem
19.65%

Global Others
3.93% Chemcon Anshul Specialty
7.07% 10.81%
Source: Frost & Sullivan Analysis

111
CMIC Global Key Manufacturers Capacity Market Share, 2019
Paushak, Global Others,
Anshul 7.0% 0.7%
Specialty,
8.0% Shanghai
Twisun,
Huangshi 29.1%
Fuertai,
14.5%

Inner
Mongolia Chemcon,
Saintchem, 26.2%
14.5%
Source: Frost & Sullivan Analysis

CMIC Global Capacity (MT) Split by Manufacturer

Company Country 2013 2014 2015 2016 2017 2018 2019

Shanghai Twisun China 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Chemcon India 360 360 600 600 1,200 1,200 1,800
Inner Mongolia Saintchem China 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Huangshi Fuertai China -- -- 1,000 1,000 1,000 1,000 1,000
Anshul Specialty India 550 550 550 550 550 550 550
Paushak India 240 240 240 240 240 480 480
Shandong Tianan China -- 500 500 500 -- -- --
Pingyuan Xinda China -- -- 500 500 -- -- --
Atul India 240 240 240 240 240 -- --
Global Others 200 200 200 150 100 50 50
Total 4,590 5,090 6,830 6,780 6,330 6,280 6,880
To cater to the increasing demand of CMIC, Chemcon expanded its capacity over the past 5 years. The encouraging
growth in CMIC demand will create opportunities for new capacity / expansion. Large players are well positioned
to capitalise on the increasing demand.
(b) CMIC Production
CMIC Global Production (MT) Split by Region / Country

Region/Country 2013 2014 2015 2016 2017 2018 2019

China 1,145 1,412 1,710 1,800 1,862 2,139 2,506
India 555 793 1,227 1,186 1,491 1,740 1,421
Total 1,700 2,205 2,938 2,985 3,353 3,880 3,927

CMIC Global Production (MT) Split by Manufacturer

Company Country 2013 2014 2015 2016 2017 2018 2019

Shanghai Twisun China 984 1,087 1,157 1,202 1,252 1,298 1,352
Chemcon India -- 194 590 507 777 1,086 677
Inner Mongolia Saintchem China 74 206 338 309 377 574 645
Anshul Specialty India 358 373 385 403 422 437 464
Huangshi Fuertai China -- -- 22 117 185 251 501
Paushak India 166 174 180 188 197 217 280
Atul India 31 52 72 87 95 -- --
Shandong Tianan China -- 18 69 58 -- -- --
Pingyuan Xinda China -- -- 12 34 -- -- --
Global Others 87 101 112 80 48 16 8
Total 1,700 2,205 2,938 2,985 3,353 3,880 3,927

112
Chinese players - Shandong Tianan and Pingyuan Xinda stopped their CMIC production in 2016, Atul in India
stopped its CMIC production in 2017. With consolidation of CMIC manufacturers, the capacity utilization rate over
the last 2 years has improved.

CMIC Global Key Manufacturers Production Market Share, 2014

Anshul Specialty
Chemcon 16.91%
8.80%
Shandong Tianan
Shanghai
0.82%
Atul Twisun49.30%
2.36%
Paushak
7.89%
Inner Mongolia
Saintchem Global Others
9.34% 4.58%

CMIC Global Key Manufacturers Production Market Share, 2019

Paushak Global Others
7% 0%
Huangshi Shanghai
Fuertai Twisun
13% 35%

Anshul
Specialty
12%

Inner Mongolia
Saintchem Chemcon
16% 17%

Source: Frost & Sullivan Analysis

(c) Regional / Country CMIC Demand [Production + Imports – Exports]

CMIC Global Demand (‘000 MT) Split by Region / Country, 2013-2019

2013 - 2019 CAGR: 17.4% 3.88 3.92 2013-19 CAGR

3.40
2.90 2.90
2.20 14.7% (India)
1.70 2.5 2.5
1.7 2.3
1.9
1.4
1.1 0.8 0.84 18.7% (NA)
0.5 0.9 0.7 0.8
0.3
0.2 0.3 0.3 0.3 0.3 0.5 0.5 16.5% (China)
2013 2014 2015 2016 2017 2018 2019

China North America India ROW

Source: Frost & Sullivan Analysis

113
CMIC Market size by End Use Industry

Key End-Use Applications and Demand Drivers

Pharmaceutical Industry – HIV & HBV Intermediate (>99% of CMIC Demand):

Tenofovir is regarded as a revolutionary drug for curing and preventing AIDS/HIV. Tenofovir disoproxil has been
used worldwide as an antiretroviral medication and has also proven to be helpful in fighting against another chronic
disease named hepatitis B. One of the most important facts that make this medication an important one is the fact
that it is on WHOs list of essential medications. CMIC is an important pharma intermediate which is used in the
manufacturing of Tenofovir.

Tenofovir is medically indicated in addition to other antiretroviral medications for the treatment of HIV-1 infection.
It is even known to treat paediatric patients that are at least 12 years in age. This medically proven medication is in
huge demand nowadays due to the fact that chronic diseases are also becoming very common. This on the other
hand has made way for a huge increase in demand for CMIC. Due to this, various CMIC manufacturers have started
manufacturing various batches of CMIC to meet the regular demand.

HIV Diagnosis and Treatment Market: The global Human Immunodeficiency Virus (HIV) diagnosis & treatment
market is expected to grow at a CAGR of 7.6% during 2019-2023.

According to world health organization (WHO), it is a main global public health issue. In 2017, approximately 36.9
million people were suffering from HIV. The global HIV diagnosis and treatment market is rapidly growing and
continuously working on trials for the proper diagnosis followed by treatment. Nearly 21 million adults were on
treatment in 2017. The number of adults on ART has more than tripled since 2010 in some LMICs, such as D R
Congo, Mozambique, Myanmar, Uganda and Tanzania. At current ART scale-up rates, over 23 million adults in
GA LMICs can be expected to be on ART by 2022.

In December 2017, the third Conference on ARV Drug Optimization (CADO3) was held in Johannesburg, South
Africa. One of the key outputs from the meeting was a prioritized list of optimized products and formulations desired
for treating adults.

Prioritized List of Optimized Products and Formulations for Adults on ART

Short Term Medium Term Long Term

1-2 years 2-5 years 5+ years

TDF/XTC/DTG TAF/XTC Long acting forms

TDF/3TC/EFV4000 TAF/XTC/DTG Maturation &

0 capsid inhibitors
New DRV/r
DRV/r (400/50mg)
formulations bNAbs

Source : CHAI

TAF is a tenofovoir pro-drug that could replace TDF in formulations such as TLD. Interest in TAF is largely based
on potential cost savings relative to TDF-based regimens given a lower required dose (TAF 25mg vs. TDF 300mg).
Mylan received tentative US FDA approval for its TAF/FTC/DTG (25/200/50 mg) product in Q1 2018, but is
expected to be the sole supplier until at least mid-2019.

114
1L NRTI Market in GA LMICs, Patient Growth

21.50 22.10 2017-23 CAGR

19.60 20.20
17.10 18.40 0.6 0.6
0.2 1.9
0.4 4.6
1.1 0.2 0.2
2.1 0.2 0.4
0.2 -24.% (AZT)
2.3
0.3 0.2

17.1 18.8 19.2 18.9 16.8

13.8 14.9
3.3% (TDF)
16.5% (China)
2017 2018 2019E 2020F 2021F 2022F 2023F

TDF ABC AZT TAF

The WHO guidelines currently do not recommend TAF-based regimens for treatment at all, whether as preferred or
alternate. Although TAF has been shown to be as effective as TDF, studies on use in some key populations, such as
pregnant women, are on-going. Full data to inform WHO review and inclusion in guidelines is not expected until
2020. Thus, uptake of TAF-regimens is only forecasted to begin in 2021

New Developments to increase CMIC consumption: TDF-based oral pre-exposure prophylaxis (PrEP) is a
prevention offering for individuals at high risk of infection. Over 350,000 individuals have started oral PrEP
globally. A vast majority of these initiations were in the US and other high-income countries (HICs) and primarily
in urban settings such as London, New York City and San Francisco. In May 2018, the US FDA approved Truvada
(TDF/FTC offering) for adolescents between the ages of 15 and 17, which should help promote access in this key
population. Less than two percent of oral PrEP users in the US were 17 years old or younger, with most of this use
driven by adolescent girls. LMICs are also building momentum around oral PrEP. As of March 2018, over 50
countries were offering oral PrEP, including LMICs such as Botswana, Kenya, Lesotho, Nigeria South Africa,
Uganda, Zambia and Zimbabwe. A benefit of TDF-based oral PrEP is that generic formulations, such as TDF/FTC,
are already in supply chains at relatively low prices. Further, generic TDF/FTC has been specifically approved for
prevention use in many of these countries to date. People who use PrEP must commit to taking the drug every
day and seeing their health care provider for follow-up every 3 months.
CMIC Market Projected growth (4 years) by key geographies

(a) CMIC Capacity Outlook

CMIC Global Capacity (MT) and Utilization Rate (%) Trend, 2019-2023P

8,080 100%
7,480 7,480
6,880 6,880

5,000 73.5% 73.0%

67.6% 65.5% 50%
57.1%

0 0%
2019 2020P 2021P 2022P 2023P
Capacity Operating Rate

Source: Frost & Sullivan Analysis

Global Capacity utilization rate in 2019 was at 57%. Going forward, the increase in CMIC demand will enhance the
utilization rate of existing capacities and provide opportunities for capacity expansions.

There is an opportunity for Chemcon / Chinese Players (such as Shanghai Twisun) to expand their existing
capacity by 2021.

115
(b) Regional / Country CMIC Demand [Production + Imports – Exports]

The CMIC Global Demand is expected to grow at a CAGR of 10.8% through the projected 4 year period.

CMIC Global Demand (‘000 MT) Split by Region / Country, 2019-2023P

2019 - 2023 CAGR: 10.8% 5.9

5.5 2019-23 CAGR
4.7 4.9
11.0% (India)
3.9
3.4 3.8
2.8 3.0
2.5
4.5% (NA)
0.9 0.9 1.0 1.0 18.9% (China)
0.8
0.5 0.9 0.9 1.0 1.0
2019 2020P 2021P 2022P 2023P

China North America India ROW

Source: Frost & Sullivan Analysis

Currently, India is a net importer of CMIC. About 62% of India’s current domestic demand is catered by imports
from China. Exports majorly consist of Deemed Exports done by Chemcon to Indian Pharmaceutical companies.

CMIC India Market (MT), 2019

1,574 -465 2,530

1,421

Production Imports Exports Domestic Demand

Source: Frost & Sullivan Analysis

With HIV & HBV Intermediates helming the important task of saving lives, the future of CMIC looks quite bright
in the upcoming years. India, a major CMIC consumer market, is expected to witness a demand growth of 11.0%
CAGR.

116
CMIC India Market (MT) Outlook

Source: Frost & Sullivan Analysis

Chemcon is the leading CMIC manufacturer in India. It is well positioned to substitute the imports from China and
hence, has an opportunity to grow at a CAGR of more than 25% between 2019 and 2023.

Quarterly Price trend of CMIC and Key Raw Materials (MCF and IPA)

MCF (Methyl Chloroformate) and IPA (Isopropyl Alcohol) are the key raw materials for CMIC.

CMIC, MCF, IPA Price (CIF) Trend, $/kg, 2013-2019

10.0 5.0
9.0 4.5
8.0 4.0
7.0 3.5
6.0 3.0
5.0 2.5
4.0 2.0
3.0 1.5
2.0 1.0
1.0 0.5
0.0 0.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19
CMIC [LHS] 8.8 8.7 8.6 8.5 8.5 8.4 8.3 8.3 8.0 7.7 7.4 7.2 7.2 7.1 6.7 6.4 6.5 6.2 6.0 6.6 8.1 7.9 7.5 8.1 7.1 6.7 6.9 7.1
IPA [RHS] 1.2 1.3 1.3 1.3 1.3 1.4 1.4 1.3 1.2 1.0 1.0 0.9 0.9 0.8 0.9 1.0 1.0 1.1 1.2 1.3 1.3 1.3 1.3 1.2 0.9 0.8 0.7 0.7
MCF [RHS] 3.0 3.0 3.1 2.8 3.0 2.8 3.0 3.0 2.6 2.3 2.5 2.0 2.3 2.6 2.4 2.5 2.4 2.5 2.5 2.6 2.8 2.5 2.5 2.3 2.3 2.1 2.0 1.9

CMIC [LHS] MCF [RHS] IPA [RHS]

Source: Frost & Sullivan Analysis

OIL WELL COMPLETION CHEMICALS (BROMIDES) MARKET OVERVIEW

Description of the different types of Oil Well Completion Chemicals

Well completion is a critical stage in oil well construction and consists of a systematic process that begins with
drilling into the oil containing layers, running casing, injecting cement and proceeds through perforation and the

117
running of production string. The well completion string is run as a final step to allow for hydrocarbon flow to the
surface. When the hydrocarbon reservoirs have been tested and the oilfield is considered ready for commercial
development, the wells that have been drilled and explored need to be completed in order to be able to achieve
optimal commercial production. Protecting the hydrocarbon reservoir and prolonging the life of hydrocarbon
deliverability are the core targets of well completion.

Oil Well Completion Chemicals are used to complete the well and is normally a salty solution made up of chlorides
or bromides. Completion Chemical should be compatible with the innate formation fluids and rock, as other type of
fluids (e.g. drilling fluids) can damage the productive zones. I n addition to cleaning the wellbore, after the drilling
is finished, completion chemical is used to control the pressure down -hole, prior to and while well-completion
operations are in progress.

Different types of Oil Well Completion Chemicals are:

• Water-Based Fluids – Drilling muds which contain solids have been modified to be used as completion fluids,
as they are relatively economical and easily available.

• Oil-Based Fluids – These fluids are generally selected to protect water sensitive clays against chemical
formation damage. Oil-based fluids contain varying amounts of both dissolved and suspended solids. These
solids can plug formation pores, for a precipitate, or settle over time. These are less damaging and more
expensive than water-based muds.

• Clear Brine Fluids – Clear brine fluids are saline liquids which are used in various oil well drilling completion
operations. They are various classes of brines such as bromides, chloride brines and formats. Today, most
completion fluids are designed to be solids-free. To achieve the higher density fluid, for deeper, more hostile
environments, clear brines have been formulated using inorganic salts. These solids-free clear brines can
minimize formation damage yet control reservoir pressures. Density ranges f rom 8.5 to 19.2 lb./gal.

The global clear brine fluids market size is primarily driven by increasing product usage in the oil & gas
industry. It is widely used in drilling activities and completion processes. These fluids are used in the
conventional drilling to control the high-pressure and high-temperature formed in the reservoir and thus reduces
the damage risk. Bromides are however popular due to their higher densities and a popular choice as drilling
fluids. Sodium Bromide liquid (NABr) and Zinc Bromide Liquid (ZnBr2) are heavily used clear brines for oil
well activities. These are stable at surface and downhole conditions and are preferred over traditional drilling
muds.

Historical CapEx incurred on exploring oil well

Capital expense in global oil production, including Greenfield and Brownfield projects and maintenance, recorded
11% p.a. growth between 2010 and 2014, hitting an all-time high of ~USD 520 billion before the oil price crash. 2
years on, capital expenditure has declined by more than 60% to an estimated ~USD 200 billion in 2016.

The collapse was driven by 2 main factors:

• The reduction in drilling activity for projects deferrals and cancellations as companies struggled to conserve cash

• Lower service costs as oversupply on the services supply side led to 20-50% reductions (e.g., rig rates).

Two-thirds of the oil production CapEx reduction was estimated due to the first driver, while factor costs explained
the remaining third. However, this split was not even across all resource types.

The decline in drilling activity was particularly visible in North American light tight oil (LTO) basins where it
accounts for almost 80% of the estimated USD 65 billion reductions in development CapEx between 2014 and 2016.
The short development cycles of LTO wells allowed producers to respond to the price collapse quickly. The North
American horizontal rig count went down by 50% in only 9 months after the price collapse as the LTO producers
became some of the first producers to stop drilling new wells.

The effect of the two drivers was closer to 50/50 in offshore capital expense. 3+ year-long development cycles in
deep water projects make offshore production relatively inelastic to changes in oil prices in the short term. On the

118
flip side, CapEx deflation/compression affects deep water production CapEx more than onshore as, on average, the
share of development CapEx in total cost is higher in deep-water.

During the fourth quarter of 2016, OPEC reversed its loose supply policy and the oil price recovered slightly. This
encouraged upstream activity, especially in the US onshore, which reflected in a higher onshore rig count and
marked rise in upstream capital expenditure through 2017 and 2018.

Historical Oil Production CapEx, USD Billion, 2013-2018E

494 519 2013-2018ECAGR: -10%

56
48 2013-18E
65 387
75 CAGR
77 46
74 299 -10%
52 -11%
62 246 29
65 -8%
62 42 -10%
58 197 32
56 49 40 48 -2%
21
52 30 37 38 -12%
28 33 51
177 201 26
30 44
125 92
62 60

2013 2014 2015 2016 2017 2018E

NA Middle East Latin America Europe & Russia Asia Pacific Africa

Source: McKinsey Energy Insight’s Global Liquids and North American supply models, Rystad Energy, Frost & Sullivan
Analysis

Estimated CapEx to be incurred on exploring oil wells

Continued and sufficient upstream investment remains critical to ensuring future supply. Drilling activity levels are
expected to rebound to 2014 levels by 2023, except for the US. However, despite growing strongly d uring the
forecast period, global oil production CapEx spending is expected to stay 8% short of 2014 highs and hover around
USD 480 billion in 2023. The main reason is cost compression as oil prices are likely to be lower than they were
before the price collapse, keeping a lid on rig rates and other factor costs.

Regionally, capital expenditure in oil production in the Middle East will recover the fastest and reach 2014 levels
by 2020. Growth in spending is driven by a forecast 10% p.a. increase in drillin g activity between 2019 and 2023
reflecting the production growth of OPEC Gulf members, in particular Saudi Arabia, Iran and Iraq. Oil production
CapEx in North America is expected to grow during the forecast period. This is driven mostly by a rebound in LTO
accounting for 80% of the total increase in USD terms, whereas oil sands and conventional spending growth stays
relatively low. On the deep-water side, oil production CapEx in both Africa and Latin America will catch up with
2014 levels towards the end of the forecast period. Capex in Angola and Nigeria deep water developments will
nearly double between 2016 and 2021 from USD4 billion to USD8 billion in both countries. Mexico is expected to
drive the majority of the deep water capital spending growth in Latin America. Brazil, on the other hand, is expected
to grow at a slower pace - drilling activity to be lower than previously expected due to Petrobras cash constraints
and serious FPSO delays in pre-salt projects.

119
Projected Oil Production CapEx, USD Billion, 2018E-2023P
2018E-2023P CAGR: 10% 2018E-23P
480 CAGR
421 448 64 18%
387 53
44 69
352 36 58 10%
27 50
299 41 67
29 50 69 68 7%
68
42 58 54 56 8%
50 52
48 41 73
38 55 62 67 8%
53
51
122 136 144 147 151 10%
92

2018E 2019P 2020P 2021P 2022P 2023P

NA Middle East Latin America Europe & Russia Asia Pacific Africa

Source: McKinsey Energy Insight’s Global Liquids and North American supply models, Rystad Energy, Frost & Sullivan
Analysis

Specific Product Description and usage - Sodium Bromide, Zinc Bromide and Calcium Bromide

Sodium Bromide liquid (NaBr): The salt is used alone or in a combination with sodium chloride or zinc bromide to
form clear workaround and drilling fluids with densities of 8.4-12.5 lbs./gal. Non-damaging to the formation, it can
be mixed with other solutions of bromide and chlorides. It is especially useful when used in formations that are
known to have sensitivity towards calcium. When chloride ion is not desirable and when calcium may not be the
preferred choice. It is extensively used in situations where formation of waters contains high levels of sulphate or
carbonate that may precipitate with the calcium ion.

Zinc Bromide liquid (ZnBr2): It is a clear, solid-free brine fluid with minimum density of 19.2 lbs./gal. It can be
used with other bromides and chlorides to prepare non-damaging liquids with densities ranging from 15.1 lbs./gal
to 19.2 lbs./gal.

Both, NaBr and ZnBr2 can be used as single-salt brines or can be mixed with other bromides and chlorides to form
better brines as required. Amongst the popular multi-salts prepared, the blend of Zinc Bromide and Calcium
Bromide (CaBr2) and Sodium Bromide and Sodium Chloride (NaCl) are popular blends used to form excellent
drilling, completion and packer fluids.

Calcium Bromide (CaBr2): Calcium bromide 52% solution is used as a completion and work-over fluid to control
wellbore pressures in upstream oil & gas operations. However, in addition to this, the salt can very well be used
individually or in collaboration with other salts viz: calcium chloride and zinc chloride fo r a clear and solid free
fluid based on various crystallization temperatures and densities. It is also used in oil drilling, completion, work
over and other operations that are associated with chemical cutting fluid. The main advantage is to avoid pollution
of the oil bearing.

Zinc Bromide / Calcium Bromide Blend: It is a clear, solids free brine fluid of 19.2 lbs./gal density, with 53-58%
ZnBr2 and 20.0-23.0% CaBr2. It can be blended with other solutions containing bromides and chlorides. This blend
is used primarily when higher densities are required.

Sodium Chloride/Sodium Bromide Blend: It is a clear brine fluid that is formulated to meet and crystallization
temperature requirements and individual density, covering the density range from 8.4 lb./gal to 12.7 lb./gal. This
blend is often used when the calcium ion is not desirable and costs are a concern, as it is less expensive than pure
sodium bromide brines.

120
Geographical Distribution of Oil Wells

Bromides find most of their applications in Medium Pressure and High pressure/high temperature (HP/HT) wells.
HP/HT wells are those where the undisturbed bottom hole temp at prospective reservoir depth or total depth is
greater than 300°F or 150°C and either the maximum anticipated pore pressure of any porous formation to be drilled
through exceeds a hydrostatic gradient of 0.8 psi/ft., or a well requiring pressure control equipment with a rated
working pressure in excess of 10,000 psi

High-pressure, high-temperature fields exist in the Gulf of Mexico, North Sea, Southeast Asia, Africa and the
Middle East.

Oil Well Completion Chemicals (Bromides) Market

The Global market for Bromides (Calcium, Sodium, Zinc) used as Oil Well Completion Chemicals in 2019 was
valued at 417 USD Mn with the global demand of 245 KT.

2013 2014 2015 2016 2017 2018 2019 2023P

Calcium Bromide (KT) 120 115 111 112 118 125 132 164
Sodium Bromide(KT) 96 90 86 82 86 91 95 118
Zinc Bromide (KT) 18 17 16 15 16 17 18 22
Total Bromides (KT) 234 222 213 210 221 233 245 304
Total Bromides (USD Mn) 339 319 301 299 321 397 417 517

Established global behemoths like Israel Chemical Ltd. (ICL), Albemarle Corporation, Chemtura Corporation,
TETRA etc. wield a substantial control over the bromides market, worldwide. Their dominant position is a result of
their massive manufacturing capacities and significant geographical outreach. Armed with substantial technological
and financial resources, the companies have been nimbly adapting to various market changes. In order to bolster
their positions further, these companies have been leveraging astute pricing policies and product development.

Bromides Global Capacity (‘000 MT) and Utilization Rate (%) Trend, 2013-2023P

400 370 373 379 379 385 362 362 362 362 362 362 100%

300 84%
75% 80%
200 68% 72% 50%
63% 60% 64%
56% 55% 57%
100

0 0%
2013 2014 2015 2016 2017 2018 2019 2020P 2021P 2022P 2023P
Capacity Operating Rate

Source: Frost & Sullivan Analysis

China's largest bromine producer Gulf Resources Inc. (GURE) and smaller competitors were ordered to idle all
bromine operations in Shandong Province in 4Q 2017 for environmental and safety rectification.

North America has captured major bromines and its derivative market share owing huge product demand in the U.S.
market. The country has also emerged as major bromine and its derivatives producer and consumer

121
Bromides Global Demand (‘000 MT) Split by Region/Country, 2013-2023P

304
2019-23P
2019-2023P CAGR: 5.5% CAGR
234 245 41 4.9%
222 222 232 1
213 209 38
34 2.2%
35 32 32 32 1
1 1 31 30 1 1 35 58 5.7%
34 28 1 1 32 33
27 31
41 40 44 46
38 39 42
166
123 121 116 108 115 122 129
6.5%

2013 2014 2015 2016 2017 2018 2019 2023P

North America MEA Europe India ROW

Source: Frost & Sullivan Analysis

With oil and gas drilling activities showing little signs of slowing down in the near future, despite over-supply, the
segment is slated to clock continued growth as they are used in the completion process of oil and gas extraction.
The segment is expected to register a CAGR of 5.5% from 2019 to 2023.

Bromides Market by Product Type: Key players, their capacities and market share

(a) Calcium Bromide/Sodium Bromide/Zinc Bromide Capacity

Bromides Global Capacity (‘000 MT) and Production (‘000 MT) Trend; 2013, 2019, 2023P

370 362 362

42 42 42 304

245 22
140 234
138 138
18 18 118
96 95

188 182 182 164

120 132

CaBr2 Capacity CaBr2 Production NaBr Capacity

NaBr Production ZnBr2 Capacity ZnBr2 Production
Source: Frost & Sullivan Analysis
Calcium/Sodium/Zinc Bromide Global Capacity (‘000 MT) Split by Region/Country, 2019 –

Region/Country CaBr2 (52%) NaBr (45%) ZnBr2 (70%) Total

North America 64 36 26 126
Israel 50 38 10 98
Jordan 40 20 -- 60
Europe 10 22 5 37
India 12 11 1 24
China 6 10 -- 16
Total 182 138 42 362

122
Israel Chemicals Ltd. (ICL) – Plants in Israel (Liquid Bromides) and Netherlands (Solid Bromides)

• Israel: Produces 52% CaBr2 14.2 lbs./gal, 45% NaBr 12.5 lbs./gal and ZnBr2 19.2 lbs./gal
• Netherlands: Produces only solid NaBr (98%) and solid CaBr2 (95%) in Terneuzen

Albemarle Corporation – Plants in USA and Jordan (Liquid Bromides), China (Solid Bromides)

• USA: Produces 52% CaBr2 14.2 lbs./gal, 45% NaBr 12.5 lbs./gal and ZnBr 2 19.2 lbs./gal in Magnolia,
Arkansas.
• Jordan: Produces 52% CaBr2 14.2 lbs./gal and 45% NaBr 12.5 lbs./gal in Jordan. Doubled bromine and clear
brines plant capacity 2012-2013.
• China : Produce solid NaBr (98%) and solid CaBr2 (95%) at their Shandong Sinobrom Albemarle Bromine
Chemicals Co., Ltd. JV in Weifang City, Shandong.

LANXESS (Chemtura) – Chemtura was formed in July, 2005 from merger of Crompton and Great Lakes Chemical
Corporation (GLK); LANXESS acquired Chemtura in April, 2017. Location of plants:

• USA: Produces 52% CaBr2 14.2 lbs./gal, 45% NaBr 12.5 lbs./gal and ZnBr2 19.2 lbs./gal
• Germany: Produces 70% ZnBr2 19.2 lbs./gal via their Leverkusen facility (former Saltigo plant), as purified by-
product from agricultural chemical product production.

TETRA: Produces 52% CaBr2 14.2 lbs./gal, 45% NaBr 12.5 lbs./gal and ZnBr2 19.2 lbs./gal in West Memphis,
Arkansas. Sources Bromine from LANXESS El Dorado, Arkansas under long-term bromine supply contract

PPC S.A.S. (Weylchem): Produces 98-99% NaBr powder at their plant in Thann, France (former Albemarle plant),
using bromine from ICL-Israel and/or Albemarle-Jordan

In India, Chemcon is the major manufacturer of Bromides (CaBr2, NaBr, ZnBr2). Agrocel and OC Specialties are
the other manufacturers of CaBr2 and NaBr respectively in India.

Calcium/Sodium /Zinc Bromide Global Capacity (‘000 MT) Split by Key Manufacturer, 2019 –

Company Country CaBr2 (52%) NaBr (45%) ZnBr2 (70%) Total

ICL Israel 50 38 10 98
ICL Netherlands 10 10 -- 20
Albemarle Jordan 40 20 -- 60
Albemarle USA 19 25 10 54
Albemarle China 6 10 -- 16
LANXESS (Chemtura) USA 25 6 6 37
LANXESS (Chemtura) Germany -- -- 5 5
TETRA USA 20 5 10 35
PPC (Weylchem) France -- 12 -- 12
Chemcon* India 8 5 1 14
Agrocel India 4 2 -- 6
OC Specialties India -- 5 -- 5
Total 182 138 42 362

*Chemcon Bromides Capacity of 14.4KT is common for Calcium, Sodium and Zinc Bromide

(a) Calcium Bromide/Sodium Bromide/Zinc Bromide Production

Calcium/Sodium/Zinc Bromide Global Production (‘000 MT) Split by Region/Country –

2013 2019
Region/Country CaBr2 NaBr ZnBr2 CaBr2 NaBr ZnBr2
Total Total
(52%) (45%) (70%) (52%) (45%) (70%)
North America 48 30 12 89 53 30 12 95

123
 2013 2019
Region/Country CaBr2 NaBr ZnBr2 CaBr2 NaBr ZnBr2
Total Total
(52%) (45%) (70%) (52%) (45%) (70%)
Israel 40 32 1 72 42 31 1 75
Jordan 21 11 - 32 21 10 - 32
Europe 5 17 5 27 5 16 5 26
India 1.5 1.8 - 3.3 8.6 5.2 0.1 13.7
China 7 5 - 11 2 2 - 4
Total (‘000 MT) 120 96 18 234 132 95 18 245
Value (USD Mn) 172 125 42 339 238 127 54 417

Calcium/Sodium/Zinc Bromide Global Production (‘000 MT) Split by Key Manufacturers –

2013 2019
Company CaBr2 NaBr ZnBr2 CaBr2 NaBr ZnBr2
Total Total
(52%) (45%) (70%) (52%) (45%) (70%)
ICL 44 38 1 83 48 37 1 86
Albemarle Corporation 37 34 1 72 39 33 1 74
LANXESS (Chemtura) 19 5 11 35 21 5 11 37
TETRA 14 4 5 23 16 4 5 25
PPC (Weylchem) -- 11 -- 11 -- 10 -- 10
Chemcon -- -- -- -- 5.9 0.5 0.1 6.5
Agrocel 1.5 -- -- 1.5 2.6 1.3 -- 3.9
OC Specialties -- 2 -- 2 -- 3.3 -- 3.3
Global Others 5 2 -- 7 -- -- -- --
Total 120 96 18 234 133 94 18 245

Bromides (CaBr2, NaBr, ZnBr2) - Global Key Manufacturers Production Market Share, 2013

Agrocel Albemarle
0.64% Corporation30.
82%

ICL
35.31%
LANXESS
(Chemtura)
14.75%

OC Specialties
Global Others 0.78%
3.13%
TETRA
PPC (Weylchem) - 4.70% 9.87%
Source: Frost & Sullivan Analysis

124
Bromides (CaBr2, NaBr, ZnBr2) - Global Key Manufacturers Production Market Share, 2019

PPC (Weylchem) OC Specialties

4% 1%

Agrocel TETRA
2% 10% ICL
35%
LANXESS
(Chemtura)
15%

Albemarle
Chemcon Corporation
3%
30%

Source: Frost & Sullivan Analysis

(b) Regional/Country-wise Bromides Demand [Production + Imports – Exports]

Bromides Global Demand (‘000 MT) Split by Region/Country, 2013-2023P

CaBr2 2019-2023P NaBr 2019-2023P ZnBr2 2019-2023P
CAGR: 5.7% CAGR: 5.6% CAGR: 5.1%
165

132 20
121 19 118
17
17 29 96 95 17
17
16 14 13 15
21
18 15 13 24
19 20
95
68 74 18 18 22
49 62
48
4 4 5
7 7 9
2013 2019 2023 2013 2019 2023 2013 2019 2023
North America MEA Europe India ROW

*Rest of the World (ROW) demand comprises majorly Bromides demand from South America, Russia
Source: Frost & Sullivan Analysis

India is a net exporter of Bromides. Chemcon is the leading manufacturer of CaBr 2 and ZnBr2 whereas OC
Specialties is the leading manufacturer of NaBr.

Calcium/Sodium/Zinc Bromide India Production (‘000 MT) Split by Key Manufacturers –

2013 2019
Company CaBr2 NaBr ZnBr2 CaBr2 NaBr ZnBr2
Total Total
(52%) (45%) (70%) (52%) (45%) (70%)
Chemcon -- -- -- -- 5.9 0.5 0.1 6.5
Agrocel 1.5 -- -- 1.5 2.6 1.3 -- 3.9
OC Specialties -- 1.8 -- 1.8 -- 3.3 -- 3.3
Total - India 1.5 1.8 -- 3.3 8.5 5.1 0.1 13.7

125
India Trade Flows: Imports and Exports

CaBr2: Chemcon and Agrocel export their production majorly to MEA, NA and Asia Pacific regions. India’s demand
of about 1.1 KT of CaBr2 (52%) in 2019 constitutes majorly of imports by companies such as Baker Hughes and
Halliburton.

NaBr: OC Specialties exports its entire production, Middle East is its major export market.

ZnBr2: Chemcon, the only manufacturer of ZnBr2 in India, exports majorly to Middle East.

Calcium Bromide (52%) India Demand (‘000 MT), 2013-2023P

2019-23PCAGR: 3.0% 1.3
1.1
1.0

2013 2018
2019 2023P

Source: Frost & Sullivan Analysis

Indian manufacturers can benefit from the growth in global demand of Bromides and target to enhance export sales
and explore potential export markets to fuel their growth.

Impact of Shale Gas on Oil Well Exploratory Activity and on the demand for Bromides

Shale gas is an unconventional natural gas explored from shale rocks or deposits underneath earth through multistage
hydraulic fracturing and horizontal drilling. The major drivers for shale gas market are identified as proved
abundance of shale gas resources across the globe, improving supply and distribution infrastructure, decline in
natural gas prices and improvements in drilling technology. The capital intensive nature of shale gas projects and
water contamination and usage issues for fracturing requirements hinder shale gas development. The opportunities
are cited in probable increase in ethylene volumes through shale gas and new basins
discovered in countries like Poland, China and Australia.

The global shale gas production is expected to grow at a CAGR of 5.4% during the 5 year forecast period. North
America is expected to remain the largest shale gas market in terms of production volumes with a share of 78% due
to technological expertise and availability of resources; followed by EMEA (13%), Asia Pacific (7%) and ROW
(2%). The current exploration and production activities by major oil and gas companies in Europe and Asia Pacific
indicate the commercialization of shale gas in these regions. The markets representing high growth rate in shale gas
production from 2019 to 2023 are China (6.2%), Poland (6%), France (5.4%), South Africa (5.1%) and U.S. (5%).

Impact on oilfield chemicals market due to soaring Shale Gas production

Availability of large amount of offshore shale reserves is likely to be a major key driving factor for global oilfield
chemicals market. There are various unexplored reserves of shale gas globally with China, Argentina, United States,
Algeria and Canada holding the largest recoverable reserves. United States is the leading producer of natural gas
and oil from Shale globally. Australia, China, India and Indonesia are also taking tentative steps to explore their
potential shale gas and oil reserves and to further develop exploration in these reserves. Hence, this would result in
higher demand for drilling, stimulation and cementing chemicals.

126
Quarterly Price trend of Bromides

Bromides Average FOB Price Trend, $/kg, 2015-2019

3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19
NaBr (45%) 1.2 1.2 1.2 1.2 1.1 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.3 1.4 1.4 1.3 1.3 1.3 1.3 1.2
CaBr2 (52%) 1.4 1.4 1.5 1.4 1.5 1.5 1.4 1.5 1.4 1.5 1.4 1.6 1.6 1.9 2.0 2.0 1.8 2.0 2.0 1.9
ZnBr2 (70%) 2.4 2.4 2.4 2.4 2.7 2.6 2.6 2.7 2.8 2.8 2.8 2.8 2.8 3.0 3.1 3.0 3.0 2.9 2.9 2.8

NaBr (45%) CaBr2 (52%) ZnBr2 (70%)

Source: Frost & Sullivan Analysis

Linkage of price of Bromides with Crude Oil prices

There is no established direct correlation between Bromides and Crude Oil prices. However, Bromides are used
largely as oil well completion chemicals and hence, the active rig count can act as a leading indicator of demand for
products used in drilling, completing, producing and processing hydrocarbons. When drilling rigs are active they
consume products and services produced by the oil service industry.

Oil rigs have a positive relationship with crude oil prices and oil production. The number of rigs in play will loosely
follow prices with a lag. Oil producers keep increasing the number of rigs drilling for oil as long crude oil prices
make production profitable.
As prices increase, rig additions may accelerate. When prices fall, rig additions may slow.

Average Yearly Rig Count Trend against Brent Crude Prices

4,000 109 120

3,500 135 145 100
419 397
3,000 75
497 540 80
2,500 254
246 117 190
2,000 319 185 85 139 60
512 92 494 191
1,500 96
198 471 548
220 201 219 40
1,000 2,116 2,242 475 226
1,170 187 1,223 20
500 1,082 939
638
0 0
2013 2014 2015 2016 2017 2018 2019

NA APAC MEA LA EU Brent Cude ($/bbl)

Source: Baker Hughes Worldwide Rig Count, Frost & Sullivan Analysis

Global Price trend for the key raw material used in the manufacture of Bromides

The key raw material used for the manufacture of bromides is Hydrobromic acid. The price of Hydrobromic acid
depends on the price of liquid Bromine. Also, the costliest component in manufacturing bromine derivatives is liquid
bromine. However, it is difficult to predict prices of liquid bromine as the market is highly volatile. It depends on
the dilution of bromine reserves and also on global demand supply gap for bromine and bromide derivatives.

127
Bromine Average FOB Price Trend, $/kg, 2015-2019

4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1Q1 2Q1 3Q1 4Q1 1Q1 2Q1 3Q1 4Q1 1Q1 2Q1 3Q1 4Q1 1Q1 2Q1 3Q1 4Q1 1Q1 2Q1 3Q1 4Q1
5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9 9 9
Bromine 2.4 2.3 2.3 2.4 2.4 2.5 2.5 2.4 2.6 2.8 3.0 3.2 3.3 3.3 3.3 3.3 3.4 3.3 3.5 3.6
Source: Frost & Sullivan Analysis

CHEMICALS USED IN MANUFACTURING OF ANTI-VIRAL PHARMACEUTICAL DRUGS

Global Anti-Retroviral (ARV) Market Overview

Scale-up of antiretroviral therapy is on a fast-track trajectory. In December 2018, the number of people living with
HIV receiving antiretroviral therapy (ARTs) has increased to about 23.3 million with the global coverage of ARTs
reaching to about 62%. The drugs used to treat HIV are called antiretroviral dru gs (ARVs). The global ARV market
was valued at about USD 21 billion in 2017.

Europe ARV Market (Regulated Market)

The European ARV market was valued at USD 9.2 billion in 2019 and is estimated to generate USD 11.5 billion in
2022.
Atripla and Truvada continue to be successful products in the European market, accounting for 14% and 28%,
respectively, of the total patient share.

Stribild, the second most prescribed HIV regimen, after Atripla, in treatment -naive patients as well as those
switching from other therapies, has been launched in the Big Five countries (the UK, Germany, France, Spain and
Italy) as well as 18 additional countries in Europe. Stribild has captured about 17% of all treatment-naive patient
shares in the Big Five countries.

Eviplera, also called Complera, has captured 22% of all treatment-naive patient shares in Big Five countries. The
drug is also the most switched-to HIV regimen in these countries. This is attributed mainly to the preferred status
attributed to the drug in France, Germany, Italy and the UK. Eviplera’s acceptance in these countries means that
health insurers will likely offer reimbursement for the drug.

Total ARV market: Revenue (USD Billion) and Growth Rate, Europe, 2012-2023P

15.0 15.0%

10.0 10.0%

7.0% 7.4% 7.5% 7.5% 7.5% 7.6% 7.7% 7.7% 7.7% 7.7% 7.6%
5.0 5.0%
5.6 6.0 6.4 6.9 7.4 8.0 8.6 9.2 9.9 10.7 11.5 12.4
0.0 0.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020P 2021P 2022P 2023P

Source - Frost & Sullivan analysis

128
Total ARV market: Per cent revenue split by Region, Europe, 2012-2023P (%)

100.0 4.8 4.7 4.5 4.5 4.5 4.4 4.3 4.2 4.3
9.0 9.0 8.9 8.9 9.0 9.0 9.1 9.1 9.2
80.0 12.3 12.4 12.5 12.6 12.7 12.7 12.8 12.9 13
8.9 9 9.2 9.4 9.5 9.7 9.8 10.0 10.1
60.0
22.8 22.4 22.1 21.6 21.2 20.8 20.5 20.1 19.9

40.0 11.7 11.7 11.5 11.5 11.4

11.6 11.7 11.8 11.8

20.0
30.6 30.8 31.0 31.2 31.4 31.7 32.0 32.2 32.1

0.0
2012 2013 2014 2015 2016 2017 2018 2019 2022P
UK Germany France Italy Spain Benelux Scandinavia

Source: Frost & Sullivan analysis

ARV drugs were introduced in late 1980’s when the number of HIV patients grew at a tremendous rate. The market
is growing at a faster pace in Nucleoside reverse transcriptase inhibitor segment followed by protease Inhibitors.

The sales of anti-retroviral drugs have shown an increasing pattern in the 5 biggest European markets in the past
and would see a nominal growth in the future. The past has bought costlier medicine but with the government aid
the price has averaged out to meet out to the poor ones as well. European biggest five countries such as Italy, France,
Germany, Spain and Britain would see huge growth till 2019 and then it would slow down.
Competitive Scenario

Gilead Sciences leads the HIV market with leading drugs like Atripila, Complera, Emtriva and Truvada along with
strong pipeline candidates. GSK closely follows the market leader by competing with Atripila through its latest
market addition Triumeq.
GSK and Pfizer’s HIV specific joint venture ViiV Healthcare contributes extensively towards the HIV drug market.

Bristol-Myers, due to discontinuation of its ‘Sustiva’, lost a small per cent of market share. It is expected to revive,
with pipeline candidates being developed in the maturation inhibitor and attachment inhibitor types of ARV drugs.

Roche, Abbott and Boehringer Ingelheim make small contributions through their existing and new drugs. Others
include candidates developed by market participants like Janssen Cilag, Pfizer, Tibotec (Janssen Research and
Development) and Merck.

USA ARV Market (Regulated Market)

The ARV market in the USA generated sales of around USD 8.1 billion in 2019; however, this number is estimated
to slightly increase to around USD 8.8 billion by 2023 which is quite lower as compared to 2012 which had market
size of USD 9.3 billion due to patent expirations and decreased incidence rates through more efficacious regimens.

129
Total ARV Market: Revenue (USD Bn) and Growth Rate, USA, 2012-2023P

10 5.0%

10 1.4% 0.7% 1.8% 2.1% 2.1% 2.0% 0.0%

0.2% -0.4%
-0.5% -0.7%
9
-5.0%
9
-10.0%
8
-17.1% -15.0%
8
9.3 9.4 9.5 9.5 9.5 9.4 9.4 8.1 8.2 8.4 8.6 8.8
7 -20.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020P 2021P 2022P 2023P

Source: Frost & Sullivan analysis.

Market Dynamics

Atripla is the most prescribed HIV regimen in the country, as it is prescribed to about 22% of all patients treated.
Stribild is the second most prescribed HIV regimen across all patients in the USA and has managed to capture 28%
of the treatment-naive patient share. It is followed by Complera, which is the third most prescribed HIV regimen
across all patients and accounts for 20% of the treatment-naive population. However, compared to Stribild and
Complera, Atripla, had only 14% of the treatment-naive patient share, indicating that it might be losing new market
share.

Truvada is used by about 29% of all treated HIV patients in the US, including 14% of the treatment -naïve patient
share. Truvada is the first drug approved by the FDA that can be used to prevent HIV in high -risk individuals.
LMICs (Low- to middle-income countries) ARV Market

The generic-accessible (GA) ARV market, which represents 94% of patients in LMICs, grew from USD 1.4 billion
in 2012 to USD 2.5 billion in 2019, at a growth rate of 8.7%.

LMICs ARV Market Size (USD Bn) In Generic-Accessible Vs. Generic-Inaccessible Countries

3.0 2.5
2.3
2.1 2.1
1.8 1.9 0.46
2.0 1.5 0.36 0.41
1.4 0.32 0.34
0.23
0.20 0.18
1.0 1.71 1.76 1.90 2.06
1.30 1.52 1.60
1.21
0.0
2012 2013 2014 2015 2016 2017 2018 2019
Generic accessible Generic inaccessible

Source: CHAI, Frost & Sullivan Analysis

Generic Accessible Market

Low- to middle-income countries (LMICs) bear the overwhelming burden of the HIV-1 epidemic in terms of the
numbers of people living with HIV/AIDS. There has been continued success in scale-up and access to HIV/AIDS

130
treatment in LMICs over the past decade. At the LMIC-level, the estimated total resources available for HIV
increased from USD 19.1 billion in 2016 to USD 21.3 billion in 2017. Access to ART has increased rapidly in
LMICs, over 19 million adults and about 980,000 paediatric patients were on ART in 2019 in GA LMICs.

ARV Market Size (USD Bn) in Generic Accessible LMICs by Line of Therapy

2012-2019 CAGR: 7.1%

2.5
1.85 1.95
2.0 1.71 1.76
1.52 1.60 0.12 0.13
1.30 0.11 0.11 0.25 0.29
1.5 1.21 0.09 0.1
0.14 0.21 0.21
0.09 0.13 Paediatric
0.09
0.13 0.14
1.0
1.3 1.36 1.39 1.44 1.49 1.54
0.5 1.07 Adults
0.99
(Second Line)
0.0
2012 2013 2014 2015 2016 2017 2018 2019
Source: CHAI, Frost & Sullivan Analysis

India ARV Market (Private Market)

According to National AIDS Control Organisation (NACO), the total number of people living with HIV in India
was estimated to be around 2.12 Million with around 86,000 new HIV infections reported in 2015. It was also
estimated that around 67,600 people died of AIDS-related causes nationally. However, in 2014, the ART coverage
was very poor with only around 8 lakh people living with HIV receiving ART from the government sector and
around 1.5 to 2 lakh from other sources like private sector and NGOs. With the new guidelines in place, it is
anticipated that the ART coverage will increase the next 5-6 years. However, in India, as in many other parts of the
world, people living with HIV and AIDS face stigma and discrimination in a variety of settings including
households, the community and workplaces which acts as a major barrier for people accessing the treatment.
However, this factor contributes to the growth of the private sector since people from middle and high income group
would not prefer the government sector for HIV treatment. The Indian market for ART was valued at around USD
28.5 million (INR 195 Crores) in 2018.

Indian government has taken progressive steps towards making the advanced therapies of HIV more accessible to
the infected population and in line with this thought process, in February, 2014, the government announced about
access to third-line drug therapy for people living with HIV/AIDS and extended free anti-retroviral therapy (ART)
to more of them by revising the eligibility norm. During the same time for receiving free ART, the minimum CD4-
count limit had been reduced from 500 to 350.

APIs (Active Pharmaceutical Ingredients) for ARVs

The world requires a reliable supply of greater volumes of HIV products in order achieve the scale required to
achieve global targets. The world is pursuing the UNAIDS 90–90–90 treatment target: by 2020, 90 percent of all
people living with HIV will know their HIV status, 90% of all people diagnosed with HIV infection will receive
sustained antiretroviral (ARV) therapy and 90% of all people receiving ARV therapy will have viral suppression.

The global market size for 11 key ARV APIs was INR 102 Bn (~USD 1.6 Bn) in 2017. Of these, four APIs have a
market size of more than INR 10 Bn each and INR 66 Bn (~USD 1 Bn) collectively.

APIs (Market Size: INR 10 Bn – 20 Bn) APIs (Market Size: Below INR 10 Bn – 20 Bn)
EFV LPV
ZDV DRV
TDF FTC
3TC NVP
RTV
ABC
Atazanavir

131
 Historical Consumption of Select APIs in GA LMICs by Volume (MT) (2013-2019)

TDF API EVF

2013-19 CAGR: 22.7% 2013-19 CAGR: 21.2%

2645 2890 2855

1900 2200
1475 1635
480 680 950 1100 1285 900 1200

2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019
Source: WHO, CHAI, Frost & Sullivan Analysis

The demand for ARV APIs will see continued growth in the coming years owing to a steady rate of new HIV
patients, higher detection and coverage rate, decline in cost of treatment and increase in ARV tenders. However, the
introduction of low-dosage DTG will lead to a decline in volumes (required DTG dosage is relatively small: ~16%).

Hepatitis-C India Market Overview

Currently, different types of treatment options are available for Hepatitis-C in in the market including multiple types
of medication, surgery and alternative medicines. Novel medical treatment which claim to have a cure rate of 90 per
cent and above is the primary driving force for the hepatitis C market in India. The availability of these drugs at a
fraction of the cost, compared to the developed world is complementing the growth of this market. The high patient
base of Hepatitis-C in India tends to make this all the more attractive for the pharmaceutical companies.

In absolute value terms North America is one of the leading markets for hepatitis C treatment; however, in the longer
run, the Asian region is expected to be the sustainable growth engine for these novel products. On account of high
patient load, China and India emerge out as the two most prospective markets for hepatitis C treatment in the Asian
region.

The introduction of direct-acting antiviral drugs (DAAs) has brought about a paradigm shift in the treatment of
hepatitis C. Though DAAs are considered as a revolutionary treatment, the prices of DAAs in the developed world
is very high (over USD 50,000) for a 12-week course and with majority of HCV patients residing in low- or middle-
income countries, affordability of this drug acts as a major restraint for market access.

To counter the challenges of affordability-related access issues, multinational companies, through novel
mechanisms i.e. licensing, technology transfers and other partnership models, are trying to make the drugs more
accessible in countries like India, one of the chief objectives of these partnership deals being bringing down the
prices of the medicines.

In 2016, the Indian patent office approved Gilead’s hepatitis C drug, Sovaldi. However, Gilead had earlier signed
non-exclusive-licencing agreement with 11 Indian generic companies including Natco Pharma Ltd, Hetero Drugs
Ltd, Cadila Healthcare Ltd, Cipla Ltd, Mylan Laboratories Ltd, Sun Pharma, Laurus Labs, Strides to name a few,
to provide generic versions of Sovaldi and Harvoni to around 101 developing nations. This philanthropic move of
Gilead turned out to be the transition point for making these drugs available to a larger section of the Indian
population, who in absence of this mechanism would have been deprived of the beneficial effects of the drug.
Moreover, the approval to India n companies to sell these drugs in 100+ other countries would be another
revolutionary step to make these drugs accessible to other parts of the world.

This move of Gilead was followed by Bristol Myers Squibb, which through Medicine Patient Pool, a non -profit
body, allowed access to its drug daclatasvir under similar conditions to other Indian companies.

Additionally, the apex committee of the Central Drugs Standard Control Organisation, India (CDSCO) granted a
waiver of local trials for crucial new direct-acting antiviral drugs treating the disease. The waiver allows quicker
introduction of generic versions of daclatasvir and sofosbuvir-ledipasvir co-formulation in the market and will cost
much lower thus providing a great relief to the HCV infected patients in India.

132
This unique partnership model has ensured that these drugs that normally cost over USD 50,000 for total therapy in
the USA will cost less than USD 1,000 in India. The high level of competition amongst generic manufacturers is
expected to bring down the prices even further and it’s widely anticipated that these therapies will be available for
less than 500 USD in a years’ time. This has given new hope to Indian patients and it’s also anticipated that a huge
number of international patients seeking high quality and cost efficient treatment for Hepatitis –C will come to India,
however it’s too early to predict about the actual number of patients coming to India as it will also be a function of
declining prices and increasing access to these drugs in the other parts of the world.

India Market Growth Drivers

Key Drivers:

Increasing Generics Penetration: Increasing numbers of licensing agreements have been signed between the
pharmaceutical companies and the Indian manufacturers to make generic versions of hepatitis C drugs. This has
made the competition extremely fierce in India, thereby leading to a decline in the drug price. Example: Gilead has
signed agreements with 11 companies in India, to manufacture generic versions of sofosbuvir which has led to the
reduction in prices of the generic drugs from USD 10 per tablet to USD 4.29, within a year of launch thus making
it much more affordable. The reducing prices of the generic medicines in India is not only contributing to the market
growth, by increasing the number of patients in India affording the treatment, but is also attracting hepatitis C
patients from outside India who are seeking high quality and cost efficient treatment, thereby making India a hub
for medical tourism. This is on account of almost an equivalent prevalence rate of Hepatitis-C in the rest of the
world albeit on a lower population base. Licensing arrangement in countries like Egypt has also led to patients
flocking from all parts of Middle East to Egypt for availing the latest treatment.

Improved Formulations: The newer drug formulations have 90% cure rates with lower treatment duration and
negligible side effects. In addition, these drugs are complemented with convenient dosage and dose forms like fixed
dose combinations, once-daily all oral formulations etc. which significantly improves patient compliance levels.
These factors directly contribute to the growth of the market by increasing the rate of prescriptions by not only the
gastroenterologists, but also at the level of General Physicians (GPs: Physicians with an MBBS degree only) and
Consulting Physicians (Physicians with MBBS and MD degree), especially in rural India.

Increased Screening/Diagnosis and novel ways for access to treatment: Rising competition in th e generic industry
and dropping prices have forced the pharmaceutical companies to design innovative ideas which help them widen
their customer base and deepen the market reach. Some of the pharmaceutical companies are involved in increasing
the patient pool by sponsoring screening devices, free test kits etc. to the hospitals, while some companies are also
involved in providing bulk discounts to entire villages for getting screened for hepatitis C. These factors contribute
to additional market creation.

For example:

• Dr. Reddy’s has set up a venture with lender Arogya Finance to offer no -interest loans for patients

• Abbott has collaborated with a French medical equipment company, Echosens SAS, to supply 13 ultrasound
machines to the Indian hospitals to determine the level of fibrosis, or hardening, without a liver biopsy.

• The overall cost of diagnosis has been coming down steadily e.g. a hepatitis c test kit which used to cost upwards
of INR 6000 has come down to INR 2500-3000, additionally the physical access to these tests has increased
drastically due to the hub and spoke and franchisee model of labs like Dr. Lal, Metropolis, SRL and Thyrocare

Other Drivers:

Population and Demographic Factors: Owing to the huge population of India prevalence rate of 1.2 -1.5% translates
into a high number of reported cases of hepatitis C infection. Migration and urbanization place people in situations
of easy contact, thus increasing the spread of such communicable diseases. Increased population densities and
undesirable living conditions in urban slums have increased the transmission of such diseases.

Rising Income Levels: There has been a significant growth in the income levels of mid -income population in India,
which also increases the affordability for treatments of hepatitis C infections. Rising income levels and the
decreasing price of the medicines will make treatment affordable for a larger section of the population.

133
Rising Awareness Levels: Due to a rising number of cases of hepatitis C and its harmful effects, people have an
increased awareness level. Hence, there’s a significant rise in the number of screening tests to detect the disease at
an early stage. Moreover, a number of public health partners are involved in creating awareness about the disease
and are encouraging the population for early screening.

Rising Healthcare Spend and Government Initiatives: A number of companies have joined hands with the
Government to sell hepatitis C drugs in India at affordable costs. Drug giant Roche has reduced the price of its drug
“Exxura” by 65% in all the Government institutions across India. India has actually become a medical tourism
destination for hepatitis C treatments, since the treatment costs almost one-fourth the price as compared to that in
other developed nations. Sofosbuvir is one of the patented drugs in the US and costs between USD 50,000 to USD
65,000 for 12 weeks treatment; however, in India, it costs less than USD 1000, for the same 12 week treatment.

Hepatitis-C Formulations India Market

The total number of patients receiving DAAs (Directly Acting Anti-viral drugs) in India in 2018 was approximately
0.44 Mn. The Formulations Market in India was valued at about INR 20 Bn in 2018. About 80% of the total
formulations market comprises of plain Sofosbuvir (INR 10 Bn), Harvoni - Sofosbuvir/Ledipasvir combination
(~INR 4 Bn) and Daclatasvir (~INR 2 Bn).

Sofosbuvir has been a backbone of the hepatitis-c therapy and majority of the clinicians either tend to prescribe
either sofosbuvir in isolation or in combination with daclatasvir, going forward this trend is expected to continue,
however there will be an increasing trend of combination therapy and daclatasvir is expected to benefit out of this
phenomenon.

It’s also anticipated that going forward pegylated interferons will be completely knocked off from the treatment
regimen of hepatitis-c and almost 100% of the treatment would be with direct acting antivirals, with a very small
proportion of difficult to treat patients being treated with ribavirin along with one the DAA combinations. This will
happen on account of side effects of pegylated interferons and the falling prices of DAA’s which when compared
to pegylated interferon is very innocuous.

Immediately after the launch of the DAAs, there was a spurt in the growth rate of DAA’s which was estimated to
be around 100% plus due to a large number of patients in the waiting list, also referred to as the reservoir effect.
However, with the depletion of the reservoir, in the subsequent years, the growth rate is estimated to be around 15-
18% along with some further correction in the prices.

Sofosbuvir is the most preferred treatment regimen not only due to its first mover advantage but it also being the
backbone of other therapies e.g. sofosbuvir+daclatasvir, sofosbuvir+ledipasvir, followed by daclatasvir which is
pan-genotypic in nature. In contrast, Harvoni is expected to have a slow growth since it is indicated only for genotype
1 which comprises 25% of the total hepatitis C population.

Interaction with clinicians indicated that going forward Sofosbuvir along with daclatasvir will be a preferred option
for treating hepatitis as it has proven to be more effective in treating genotype 3, which is a more prevalent form of
hepatitis-c in India. However, an equally high number of clinicians also opined that due to cost considerations they
might be forced to offer only one drug which as per their opinion would be Sofosbuvir.

Due to this interplay amongst efficacy, outcome and cost considerations it’s anticipated that daclatasvir will grow
at a higher pace (albeit on a smaller base), however due to economic considerations monotherapy will be more
prevalent and the beneficial impact of that phenomenon would be on Sofosbuvir.
Hepatitis-C Key APIs India Market

The growth in APIs Market is driven by increasing generic formulation companies penetrating the market, thereby
increasing the consumption of APIs.

Sofosbuvir API Market (includes both Sofosbuvir mono-therapy as well as the API in generic Harvoni):

The consumption of Sofosbuvir API is estimated to grow from approximately 17,500 Kg in 2019 to around 27,500
Kg by 2021, at a CAGR of 35%.

The API market of Sofosbuvir by value is estimated to grow from approximately INR 1.25 Bn in 2019 to around
INR 1.88 Bn by 2021, at a CAGR of 21%. Prices before 2015 were high at around between USD 5,000 and USD

134
2,500 per Kg, which it reduced to around between USD 1,250 to USD 1,000 per Kg in 2016. The prices are
anticipated to have further reduced by two percent and continue to reduce till 2021.

Ledipasvir API Market:

The consumption of Ledipasvir API is estimated to grow from approximately 650 Kg in 2019 to around 900 Kg by
2021, at a CAGR of 17.6%.

The API market of Ledipasvir by value is estimated to grow from approximately INR 0.28 Bn in 2016 to around
INR 0.36 Bn by 2021, at a CAGR of 14.0%. The price movement from 2016 to 2021 is estimated to fall
approximately three percent.

Daclatasvir API Market:

The consumption of Daclatasvir API is estimated to grow from approximately 950 Kg in 2019 to around 1,400 Kg
by 2021, at a CAGR of 21%.

The API market of Daclatasvir by value is estimated to grow from approximately INR 0.07 Bn in 2019 to around
INR 0.09 Bn by 2021, at a CAGR of 18 to 19%.

135
 OUR BUSINESS

Some of the information in the following section, especially information with respect to our plans and strategies,
contain certain forward-looking statements that involve risks and uncertainties. You should read the section entitled
“Forward-Looking Statements” on page 16 for a discussion of the risks and uncertainties related to those statements
and the section entitled “Risk Factors” on page 23 for a discussion of certain risks that may affect our business,
financial condition or results of operations.

Unless otherwise stated, or the context otherwise requires, the financial information used in this section is derived
from our Restated Financial Statements included in this Red Herring Prospectus, on page 194.

Overview

We are a manufacturer of specialised chemicals, such as HMDS and CMIC which are predominantly used in the
pharmaceuticals industry (the “Pharmaceutical Chemicals”), and inorganic bromides, namely Calcium Bromide,
Zinc Bromide and Sodium Bromide, which are predominantly used as completion f luids in the oilfields industry
(the “Oilwell Completion Chemicals”). We were the only manufacturer of HMDS in India and were the third
largest manufacturer of HMDS worldwide in terms of production in the calendar year 2019 (source: Frost &
Sullivan Report). We were the largest manufacturer of CMIC in India and the second largest manufacturer of CMIC
worldwide, in terms of production and capacity in calendar year 2019 (source: Frost & Sullivan Report). Further,
we were the only manufacturer of Zinc Bromide and the largest manufacturer of Calcium Bromide in India, in terms
of production in calendar year 2019 (source: Frost & Sullivan Report).

We supply our products to domestic customers and also export our products to countries including United States of
America, Italy, South Korea, Germany, People’s Republic of China, Japan, United Arab Emirates, Serbia, Russia,
Spain, Thailand and Malaysia. In Fiscals 2020, 2019 and 2018, our revenue from exports (including Deemed
Exports) contributed 39.78%, 31.99% and 47.84%, respectively of our revenue from operations. Our revenues from
exports (including Deemed Exports) have grown at a CAGR of 17.57% between Fiscals 2018 and 2020.

The key customers of our Pharmaceutical Chemicals include Hetero Labs Limited, Laurus Labs Limited, Aurobindo
Pharma Limited, Sanjay Chemicals (India) Private Limited, Lantech Pharmaceuticals Limited, Ind -Swift
Laboratories Limited, Vivin Drugs & Pharmaceuticals Limited and Macleods Pharmaceuticals Limited and the key
customers of our Oilwell Completion Chemicals include Shree Radha Overseas, Water Systems Specialty Chemical
DMCC and CC Gran Limited Liability Company.

We are an ISO 9001:2015 and ISO 14001:2015 certified company for the “Manufacture and supply of
pharmaceutical intermediates, silanes and oilfield chemicals”. Our manufacturing facility is located at Manjusar
near Vadodara in Gujarat (our “Manufacturing Facility”). As on the date of this Red Herring Prospectus, within
our Manufacturing Facility, we currently have seven operational plants of which two plants are dedicated to the
manufacturing of HMDS and ancillary products (including one plant dedicated to the manufacturing of hi-purity
HMDS), one multipurpose plant, currently being used for manufacturing of HMDS and other pharmaceutical
chemicals, two plants are dedicated to the manufacturing of CMIC and two plants dedicated to the manufacturing
of our Oilwell Completion Chemicals, along with three warehouses for the storage of our products and raw materials.
We also have an in-house laboratory at our Manufacturing Facility to test our raw materials procured, as well as our
products at the various stages of the manufacturing process. Further, we have five leased warehouses located outside
our Manufacturing Facility, in Manjusar, Vadodara. Our Corporate Office (which is owned by us) is located in
Vadodara and our sales and marketing offices are located in Hyderabad and Mohali, which are on a leasehold basis.

For Fiscals 2020, 2019 and 2018, our revenue from operations was ₹ 2,620.52 million, ₹3,033.41 million and
₹1,576.42 million, respectively, growing at a CAGR of 28.93% between Fiscal 2018 and Fiscal 2020. Our EBITDA
for Fiscals 2020, 2019 and 2018 was ₹ 702.61 million, ₹660.83 million and ₹450.96 million respectively, growing
at a CAGR of 24.82% between Fiscal 2018 and Fiscal 2020, while our profit after tax for Fiscals 2020, 2019 and
2018 was ₹ 488.53 million, ₹430.41 million and ₹263.81 million respectively, growing at a CAGR of 36.08%
between Fiscal 2018 and Fiscal 2020.

In Fiscals 2020, 2019 and 2018, our Pharmaceutical Chemicals, contributed 63.75%, 63.14% and 62.18% of our
total revenue from operations respectively, while our Oilwell Completion Chemicals, contributed 33.47%, 35.30%
and 35.63% respectively of our total revenue from operations.

136
Impact of COVID-19

The outbreak of COVID-19 was recognized as a public health emergency of international concern on January 30,
2020 and as a pandemic by the WHO on March 11, 2020. In response to the COVID-19 outbreak, the governments
of many countries, including India have taken preventive or protective actions, such as imposing country-wide
lockdowns, as well as restrictions on travel and business operations.

However, since some of the chemicals manufactured by us find application in the pharmaceuticals industry, our
Pharmaceutical Chemicals were categorized as ‘essential goods’ and our Manufacturing Facility was only
temporarily shut during the pandemic from March 24, 2020 till March 31, 2020. We resumed manufacturing our
Pharmaceutical Chemicals on April 1, 2020. We have implemented greater safety procedures and requirements at
our Manufacturing Facility. Due to limited availability of labour, logistics and supply chain constraints, our
Manufacturing Facility was initially operating at sub-optimal capacity utilization in the current Fiscal.

We have resumed operations in a phased manner as per the Government of India and state government’s directives.
Our plant utilization has improved, raw material suppliers have resumed operations and supply and logistics have
become more regular. We have not terminated any lease deed or laid-off any employees and have not withheld any
payments to employees as a consequence of the COVID-19. We have continued to source raw materials from our
suppliers and have been able to continue to supply our Pharmaceutical Chemicals to our customers.

The reduced demand for oil and gas in Fiscal 2021 has resulted in a reduced demand for our Oilwell Completion
Chemicals. Accordingly, as on the date of this Red Herring Prospectus, we are yet to resume manufacturing new
batches of Oilwell Completion Chemicals since the country-wide lockdown was lifted.

The future impact of COVID-19 or any other severe communicable disease on our business and results of operations
depends on several factors including those discussed in “Risk Factors – Internal Risk Factors –The recent outbreak
of the novel coronavirus could have a significant effect on our operations, and could negatively impact our business,
revenues, financial condition and results of operations.” on page 24 and “Risk Factors – External Risk Factors-
Natural disasters, fires, epidemics, pandemics, acts of war, terrorist attacks, civil unrest and other events could
materially and adversely affect our business.” on page 46. We are continuously monitoring the economic conditions
and have outlined certain measures to combat the pandemic situation and to minimize the impact on our business.
For more details, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
on page 243.

Our strengths:

We are a leading manufacturer globally of the Pharmaceutical Chemicals and we are a leading manufacturer in
India of the Oilwell Completion Chemicals

We were the only manufacturer of HMDS in India and were the third largest manufacturer of HMDS worldwide in
terms of production in calendar year 2019 (source: Frost & Sullivan Report). We were the largest manufacturer of
CMIC in India and the second largest manufacturer of CMIC worldwide, in terms of production and capacity in
calendar year 2019 (source: Frost & Sullivan Report).

India is currently a net importer of HMDS, with about 40% of India’s domestic demand in calendar year 2019 being
catered by imports majorly from China and Germany. India is expected to witness a demand growth for H MDS of
10.6% CAGR between calendar year 2019 and calendar year 2023 (source: Frost & Sullivan Report). Our Company
was the only manufacturer of HMDS in India, and we believe that our Company is well positioned to capitalise on
the potential growth of the HMDS market. Frost & Sullivan further estimates that by substituting imports and
catering to India’s growing HMDS market, Chemcon has immense opportunity in India. Additionally other countries
of the world are dependent on China for their HMDS requirement, however with changing environment regulations,
the trade from the country is low, giving opportunity to Chemcon to target China’s export customer base. All these
factors provide an opportunity to Chemcon to grow at a CAGR of 15-20% between 2019 and 2023 including great
opportunity for exports. (source: Frost & Sullivan Report).

India and China are the only countries that produce CMIC (source: Frost & Sullivan Report). Our share in the global
CMIC manufacturing capacity has increased from 7.07% in calendar year 2014 to 26.16% in calendar year 2019
(Source: Frost & Sullivan Report). India is a net importer of CMIC, with about 62% of India’s domestic demand in
calendar year 2019 being catered to by imports from China. India, a major CMIC consumer market, is ex pected to
witness a demand growth at a CAGR of 11.0% between 2019 and 2023 (source: Frost & Sullivan Report). Frost &

137
Sullivan further estimates that our Company is well positioned to substitute the imports from China and hence, has
an opportunity to grow at a CAGR of more than 25% between 2019 and 2023 (source: Frost & Sullivan Report).

The trade dispute between the USA and China, may influence China’s HMDS exports to the USA and may indirectly
help India boost its exports and our Company has already started the supply of HMDS to the customers in the USA
based on the opportunity created due to such trade dispute (source: Frost & Sullivan Report).

We were the only manufacture of Zinc Bromide and the largest manufacturer of Calcium Bromide in I ndia, in terms
of production in calendar year 2019. Further, while we commenced the sales of our Oilwell Completion Chemicals
in calendar year 2014, our share in the global production of the Oilwell Completion Chemicals has grown to 2.65%
in calendar year 2019 (source: Frost & Sullivan Report).

We believe that our positioning in the markets in which we operate and our established relationships with our
customers and suppliers, will enable us to benefit from any growth opportunities in the markets in which we operate
and continue to expand our operations.

Diversified customer base coupled with long standing relationships

We supply our products to customers in India and also export our products to countries including United States of
America, Germany, Italy, South Korea, People’s Republic of China, Japan, United Arab Emirates, Serbia, Russia,
Spain, Thailand and Malaysia. In Fiscals 2020, 2019 and 2018, our exports (including Deemed Exports) contributed
39.78%, 31.99% and 47.84% respectively of our total revenue from operations. Our revenue from exports (including
Deemed Exports) have grown at a CAGR of 17.57% between Fiscals 2018 and 2020.

Our top five customers and our top ten customers contributed 59.35% and 72.26%, respectively of our total revenue
from operations in Fiscal 2020, as compared to 45.94% and 67.56%, respectively of our total revenue from
operations in Fiscal 2019 and 60.01% and 75.67%, respectively of our total revenue from operations in Fiscal 2018.

We have established relationships with our key customers. For instance, we conduct business with Aurobindo
Pharma Limited on the basis of purchase orders and they have been our client for over 20 years. 68.61% of our total
revenue from operations in Fiscal 2020 was contributed by customers who have been consistently purchasing our
products over the last five years. Our top seven customers for Fiscal 2020 have been our customers for over four
years.

We believe that as a result of our diversified customer base and our endeavor to maintain long standing relationships
with our customers, we are well equipped to retain our presence in the market and build upon these relationships to
increase our product base and reach out to new customers.

The specialty chemicals industry in which we operate has high entry barriers

The specialty chemicals industry in which we operate has high entry barriers due to inter alia: (a) the involvement
of complex chemistry in the manufacture of our Products, which is difficult to commercialize on a large scale and;
(b) a long gestation period to be enlisted as a supplier with the customers, particularly with the customers of our
Pharmaceutical Chemicals.

We believe that the specialty chemicals industry is highly knowledge intensive. Our Products have application in
the pharmaceutical, oil-well drilling, semi-conductor and electronic-chemical industries where they are used to
manufacture high value proprietary and specialised products. Given the nature of the application of our products,
our processes and products are subject to, and measured against, high quality standards and stringent impurity
specifications. Further, end products manufactured by our customers, where our products are used, and where such
use has been formally recognised in filings with regulatory agencies, any change in the vendor of the product may
require significant time and cost for the customer. Hence, customer acquisition involves a long gestation period,
resulting in a very few players being involved in manufacturing of the products. We believe that we have, over the
years, built strong relationships with our customers, who recognise our technical capabilities and timely deliveries
and associate our Company with good and consistent quality products.

Moreover, some of the raw materials that we use such as bromine, MCF and TMCS are highly corrosive and toxic
chemicals. Therefore, handling these chemicals requires a high degree of technical skill and expertise, and
operations involving such hazardous chemicals ought to be undertaken only by personnel who are well trained to

138
handle such chemicals. We believe that the level of technical skill and expertise that is essential for handling such
chemicals can only be achieved over a period of time, creating a further barrier for new entrants.

Consistent financial performance with a strong financial position

We have a track record of operations of over two decades and have a strong balance sheet with stable cash flows.
We have experienced sustained growth in various financial indicators including our revenue and PAT, as well as a
consistent improvement in our balance sheet position in the last three Fiscals, wherein we have seen an increase in
our net worth.

The table below sets forth some of the key financial indicators for Fiscals 2020, 2019 and 2018:

Particulars Fiscal 2020 Fiscal 2019 Fiscal 2018

Revenue from operations (in ₹ million) 2,620.52 3,033.41 1,576.42
EBITDA (in ₹million) 702.61 660.83 450.96
EBITDA/revenue from operations (in %) 26.81% 21.79% 28.61%
Profit after tax (“PAT”) (in ₹million) 488.53 430.41 263.81
PAT/revenue from operations (in %) 18.64% 14.19% 16.73%
Earnings per share (basic and diluted) (in ₹) 15.37 13.54 8.30
Return on capital employed (in %)* 37.92% 53.90% 62.06%
Return on equity (in %)** 34.23% 44.94% 49.20%
* Return on capital employed is calculated as Earnings before interest and taxation (“EBIT”)/ Capital employed (Net of cash
and bank balances) at the end of the year/ period. EBIT is calculated as EBITDA net of depreciation and amortisation.
** Return on equity is calculated as Net Profit after taxes as restated/ Net worth at the end of the year as restated

We believe that we have been able to maintain and improve our financial performance by regular capacity
augmentation, diversification of our customer base and optimizing costs of sourcing raw materials and other fixed
costs.

Further, because of our strong business performance, we have been able to maintain a low debt position. As on
March 31, 2020, our total borrowing was ₹445.11 million, while our debt to equity ratio was 0.31 and our interest
coverage ratio was 14.01.

Manufacturing facility with dedicated plants for our products

We are ISO 9001:2015 and ISO 14001:2015 certified company for the manufacture and supply of pharmaceutical
intermediates, silanes and oilfield chemicals. Our Manufacturing Facility is located in Manjusar, near Vadodara in
Gujarat.

As on the date of this Red Herring Prospectus, within our Manufacturing Facility, have seven operational plants of
which two plants are dedicated to the manufacturing of HMDS and ancillary products (including one plant dedicated
to the manufacturing of hi-purity HMDS), one multipurpose plant, currently being used for manufacturing of HMDS
and other pharmaceutical chemicals, two plants are dedicated to manufacturing of CMIC and two plants are
dedicated to manufacturing of our Oilwell Completion Chemicals, along with three warehouses for the storage of
our products and raw materials. As of July 31, 2020, our installed capacity for: (a) HMDS was 4,200 MT per annum
and HMDS (hi-purity) was 600 MT per annum; (b) CMIC was 1,800 MT per annum and; (c) Oilwell Completion
Chemicals was 14,400 MT per annum, while our total volumetric reactor capacity was 374.85 KL.

We are in the process of setting up two new plants, within our Manufacturing Facility. For further details see “Our
Business - Our Manufacturing Facility” on page 145.

As on the date of this Red Herring Prospectus, the Manufacturing Facility comprises of seven individual operational
plants, which are dedicated towards the manufacture of specific products. However, the plants dedicated to the
manufacture of CMIC are versatile in nature and can also be utilised towards the manufacture of HMDS and
ancillary products, with minor modifications. Meanwhile, plant “P-7”, is a multipurpose plant and besides HMDS,
it can also be utilized for manufacturing other products being manufactured by our Company i.e. 4 CBC and 2,5
DHT.

139
Accordingly, we believe that having each of our plants at our Manufacturing Facility focused on the manufacture
of specific products enables us to tailor each plant to the needs of the relevant product, thereby improving efficiency,
while also being better placed to manage the production process and quantum produced of each product depending
on inter alia demand for the products in the market. Further, the plants dedicated to the manufacture of CMIC are
versatile in nature and can also be utilised towards the manufacture of HMDS and ancillary products with minor
modification.

Experienced Senior management

We have a strong and experienced management team which we believe has positioned our business well for
continued growth and development. Our management team has significant experience in the areas of finance,
manufacturing, quality control, strategy, raw material sourcing, process re-engineering and business development.
Two of our Wholetime Directors (who are not members of the Promoter Group) have been associated with our
Company for over 20 years and have played a key role in developing our business and we benefit from their
significant experience in their respective areas of expertise.

We believe that the knowledge and experience of our management team provides us with a significant competitive
advantage as we seek to grow in our existing markets and enter new segments and geographies. Our experienced
management team has enabled us to improve our financial results over the years and increase portfolio of our
products as well as our markets. We believe our management team has demonstrated its ability to execute our
business plan and has the skills and experience needed to implement our strategic objectives related to our business
and expansion in the future.

Strategies

Expansion of our total installed production capacity

We aim to expand our manufacturing operations and production capacity. As on the date of this Red Herring
Prospectus, we have seven operational individual plants for the production of our Products, within the
Manufacturing Facility. Our total volumetric reactor capacity as on July 31, 2020 was 374.85 KL.

Our Company intends to build two additional plants with a total volumetric reactor capacity of 251.00 KL. These
additional plants shall be utilised for the manufacturing of chemicals which are principally used pharmaceutical
industry. For further details, see “Objects of the Issue- Details of the Objects of the Fresh Issue-Capital expenditure
towards expansion of Manufacturing Facility” on page 76.

With the completion of such expansion, our total volumetric reactor capacity at the Manufacturing Facility shall
increase from our volumetric reactor capacity of 374.85 KL to 625.85 KL and will enable us to significantly benefit
from economies of scale.

Further, our Company has recently acquired approximately 22,000 square metres of land next to our Manufacturing
Facility, to enable future expansion of the Manufacturing Facility. Together with the existing land of approximately
29,000 square metres, the total land available for the Manufacturing Facility after this acquisition is approximately
51,000 square metres.

Augmenting growth in the current geographic markets and expanding into new geographic markets

India is currently a net importer of HMDS, with about 40% of India’s current domestic demand being catered by
imports majorly from China and Germany. India is expected to witness a demand growth for HMDS of 10.6%
CAGR between 2019 and 2023 (source: Frost & Sullivan Report).

Further, India and China are the only countries that produce CMIC (Source: Frost & Sullivan Report). India is a net
importer of CMIC, with about 62% of India’s current domestic demand being catered to by imports majorly from
China. India, a major CMIC consumer market, is expected to witness a demand growth at a CAGR of 11 .0% between
2019 and 2023 (source: Frost & Sullivan Report).

Our Company, the only manufacturer of HMDS in India and the largest manufacturer of CMIC in India in terms of
production in calendar year 2019, aims to capitalise on the potential growth of the HMDS and CMIC market in
India by expanding our manufacturing and sales of HMDS and CMIC. India is a net importer of CMIC and HMDS
(source: Frost & Sullivan Report) and our Company aims to expand our manufacturing and sales operations of

140
CMIC and HMDS to substitute such imports. The trade dispute between the USA and China, may influence China’s
HMDS exports to the USA and may indirectly help India boost its exports and our Company has already started the
supply of HMDS to the customers in the USA based on the opportunity created due to such trade dispute (source:
Frost & Sullivan Report).

In Fiscal 2020 we supplied the Oilwell Completion Chemicals largely to customers in India, the Middle East, Serbia
and Russia. We aim to expand the sales of the Oilwell Completion Chemicals in existing and new geographies
including Nigeria, Malaysia, China and Ghana. To access newer markets, we regularly participate in trade
exhibitions in different geographies. In the recent past, we have participated in trade exhibitions, including CPHI
Worldwide 2019 (in Frankfurt, Germany), CPHI India 2018, Adipec 2018 (in Abu Dhabi, United Arab Emirates),
CPHI Japan 2019 and CPHI & ICSE China 2019.

Accordingly, we intend to further consolidate our position in the geographic markets where we sell our products as
well as expand into additional geographic markets.

Exploring newer applications of our existing products as well as focusing on new products that are in synergy
with our current operations

Our Company aims to expand the sale of our products to other industries where such products have application. For
instance, while we currently supply HMDS largely to the pharmaceuticals industry, we aim to market our products
for end-use applications in other industries including the rubber and semiconductor manufacturing industry. We
have recently commissioned a plant (Plant P2) which has the capacity to manufacture upto 600 MT per annum of
high purity /electronic grade HMDS which finds application in the pharmaceuticals, silicone/rubber as well as
semiconductor industries.

Further, we have a product development team which seeks to identify additional products which we can venture
into.We believe that we have, over the years, built strong relationships with our customers, who recognise our
technical capabilities and ability to deliver products on a timely basis and associate our Company with good and
consistent quality products, and we can benefit from such relationship to expand our product portfolio.We aim to
undertake the development and manufacture of newer products, largely focusing on chemicals used in the
pharmaceuticals, semiconductors and rubber industries. We have recently developed 2 new products, namely 4 CBC
and 2,5 DHT. While, we have already executed our first sale of 4 CBC in July 2020, we are in the process of
commencing the commercial production of 2,5 DHT.

Further, the State Level Environment Impact Assessment Authority, Government of Gujarat, has recently granted
us the environmental clearance for manufacturing an aggregate of 44 products (including the products currently
manufactured by us) and increasing the quantity of products produced from 2,511 MT per month to 10,611 MT per
month.

Continue to strive for cost efficiency

We intend to continue to be cost efficient in the production of our products. This efficiency is achieved through
strategies like having a large single location manufacturing facility, dedicated plants for each product, process re-
engineering for efficient raw material consumption and being a sizeable player in the industry in each of our
products. Economies of scale will also enable us to continuously improve our operational efficiencies.

Our Products

Our Company has an experience of over two decades in manufacturing and export of different types of specialised
chemicals. As on the date of this Red Herring Prospectus, we are engaged in the manufacture of following products:

A. Pharmaceutical Chemicals: These comprise of the chemicals which are utilised in the process of prod ucing
inter alia anti-viral and anti-bacterial drugs and a drug for treatment of tuberculosis. Currently we principally
manufacture three products, namely:

1. HMDS and ancillary products (including hi-purity HMDS)

2. CMIC
3. 4 CBC

141
B. Oilwell Completion Chemicals: These comprises of inorganic bromides which are utilised inter alia as
completion fluids in the oil and gas exploration process. Currently we manufacture a range of inorganic
bromides, namely:

1. Calcium Bromide (solution and powder)

2. Zinc Bromide (solution)
3. Sodium Bromide (solution and powder)

Additionally, our Company is in the process of commencing the commercial production of 2,5 DHT. 2,5 DHT is
predominately used in the pharmaceutical industry in the preparation of and synthesis of substituted
tetrahydrothiophene derivatives 2-amino-3-(arylsulfonyl) thiophenes, potential antiviral and antitumor agents.
However, due to the COVID-19 pandemic and the related travel restrictions, our potential customers are currently
unable to visit our Manufacturing Facility to inspect our product and grant their approval for the purchase of 2,5
DHT produced by us.

Set forth below is the product-wise distribution of the revenue generated by our Company from our products:

Fiscal 2020 Fiscal 2019 Fiscal 2018

Amount % of revenue Amount % of revenue Amount % of revenue
Particulars
(in ₹ from (in ₹ from (in ₹ from
million) operations) million) operations) million) operations)
Income
Revenue from operations
Revenue from sale of products
Pharmaceutical A = B + C 1,504.77 57.42% 1,827.03 60.23% 933.27 59.20%
Chemicals +D
- HMDS (including B 1,147.46 43.79% 1,224.42 40.36% 606.38 38.47%
ancillary Products)
- CMIC C 338.55 12.92% 475.39 15.67% 326.88 20.74%
- Others D 18.75 0.72% 127.22 4.19% - 0.00%
Pharmaceutical
Chemicals
Oilwell Completion E 877.18 33.47% 1,070.89 35.30% 561.75 35.63%
Chemicals
Others F 60.76 2.32% 39.31 1.30% 28.10 1.78%
Total Revenue from G = A + E 2,442.71 93.21% 2,937.23 96.83% 1,523.11 96.62%
Sales of Products +F
Revenue from sale of services – Job work charges
Pharmaceutical H=I+J 165.77 6.33% 88.30 2.91% 46.96 2.98%
Chemicals +K
- HMDS (including I 164.96 6.29% 80.05 2.64% 45.73 2.90%
ancillary Products)
- CMIC J 0 0.00% 0 0.00% 0 0.00%
- Others K 0.81 0.03% 8.25 0.27% 1.23 0.08%
Pharmaceutical
Chemicals
Oilwell Completion L 0 0.00% 0 0.00% 0 0.00%
Chemicals
Others M 2.24 0.09% - -
Total Revenue from N = H + L 168.01 6.41% 88.30 2.91% 46.96 2.98%
Sales of Services +M
Other operating revenue O 9.80 0.37% 7.87 0.26% 6.35 0.40%
Total Revenue from P = G + N 2,620.52 100.00% 3,033.41 100.00% 1,576.42 100.00%
operations +O
Break up of Total
Revenue from
Operations
- Total Revenue from Q = R + S 1,670.53 63.75% 1,915.33 63.14% 980.22 62.18%
Pharmaceutical +T

142
 Fiscal 2020 Fiscal 2019 Fiscal 2018
Particulars Amount % of revenue Amount % of revenue Amount % of revenue
(in ₹ from (in ₹ from (in ₹ from
million) operations) million) operations) million) operations)
Chemicals
- HMDS (including R = B + I 1,312.42 50.08% 1,304.46 43.00% 652.11 41.37%
ancillary Products)
- CMIC S=C+J 338.55 12.92% 475.39 15.67% 326.88 20.74%
- Others Pharmaceutical T= D+K 19.56 0.75% 135.48 4.47% 1.23 0.08%
Chemicals
- Total Revenue from U=E+L 877.18 33.47% 1,070.89 35.30% 561.75 35.63%
Oilwell Completion
Chemicals
- Others V=F+ M 63.00 2.40% 39.31 1.30% 28.10 1.78%
- Other operating W=O 9.80 0.37% 7.87 0.26% 6.35 0.40%
revenue
Total Revenue from X = Q + U 2,620.52 100.00% 3,033.41 100.00% 1,576.42 100.00%
operations +V+ W

A. Pharmaceutical Chemicals

Our total revenue from the sale of the Pharmaceutical Chemicals in Fiscals 2020, 2019 and 2018 was ₹ 1,670.53
million, ₹1,915.33 million and ₹980.22 million, respectively, representing 63.75% %, 63.14% and 62.18% of our
total revenue from operations respectively. Further out of our total revenue from Pharmaceutical Chemicals in
Fiscals 2020, 2019 and 2018, domestic sales in India constituted ₹ 1,403.00 million, ₹1,437.89 million and ₹687.14
million respectively and export sales (including Deemed Exports) constituted ₹ 267.54 million, ₹477.44 million and
₹293.09 million respectively.

HMDS

We were the only manufacturer of HMDS in India and were the third largest manufacturer of HMDS worldwide, in
terms of production in calendar year 2019 (source: Frost & Sullivan Report).

HMDS is widely used in the pharmaceutical industry as a silylating agent in the process of manufacture of
pharmaceutical drugs of the Penicillin group (such as Amikacin, Penicillin, Cephalosporins and other kinds of
Penicillin derivatives), hydroxyl protectants, preparation of 5-azacytidine, an antineoplastic drug, preparation of β3-
AR agonists used in anti-stress formulations and the manufacture of antibiotics such as Cefprozil and Cefadroxil
and anti-viral drugs such as Sofosbuvir, Lamivudine and Emtricitabine. HMDS may also be used in the
semiconductor electronics industry and in vinyl silicone rubber to improve their tearing strength. (source: Frost &
Sullivan Report)

Our total revenue from HMDS (including ancillary products) in Fiscals 2020, 2019 and 2018 was ₹ 1,312.42 million,
₹ 1,304.46 million and ₹652.11 million, comprising 50.08%, 43.00% and 41.37% of our total revenue from
operations in Fiscals 2020, 2019 and 2018 respectively. Further out of our total revenue from HMDS in Fisc als
2020, 2019 and 2018, domestic sales in India constituted ₹1,147.11 million, ₹1,077.02 million and ₹543.24 million
respectively and export sales (including Deemed Exports) constituted ₹165.31 million, ₹227.44 million and ₹108.87
million respectively.

Our key customers of HMDS in Fiscal 2020 included Hetero Labs Limited, Laurus Labs Limited, Aurobindo
Pharma Limited, Ind-Swift Laboratories Limited, Sanjay Chemicals (India) Private Limited and Vivin Drugs &
Pharmaceuticals Limited.

We also manufacture hi-purity HMDS, which finds application in the pharmaceuticals, semiconductors and rubber
industries. We are yet to commence the commercial sale of hi-purity HMDS. We have sent sample batches to
potential customers. However, due to the COVID-19 pandemic and the related travel restrictions, our potential
customers are currently unable to visit our Manufacturing Facility to inspect our product and grant their approval
for the purchase hi-purity HMDS produced by us.

143
 CMIC

Our Company was the largest manufacturer of CMIC in India and the second largest manufacturer of CMIC
worldwide, in terms of production and capacity in calendar year 2019 (source: Frost & Sullivan Report).

CMIC is a key intermediate for the manufacture of Tenofovir, a nucleotide antiviral anti-AIDS and anti-Hepatitis B
drug. Tenofovir has been approved by the US FDA for the treatment of HIV infections and Hepatitis B and by the
European Medicine Authority for the treatment of Hepatitis B. Tenofovir and its combination preparations have
witnessed the largest sales for anti-AIDS drugs (source: Frost & Sullivan Report). CMIC is also used in the synthesis
of other anti-viral drugs.

Our total revenue from sale of CMIC in the Fiscals 2020, 2019 and 2018 was ₹ 338.55 million, 475.39 million and
₹326.88 million, comprising 12.92%, 15.67% and 20.74% of our total revenue from operations in the Fiscals 2020,
2019 and 2018 respectively. Further out of our total revenue from CMIC in the Fiscals 2020, 2019 and 2018,
domestic sales in India constituted ₹236.79 million, ₹225.39 million and ₹142.66 million respectively and export
sales (including Deemed Exports) constituted ₹101.76 million, ₹250.00 million and ₹184.22 million respectively.

Our key customers of CMIC in Fiscal 2020 included Hetero Labs Limited, Aurobindo Pharma Limited, Macleods
Pharmaceuticals Limited and Sanjay Chemicals (India) Private Limited.

4 CBC

4 CBC is widely used in the pharmaceutical and agrochemical industry in the preparation of Pyrazinamide, a
medication used to treat tuberculosis. 4 CBC is also used in the agrochemical industry in the preparation of a 4-
hydroxyphenylpyruvate dioxygenase inhibitor which is used as a herbicide for weed control in maize and sugarcane.
We executed our first sale of 4 CBC in July 2020.

The following table sets forth details of the domestic and export sales (including Deemed Exports) of the Company
from the sale of Pharmaceutical Chemicals as a percentage of the total revenue from operations of the Company
during Fiscals 2020, 2019 and 2018:

Fiscal 2020 Fiscal 2019 Fiscal 2018

% of total % of total % of total
revenue from % of total revenue from % of total revenue from % of total
Pharmaceutical Amount operations Amount operations Amount operations
revenue revenue revenue
Chemicals (₹ from the sale (₹ from the sale (₹ from the sale
from from from
million) of million) of
operations million)
of
operations operations
Pharmaceutic Pharmaceutic Pharmaceutic
al Chemicals al Chemicals al Chemicals
Domestic Sales 1,403.00 83.98 53.54 1,437.89 75.07 47.40 687.14 70.10 43.59
Export Sales* 267.54 16.02 10.21 477.44 24.93 15.74 293.09 29.90 18.59
Total 1,670.53 100.00 63.75 1,915.33 100.00 63.14 980.22 100.00 62.18
*Includes deemed exports.

B. Oilwell Completion Chemicals

Our Company is engaged in the manufacturing of Oilwell Completion Chemicals, which are predominantly utilised
in the oil and gas exploration process as completion chemicals. Completion chemicals act as demulsifying agents
for crude oil in offshore operations and are used to control wellbore pressures in upstream oil and gas operations.
We manufacture the following types of bromides - Calcium Bromide (solution and powder), Sodium Bromide
(solution and powder) and Zinc Bromide (solution). Our principal product, Calcium Bromide, is typically used in
high temperate and pressure oil wells.

We were the only manufacturer of Zinc Bromide and the largest manufacturer of Calcium Bromide in India, in terms
of production in calendar year 2019 (source: Frost & Sullivan Report).

Our total revenue from the sale of our Oilwell Completion Chemicals in Fiscals 2020, 2019 and 2018 was ₹877.18
million, ₹1,070.89 million and ₹561.75 million, comprising 33.47%, 35.30% and 35.63% of our total revenue from
operations in Fiscals 2020, 2019 and 2018 respectively. Further out of our total revenue from Oilwell Completion

144
 Chemicals in the Fiscals 2020, 2019 and 2018, domestic sales in India constituted ₹102.28 million, ₹579.74 million
and ₹105.33 million respectively and export sales (including deemed exports) constituted ₹774.90 million, ₹491.16
million and ₹456.42 million respectively.

The following table sets forth details of the domestic and export sales (including Deemed Exports) of the Company
from the sa le of the Oilwell Completion Chemicals, as a percentage of the total revenue from operations of the
Company during Fiscals 2020 2019 and 2018:

Fiscal 2020 Fiscal 2019 Fiscal 2018

Amount % of total % of total Amount % of total % of total Amount % of total % of total
(₹ revenue from revenue (₹ revenue from revenue (₹ million) revenue from revenue
Oilwell
Completion million) operations from million) operations from operations from
Chemicals from the sale operations from the sale operations from the sale operations
of Oilwell of Oilwell of Oilwell
Completion Completion Completion
Chemicals Chemicals Chemicals
Domestic 102.28 11.66 3.90 579.74 54.14 19.11 105.33 18.75 6.68
Sales
Export 774.90 88.34 29.57 491.16 45.86 16.19 456.42 81.25 28.95
Sales*
Total 877.18 100.00 33.47 1,070.89 100.00 35.30 561.75 100.00 35.63
*Including deemed exports.

Our key customers of our Oilwell Completion Chemicals in Fiscal 2020 included Water Systems Specialty Chemical
DMCC, Shree Radha Overseas and CC Gran Limited Liability Company.

Our Manufacturing Facility

We are an ISO 9001:2015 and ISO 14001:2015 certified company for the manufacture and supply of pharmaceutical
intermediates, silanes and oilfield chemicals.

Our Manufacturing Facility is located in Manjusar near Vadodara in Gujarat, spread across approximately 29,000
square metres. The Manufacturing Facility currently comprises of seven individual operational plants (the
“Operational Plants”), each dedicated to the manufacturing of specific products of our Company. The aggregate
volumetric reactor capacity of these seven Operational Plants was 374.85 KL as on July 31, 2020.

Set forth below are the details of the Operational Plants:

As on July 31, 2020

Product Installed Volumetric
Product Plant
Category Capacity (in Reactor Capacity
MT per annum) (in KL)
P-3 2,400 52.60
P-7 (1) 1,800 125.20
HMDS and ancillary products
Pharmaceutical Total
4,200 177.80
Chemicals (P-3 + P-7)
HMDS (hi-purity) P-2 (2) 600 13
CMIC P4&P6 1,800 121.75
Calcium Bromide (Solution), Sodium Bromide Oilwell
P-5 (3) 14,400 57.30
(Solution) and Zinc Bromide (Solution) Completion
Calcium Bromide (Powder) Chemicals P-1 (3) 600 5
Total Volumetric Reactor Capacity 374.85
(1)
The plant “P-7” was commissioned on March 16, 2020 with a reactor capacity of 125.20 KL and an installed capacity of
1,800 MT per annum. Plant “P-7” is a multipurpose plant and besides HMDS, it can also be utilized for manufacturing other
products including 4 CBC and 2,5 DHT.
(2)
Plant P-2 was damaged in a fire in Fiscal 2018. It has been rebuilt and was commissioned on July 6, 2020 with reactor
capacity of 13 KL and installed production capacity of 600 MT per annum.
(3)
The plant “P-1” is solely used for converting Calcium Bromide (solution) to Calcium Bromide (powder). The installed
capacity for Oilwell Completion Chemicals in the plant “P-5” as described above is for the production of the Oilwell
Completion Chemicals in solution form. Our Company converts a portion of the Calcium Bromide (solution) produced in

145
 plant “P-5” to Calcium Bromide (powder) either in “P-1” or by using external service providers or job workers.
Accordingly, this is not counted in the installed production capacity.

In addition to the Operational Plants, our Company is in process of setting up two additional plants (“P-8” and “P-
9”), within the premises of the Manufacturing Facility (the “Additional Plants”). The Additional Plants are to be
used for the manufacturing of chemicals used in the pharmaceutical industry.

Our Company has three warehouses within the premises of our Manufacturing Facility for the storage of our
products and raw materials along with one storage tank for the storage of HMDS and five external leased warehouses
also situated in Manjusar.

We believe we have sufficient fire prevention facilities at our Manufacturing Facility. Further, our Company has
received the necessary environmental clearances. We have arrangements for regular power and water supply at our
Manufacturing Facility together with provision for back-up electric power including using a diesel generator set.

The product-wise details of the installed production capacity, available capacity, actual production and capacity
utilisation at our Manufacturing Facility for Fiscals 2020, 2019 and 2018, are set forth below:

HMDS: Plants “P-3” & “P-7”(1)

Actual
Installed production capacity Available Capacity Production Capacity
at end of Fiscal / Period for the Fiscal / Period during the Utilization
Period
(Metric Tonne per annum) (Metric Tonne) Fiscal / Period (%)
(A) (B) (Metric Tonne) (D=C/B)
(C)
Four month period 4,200 1,400 696.36 49.74%
ended July 31, 2020
Fiscal 2020 4,200 (2) 2,475 2,915.01(3) 117.78%
Fiscal 2019 1,800 1,800 1,674.39 93.02%
Fiscal 2018 1,800 2,300 (4) 1,587.53 69.02%
(1)
Plant “P-7” was commissioned on March 16, 2020.
(2)
Capacity of Plant “P-3” increased by 600 MT as we added a distillation column on April 1, 2019 by which the installed
production capacity of Plant “P-3” increased to 2,400 MT per annum from 1,800 MT per annum.
(3)
Our plants “P-4”/”P-6” dedicated to the manufacture of CMIC, being versatile in nature, were utilised for the
manufacturing of HMDS due to additional demand in Fiscal 2020.
(4)
The available capacity for Fiscal 2018 includes capacity for plant “P-2” for 10 months before it was damaged by fire on
January 9, 2018.

HMDS (hi-purity): Plant “P-2” (1)

Actual
Installed production capacity Available Capacity Production Capacity
at end of Fiscal / Period for the Fiscal / Period during the Utilization
Period
(Metric Tonne per annum) (Metric Tonne) Fiscal / Period (%)
(A) (B) (Metric Tonne) (D=C/B)
(C)
Four month period 600 42 - -
ended July 31, 2020
Fiscal 2020 - - - -
Fiscal 2019 - - - -
Fiscal 2018 - - - -
(1)
Plant “P-2” was damaged in fire in Fiscal 2018 and has been rebuilt. It was commissioned on July 6, 2020.

146
CMIC: Plants “P-4” & “P-6” (1)

Actual
Installed production capacity Available Capacity Production Capacity
at end of Fiscal / Period for the Fiscal / Period during the Utilization
Period
(Metric Tonne per annum) (Metric Tonne) Fiscal / Period (%)
(A) (B) (Metric Tonne) (D=C/B)
(C)
Four month period 1,800 600 451.45 75.24%
ended July 31, 2020
Fiscal 2020 1,800 1,800 807.82(2) 44.88%
Fiscal 2019 1,800 1,250 (3) 1,195.65 95.65%
Fiscal 2018 1,200 1,200 1,076.01 89.67%
(1)
CMIC Plant used for HMDS production.
(2)
Due to additional demand for HMDS, our Company utilized CMIC Capacity for manufacturing HMDS in Fiscal 2020.
(3)
New capacity of 600 MT per annum in plant “P-6” was commissioned in March 2019 and hence available for one month
in Fiscal 2019.

Oil Well Completion Chemicals: Plant “P-5”

Actual
Installed production capacity Available Capacity Production
Capacity
at end of Fiscal / Period for the Fiscal / Period during the
Period Utilization (%)
(Metric Tonne per annum) (Metric Tonne) Fiscal / Period
(D=C/B)
(A) (B) (Metric Tonne)
(C)
Four month period 14,400 4,800 87.96 1.83%
ended July 31, 2020
Fiscal 2020 14,400 14,400 6,038.56 41.93%
Fiscal 2019 14,400 14,400 8,247.77 57.28%
Fiscal 2018 14,400 14,400 5,846.82 40.60%

Calcium Bromide (Powder): Plant “P-1” (1)

Actual
Installed production capacity Available Capacity Production Capacity
at end of Fiscal / Period for the Fiscal / period during the Utilization
Period
(Metric Tonne per annum) (Metric Tonne) Fiscal / Period (%)
(A) (B) (Metric Tonne) (D=C/B)
(C)
Four month period 600 200 - -
ended July 31, 2020
Fiscal 2020 600 600 199.55 33.26%
Fiscal 2019 600 600 418 69.66%
Fiscal 2018 - - - -
(1)
Our Company converts a portion of the Calcium Bromide (solution) produced in plant “P -5” to Calcium Bromide (powder)
either in plant “P-1” or by using external service providers or job workers.

Note: Capacity utilization has been calculated on the basis of actual production in the relevant Fiscal/ period divided by the
installed production capacity of a plant available during the relevant Fiscal./ period.

Raw materials

We purchase our raw materials from multiple suppliers on a purchase order basis. The aggregate cost of raw
materials purchased in Fiscals 2020, 2019 and 2018 was ₹1,512.17 million, ₹2,093.54 million and ₹895.50 million,
respectively. The aggregate cost of materials consumed in Fiscals 2020, 2019 and 2018, was ₹1,533.71 million,
₹1,947.39 million and ₹ 793.82 million respectively.

In Fiscals 2020, 2019 and 2018, our Company incurred 57.71%, ,69.02% and 56.81% of its total revenue from
operations towards raw material procurement expenses.

147
The primary raw materials essential to the manufacturing of HMDS are TMCS, Ammonia and Hydrochloric Acid.
We principally use TMCS as the base chemical for manufacture of HMDS. However, we also manufacture a portion
of our HMDS production using HMDO as an input raw material, by converting HMDO into TMCS and then using
TMCS to manufacture HMDS. HMDO is a residual product which comes out during the process of utilization of
HMDS by our customers. The HMDO used by us in the manufacture of TMCS is sourced by us from our customers
for HMDS. We purchase the key raw materials required for manufacturing HMDS from suppliers in China and
India. In Fiscals 2020, 2019 and 2018, our expenditure on raw materials (cost of materials consumed) for the
manufacturing of HMDS (including ancillary products) was ₹ 646.94 million, ₹728.66 million and ₹236.10 million,
respectively, representing 24.69%, 24.02% and 14.98% of our total revenue operations for the relevant Fiscal.

The primary raw materials essential to the manufacturing of CMIC are MCF, IPA and Chlorine. We purchase such
raw materials from suppliers in China and India. In Fiscals 2020, 2019 and 2018 our expenditure on raw materials
(cost of materials consumed) for the manufacturing of CMIC was ₹ 220.08 million, ₹359.00 million and ₹156.49
million, respectively, representing 8.40%, 11.83% and 9.93% of our total revenue operations for the relevant Fiscal.

The raw materials essential for the manufacturing of Calcium Bromide (solution and powder), Sodium Bromide
(solution and powder) and Zinc Bromide (solution) are primarily HBR, Bromine and lime. In Fiscals 2020, 2019
and 2018, our expenditure on raw materials (cost of raw materials consumed) for manufacturing of our Oilwell
Completion Chemicals was ₹635.50 million, ₹737.99 million and ₹381.11 million, respectively, representing
24.25%, 24.33% and 24.18% of our total revenue operations for the relevant financial period.

We procure our raw materials essential for manufacturing our products from domestic and international vendors.
40.19%, 51.13% and 36.62% of our costs of raw materials, in Fiscals 2020, 2019 and 2018, was on imported raw
materials.

Details in relation to the geographical location of the top 5 suppliers of the Company from whom a significant
portion of its raw materials were purchased during the Fiscals 2020, 2019 and 2018, for the Pharmaceuticals
Business and the Oilwell Completion Chemicals Business, are as follows:

Particulars Fiscal 2020 Fiscal 2019 Fiscal 2018

Pharmaceuticals Chemicals
Geographical location of top five suppliers Hong Kong and China Hong Kong, China, China, UAE, Hong
UAE and India Kong and India
Oilwell Completion Chemicals
Geographical location of top five suppliers India and Germany India India

Details in relation to the names of the Chinese raw materials purchased by our Company in the Fiscals 2020, 2019
and 2018, along with details of the percentage of expenditure incurred by our Company in the Fiscals 2020, 2019
and 2018, towards the procurement of raw materials from China, as a percentage of the total expenditure of our
Company towards procurement of raw materials, is as follows:

% of total expenditure towards procurement of raw materials in

Name of the raw material
Fiscal 2020 Fiscal 2019 Fiscal 2018
Methyl Chloroformate (MCF) 1.56% 1.51% 7.41%
Trimethyl Chlorosilane (TMCS) 18.61% 17.10% 15.30%
Others 0.28% 0.02% -
Total percentage of expenditure on 20.45% 18.63% 22.70%
raw materials imported from China

While we do not have long term contracts for the supply of our raw materials, and procure the same through purchase
orders, we have long-established relationships with a number of such suppliers, and such long-established
relationship with multiple suppliers ensures stable supply without dependency on a single source. We have
subsisting relationships with certain suppliers for up to 10 years.

Product development

We have a product development department which performs various critical functions with respect to our existing
products, while also seeking to identify potential new products as well as newer applications for our existing
products. As on July 31, 2020, four permanent employees were engaged in the product development function of our
Company.

148
With respect to our existing products, our product development department is engaged in: (a) the review of the
functionality of our products (including the resolution of any problem with our products) and the need for
modifications, if any; (b) developing solutions if our manufacturing process and current procedures requires change
to inter alia reduce expenditure; and (c) review of the quantity of chemicals to be manufactured and sold to best
achieve economies of scale and develop strategies which would help conserve and minimise the usage of raw
materials and/or control wastage in the chemical production process.

Our product development department also seeks to identify new potential marketable products and carries a
thorough study including product specifications, potential products costs and production timeline, while also
evaluating the need for the potential products in the market. Further, we have dedicated personnel, who work on the
schematic route of synthesis, by reviewing the viability of cheaper alternative raw materials or shortening the period
of synthesis.

Manufacturing process

Brief details of the manufacturing process for our products are set forth below:
Pharmaceutical Chemicals

1. HMDS

HMDS can be manufactured by 2 different processes:

(a) using TMCS as the starting chemical; and

(b) using HMDO as the starting chemical

Process of manufacturing of HMDS using TMCS

The basic raw materials used in the manufacturing of HMDS in this process are TMCS, Liquified Ammonia and
Distilled Water.

Step – 1: TMCS, Liquified Ammonia and Distilled Water charged in a stainless steel reactor (SSR). This chemical
reaction results in production of crude HMDS along with ammonium chloride solution as a by-product.

Step – 2: Crude HMDS is fed into a stainless steel distillation column to produce pure HMDS along with HMDO
as an impurity.
Block Diagram for production of HMDS using TMCS

Process of manufacturing of HMDS using HMDO

The basic raw materials used in the manufacturing of HMDS in this process a re HMDO, Hydrochloric Acid,
Liquified Ammonia and Distilled Water.

Step – 1: Liquid Hydrochloric Acid (“HCL”) is first fed into an evaporator.

Step – 2: HCL (in vapour form) and HMDO are then fed in a glass lined reactor (GLR). This process results in the
production of crude TMCS along with water as a by-product.

149
Step – 3: Crude TMCS, Liquified Ammonia and Distilled Water charged in a stainless steel reactor (SSR). This
chemical reaction results in production of crude HMDS along with ammonium chloride solution as a by-product.

Step – 4: Crude HMDS is fed into a stainless steel distillation column to produce pure HMDS (of desired purity)
along with HMDO as an impurity.

Block Diagram for production of HMDS using HMDO

2. CMIC

The basic raw materials used in the manufacturing of CMIC are MCF, IPA and Catalyst.

Step – 1: A mixture of MCF and Catalyst is first charged in a glass lined reactor (‘GLR’) and thereafter Chlorine is
added to the process while maintaining reflux temperature. This chemical reaction results in production of crude
Chloromethyl Chloroformate (“CMCF”) and hydrochloric acid (“HCL”) as a by-product.

Step – 2: Crude CMCF is then transferred to a glass lined reactor (GLR) to remove any unreacted MCF and increase
the purity of CMCF.

Step – 3: Distilled CMCF is charged into another glass lined reactor and thereafter IPA and catalyst are added. The
chemical reaction results in the elimination of HCL gas and production of crude CMIC.

Step – 4: Crude CMIC is then fed into another glass lined reactor to be heated under reduced pressure and the low
boiler impurities are removed. The distillation process results in production of pure CMIC (of desired purity) and
thereafter the residue is drained.

Block Diagram for production of CMIC

150
3. Oilwell Completion Chemicals

Calcium Bromide Solution

The basic raw materials used in the manufacturing of Calcium Bromide Solution (CaBr 2) are Bromine, Sulpher,
Calcium Lime (Ca(OH)2) and Water.

Step – 1: Water and sulphur are first charged in a glass lined reactor (‘GLR’) and thereafter bromine is added to the
process with jacket cooling. This chemical reaction results in production of hydrobromic acid.

Step – 2: Hydrobromic acid and Calcium Lime solution is charged in a stainless steel reactor (SSR). This chemical
reaction results in production of dilute Calcium Bromide (CaBr 2) solution.

Step – 3: Dilute Calcium Bromide (CaBr2) solution is fed into a distillation column to distil out excess water and
enrich the concentration. This process results in the production of 52% CaBr2 solution.

Block Diagram for production of Calcium Bromide Solution

Sodium Bromide Solution

The basic raw materials used in the manufacturing of Sodium Bromide Solution (NaBr) are Crude Sodium Bromide
Solution and Activated Charcoal.

Step – 1: Crude Sodium Bromide solution along with activated charcoal in charged in a Stainless Steel reactor
(SSR). The solution is processed further to remove impurity and colour.

Step – 2: Sample Sodium Bromide (NaBr) is checked for clarity and impurity. Post quality check approval, the
Sodium Bromide solution is passed through the filter and collected in a tank as 46% NaBr solution.

Block Diagram for production of Sodium Bromide Solution

151
Zinc Bromide Solution

Zinc Bromide Solution is usually sold as a mixture of Calcium Bromide and Zinc Bromide. The production process
of Zinc Bromide is similar to the process of production of Calcium Bromide Solution with just one change – instead
of Calcium Lime (Ca(OH)2), Zinc Hydroxide (Zn(OH)2) is used in the process of manufacture of Zinc Bromide.

Calcium Bromide / Sodium Bromide Powder

Calcium Bromide (CaBr2) solution or Sodium Bromide solution is fed into a flaker to produce Calcium Bromide or
Sodium Bromide in powder form.

4. 4 CBC

Raw Material

GBL :- Gama Butyrolactone, TC :- Thionyl Chloride, ZnCl2:- Zinc Chloride as Catalyst

Brief Process :-
1. Charge GBL in reactor and add Catalyst under stirring.
2. Heat mass up to 95 OC. and connect vent of reactor with scrubber.
3. Add TC in mass by maintain temperature 95 + 2 OC.
4. Increase temperature up to 100 OC and maintain for 2 hrs.
5. Send sample for % TC check.
6. If result is not ok then add extra TC as per requirement and result is OK then Recover TC by applying
low vacuum.
7. After TC recovery Transfer Mass in Distillation Vassal. Apply High vacuum up to 750 mmHg.
8. Initially Distill out LF till colorless distillate.
9. After getting colorless distillate collect Product in separate receiver till bottom temp Max. 80 OC.
10. Unload residue in drum from distillation vassal.
11. Send sample of product for full analysis and unload product in fresh drum.

Block Diagram for production of 4 CBC

5. 2,5 DHT

Our Company is in the process of commencing the commercial production of 2,5 DHT.

Raw Material Name

• VAM:- Vinal Acetate Monomer (VAM)

• Cl Gas

152
Brief process

Step 1 (Chloroacetaldehyde)

• Charge Qty of VAM and water in reactor at Room Temperature.

• After completion of charging, cool the reaction mass at 0 0C to 5 0C.
• Purge Cl gas in reaction mass and maintain temperature at 0 0C to 5 0C.
• After Complete reaction mass, temperature rise up to 40 0C and maintain 30 minutes.
• After 30 min maintain cool the reaction mass at 100C.
• Neutralize the reaction mass by caustic lye at maintain pH 1.0(Acidic) and maintain temperature at 10 0C to 20 0C

Step 2
• Charge qty of NASH in reactor.
• Cool down reaction mass at 7 0C.
• Add ChloroAcetaldehyde(Step 1).
• After complete addition centrifuge the reaction mass.
• After complete centrifuge gives the water wash.
• After complete water wash put the material in dryer.
• Finally we get pure material of 2,5 Dihydroxy 1,4 dithain powder.

Block Diagram for production of 2,5 DHT

Quality control and quality assurance

Our Company has received ISO 9001:2015 and ISO 14001:2015 certification with respect to the manufacture and
supply of pharmaceutical intermediates, silanes and oilfield chemicals. Various in-process quality checks are
performed to monitor product quality during the manufacturing process.

Our Manufacturing Facility may be inspected by our customers to review our quality control mechanisms. We
believe that maintaining a high standard of quality of our products and our Manufacturing Facility is critical to our
Company and continued success. We have put in place quality systems that cover all areas of our business processes
from manufacturing to product delivery for ensuring consistent quality, efficacy and safety of our products.

As on July 31, 2020, our quality control teams consisted of seven permanent employees in our Manufacturing
Facility.

We believe that we implement and maintain best industry practices including for, adequat e premises and space,
suitable equipment, appropriate use of raw materials, carrying out our manufacturing through approved procedures
and instructions. All products are tested to specification before release to our customers and monitored throughout
shelf life.

153
Sales, marketing and distribution

We sell our products to our customers in India and as well as outside India. The Pharmaceutical Chemicals are
predominantly sold to players in the pharmaceuticals industry, while our Oilwell Completion Chemica ls are
predominantly sold to players in the oilfields exploration and service industry as well as aggregators of chemicals
used in oilfields exploration industry.

Where required, we transport our products directly to our customers by land, air or sea, based on the circumstances
involved and the requirements of our customers.

Our revenue from operation in Fiscals 2020, 2019 and 2018 were ₹ 2,620.52 million, ₹3,033.41 million, and
₹1,576.42 million, respectively. Of such revenue from operations, 60.22% was from domestic sales while 39.78%
was from exports (including Deemed Exports) in Fiscal 2020 while 68.01% was from domestic sales while 31.99%
was from exports (including Deemed Exports) in Fiscal 2019.

Set forth below are the details of our top 10 customers on an aggregate basis in Fiscal 2020:

% contribution to total
Sr.
Name Category revenue from operations
No.
in Fiscal 2020 (in %)
1. Water Systems Speciality Chem DMCC Oilwell Completion Chemicals 26.03%
2. Hetero Labs Limited Pharmaceutical Chemicals 17.51%
3. Laurus Labs Limited Pharmaceutical Chemicals 7.92%
4. An Indian pharmaceuticals company* Pharmaceutical Chemicals 3.95%
5. Aurobindo Pharma Limited Pharmaceutical Chemicals 3.94%
6. Sanjay Chemicals (India) Private Limited Pharmaceutical Chemicals 3.16%
7. A multi-national pharmaceuticals company* Pharmaceutical Chemicals 2.84%
8. A Thailand based subsidiary of a Japanese Pharmaceutical Chemicals 2.80%
chemical company*
9. A Serbian oil and gas company* Oilwell Completion Chemicals 2.21%
10. Lantech Pharmaceuticals Limited Pharmaceutical Chemicals 1.89%
Total 72.26%
*Confidential

With Gujarat being one of the major pharmaceutical and chemical hubs in India, our Manufacturing Facility is
strategically located. Additionally, we have two sales and marketing offices in Hyderabad and Mohali, strategically
located in and a round two other pharmaceutical hubs of India, namely Telangana and Baddi, Himachal Pradesh,
thereby enabling us better access to our customers in India.

We have an in house team dedicated to marketing, distribution and sale of our products, in India and abroad. We
regularly participate in domestic and international exhibitions for marketing our products in current and additional
geographies. Further, we seek to maintain direct relationships with our key customers to better understand their
requirements.

Logistics

We transport our raw materials and our finished products typically by road and sea. We rely on freight forwarders
to deliver our products. We do not have formal contractual relationships with our freight forwarders. The pricing
for freight is negotiated on a shipment basis.

We procure raw materials based on our requirement, from pre-approved vendors. On receipt of the raw materials,
our quality control team tests the materials and after such testing of the materials, the quality control department
confirms whether the material is to be approved or rejected. The unloading of the raw materials in our warehouses
are always done under supervision of the warehouse personnel.

Human resources

Our work force is a critical factor in maintaining quality and safety standards and that good relations with our
workforce is critical in strengthen our competitive position.

154
As of July 31, 2020, we had 172 permanent employees on our rolls and 150 workers whom we engaged on a contract
labour basis .

The breakdown of the total number of permanent employees of our Company as well as workers engaged by the
Company on contract basis as on July 31, 2020, March 31, 2020, March 31, 2019 and March 31, 2018, are as
follows:

As at Number of employees on contract basis Number of employees on permanent basis

July 31, 2020 150 172
March 31, 2020 150 162
March 31, 2019 150 128
March 31, 2018 146 106

The breakdown of our permanent employees in different functionalities as on July 31, 2020, has been provided
below:

Function Number of permanent employees

Manufacturing 86
Sales and marketing 5
Product development 4
Quality control 7
Finance, human resources and operations 19
Legal and secretarial 1
Export 4
Material (purchase, stores, dispatch) 11
Project, engineering and maintenance 23
Environment and safety 12
Total 172

A further breakdown of our permanent employees in the specific functionalities of (i) finance; (ii) human resources;
and (iii) operations, as at July 31, 2020, March 31, 2020, March 31, 2019 and March 31, 2018, respectively are as
below:

As at July As at March 31, As at March 31, As at March 31,

Department
31, 2020 2020 2019 2018
Finance 8 7 5 4
Human Resources 3 2 2 2
Operations 8 6 10 10
Total 19 15 17 16

Attrition rates faced by the Company

The attrition rate faced by the Company is calculated by it at the end of a particular fiscal. Accordingly, details in
relation to the attrition rate faced by the Company during the last three Fiscals, being Fiscals 2020, 2019 and 2018,
are as follows:

Fiscal Rate of attrition

2020 17.97%
2019 15.09%
2018 13.33%

Information technology

We have implemented a Tally based ERP system, pursuant to which various financial and MIS reports are generated.

Regulatory and environmental matters

We are subject to extensive environmental laws and regulations, including regulations relating to the p revention and
control of water pollution and air pollution, environmental protection, hazardous waste management and noise

155
pollution, in relation to our manufacturing facility. These laws and regulations govern the discharge, emission,
storage, handling and disposal of a variety of substances that may be used in or result from our operations. Our
Company has obtained the necessary environment related approvals in relation to our Manufacturing Facility.

Our Manufacturing Facility possess effluent treatment processes in compliance with applicable law. We are a
member of a common hazardous waste disposal facility in Vadodara, Gujarat.

Health and safety

We aim to comply with applicable health and safety regulations and other requirements in our operations and have
adopted a health and safety policy that is aimed at complying with legislative requirements, requirements of our
licenses, approvals, various certifications and ensuring the safety of our employees and the people working at our
facility or under our management.

We believe that accidents and occupational health hazards can be significantly reduced through a systematic analysis
and control of risks and by providing appropriate training to our management and our employees.

Intellectual property

As on the date of this Red Herring Prospectus, our Company owns one trademark in relation to our logo.

Competitors

Our Company was the only manufacturer of HMDS in India and the third largest manufacturer of HMDS worldwide,
in terms of production in calendar year 2019. The major international manufacturers of HMDS in calendar year
2019 were Xinyaqiang Silicon Chemistry Limited Liability Company, The Dow Chemical Company, Shin-Etsu
Chemical Co., Ltd, Wacker Chemie AG, Evonik Industries AG, Zhejiang Sorbo Chemical Co., Ltd. and Jiangxi
Bluestar Xinghuo Silicones Company Limited (source: Frost & Sullivan Report).

We were the largest manufacturer of CMIC in India and the second largest manufacturer of CMIC worldwide, in
terms of production and capacity in calendar year 2019 (source: Frost & Sullivan Report). The other major
manufacturers of CMIC in calendar year 2019 were Shanghai Twisun Bio-Pharm Co., Ltd, Inner Mongolia
Saintchem Chemicals Co., Ltd., Anshul Specialty Molecules Private Limited, Huangshi Fuertai Pharmaceutical
Tech Co., Ltd and Paushak Limited (source: Frost & Sullivan Report).

We were the largest manufacturer of the Oilwell Completion Chemicals in India in calendar year 2019 (source:
Frost & Sullivan Report). The other major manufacturers of our Oilwell Completion Chemicals in India in calendar
year 2019 were Agrocel and OC Specialties Private Limited, while major international manufacturers of our Oilwell
Completion Chemicals include Israel Chemicals Ltd., Albemarle Corporation, LanxessAG, TETRA Technologies,
Inc and Potasse et Produits Chimiques SAS (source: Frost & Sullivan Report).

Insurance

We have obtained public liability insurance in compliance with requirements under the Public Liability Insurance
Act, 1991, as amended, as well as industrial all risk insurance (including material damage and business interruption
insurance) with respect to our Manufacturing Facility, covering inter alia buildings, plant and machinery, furniture
and stock located therein and a marine cargo open policy with respect to our key products and raw materials. Further,
we have also obtained standard fire and special perils policies with respect to our Corporate Office, our sales and
marketing office in Mohali and one external leased warehouses in Manjusar, Gujarat, a fire floater policy with
respect to four external leased warehouses, a commercial care package policy with respect to our sales and marketing
office in Hyderabad and a money insurance policy covering our Corporate Office and Manufacturing Facility.

Insurance coverage taken by the Company during the current financial year as well as for Fiscals 2020, 2019 and
2018 for stocks, buildings, furniture, plant and machinery as below:
(in ₹ million)
Sr. No. Fiscal Total insurance coverage taken for stocks, buildings, furniture, plant and machinery
1. 2020 1,312.35
2. 2019 1,139.00
3. 2018 722.50

156
While, our Company believes that we have adequately insured our assets, we can provide no assurance in this regard
for further details, see “Risk Factors- Our insurance coverage may not be sufficient or adequate to protect us against
all material hazards, which may adversely affect our business, results of operations, financial condition and cash
flows.” on page 40.

Corporate social responsibility

We were required to incur corporate social expenditure in Fiscals 2020 and 2019 in terms of Section 135(5) of the
Companies Act, 2013. Accordingly, we incurred an expenditure of `1.75 million and ₹4.58 million in Fiscals 2020
and 2019 respectively, towards donations made to certain hospitals and towards certain schools. Our Company was
not required to incur any expenditure towards corporate social responsibility initiatives, for Fiscal 2018, in terms of
Section 135(5) of the Companies Act, 2013.

Properties

The details of the material properties used by our Company for our operations are set forth below:

Sr. Leased/
Particulars Address
No. Owned
1. Manufacturing Facility* Block numbers 355, 357,357/1, 358, 359/1, Village: Owned
Manjusar, Taluka: Savli, Vadodara, Gujarat
2. Land Block number 336, Village: Manjusar, Taluka: Savli, Owned
Vadodara, Gujarat
3. Corporate office 9th Floor, Onyx Business Centre, Akshar Chowk, O P Road, Owned
Vadodara 390 015, Gujarat
4. Sales and marketing office Flat No: 101, First Floor in West Wing, S.V.S.S. NIVAS Leased
Premises No: 7 2-1813/5/A/1, Czech Colony, Sanathnagar,
Hyderabad 500 018, Telangana
5. Sales and marketing office B/30, Industrial Area, SAAS Nagar, Mohali, Punjab 140 604, Leased
Punjab
6. Warehouse Plot No. 415, GIDC Estate, Village: Manjusar, Taluka: Savli, Leased
District: Vadodara, Gujarat
7. Warehouse Plot No 416, GIDC Estate, Village: Manjusar, Taluka: Savli, Leased
District: Vadodara, Gujarat
8. Warehouse Plot no. 42, Opposite GIDC Main Gate, Village: Manjusar, Leased
Taluka: Savli, District: Vadodara, Gujarat
9. Warehouse Plot no. 461, GIDC Estate, Village: Manjusar, Taluka: Savli, Leased
District: Vadodara, Gujarat
10. Warehouse Plot no. 462, GIDC Estate, Village: Manjusar, Taluka: Savli, Leased
District: Vadodara, Gujarat
*Our Registered Office is located at Block Number 355, Manjusar Kunpad Road, Manjusar Village, Taluka Savli, Vadodara
391 775, Gujarat.

157
 KEY REGULATIONS AND POLICIES IN INDIA

Our Company is a manufacturer of specialised chemicals. The following description is a summary of certain key
statutes, bills, regulations, notifications, memorandums, circulars and policies which are applicable to our
Company and the business undertaken by our Company.

Taxation statutes such as the Income Tax Act, 1961, the Customs Act, 1962 and the relevant goods and services tax
legislation apply to us as they do to any other company. For details of government approvals obtained by our
Company, see “Government and Other Approvals” beginning on page 279.

The information detailed in this chapter, is based on the current provisions of key statutes, bills, regulations,
notifications, memorandums, circulars and policies which are subject to amendments, changes and/or
modifications. The information detailed in this chapter has been obtained from sources available in the public
domain. The regulations set out below may not be exhaustive and are only intended to provide general information
to the investors and are neither designed nor intended to substitute for professional legal advice.

Laws in relation to our business

The Factories Act, 1948 (“Factories Act”)

The term ‘factory’, as defined under the Factories Act, means any premises which employs or has employed on any
day in the previous 12 months, 10 or more workers and in which any manufacturing process is carried on with the
aid of power, or any premises wherein 20 or more workmen are employed at any day during the preceding 12 months
and in which any manufacturing process is carried on without the aid of power. State Governments have issued rules
in respect of the prior submission of plans and their approval for the establishment of factories and registration and
licensing of factories. The Factories Act requires the ‘occupier’ of a factory to ensure the health, safety and welfare
of all workers in the factory premises. Further, the “occupier” of a factory is also required to ensure (i) the safety
and proper maintenance of the factory such that it does not pose health risks to persons in the factory premises; (ii)
the safe use, handling, storage and transport of factory articles and substances; (iii) provision of adequate instruction,
training and supervision to ensure workers’ health and safety; and (iv) cleanliness and safe working conditions in
the factory premises. If there is a contravention of any of the provisions of the Factories Act or the rules framed
thereunder, the occupier and manager of the factory may be punished with imprisonment or with a fine or with both.

The Indian Boilers Act, 1923 (“Boilers Act”)

The Boilers Act seeks to regulate inter alia, the manufacture, possession and use of boilers. Under the provisions of
the Boilers Act, an owner of a boiler is required to get the boiler registered and certified for its use, by the Inspector
so appointed by the relevant State Government. In the event of the use of boilers in non-compliance with the Boilers
Act, a fine may be imposed on the owner of such boiler.

The Public Liability Insurance Act, 1991 (“PLI Act”)

The PLI Act imposes liability on the owner or controller of hazardous substances for any damage arising out of an
accident involving such hazardous substances. A list of hazardous substances covered by the legislation has been
enumerated by the government by way of a notification. Under the law, the owner or handler is also required to take
out an insurance policy insuring against liability. The rules made under the PLI Act mandate that the employer has
to contribute towards the Environmental Relief Fund a sum equal to the premium paid on the insurance policies.

Legal Metrology Act, 2009 (“LM Act”) and the Legal Metrology (Packaged Commodities) Rules, 2011
(“Packaged Commodity Rules”)

The LM Act aims to establish and enforce standards of weights and measures, regulate trade and commerce in
weights, measures and other goods which are sold or distributed by weight, measure or number. The LM Act and
rules framed thereunder regulate inter alia, the labelling and packaging of commodities, verification of weights and
measures used, and lists penalties for offences and compounding of offences under it. The Controller of Legal
Metrology Department is the competent authority to grant the licence under the LM Act. Any manufacturer dealing
instruments for weights and measuring of goods must procure a license from the state department under the LM
Act. Any non-compliance or violation under the LM Act may result in inter alia a monetary penalty on the
manufacturer or seizure of goods or imprisonment in certain cases. The Packaged Commodity Rules were framed

158
under Section 52(2) (j) and (q) of the LM Act. The Packaged Commodity Rules lays down specific provisions
applicable to packages intended for retail sale, whole sale and for export and import. The Packaged Commodity
Rules were amended in the year 2017 to increase protection granted to consumers. Some recent additions include
increased visibility of retail price, removal of dual MRP and bringing e-commerce within the ambit of these rules.

Foreign Trade (Development and Regulation) Act, 1992 (“FTA”)

The FTA seeks to increase foreign trade by regulating imports and exports to and from India. The FTA read with
the Indian Foreign Trade Policy, 2015-20 provides that no person or company can make exports or imports without
having obtained an importer exporter code number unless such person or company is specifically exempted. An
application for an importer exporter code number has to be made to the Office of the Director General of Foreign
Trade, Ministry of Commerce. An importer-exporter code number allotted to an applicant is valid for all its branches,
divisions, units and factories.

The main objective of the FTA is to develop a nd regulate foreign trade by facilitating imports into India and
augmenting exports from India. Under the FTA, an importer exporter code (“IEC”), granted by the Director General
of Foreign Trade, is required to be obtained in the event any import or export of the product is envisaged. Failure to
obtain the IEC number shall attract penalty under the FTA.

The Explosives Act, 1884 (“Explosives Act”)

The Explosives Act is a comprehensive law which regulates by licensing for the manufacturing possession, sale,
transportation, export and import of explosives. As per the definition of ‘explosives’ under the Explosives Act, any
substance, whether a single chemical compound or a mixture of substances, whether solid or liquid or gaseous, used
or manufactured with a view to produce a practical effect by explosion or pyrotechnic effect shall fall under the
Explosives Act. The Central Government may, for any part of India, make rules consistent with this act to regulate
or prohibit, except under and in accordance with the conditions of a license granted as provided by those rules, the
manufacture, possession, use sale, transport, import and export of explosives, or any specified class of explosives.
Extensive penalty provisions have been provided for manufacture, import or export, possession, usage, selling or
transportation of explosives in contravention of the Explosives Act.

The Static and Mobile Pressure Vessels (Unfired) Rules 2016 (“SMPV Rules”)

The SMPV Rules regulate the manufacture, filling, delivery, import, modification and repair of pressure vessels.
Under the SMPV Rules, licenses are required to be obtained for storage and transportation of compressed gas. The
SMPV Rules also prescribe conditions under which the licenses can be amended, renewed, suspended or cancelled.

Environmental laws

The Environment (Protection) Act, 1986 (“EPA”)

The EPA has been enacted for the protection and improvement of the environment. It stipulates that no person
carrying on any industry, operation or process shall discharge or emit or permit to be discharged or emitted any
environmental pollutant in excess of such standards as may be prescribed. Further, no person shall handle or cause
to be handled any hazardous substance except in accordance with such procedure and after complying with such
safeguards as may be prescribed. EPA empowers the Central Government to take all measures necessary to protect
and improve the environment such as laying down standards f or emission or discharge of pollutants, providing for
restrictions regarding areas where industries may operate and generally to curb environmental pollution.

Water Prevention and Control of Pollution Act, 1974 (“Water Act”)

The Water Act aims to prevent and control water pollution and to maintain or restore wholesomeness of water. The
Water Act provides for one Central Pollution Control Board, as well as State Pollution Control Boards, to be formed
to implement its provisions. Any person intending to establish any industry, operation or process or any treatment
and disposal system likely to discharge sewage or other pollution into a water body, is required to obtain the consent
of the relevant state pollution control board by making an application.
Air Prevention and Control of Pollution Act, 1981 (“Air Act”)

The Air Act aims to prevent, control and abate air pollution, and stipulates that no person shall, without prior consent
of the relevant State Pollution Control Board, establish or operate any industrial plant which emits air pollutants in

159
an air pollution control area. They also cannot discharge or cause or permit to be discharged the emission of any air
pollutant in excess of the standards laid down by the State Boards. The Central Pollution Control Board and the
State Pollution Control boards constituted under the Water Act perform similar functions under the Air Act as well.

Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 (“Hazardous Waste
Rules”)

The Hazardous Waste Rules regulate the management, treatment, storage and disposal of hazardous waste by
imposing an obligation on every occupier and operator of a facility generating hazardous waste to dispose of such
waste without harming the environment. Every occupier and operator of a facility generating hazardous waste must
obtain authorization from the relevant State Pollution Control Board. Further, the occupier, importer or exporter is
liable for damages caused to the environment resulting from the improper handling and disposal of hazardous waste
and must pay any financial penalty that may be levied by the respective state pollution control board.

The Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996 (“Chemical Accidents
Rules”)

The Chemical Accidents Rules, formulated pursuant to the provisions of the EPA, seek to manage the occurrence
of chemical accidents, by inter alia, setting up a central crisis group and a central crisis alert system. The functions
of the central crisis group inter alia include, (i) conducting post-accident analysis of major chemical accidents; (ii)
rendering infrastructural help in the event of a chemical accident; and (iii) review district off site emergency plans.

The Manufacture, Storage and Import of Hazardous Chemical Rules, 1989 (“HCR Rules”)

The HCR Rules are formulated under the Environment (Protection) Act, 1986. The HCR Rules are applicable to an
industrial activity in which a hazardous chemical which satisfies certain criteria as listed in the schedule thereto, and
to an industrial activity in which there is involved a threshold quantity of hazardous chemicals as specified in the
schedule thereto. The occupier of a facility where such industrial activity is undertaken has to provide evidence to
the prescribed authorities that he has identified the major accident hazards and that he has taken steps to prevent the
occurrence of such accident and to provide to the persons working on the site with the information, training and
equipment including antidotes necessary to ensure their safety. Where a major accident occurs on a site or in a
pipeline, the occupier shall forthwith notify the concerned authority and submit reports of the accident to the said
authority. Furthermore, an occupier shall not undertake any industrial activity unless he has submitted a written
report to the concerned authority containing the particulars specified in the schedule to the HCR Rules at least three
months before commencing that activity or before such shorter time as the concerned authority may agree.

Intellectual Property laws

The Trade Marks Act, 1999 (“Trademarks Act”)

The Trademarks Act provides for the application and registration of trademarks in India for granting exclusive rights
to marks such as a brand, label and heading and obtaining relief in case of infringement. The Trademarks Act also
prohibits any registration of deceptively similar trademarks or chemical compounds among others. It also provides
for infringement, falsifying and falsely applying for trademarks.

Labour related legislations

Depending upon the nature of the activity undertaken by us, the applicable labour enactments other than state-wise
shops and establishments acts includes the following:

• The Apprentices Act, 1961;

• The Contract Labour (Regulation and Abolishment) Act, 1970;
• The Employee’s Compensation Act, 1923;
• Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979;
• The Payment of Gratuity Act, 1972;
• The Maternity Benefit Act, 1961;
• The Employee’s State Insurance Act, 1948;
• The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
• The Industrial Disputes Act, 1947;
• The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013;

160
 • The Code on Wages, 2019 (the Code on Wages, 2019, once in force, will repeal the Payment of Bonus Act,
1965, Minimum Wages Act, 1948, Equal Remuneration Act, 1976 and the Payment of Wages Act, 1936);;
and
• The Child Labour (Prohibition and Regulation) Act, 1986

In order to rationalize and reform labour laws in India, three additional labour codes have been introduced as bills
before the Lok Sabha, namely, (i) the Industrial Relations Code, 2019, (ii) the Code on Social Security, 2019, and
(ii) the Occupational Safety, Health and Working Conditions Code, 2019.

Other laws

In addition to the above, our Company is also required to comply with the provisions of the Companies Act and
rules framed thereunder, and other applicable statutes imposed by the Centre or the State Government and authorities
for our day-to-day business and operations. Our Company is also amenable to various central and state tax laws.

161
 HISTORY AND CERTAIN CORPORATE MATTERS

Brief history of our Company

Our Company was originally incorporated as Gujarat Quinone Private Limited at Vadodara, Gujarat, India, as a
private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated December
15, 1988 issued by the RoC. Our Promoters and Promoter Group completed the acquisition of 100% of the Equity
Share capital of our Company in 2004 from the shareholders of our Company at the time.

Chemcon Engineers Private Limited” (“CEPL”) was incorporated at Vadodara, Gujarat, India as a private limited
company under the Companies Act, 1956, pursuant to a certificate of incorporation dated April 30, 1996 issued by
the RoC. CEPL, a company largely owned and promoted by our Promoters and Promoter Group, merged into our
Company pursuant to an order of the High Court of Gujarat dated May 6, 2004 approving the Scheme of
Amalgamation between CEPL and our Company. Thereafter, to reflect the nature of activities of our Company
consequent to the Scheme of Amalgamation, the name of our Company was changed to “Chemcon Speciality
Chemicals Private Limited” pursuant to the approval of our Shareholders at an extra-ordinary general meeting held
on July 24, 2004 and the fresh certificate of incorporation on change of name issued by the RoC on July 27, 200 4.

Subsequently, our Company was converted into a public limited company pursuant to the approval of our
Shareholders at an extra-ordinary general meeting held on November 28, 2018. Consequently, the name of our
Company was changed to “Chemcon Speciality Chemicals Limited” and a Fresh certificate of incorporation
consequent upon conversion to public limited company was issued by the RoC on April 10, 2019.

Change in the Registered Office

The details of the change in our registered office since incorporation are detailed below:

Effective date of Reason(s)

Details of Change
Change for change
November 6, 1992 The registered office of our Company was changed from 12, Suvarnpuri Operational
Society, Jetalpur Road, Baroda, Gujarat to 23, Baroda People’s Co-operative convenience
Society Limited, Wadi, Baroda 390 007, Gujarat
1994* The registered office of our Company was changed from 23, Baroda People’s Operational
Co-operative Society Limited, Wadi, Baroda 390 007, Gujarat to Block No. convenience
150/B, Tundav Anjesar Road, Taluka Savli, Baroda district, Gujarat
January 21, 2004 The registered office of our Company was changed from Block No. 150/B, Operational
Tundav Anjesar Road, Taluka Savli, Baroda district to Village Bil (C.K Patel) convenience
near Bhaili Railway Station, Bhaili, Baroda district, Gujarat
July 15, 2004 The registered office of our Company was shifted from Village Bil (C.K Operational
Patel) near Bhaili Railway Station, Bhaili, Baroda district, Gujarat to Block convenience
Number 355, Manjusar Kunpad Road, Manjusar Village, Taluka Savli,
Vadodara 391 775, Gujarat
*Based on the Annual Return for Fiscal 1995. For details, see “Risk Factors- Certain documents filed by us with the RoC and
certain corporate records and other documents, are not traceable. While we have conducted a search with the RoC, in respect
of the unavailability of such forms and other records, we cannot assure you that such forms or records will be available at all
or any time in the future” on page 35 .

Main Objects of our Company

The main object contained in the Memorandum of Association of our Company is as mentioned below:

“To carry on the business as manufacturers, processors, importers, exporters, dealers, sellers, buyers, consignors,
consignees, agents, stockiest, suppliers of all classes, kinds, types and nature of chemicals, dyes, pigments and
auxiliaries, intermediates including but without limiting the generality of the foregoing, heavy chemicals, fine
chemicals, organic and inorganic chemicals, pharmaceuticals, drugs and medicinal chemicals, gum, allied
chemicals, and boiling agents for textiles, paints, cosmetics, pharmaceuticals, paper, processing, leather, metals,
food pigments and other industries made from whatever substances including minerals”

The main object as contained in the Memorandum of Association enables our Company to carry on the business
presently being carried out. For further details, see “Objects of the Issue” on page 75.

162
Amendments to our Memorandum of Association

Set out below are the amendments to our Memorandum of Association in the ten years preceding the date of this
Red Herring Prospectus:

Date of Shareholders’
Particulars
Resolution
October 9, 2018 Clause V our Memorandum of Association was substituted to reflect the increase in
the authorised share capital of our Company from ₹ 80,000,000 comprising of
8,000,000 Equity Shares of ₹10 each to ₹500,000,000 comprising of 50,000,000
Equity Shares of ₹10 each.
November 28, 2018 Clause I of our Memorandum of Association was substituted to reflect the new name
of our Company pursuant to the conversion of our Company from a private limited
company to a public limited company.

Major events and milestones of our Company

The table below sets forth the key events in the history of our Company:

Fiscal Particulars
2005 Amalgamation of CEPL into our Company, pursuant to the scheme of amalgamation of Chemcon
Engineers Private Limited with Gujarat Quinone Private Limited
First export shipment of HMDS
2014 First sale of CMIC
2015 First sale of Calcium Bromide (Solution)
2016 First sale of Zinc Bromide (Solution)
2017 First sale of Calcium Bromide (Powder)
First sale of Sodium Bromide Solution
2018 Increase in annual installed production capacity for (i) CMIC (from 600 MT per annum to 1,200 MT
per annum) and (ii) Oilwell Completion Chemicals (from 7,200 MT per annum to 14,400 MT per
annum)
2019 Increase in the annual installed production capacity for CMIC (from 1,200 MT per annum to 1,800
MT per annum)
Our Company was assigned a “4A3” rating by Dun & Bradstreet Information Services India Private
Limited
2020 Increase in the annual installed production capacity for HMDS (from 1,800 MT per annum to 4,200
MT per annum)
2021 First sale of 4CBC

Awards, accreditations or recognitions

Our Company has received the following accreditation:

Sr. Year of
Accreditations
No. accreditation
1. Our Company received ISO 9001: 2015 and ISO 14001:2015 certification with respect to 2019
the manufacture and supply of pharmaceutical intermediates, silanes and oilfield
chemicals

Our Holding Company

As on the date of this Red Herring Prospectus, our Company does not have a holding Company.

Subsidiaries or joint ventures

As of the date of this Red Herring Prospectus, our Company does not have any subsidiaries or joint ventures.

163
Time/cost overrun
There have been no time/cost overruns pertaining to our business operations since incorporation.

Defaults or rescheduling of borrowings with financial institutions/banks

Our Company has not defaulted on repayment of any loan availed from any banks or financial institutions. The
tenure of repayment of any loan availed by our Company from banks or financial institutions has not been
rescheduled.

Details of acquisition or divestments

Our Company has not acquired or divested any business/undertaking in the 10 years preceding the date of this Red
Herring Prospectus.

Mergers or amalgamation

Our Company has not undertaken any merger or amalgamation in the 10 years preceding the date of this Red
Herring Prospectus.
Revaluation of assets
Our Company has not revalued its assets in the 10 years preceding the date of this Red Herring Prospectus.

Details of shareholders’ agreements

As on the date of this Red Herring Prospectus, there are no subsisting shareholder’s agreements among our
shareholders vis-a-vis our Company, which our Company is aware of.

Other agreements
Neither our Promoters nor any of the Key Managerial Personnel, Directors or employees of our Company have
entered into an agreement, either by themselves or on behalf of any other person, with any Shareholder or any other
third party with regard to compensation or profit sharing in connection with the dealings of the securities of our
Company.

Further, our Company has not entered into any other subsisting material agreement, other than in the ordinary course
of business.

Financial and/or Strategic Partners

Our Company does not have any financial and/or strategic partners as of the date of this Red Herring Prospectus.

Guarantees given by our promoter/ Selling Shareholder

In connection with the financing facilities availed by our Company, one of our Promoters, Kamalkumar Rajendra
Aggarwal, who is also a Selling Shareholder, has issued a joint guarantee in favour of HDFC Bank Limited
(“HDFC”) with Naresh Vijaykumar Goyal, a Selling Shareholder and member of the Promoter Group, the details
of which are set out below:

Sr. Guarantee Guarantee Financial implication in

Reason for guarantee Consideration
No. amount period case of default
1. Performance of ₹530,000,000 During the Repayment of the principal Nil
contractual obligations subsistence of loan amount, along with an
by our Company, as the facility, in additional rate of interest of
stipulated in the accordance with 18% per annum or such
sanction letter dated the terms other rate as HDFC may, in
May 30, 2019 issued by contained in the its absolute discretion
HDFC to our Company Sanction Letter stipulate, from the date of
(“Sanction Letter”) demand till the date of
repayment

For details of the security available to HDFC under the financing arrangement referenced above, please refer to the
section titled “Restated Financial Statements - Annexure VI-Note 17: Borrowings” on page 221.

164
 OUR MANAGEMENT

Board of Directors

The Articles of Association require that our Board shall comprise of not less than three Directors and not more than
15 Directors, provided that our Shareholders may appoint more than 15 Directors after passing a special resolution
in a general meeting.

As on the date of this Red Herring Prospectus, we have ten Directors on our Board, of whom five are Independent
Directors. Of such Independent Directors, one Director is a woman Director. Our Company is in compliance with
the corporate governance norms prescribed under the SEBI Listing Regulations and the Companies Act, 2013 in
relation to the composition of our Board and constitution of committees thereof.

The following table sets forth the details of our Board as of the date of filing of this Red Herring Prospectus with
SEBI:

Name, designation, date of birth, address, occupation, Age

Other directorships
current term, date of appointment and DIN (years)
Kamalkumar Rajendra Aggarwal 57 Indian companies

Designation: Chairman and Managing Director 1. Medicap Healthcare Limited

Date of birth: December 27, 1962 Foreign companies

Address: 13-A, Shivashray Society, near Rameshwar Nil

Temple, Vasna Road, Vadodara 390 020, Gujarat

Occupation: Business

Current term: For a period of three years, with effect from

May 1, 2019

Period of directorship: Since January 19, 2004

DIN: 00139199
Rajesh Chimanlal Gandhi 49 Indian companies

Designation: Whole-time Director and Chief Financial 1. Medicap Healthcare Limited

Officer
Foreign companies
Date of birth: April 12, 1971
Nil
Address: G-1, Dwarika Flat (behind Surya Nagar Garba
Ground), Waghodia Road, Vadodara 390 019, Gujarat

Occupation: Professional

Current term: Liable to retire by rotation for a period of

three years, with effect from May 1, 2019

Period of directorship: Since May 1, 2012

DIN: 03296784
Himanshu Purohit 47 Indian companies

Designation: Whole-time Director Nil

Date of birth: July 30, 1973 Foreign companies

165
 Name, designation, date of birth, address, occupation, Age
Other directorships
current term, date of appointment and DIN (years)
Address: 204, Suryadarshan Complex (near Taksh Nil
Complex), Vasna Road, Vadodara Racecourse, Vadodara
390 007, Gujarat

Occupation: Professional

Current term: Liable to retire by rotation for a period of

three years with effect from May 1, 2019

Period of directorship: Since May 1, 2012

DIN: 03296807
Navdeep Naresh Goyal 30 Indian companies

Designation: Deputy Managing Director 1. Super Industrial Lining Private

Limited; and
Date of birth: May 8, 1990 2. Supertech Fabrics Private Limited;

Address: B/30 Shivashray Housing Society, Saiyed Vasna Foreign companies

Road, Vadodara 390 007 , Gujarat
Nil
Occupation: Business

Current term: Liable to retire by rotation for a period of

three years with effect from May 1, 2019

Period of directorship: Since April 1, 2015

DIN: 02604876
Rajveer Aggarwal 25 Indian companies

Designation: Whole-time Director 1. Medicap Healthcare Limited

Date of birth: August 17, 1995 Foreign companies

Address: 13-A, Shivashray Society, near Rameshwar Nil

Temple, Vasna Road, Vadodara 390 020, Gujarat

Occupation: Business

Current term: Liable to retire by rotation for a period of

three years with effect from May 1, 2019

Period of directorship: Since October 1, 2017

DIN: 07883896
Lalit Chaudhary 60 Indian companies

Designation: Independent Director 1. Chaudhary Cranes Private Limited

Date of birth: January 1, 1960 Foreign companies

Address: 31, Vitthal Nagar Society, Opposite Mental Nil

Hospital, Karelibaug, Vadodara 390 018, Gujarat

Occupation: Business

166
 Name, designation, date of birth, address, occupation, Age
Other directorships
current term, date of appointment and DIN (years)
Current term: For a period of five years from April 29,
2019

Period of directorship: Since April 29, 2019

DIN: 00651372
Bharat Shah 62 Indian companies

Designation: Independent Director Nil

Date of birth: May 7, 1958 Foreign companies

Address: Arunodaya, Chittekhan Gali, Gendigate Road, Nil

Vadodara 390 017, Gujarat

Occupation: Business

Current term: For a period of five years from April 29,

2019

Period of directorship: Since April 29, 2019

DIN: 08281811
Neelu Shah 49 Indian companies

Designation: Independent Director Nil

Date of birth: October 12, 1970 Foreign companies

Address: 38, Spun Ville Lane No. 4, Arunoday Society Nil

(near Crossword Circle), Alkapuri, Racecourse, Vadodara
390 007, Gujarat

Occupation: Business

Current term: For a period of five years from April 29,

2019

Period of directorship: Since April 29, 2019

DIN: 08283933
Devendra Rajkumar Mangla 63 Indian companies

Designation: Independent Director Nil

Date of birth: February 26, 1957 Foreign companies

Address: 301/A, Perl Nautilas Tower (A), Near Sabri Nil

School, Vasna Road, Vadodara 390 007, Gujarat

Occupation: Business

Current term: For a period of 5 years from April 29, 2019

Period of directorship: Since April 29, 2019

DIN: 08421613

167
 Name, designation, date of birth, address, occupation, Age
Other directorships
current term, date of appointment and DIN (years)
Samir Chandrakant Patel 54 Indian companies

Designation: Independent Director 1. Samir Tech-Chem Private Limited

Date of birth: October 3, 1965 Foreign companies

Address: 24-25, Earth Bunglow, Akshar Chowk, Vadodara Nil

390 015, Gujarat

Occupation: Business

Current term: For a period of 5 years from April 29, 2019

Period of directorship: Since April 29, 2019

DIN: 00086774

Brief profiles of our Directors

Kamalkumar Rajendra Aggarwal is the Chairman and Managing Director of our Company. He holds a diploma
in petrochemical technology (plastic technology) from the Maharaja Sayajirao University of Baroda, Gujarat. In the
past, he was associated with CEPL in the capacity of director. He has more than 23 years of experience in the
specialised chemicals industry. He has been on our Board since January 19, 2004.

Rajesh Chimanlal Gandhi is a Whole-time Director and the Chief Financial Officer of our Company. He holds a
bachelor’s degree in commerce from Gujarat University, Gujarat. In the past, he was associated with CEPL in the
capacity of Accounts & Finance Manager. He has more than 20 years of experience in finance & accounts and
related operations. He has been on our Board since May 1, 2012.

Himanshu Purohit is a Whole-time Director of our Company. He holds a master’s degree in science in inorganic
chemistry from the Sardar Patel University, Gujarat. In the past, he has been associated with CEPL in the capacity
of production manager. He has more than 20 years of experience in production related operations. He has been on
our Board since May 1, 2012.

Navdeep Naresh Goyal is the Deputy Managing Director of our Company. He has obtained a passing certificate
for completion of his higher secondary examinations from the Gujarat Secondary & Higher Secondary Education
Board, Gandhinagar. He is currently associated with SILPL in the capacity of director (operations). He has more
than 10 years of experience in operations. He has been on our Board since April 1, 2015.

Rajveer Aggarwal is a Whole-time Director of our Company. He holds a bachelor’s degree in chemical engineering
from the Gujarat Technological University, Gujarat. He is currently associated with Medicap Healthcare Limited in
the capacity of director (operations). He has more than five years of experience in operations. He has been on our
Board since October 1, 2017.

Lalit Chaudhary is an Independent Director of our Company. He holds a bachelors’ degree in commerce from the
Sardar Patel University, Gujarat. He has been associated with Chaudhary Crains Private Limited as a director since
1993. He has more than 20 years of experience as an entrepreneur. He has been on our Board since April 29, 2019.

Bharat Shah is an Independent Director of our Company. He holds a bachelor’s degree in science from the
Maharaja Sayajirao University of Baroda, Gujarat . In the past, he has been associated with Bank of Baroda in
various roles. He has more than 37 years of experience in the financial services sector. He has been on our Board
since April 29, 2019.

Neelu Shah is an Independent Director of our Company. She holds a bachelor’s degree in science from Kanpur
University, Uttar Pradesh and a master’s degree in business administration from the Jiwaji University, Gwalior. She
has been engaged by “Dageena-the Jewellery Shoppe” since the year 2014, as a sales manager. She has 5 years of
experience in sales. She has successfully completed a training programme on gold appraisal, organised by the
MSME-Technology Development Centre, Agra , GoI. She has been on our Board since April 29, 2019.

168
Devendra Rajkumar Mangla is an Independent Director of our Company. He holds a bachelor’s degree in
commerce from the University of Delhi. He is currently a partner in “Baroda Freight Carrier”, and ha s been
associated as partner since 1979. He has over 15 years of experience in logistics. He has been on our Board since
April 29, 2019.

Samir Chandrakant Patel is an Independent Director of our Company. He holds a master’s degree in science from
the Sardar Patel University, Gujarat. He has been associated with Samir Tech – Chem Private Limited as a director.
He has more than 30 years of experience in manufacturing and trading of laboratory chemicals. He has been on our
Board since April 29, 2019.

Confirmations

None of our Directors is or was a director of any company listed on any stock exchange, whose shares have been or
were suspended from being traded during the five years preceding the date of this Red Herring Prospectus, during
the term of his/her directorship in such company.

None of our Directors is, or was a director of any listed company, which has been or was delisted from any stock
exchange, during the term of his/her directorship in such company.

Except Kamalkumar Rajendra Aggarwal who is the father of Rajveer Aggarwal, none of our other Directors are
related to each another.

No consideration, either in cash or shares or in any other form have been paid or agreed to be paid to any of our
Directors or to the firms, trusts or companies in which they have an interest in, by any person, either to induce any
of our Directors to become or to help any of them qualify as a director, or otherwise for services rendered by them
or by the firm, trust or company in which they are interested, in connection with the promotion or formation of our
Company.

Arrangement or understanding with major Shareholders, customers, suppliers or others

None of our Directors have been appointed or selected pursuant to any arrangement or understanding with our major
Shareholders, customers, suppliers or others.

Service contracts with Directors

Our Company has not entered into any service contracts with any Director, which provide for benefits upon
termination of employment.

Terms of appointment of our Executive Directors:

1. Kamalkumar Rajendra Aggarwal

Our Shareholders at their AGM held on June 14, 2019, approved the change in designation of Kamalkumar Rajendra
Aggarwal to Managing Director for a period of three years with effect from May 1, 2019. Subsequently, our Board
through their meeting held on August 1, 2019, approved the designation of Kamalkumar Rajendra Aggarwal as the
Chairman of the Board with effect from August 1, 2019. The following table sets forth the terms of re -appointment
of Kamalkumar Rajendra Aggarwal as approved by our Shareholders a t their AGM held on June 14, 2019:

Sr.
Category Remuneration
No.
1. Salary (basic pay) ₹0.40 million per month, subject to periodic increments based on
recommendations of the Nomination and Remuneration Committee and as
ratified by the Board
2. Variable pay linked to 4% of the net profits of our Company for a relevant financial year, subject to
profits of our Company the thresholds specified by Section 197 of the Companies Act and computed
(per annum) in accordance with the manner outlined by Section 198 of the Companies Act
3. Reimbursement of Expenses incurred by Kamalkumar Rajendra Aggarwal for and on behalf of
expenses (at actuals) our Company, including costs related to travelling, boarding, lodging and
communication

169
2. Rajesh Chimanlal Gandhi

Our Shareholders at their AGM held on June 14, 2019, approved the change in designation of Rajesh Chimanlal
Gandhi to Whole-time Director, liable to retire by rotation for a period of three years with effect from May 1, 2019.
The following table sets forth the terms of re-appointment of Rajesh Chimanlal Gandhi as approved by our
Shareholders at their AGM held on June 14, 2019:

Sr.
Category Remuneration
No.
1. Salary (basic pay) ₹0.18 million per month subject to periodic increments based on
recommendations of the Nomination and Remuneration Committee and as
ratified by the Board
2. Perquisites and Company contribution to provident fund, superannuation fund and payment
allowances of gratuity as per the rules of our Company
3. Reimbursement of Expenses incurred by Rajesh Chimanlal Gandhi for and on behalf of our
expenses (at actuals) Company, including costs related to travelling, boarding, lodging and
communication

3. Himanshu Purohit

Our Shareholders at their AGM held on June 14, 2019, approved the change in designation of Himanshu Purohit to
Whole-time Director, liable to retire by rotation for a period of three years with effect from May 1, 2019. The
following table sets forth the terms of re-appointment of Himanshu Purohit as approved by our Shareholders at their
AGM held on June 14, 2019:

Sr.
Category Remuneration
No.
1. Salary (basic pay) ₹0.18 million per month subject to periodic increments based on recommendations
of the Nomination and Remuneration Committee and as ratified by the Board
2. Perquisites and Company contribution to provident fund, superannuation fund and payment of
allowances gratuity as per the rules of our Company
3. Reimbursement of Expenses incurred by Himanshu Purohit for and on behalf of our Company,
expenses (at actuals) including costs related to travelling, boarding, lodging and communication

4. Navdeep Naresh Goyal

Our Shareholders at their AGM held on June 14, 2019 approved the change in designation of Navdeep Naresh
Goyal, to Whole-time Director and Chairman of our Company, liable to retire by rotation, for a period of three years
with effect from May 1, 2019. Subsequently, our Shareholders at their EGM held on August 1, 2019, approved the
change in designation of Navdeep Naresh Goyal to Deputy Managing Director with effect from August 1, 2019, for
the remaining period of his tenure (three years commencing from May 1, 2019). The following table sets forth the
terms of re-appointment of Navdeep Naresh Goyal as approved by our Shareholders at their EGM held on August
1, 2019:

Sr.
Category Remuneration
No.
1. Salary (basic pay) ₹0.60 million per month subject to periodic increments based on
recommendations of the Nomination and Remuneration Committee and as ratified
by the Board
2. Variable pay linked to 4% of the net profits of our Company for a relevant financial year, subject to the
profits of our thresholds specified by Section 197 of the Companies Act and computed in
Company (per annum) accordance with the manner outlined by Section 198 of the Companies Act
3. Reimbursement of Expenses incurred by Navdeep Naresh Goyal for and on behalf of our Company,
expenses (at actuals) including costs related to travelling, boarding, lodging and communication

5. Rajveer Aggarwal

Our Shareholders at their AGM held on June 14, 2019, approved the change in designation of Rajveer Aggarwal to
Whole-time Director, liable to retire by rotation for a period of three years with effect from May 1, 2019. The

170
following table sets forth the terms of re-appointment of Rajveer Aggarwal as approved by our Shareholders at their
AGM held on June 14, 2019:

Sr.
Category Remuneration
No.
1. Salary (basic pay) ₹0.20 million per month subject to periodic increments based on
recommendations of the Nomination and Remuneration Committee and as
ratified by the Board
2. Reimbursement of Expenses incurred by Rajveer Aggarwal for and on behalf of our Company,
expenses (at actuals) including costs related to travelling, boarding, lodging and communication

Terms of appointment of our Independent Directors:

Our Board of Directors at their meeting held on April 27, 2019, have approved the payment of sitting fees to our
Independent Directors of ₹10,000 for attending each meeting of our Board of Directors and ₹5,000 for attending
each meeting of the committees of our Board.

Payments or benefits to Directors

Our Company has not entered into any contract appointing or fixing the remuneration of a Director in the two years
preceding the date of this Red Herring Prospectus.

In Fiscal 2020, our Company has not paid any compensation or granted any benefit on an individual basis to any of
our Directors (including contingent or deferred compensation) other than the remuneration paid to them for such
period.

The remuneration paid to our Directors in Fiscal 2020 is as follows:

1. Whole-time Directors

The details of the remuneration paid to our Whole-time Directors in Fiscal 2020 is as set out below:
(in ₹ million)
Name of Director Current Designation Remuneration
Kamalkumar Rajendra Aggarwal Chairman and Managing Director 23.58
Rajesh Chimanlal Gandhi Whole Time Director 2.16
Himanshu Purohit Whole Time Director 2.16
Navdeep Naresh Goyal Deputy Managing Director 25.98
Rajveer Aggarwal Whole Time Director 2.40

2. Independent Directors

The details of the sitting fees paid to our Independent Directors in Fiscal 2020 is as set out below:
(in ₹ million)
Name of Director Current Designation Remuneration
Lalit Chaudhary Independent Director 0.11
Bharat Shah Independent Director 0.06
Neelu Shah Independent Director 0.16
Devendra Rajkumar Mangla Independent Director 0.12
Samir Chandrakant Patel Independent Director 0.11

Shareholding of Directors in our Company

Our Articles of Association do not require our Directors to hold qualification shares.

The table below sets forth details of Equity Shares held by the Directors as on date of this Red Herring Prospectus:

Sr. No. Name of the Director Number of Equity Shares held

1. Kamalkumar Rajendra Aggarwal 11,927,080

171
Sr. No. Name of the Director Number of Equity Shares held
2. Navdeep Naresh Goyal 8,608,166*
3. Rajveer Aggarwal 2,532,800
*Includes 6,233,500 Equity Shares held by Navdeep Naresh Goyal as first holder, jointly with Shubharangana Goyal .

Borrowing Powers

Pursuant to our Articles of Association, the applicable provisions of the Companies Act, 2013, and a resolution
passed by our Shareholders at their AGM held on June 14, 2019 , our Board has been authorized to borrow any sum
or sums of monies (including fund based and non -fund borrowings and non-convertible debentures),
notwithstanding that the moneys to be borrowed by our Company together with monies already borrowed (apart
from temporary loans obtained or to be obtained from our Company’s bankers in the ordinary course of business),
will or may exceed our Company’s aggregate paid-up share capital, free reserves and securities premium, provided
that the total amount of money so borrowed by the Board shall not at any time together with interest payable exceed
a sum of ₹ 8,000 million.

Bonus or profit-sharing plan for our Directors

Except as mentioned below, our Company does not have any performance linked bonus or a profit -sharing plan for
our Directors:

In accordance with their respective terms of employment , Kamalkumar Rajendra Aggarwal and Navdeep Naresh
Goyal as Chairman and Managing Director and the Deputy Managing Director respectively, are each entitled to 4%
of the net profits of our Company for a relevant financial year linked to the profits of the Company, in compliance
with the Companies Act, 2013.

Interest of Directors

All our Independent Directors may be deemed to be interested to the extent of sitting fees payable to them for
attending meetings of our Board and/or committees thereof as approved by our Board, the reimbursement of
expenses payable to them, as approved by our Board.

Our Chairman and Managing Director, our Deputy Managing Director and our other Whole-time Directors may be
deemed to be interested to the extent of the remuneration payable to each of them by our Company as Directors of
our Company and any variable pay linked to profits earned by the Company, payable to them.

Kamalkumar Rajendra Aggarwal, Navdeep Naresh Goyal and Rajveer Aggarwal may also be interested to the
extent of their shareholding in our Company, and to the extent of any dividend payable to them and other
distributions in respect of such shareholding.

All the Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be
entered into by our Company with any company which is promoted by them or in which they hold directorships or
any partnership firm in which they are partners as declared in their respective capacity.

Interest of Directors in the promotion or formation of our Company

Except as disclosed below, our Directors do not have any interest in any property acquired or proposed to be acquired
of or by our Company.

Our Company has entered into multiple lease agreements with Kamalkumar Rajendra Aggarwal, our Chairman and
Managing Director, with respect to certain premises used by our Company to provide residential accommodation to
its employees. For details, see Restated Financial Statements- Annexure VI- Note 35: Related Party Disclosures” at
page 229.

Further, other than in the ordinary course of business and as disclosed in “Restated Financial Statements- Annexure
VI- Note 35: Related Party Disclosures” at page 229, our Directors do not have any interest in any transaction by
our Company for acquisition of land, construction of building or supply of machinery during the three years
preceding the date of this Red Herring Prospectus.

172
Changes to our Board in the last three years*

Designation (at the time Date of appointment/ change

Name Reason
of appointment/cessation) in designation/ cessation
Bharat Shah Independent Director April 29, 2019 Appointment as an
Independent Director
Neelu Shah Independent Director April 29, 2019 Appointment as an
Independent Director
Lalit Chaudhary Independent Director April 29, 2019 Appointment as an
Independent Director
Devendra Rajkumar Independent Director April 29, 2019 Appointment as an
Mangla Independent Director
Samir Chandrakant Independent Director April 29, 2019 Appointment as an
Patel Independent Director
Naresh Vijaykumar Whole-time Director February 15, 2019 Cessation
Goyal
Rajveer Aggarwal Additional Director (Non- October 1, 2017 Appointment as an
Executive) Additional Director**
Atin Tibrewala Independent Director September 30, 2017*** Cessation***
* The aforementioned changes to our Board in the past three years do not include changes in the designation of our Directors
post their initial appointment on the Board.

**The appointment of Rajveer Aggarwal as a Non -Executive Director was regularised pursuant to the resolution of our
Shareholders at their annual general meeting held on September 29, 2018. Subsequently, pursuant to a resolution of our
Shareholders at their extra-ordinary general meeting held on June 14, 2019. Rajveer Aggarwal was re-designated as a Whole-
time Director.

***Atin Tibrewala was originally appointed as an Additional Director on March 28, 2016 till the date of the subsequent annual
general meeting, pursuant to the resolution passed of our Board on March 28, 2016. However, he resigned from our Board on
September 5, 2016. Subsequently, Atin Tibrewala was again appointed as an Additional Director till the date of the subsequent
annual general meeting on November 19, 2016 pursuant to the resolution passed by our Board on November 19, 2016. However,
such appointment was not regularized by our Shareholders at their annual general meeting held on September 30, 2017.

Corporate Governance

The provisions of the Companies Act, 2013 along with the SEBI Listing Regulations, with respect to corporate
governance, will be applicable to our Company immediately upon the listing of the Equity Shares on the Stock
Exchanges. Our Company is in compliance with the requirements of the applicable regulations in respect of
corporate governance in accordance with the SEBI Listing Regulations, and the Companies Act, 2013, pertaining
to the constitution of the Board and committees thereof.

As on the date of filing this Red Herring Prospectus, we have 10 Directors on our Board, of whom five are
Independent Directors. Of such Independent Directors, one Director is a woman Director.

Committees of our Board

Our Board may constitute committees to delegate certain powers as permitted under the Companies Act, 2013.

In terms of the SEBI Listing Regulations and the provisions of the Companies Act, 2013, our Company has
constituted the following Board-level committees:

1. Audit Committee

The Audit committee was constituted by a resolution of our Board dated April 29, 2019. The current constitution
of the Audit committee is as follows:

Name of Director Position in the Committee Designation

Bharat Shah Chairman Independent Director
Neelu Shah Member Independent Director
Samir Chandrakant Patel Member Independent Director
Kamalkumar Rajendra Aggarwal Member Chairman and Managing Director

173
The scope and function of the Audit committee is in accordance with Section 177 of the Companies Act, 2013
and Regulation 18 of the SEBI Listing Regulations and its terms of reference are as follows:

The Company Secretary of our Company shall serve as the secretary of the Audit Committee.

The roles and responsibilities of the Audit Committee include the following:

(i) The Audit Committee shall have powers, which should include the following:

(a) To investigate any activity within its terms of reference;

(b) To seek information from any employee of the Company;

(c) To obtain outside legal or other professional advice; and

(d) To secure attendance of outsiders with relevant expertise, if it considers necessary.

(ii) The role of the Audit Committee shall include the following:

(a) Oversight of the Company’s financial reporting process, examination of the financial statement and the
auditors’ report thereon and the disclosure of its financial information to ensure that the fin ancial statement
is correct, sufficient and credible;

(b) Recommendation for appointment, re-appointment and replacement, remuneration and terms of
appointment of auditors, including the internal auditor, cost auditor and statutory auditor, of the Company
and the fixation of audit fee;

(c) Approval of payments to statutory auditors for any other services rendered by the statutory auditors of the
Company;

(d) Reviewing, with the management, the annual financial statements and auditor’s report thereon before
submission to the Board for approval, with particular reference to:

(e) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s
report in terms of clause (c) of sub-Section 3 of Section 134 of the Companies Act;

(i) Changes, if any, in accounting policies and practices and reasons for the same;
(ii) Major accounting entries involving estimates based on the exercise of judgment by the management
of the Company;

(iii) Significant adjustments made in the financial statements arising out of audit findings;

(iv) Compliance with listing and other legal requirements relating to financial statements;

(v) Disclosure of any related party transactions; and

(vi) Qualifications / modified opinion(s) in the draft audit report.

(f) Reviewing, with the ma nagement, the quarterly, half-yearly and annual financial statements before
submission to the board for approval;

(g) Reviewing, with the management, the statement of uses/application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those
stated in the offer document/prospectus/notice and the report submitted by the monitoring agency
monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations
to the Board to take up steps in this matter;

(h) Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

174
(i) Formulating a policy on related party transactions, which shall include materiality of related party
transactions;

(j) Approval or any subsequent modification of transactions of the Company with related parties and omnibus
approval for related party transactions proposed to be entered into by the Company subject to such
conditions as may be prescribed;

(k) Review, at least on a quarterly basis, the details of related party transactions entered into by the Company
pursuant to each of the omnibus approvals given;

(l) Scrutiny of inter-corporate loans and investments;

(m) Valuation of undertakings or assets of the company, wherever it is necessary;

(n) Evaluation of internal financial controls and risk management systems;

(o) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal
control systems;

(p) Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage and
frequency of internal audit;

(q) Discussion with internal auditors of any significant findings and follow up there on;

(r) Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the
matter to the Board;

(s) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well
as post-audit discussion to ascertain any area of concern;

(t) To look into the reasons for substantial def aults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors;

(u) Recommending to the board of directors the appointment and removal of the external auditor, fixation of
audit fees and approval for payment for any other services;

(v) To review the functioning of the whistle blower mechanism;

(w) Approval of the appointment of the chief financial officer of the Company (i.e., the whole-time finance
director or any other person heading the finance function or discharging that function) after assessing the
qualifications, experience and background, etc., of the candidate;

(x) Carrying out any other functions as provided under the Companies Act, the SEBI Listing Regulations and
other applicable laws;

(y) To formulate, review and make recommendations to the Board to amend the Audit Committee charter from
time to time;

(z) Establishing a vigil mechanism for directors and employees to report their genuine concerns or grievances;
and

(aa) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

(bb)Reviewing the utilization of loans and/or advances from/investment by the company in a subsidiary
exceeding rupees 100 crore or 10% of the asset size of such subsidiary, whichever is lower.

175
Further, the Audit Committee shall mandatorily review the following information:

(a) Management discussion and analysis of financial condition and results of operations;

(b) Statement of significant related party transactions (as defined by the Audit Committee), submitted by the
management of the Company;

(c) Management letters/letters of internal control weaknesses issued by the statutory auditors of the Company;

(d) Internal audit reports relating to internal control weaknesses;

(e) The appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review
by the Audit Committee;

(f) Statement of deviations:

(i) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to
stock exchange(s) in terms of Regulation 32(1) of the SEBI Listing Regulations; and

(ii) annual statement of funds utilised for purposes other than those stated in the offer
document/prospectus/notice in terms of Regulation 32(7) of the SEBI Listing Regulations; and

(g) review the financial statements, in particular, the investments made by any unlisted subsidiary.

The Audit Committee shall have the authority to investigate into any matter in relation to the items specified above
or such other matter as may be referred to it by the Board and for this purpose, shall have the power to obtain
professional advice from external sources and have full access to information contained in the records o f the
Company.

2. Nomination and Remuneration Committee

The Nomination and Remuneration committee w a s constituted by a resolution of our Board dated April 29,
2019. The current constitution of the Nomination and Remuneration committee is as follows:

Name of Director Position in the Committee Designation

Lalit Chaudhary Chairman Independent Director
Neelu Shah Member Independent Director
Bharat Shah Member Independent Director

The scope and function of the Nomination and Remuneration committee is in accordance with Section 178 of the
Companies Act, 2013 read with Regulation 19 of the SEBI Listing Regulations and its terms of reference are as
follows:

(a) Formulation of the criteria for determining qualifications, positive attributes and independence of a director and
recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and
other employees;

(b) Formulation of criteria for evaluation of performance of independent directors and the Board;

(c) Devising a policy on Board diversity;

(d) Identifying persons who are qualified to become directors of the Company and who may be appointed in senior
management in accordance with the criteria laid down, and recommend to the Board their appointment and
removal. The Company shall disclose the remuneration policy and the evaluation criteria in its annual report;

(e) Analysing, monitoring and reviewing various human resource and compensation matters;

(f) Determining the Company’s policy on specific remuneration packages for executive directors including pension
rights and any compensation payment, and determining remuneration packages of such directors;

176
(g) Recommending the remuneration, in whatever form, payable to the senior management personnel and other
staff (as deemed necessary);

(h) Reviewing and approving compensation strategy from time to time in the context of the then current Indian
market in accordance with applicable laws;

(i) Determining whether to extend or continue the term of appointment of the independent director, on the basis of
the report of performance evaluation of independent directors;

(j) Perform such functions as are required to be performed by the compensation committee under the Securities
and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

(k) Framing suitable policies, procedures and systems to ensure that there is no violation of securities laws, as
amended from time to time, including:

(i) the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as
amended; and

(ii) the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating
to the Securities Market) Regulations, 2003, as amended,

by the Company and its employees, as applicable.

(l) Performing such other activities as may be delegated by the Board of Directors and/or are statutorily prescribed
under any law to be attended to by the Nomination and Remuneration Committee.

3. Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee was r e - constituted by a resolution of our Board dated April 29,
2019. The current constitution of the Corporate Social Responsibility committee is as follows:

Name of Director Position in the Committee Designation

Navdeep Naresh Goyal Chairman Deputy Managing Director
Bharat Shah Member Independent Director
Devendra Kumar Mangla Member Independent Director

The terms of reference of the Corporate Social Responsibility Committee framed in accordance with Section 135
of the Companies Act, 2013, are as follows:

(a) To formulate and recommend to the board, a corporate social responsibility policy which shall indica te the
activities to be undertaken by the Company as specified in Schedule VII of the Companies Act and the rules
made thereunder and make any revisions therein as and when decided by the Board;

(b) To identify corporate social responsibility policy partners and corporate social responsibility policy
programmes;

(c) To recommend the amount of expenditure to be incurred for the corporate social responsibility activities and
the distribution of the same to various corporate social responsibility programmes undertaken by the Company;

(d) To delegate responsibilities to the corporate social responsibility team and supervise proper execution of all
delegated responsibilities;

(e) To review and monitor the implementation of corporate social responsibility programmes and issuing necessary
directions as required for proper implementation and timely completion of corporate social responsibility
programmes; and

(f) To perform such other duties and functions as the Board may require the corporate social responsibility
committee to undertake to promote the corporate social responsibility activities of the Company and exercise
such other powers as may be conferred upon the CSR Committee in terms of the provisions of Section 135 of
the Companies Act, 2013.

177
4. Stakeholder Relationship Committee (“SR Committee”)

The SR Committee was constituted by a resolution of our Board dated April 29, 2019. The current constitution of
the SR Committee is as follows:

Name of Director Position in the Committee Designation

Bharat Shah Chairman Independent Director
Rajesh Chimanlal Gandhi Member Whole-time Director
Lalit Chaudhary Member Independent Director

The scope and function of the SR committee is in accordance with Regulation 20 of the SEBI Listing Regulations
and its terms of reference are as follows:

(a) Redressal and resolving of all security holders’ and investors’ grievances including complaints related to
transfer/transmission of shares, including non-receipt/issue of share certificates/duplicate share certificates and
review of cases for refusal of transfer/transmission of shares and debentures, non-receipt of balance sheet, non-
receipt of declared dividends, non-receipt of annual reports, etc., and assisting with quarterly reporting of such
complaints;

(b) Reviewing of measures taken for effective exercise of voting rights by shareholders;

(c) Investigating complaints relating to allotment of shares, approval of transfer or transmission of shares,
debentures or any other securities;

(d) Giving effect to all transfer/transmission of shares and debentures, dematerialisation of shares and re -
materialisation of shares, split and issue of duplicate/consolidated share certificates, compliance with all the
requirements related to shares, debentures and other securities from time to time;

(e) Reviewing the measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends
and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the
Company.

(f) Reviewing the adherence to the service standards adopted by the Company with respect to various services
rendered by the registrar and transfer agent of the Company and to recommend measures for overall
improvement in the quality of investor services; and

(g) Carrying out such other functions as may be specified by the Board from time to time or specified/provided
under the Companies Act or SEBI Listing Regulations, or by any other regulatory authority.

178
Management organization chart

Director Director
Kamalkumar Rajendra Aggarwal Navdeep Naresh Goyal

Director Production Director F&A Director Operations

Manager Marketing
Himanshu Purohit Rajesh Chimanlal Gandhi Rajveer Aggarwal

I/C Material Manager

Management Manager Manager
Exports
Sales (2) Factory Administration
Manager
Manager Manager
EHS
Accounts HR
Manager
Product In charge
Development
Exim

Manager Production
(4) Manager
Compliance
In-charge
Safety

Manager
Project & Maintenance

Key Managerial Personnel

In addition to our Chairman and Managing Director, Deputy Managing Director, Whole-time Directors including
Rajesh Chimanlal Gandhi, our Whole-time Director and Chief Financial Officer, whose details are provided in “Our
Management-Brief profiles of our Directors” on page 168, the details of our other Key Managerial Personnel as on
the date of this Red Herring Prospectus are as set forth below:

Shahilkumar Maheshbhai Kapatel, aged 32, is the Company Secretary and Compliance Officer of our Company
and is responsible for overlooking the secretarial matters of our Company. He joined our Company on September
26, 2018. He holds a bachelor’s degree in commerce from I.V. Patel Commerce College, Gujarat. He has also
completed the “Professional Programme Examination” conducted by the Institute of Company Secretaries of India.
In the past, he has been associated with Rotomotive Powerdrives India Limited. He has more than one year of
experience in secretarial matters. In Fiscal 2020, he received a remuneration of ₹0.25 million from us.

All our Key Managerial Personnel are permanent employees of our Company.

Retirement and termination benefits

Except applicable statutory benefits, none of our Key Managerial Personnel would receive any benefits on their
retirement or on termination of their employment with our Company.

Family relationships of Directors with Key Managerial Personnel

Except Kamalkumar Rajendra Aggarwal, who is the father of Rajveer Aggarwal, none of our Key Managerial
Personnel are related to any of our Directors or other Key Managerial Personnel.

Arrangements and Understanding with Major Shareholders

None of our Key Managerial Personnel have been selected pursuant to any arrangement or understanding with
any major Shareholders, customers or suppliers of our Company, or others.

179
Shareholding of the Key Managerial Personnel

None of our Key Managerial Personnel (other than our Directors) hold any Equity Shares as on date of this Red
Herring Prospectus.

Service Contracts with Key Managerial Personnel

Our Key Managerial Personnel have not entered into any service contracts with our Company.

Contingent and deferred compensation payable to Key Managerial Personnel

There is no contingent or deferred compensation payable to Key Managerial Personnel, which does not form part
of their remuneration.

Bonus or profit-sharing plan of the Key Managerial Personnel

Other than as disclosed in “Our Management- Bonus or profit-sharing plan for our Directors”, our Company
does not have any formal bonus or profit-sharing plan.

Interest of Key Managerial Personnel

For details of the interest of our Directors in our Company, see “Our Management-Interest of Directors” on page
172.

Our Key Managerial Personnel (other than our Directors) are interested in our Company only to the extent of the
remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of
expenses incurred by them during the ordinary course of their service.

Changes in the Key Managerial Personnel in last three years:

For details of the changes in our Directors, see “-Changes to our Board in the last three years” on page 173. The
changes in our Key Managerial Personnel (other than our Directors) in the three years preceding the date of this
Red Herring Prospectus is as mentioned below:

Name Designation Date of Change Reason

Shahilkumar Maheshbhai Kapatel Company Secretary and September 26, 2018 Appointment
Compliance Officer
Rajesh Chimanlal Gandhi Chief Financial Officer May 1, 2019 Appointment

Payment or Benefit to officers of our Company (non-salary related)

Except as disclosed in this section and Restated Financial Statements- Annexure VI- Note 35: Related Party
Disclosures” at page 229, no non-salary related amount or benefit has been paid or given within the two preceding
years or intended to be paid or given to any officer of the Company, including our Directors and Key Managerial
Personnel.

180
 OUR PROMOTERS AND PROMOTER GROUP

Our Promoters

The Promoters of our Company are:

1. Kamalkumar Rajendra Aggarwal;

2. Navdeep Naresh Goyal; and

3. Shubharangana Goyal.

As on the date of this Red Herring Prospectus, our Promoters hold 22,514,134 Equity Shares in aggregate,
representing 70.85% of the issued, subscribed and paid-up Equity Share capital of our Company. For details, please
see the section titled “Capital Structure – Build-up of the Promoters’ shareholding in our Company” beginning on
page 70.

Details of our Promoters are as follows:

1. Kamalkumar Rajendra Aggarwal

Kamalkumar Rajendra Aggarwal, aged 57 years, is one of our Promoters

and is also the Chairman and Managing Director on our Board.

Date of birth: December 27, 1962

Address: 13-A, Shivashray Society, near Rameshwar Temple, Vasna Road,
Vadodara 390 020, Gujarat.

Permanent Account Number: ABMPA5842R.

Aadhar Card Number: 588657860447.
Driving License: GJ0619840115335.

For the complete profile of Kamalkumar Rajendra Aggarwal, along with

details of his educational qualifications, professional experience,
position/posts held in the past, directorships held, and business and
financial activities, see “Our Management – Board of Directors” on page
165.

2. Navdeep Naresh Goyal

Navdeep Naresh Goyal, aged 30 years, is one of our Promoters and is also
the Deputy Managing Director of our Company.

Date of Birth: May 8, 1990

Address: B/30 Shivashray Housing Society, Saiyed Vasna Road, Vadodara
390 007 , Gujarat.

Permanent Account Number: AQPPG5045C

Aadhar Card Number: 993283101160
Driving License: GJ0620070000960

For the complete profile of Navdeep Naresh Goyal, along with details of
his educational qualifications, professional experience, position/posts held
in the past, directorships held, specia l achievements and business and
financial activities, see “Our Management – Board of Directors” on page
165.

181
3. Shubharangana Goyal

Shubharangana Goyal, aged 58 years, is one of our Promoters

Date of Birth: October 2, 1961

Address: B/30 Shivashray Housing Society, Saiyed Vasna Road, Vadodara
390 007 , Gujarat

Permanent Account Number: ALSPG9860D

Aadhar Card Number: 909037240671
Driving License: Not available

Brief Profile of Shubharangana Goyal

Shubharangana Goyal is one our Promoters. She holds a master’s degree

in political science from Meerut University, Uttar Pradesh as well as a
master’s degree in English literature from Chaudhary Charan Singh
University, Meerut. She has been associated with our Company as a
Shareholder, since 2010.

The ventures of our Promoters (other than our Company) are as mentioned below:

Name of Promoter Ventures

Kamalkumar Rajendra Aggarwal • Medicap Healthcare Limited;
• Overseas Synthetics Limited*;
• Shivam Petrochem Industries; and
• Kana Real Estate Private Limited
Navdeep Naresh Goyal • SILPL;
• Supertech Fabric Private Limited;
• Overseas Synthetics Limited*;
• DTech Products Private Limited; and
• Shivam Petrochem Industries
Shubharangana Goyal • SILPL;
• Overseas Synthetics Limited*; and
• DTech Products Private Limited
* The Promoters, Kamalkumar Rajendra Aggarwal, Shubharangana Goyal and Navdeep Naresh Goyal and certain members of
the Promoter Group, namely, Naresh Vijaykumar Goyal and Minal Kamal Aggarwal (“OSL PG Shareholders”) had entered
into a share purchase agreement dated June 24, 2019 (the “OSL SPA”) with certain shareholders of OSL (the “OSL
Acquirers”) for the sale of their collective shareholding of 20.37% of the sh are capital of OSL to the OSL Acquirers. Upon
completion of the open offer and subsequent transfer of their collective shareholding in compliance with the Takeover
Regulations and consequently upon receipt of a letter dated January 20, 2020 from the OSL PG Shareholders, OSL has intimated
BSE Limited on January 21, 2020 of the request of the OSL PG Shareholders to be de -classified as promoters of OSL. Thereafter,
at its meeting held on July 30, 2020, the board of directors of OSL have passed a resolution for re-classification of the OSL PG
Shareholders, subject to ratification by the shareholders of OSL.

Our Company confirms that the permanent account numbers, bank account numbers and passport numbers of our
Promoters, has been submitted to the Stock Exchanges at the time of filing the Draft Red Herring Prospectus.

Change in control of our Company

There has not been any change in the control of our Company in the five years immediately preceding the date of
this Red Herring Prospectus.

Interests of Promoters

Our Promoters are interested in our Company to the extent that they are the Promoters of our Company and to the
extent of their respective shareholding in our Company, their directorship in our Company and the dividends
payable, if any, and any other distributions in respect of their respective shareholding in our Company or the
shareholding of their relatives in our Company. For details of the shareholding of our Promoters in our Company,

182
see “Capital Structure” beginning on page 65. For further details of interest of our Promoters in our Company, see
“Financial Information” beginning on page 193.

Kamalkumar Rajendra Aggarwal and Navdeep Naresh Goyal may also be deemed to be interested to the extent of
remuneration, variable linked pay, benefits and reimbursement of expenses payable to them as Directors on our
Board. For further details, see “Our Management” beginning on page 165.

Other than as disclosed in “Our Management-Interest of Directors” on page 172, none of our Promoters, have any
interest, whether direct or indirect, in any property acquired by our Company within the preceding three years from
the date of this Red Herring Prospectus or proposed to be acquired by it as on the date of this Red Herring Prospectus,
or in any transaction by our Company for acquisition of land, construction of building or supply of machinery.

Our Promoters are not interested as a member in any firm or company which has any interest in our Company.
Further, no sum has been paid or agreed to be paid to any of our Promoters or to any firm or company in which any
of our Promoters are interested as a member, in cash or shares or otherwise by any person either to induce any of
our Promoters to become, or qualify him as a director, or otherwise for services rendered by any our Promoters or
by such firm or company in connection with the promotion or formation of our Company.

Our Promoters do not have any interest in any venture that is involved in any activities similar to those conducted
by our Company.

Payment or Benefits to Promoters or Promoter Group

Except as disclosed herein and as stated in Restated Financial Statements- Annexure VI- Note 35: Related Party
Disclosures” at page 229, there has been no payment or benefits by our Company to our Promoters or any of the
members of the Promoter Group during the two years preceding the date of this Red Herring Prospectus nor is there
any intention to pay or give any benefit to our Promoters or Promoter Group as on the date of this Red Herring
Prospectus.

Companies or firms with which our Promoters have disassociated in the last three years

Except for the following, none of our Promoters have disassociated itself from any other company or firm in the
three years preceding the date of this Red Herring Prospectus:

Sr. Date of
Name of the entity Promoter Reason
No. disassociation
1. Overseas Synthetics Kamalkumar Rajendra October 14, 2019 Liquidation of shareholding
Limited* Aggarwal, Navdeep pursuant to an open offer in
Naresh Goyal and accordance with the Takeover
Shubhrangana Goyal Regulations and consequent
resignation from directorship
2. DTech Products Navdeep Naresh Goyal March 13, 2020 Resignation from directorship
Private Limited
3. Shivam Petrochem Shubharangana Goyal March 31, 2020 Retired from partnership
Industries
* The Promoters, Kamalkumar Rajendra Aggarwal, Shubharangana Goyal and Navdeep Naresh Goyal and certain members of the Promoter
Group, namely, Naresh Vijaykumar Goyal and Minal Kamal Aggarwal (“ OSL PG Shareholders”) had entered into a share purchase agreement
dated June 24, 2019 (the “OSL SPA”) with certain shareholders of OSL (the “OSL Acquirers”) for the sale of their collective shareholding of
20.37% of the share capital of OSL to the OSL Acquirers. Upon completion of the open offer and subsequent transfer of their collective
shareholding in compliance with the Takeover Regulations and consequently upon receipt of a letter dated January 20, 2020 from the OSL PG
Shareholders, OSL has intimated BSE Limited on January 21, 2020 of the request of the OSL PG Shareholders to be de-classified as promoters
of OSL. Thereafter, at its meeting held on July 30, 2020, the board of directors of OSL have passed a resolution for re-classification of the OSL
PG Shareholders, subject to ratification by the shareholders of OSL.

Material Guarantees

Our Promoters have not given any material guarantee to any third party, in respect of the Equity Shares, as of the
date of this Red Herring Prospectus.

183
Promoter Group

In addition to our Promoters, the individuals and entities that form a part of the Promoter Group of our Company in
terms of Regulation 2(1)(pp) of the SEBI ICDR Regulations are set out below.

Natural persons who are part of the Promoter Group

The natural persons who are part of the Promoter Group, other than our Promoters, are as follows:

1. Naresh Vijaykumar Goyal;

2. Minal Kamal Aggarwal;
3. Kumkum Bansal;
4. Karuna Jadhav;
5. Rajveer Aggarwal;
6. Kanishka Aggarwal;
7. Puja Sarman Shah;
8. Vikash Jain;
9. Gaurangna Jain;
10. Vivek Jain;
11. Vikram Jain;
12. Parul Gupta;
13. Ashit Aggarwal;
14. Jayesh Aggarwal;
15. Rangolee Navdeep Goyal;
16. Sunil Bansal;
17. Manishi Bansal;
18. Siddhartha Bansal;
19. Neelam Singla;
20. Divyansh Goyal;
21. Veena Garg; and
22. Nirmala Singla.

Entities forming part of the Promoter Group*

The entities forming part of our Promoter Group are as follows:

1. Medicap Healthcare Limited;

2. M/s. Shivam Petrochem Industries;
3. Super Industrial Lining Private Limited;
4. SuperTech Fabrics Private Limited;
5. Rudra Shares & Stock Brokers Limited;
6. Rudra Fincorp Private Limited;
7. Kana Real Estate Private Limited;
8. Usha Dealcom Private Limited;
9. DTech Products Private Limited;
10. Rudra Alchem (India) Private Limited;
11. Rudra Fincare Private Limited (formally known as Rudra Agrichem Private Limited);
12. Rudra Genext Corporation Private Limited;
13. Rudra Multicorp Private Limited;
14. Rangolee Securities Private Limited;
15. Rudra Comventures Private Limited;
16. M/s. Nobel Investments;
17. M/s. Gigantic Enterprises; and
18. Super Chemical Industries.

* The Promoters, Kamalkumar Rajendra Aggarwal, Shubharangana Goyal and Navdeep Naresh Goyal and certain members of the Promoter
Group, namely, Naresh Vijaykumar Goyal and Minal Kamal Aggarwal (“ OSL PG Shareholders”) had entered into a share purchase agreement
dated June 24, 2019 (the “OSL SPA”) with certain shareholders of OSL (the “OSL Acquirers”) for the sale of their collective shareholding of
20.37% of the share capital of OSL to the OSL Acquirers. Upon completion of the open offer and subsequent transfer of their collective
shareholding in compliance with the Takeover Regulations and consequently upon receipt of a letter dated January 20, 2020 from the OSL PG
Shareholders, OSL has intimated BSE Limited on January 21, 2020 of the request of the OSL PG Shareholders to be de-classified as promoters

184
of OSL. Thereafter, at its meeting held on July 30, 2020, the board of directors of OSL have passed a resolution for re-classification of the OSL
PG Shareholders, subject to ratification by the shareholders of OSL.

Our Company had filed an application dated August 7, 2019 with SEBI under Regulation 300(1)(c) of the SEBI
ICDR Regulations, seeking an exemption from classifying Sudesh Goyal and Suresh Goyal (brothers of the spouse
of Shubharangana Goyal) and body corporates in which Sudesh Goyal or Suresh Goyal hold 20% or more of the
equity share capital, as members of the Promoter Group (“Exemption”). Pursuant to a letter bearing reference
number CFD/WRO/SKD/DD/220/1/2020, dated January 28, 2020, SEBI granted the Exemption to the Company.

185
 GROUP COMPANIES

In terms of the SEBI ICDR Regulations, the term “group companies”, includes (i) such companies (other than
promoter(s) and subsidiary(ies)) with which there were related party transactions during the period for which
financial information is disclosed, as covered under applicable accounting standards, and (ii) any other companies
considered material by the board of directors of the relevant issuer company.

Accordingly, all such companies with which our Company had related party transactions as per the Restated
Financial Statements, as covered under the relevant accounting standard (i.e. Ind AS 24) have been considered as
Group Companies in terms of the SEBI ICDR Regulations.

Additionally, pursuant to the Materiality Policy, a company shall be considered material and shall be disclosed as a
Group Company in this Red Herring Prospectus if: (i) such company: (a) is a member of the Promoter Group; and
(b) has entered into one or more transactions with our Company during the last completed full financial year, which,
individually or cumulatively, in value, exceeds 10% of the total revenue of our Company for that financial year, as
per the Restated Financial Statements.

Based on the above, our Group Companies are set forth below:

1. Super Industrial Lining Private Limited;

2. Supertech Fabrics Private Limited; and

3. Kana Real Estate Private Limited

Details of our Group Companies

The details of our Group Companies are provided below:

1. Super Industrial Lining Private Limited

Corporate Information

Super Industrial Lining Private Limited (“SILPL”) was incorporated in its present name in India as a private
limited company under the Companies Act, 1956 on April 25, 2008.

Nature of activities

SILPL is presently engaged in the business of inter alia manufacture, production and processing of industrial
lining products and fittings and other lining works and engineering products.

Financial information

The financial information derived from the last three audited financial statements of SILPL (for the Fiscals 2019,
2018 and 2017) are set forth below:
(₹ in million, except per share data)
For the Fiscals
Particulars
2019* 2018* 2017*
Equity capital 34.00 34.00 34.00
Sales 214.38 197.79 202.34
Profit/(loss) after tax 3.88 5.10 4.96
Reserves (excluding revaluation reserves) and surplus 39.59 35.72 30.62
Basic earnings per share (face value of ₹ 10) 1.14 1.50 1.46
Diluted earnings per share (face value of ₹ 10) 1.14 1.50 1.46
Net asset value per share 21.64 20.50 19.00
* As per audited financial statements in accordance with Indian GAAP.

Except as stated below, there are no significant notes of the auditors of SILPL, in relation to the aforementioned
financial statements for the last three years:

186
 CARO observations :

Fiscal 2017

“(a) According the information and explanations given to us, the company has granted interest -bearing
unsecured loans /advances of ₹74,72,178 to Shivam Petrochem Industries, a firm listed in the Register
maintained under section 189 of the Companies Act, 2013 except that, the company has not granted any loans-
secured or unsecured to the companies, firms, LLPs or other parties listed in the Register maintained under
section 189 of the Companies Act, 2013.

(b) In respect of the loan granted to the parties mentioned in above clause, such loan has been given on interest
and the rate of interest is prima facie not prejudicial to the interest of the company.

(c) In respect of the loan granted to the parties mentioned in above clause, the term of the repayment of such
loans have not been stipulated and to that extent, it is prejudicial to the interest of the company.”

Fiscal 2018

“(a) According the information and explanations given to u s, the company has granted interest-bearing
unsecured loans /advances of ₹47,00,000/- to Shivam Petrochem Industries, a firm listed in the Register
maintained under section 189 of the Companies Act, 2013 except that, the company has not granted any loans-
secured or unsecured to the companies, firms, LLPs or other parties listed in the Register maintained under
section 189 of the Companies Act, 2013.

(b) In respect of the loan granted to the parties mentioned in above clause, such loan has been given on interest
and the rate of interest is prima facie not prejudicial to the interest of the company.

(c) In respect of the loan granted to the parties mentioned in above clause, the term of the repayment of such
loans have not been stipulated and to that extent, it is prejudicial to the interest of the company.”

Fiscal 2019

“(a) According the information and explanations given to us, the company has granted interest-free unsecured
advances of ₹64,930/- to parties listed in the Register maintained under section 189 of the Companies Act, 2013
which are in the nature of temporary advances except that, the company has not granted any loans- secured or
unsecured to the companies, firms, LLPs or other parties listed in the Register maintained under section 189
of the Companies Act, 2013.

(b) In respect of the advances granted to the parties mentioned in above clause, such loan has been given as
temporary advances without any interest but considering the amount involved, It is prima -facie not prejudicial
to the interest of the company.

(c) In respect of the loan granted to the parties mentioned in above clause, such advances temporary nature
and on behalf payment and considering the amount involved, it is not considered as prejudicial to the interest
of the company.”

2. Supertech Fabrics Private Limited

Corporate Information

Supertech Fabrics Private Limited (“SFPL”) was originally incorporated in its present name in India on
February 17, 2015, as a private limited company, under the Companies Act, 2013.

Nature of activities

SFPL is presently engaged in the business of inter alia manufacture, processing, import and export of technical
textiles and technical fabric products.

187
Financial information

The financial information derived from the last three audited financial statements of SFPL (for the Fiscals 2019,
2018 and 2017) are set forth below:
(₹ in million, except per share data)
For the Fiscals
Particulars
2019* 2018* 2017*
Equity capital 15 15 15
Reserves (excluding revaluation reserves) and surplus (2.21) (3.88) (12.04)
Sales 81.02 62.22 4.13
Profit/(loss) after tax 1.67 8.16 (11.16)
Basic earnings per share (face value of ₹ 10) 1.11 5.44 (7.44)
Diluted earnings per share (face value of ₹ 10) 1.11 5.44 (7.44)
Net asset value per share 8.53 7.41 1.97
* As per audited financial statements in accordance with Indian GAAP

Other than as disclosed below, there are no significant notes of the auditors of SFPL in relation to the
aforementioned financial statements for the last three years.

Emphasis of Matters

Fiscal 2017:

“We draw attention to the following matters in the notes to financial statements:

a. Your attention is drawn to the note no. 9 on Fixed assets, capital work in progress and depreciation, where
it has been stated that, “the document for the purchase of land has been executed and the land has been
registered in the name of company but the sellers have disputed the ownership and title of the land.

There is a dispute amongst sellers relating to the sale of Dabhasa land purchased by the company for
₹19,50,000 but as the document for the purchase of land has been executed and registered and as the payment
for purchase has been made, the effect of the purchase transaction of land is reflected in the books of accounts
by the Company, but as the matter is under dispute, we draw your attention as to the dispute relating to the title
of the property. Our opinion is not modified or qualified in respect of this matter.”

Fiscal 2018:

“We draw attention to the following matters in the notes to financial statements:

a. Your attention is drawn to the note no. 11 on Fixed assets, capital work in progress and depreciation, where
it has been stated that, “the document for the purchase of land has been executed and the land has been
registered in the name of company but the sellers have disputed the ownership and title of the land.”

There is a dispute amongst sellers relating to the sale of Dabhasa land purchased by the company for
₹19,50,000 but as the document for the purchase of land has been executed and registered and as the payment
for purchase has been made, the effect of the purchase transaction of land is reflected in the books of accounts
by the Company, but as the matter is under dispute, we draw your attention as to the dispute rela ting to the title
of the property. Our opinion is not modified or qualified in respect of this matter.”

CARO observations

Fiscal 2017

“(c) As per the information and explanation provided to us and as stated in Note No.9 on Fixed Assets, the title
of the land purchased by the Company for its project for ₹19,50,000/- is under dispute.”

Fiscal 2018

“ (c) As per the information and explanation provided to us and as stated in Note No. 11 on Fixed Assets, the
title of the land purchased by the Company for its project for ₹19,50,000/- is under dispute.”

188
 Fiscal 2019:

“(c) As per the information and explanation provided to us and as stated in Note No.11 on Fixed Assets, the
title of the land purchased by the Company for its project for ₹19,50,000/- is under dispute.”

“Note No 11 where it has been stated that, “the document for the purchase of land has been executed and the
land has been registered in the name of company but the sellers have disputed the ownership and title of the
land.”

3. Kana Real Estate Private Limited

Corporate Information

Kana Real Estate Private Limited (“KPL”) was originally incorporated in India on November 7, 2006, as a
private limited company, under the Companies Act, 1956.

Nature of activities

KPL is presently engaged in the business of inter alia construction, purchase, hire or exchange of land,
properties and estates.

Financial information

The financial information derived from the last three audited financial statements of KPL (for the Fiscals 2019,
2018 and 2017) are set forth below:

(₹ in million, except per share data)

For the Fiscals
Particulars
2019* 2018* 2017*
Equity capital 0.15 0.15 0.15
Reserves (excluding revaluation reserves) and surplus (17.62) (17.59) (14.69)
Sales 0.00 0.00 4.90
Profit/(loss) after tax (0.02) (2.90) 0.53
Basic earnings per share (face value of ₹ 10) (1.50) (193.30) 35.51
Diluted earnings per share (face value of ₹ 10) (1.50) (193.30) 35.51
Net asset value per share (1,164.42) (1,162.92) (969.62)
* As per audited financial statements in accordance with Indian GAAP.

Except as disclosed below, there are no significant notes of the auditors of KPL in relation to the aforementioned
financial statements for the last three years.

Emphasis of Matters

Fiscal 2017:

“We draw attention to the following matters in the notes to the financial statements:

Note No. 33 in the financial statements which indicates that the company has accumulated losses and its net
worth has been fully eroded, the company has incurred a net loss during the current and previous year(s).
However, the financial statement of the company has been prepared on a going concern basis for the reason
stated in the said note

Our opinion is not modified in respect of these matters.”

“The accumulated losses have been exceeded the net owned fund of the shareholders. However, the account
for the period ended 31st March 2017 have been prepared on the basis that the company is a going concern.”

Fiscal 2018:

“We draw attention to the following matters in the notes to the financial statements:

189
 Note No. 32 in the financial statements which indicates that the company has accumulated losses and its net
worth has been fully eroded, the company has incurred a net loss during the current and previous year(s).
However, the financial statement of the company has been prepared on a going concern basis for the reason
stated in the said note

Our opinion is not modified in respect of these matters.”

“The accumulated losses have been exceeded the net owned fund of the shareholders. However, the account for
the period ended 31 st March 2018 have been prepared on the basis that the company is a going concern.”

Fiscal 2019:

“We draw attention to the following matters in the notes to the financial statements:

Note No. 28 in the financial statements which indicates that the company has accumulated losses and its net
worth has been fully eroded, the company has incurred a net loss during the current and previous year(s).
Moreover, the company also ceases to generate revenue as it has close down the operations which helps to
generate revenue and maintains company’s viability on future profit. Also, the company current liabilities
exceeded its current assets as at balance sheet date. These events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.
However, the financial statement of the company has been prepared on a going concern basis

Our opinion is not modified in respect of these matters.”

Nature and extent of interest of Group Companies

1. In the promotion of our Company

None of our Group Companies have any interest in the promotion of our Company.

2. In the properties acquired by our Company in the past three years before filing this Red Herring Prospectus
or proposed to be acquired by our Company

None of our Group Companies are interested in the properties acquired by our Company in the three years
preceding the filing of this Red Herring Prospectus or proposed to be acquired by our Company.

3. In transactions for acquisition of land, construction of building and supply of machinery, etc.

Other than the purchase of certain fixed assets and consumables by SILPL from our Company, in the ordinary
course of business, none of our Group Companies are interested in any transactions for acquisition of land,
construction of building or supply of machinery, etc. For further details, see “Restated Financial Statements-
Annexure VI- Note 35: Related Party Disclosures” at page 229.

Common pursuits among the Group Companies and our Company

There are no common pursuits amongst our Group Companies and our Company.

Related Business Transactions within our Group Companies and significance on the financial performance
of our Company

For details of related business transactions during the last three Fiscals, see “Restated Financial Statements-
Annexure VI- Note 35: Related Party Disclosures” at page 229.

Litigation

As on the date of this Red Herring Prospectus, there is no pending litigation involving our Group Companies which
will have a material impact on our Company.

190
Business interest of Group Companies

Except in the ordinary course of business and as stated in “Our Business” on page 136 and in “Restated Financial
Statements- Annexure VI- Note 35: Related Party Disclosures” at page 229 with respect to the last three Fiscals,
none of our Group Companies have any business interest in our Company.

Defunct Group Companies

None of our Group Companies remain defunct and no application has been made to the RoC for striking off the
name of any of our Group Companies during the five years preceding the date of this Red Herring Prospectus.

Sick company/winding up/insolvency proceedings

None of our Group Companies fall under the definition of sick companies under the erstwhile SICA and none of
them are under winding up. Further, there are no pending insolvency proceedings in respect of any Group Company.

Loss making Group Companies

Other than as disclosed below, none of our Group Companies have incurred losses in their respective last audited
Fiscal.
(in ₹ million)
Profit after tax/(loss) for the Fiscal
Name of the Group Company
March 31, 2019 March 31, 2018 March 31, 2017
Kana Real Estate Private Limited (0.02) (2.90) 0.53

Confirmations

None of our Group Companies have any securities listed on a stock exchange. Further, neither of our Group
Companies has made any public or rights issue (as defined under the SEBI ICDR Regulations) of securities in the
three years preceding the date of this Red Herring Prospectus.

Further, neither have any of the securities of our Company or any our Group Companies been refused listing by any
stock exchange in India or abroad, nor has our Company or any of our Group Companies failed to meet the listing
requirements of any stock exchange in India or abroad.

191
 DIVIDEND POLICY

As on the date of this Red Herring Prospectus, our Company does not have a formal dividend policy. The declaration
and payment of dividend on our Equity Shares, if any, will be recommended by our Board and approved by our
Shareholders, at their discretion, in accordance with provisions of our Articles of Association and applicable law,
including the Companies Act (together with applicable rules issued thereunder) and will depend on a number of
factors, including but not limited to our profits, capital requirements, contractual obligations and the overall financial
condition of our Company. Any future determination as to the declaration and payment of dividends will be at the
discretion of our Board and will depend on factors that our Board deem relevant, including among others, our results
of operations, financial condition, revenues, profits, cash flow, cash requirements, capital requirements, business
prospects and any other financing arrangements.

Our Company has not declared any dividends during the last three Fiscals on the Equity Shares. The past trend in
relation to our payment of dividends is not necessarily indicative of our dividend trend or dividend policy, in the
future, and there is no gua rantee that any dividends will be declared or paid in the future. For details in relation to
the risk involved, see “Risk Factors- We cannot assure payment of dividends on the Equity Shares in the future.” on
page 46.

192
 SECTION VII – FINANCIAL INFORMATION

OTHER FINANCIAL INFORMATION

In accordance with the SEBI ICDR Regulations, the audited financial statements of our Company for Fiscals 2020,
2019 and 2018 (collectively, the “Audited Financial Statements”) are available on our website at
http://www.cscpl.com/financials.html.

Our Company is providing a link to this website solely to comply with the requirements specified in the SEBI ICDR
Regulations. The Audited Financial Statements do not constitute, (i) a part of this Red Herring Prospectus; or (ii) a
prospectus, a statement in lieu of a prospectus, an offering circular, an offering memorandum, an advertisement, an
offer or a solicitation of any offer or an offer document to purchase or sell any securities under the Companies Act,
the SEBI ICDR Regulations, or any other applicable law in India or elsewhere. The Audited Financial Statements
should not be considered as part of information that any investor should consider subscribing for or purchase any
securities of our Company or any entity in which our Shareholders have significant influence (collectively, the
“Group”) and should not be relied upon or used as a basis for any investment decision. None of the Group or any
of its advisors, nor BRLMs or the Selling Shareholders, nor any of their respective employees, directors, affiliates,
agents or representatives accept any liability whatsoever for any loss, direct or indirect, arising from any information
presented or contained in the Audited Financial Statements, or the opinions expressed therein.

For details of accounting ratios, see “Restated Financial Statements-Annexure VII: Restated Statement of
Accounting Ratios” on page 240.

193
 RESTATED FINANCIAL STATEMENTS

[The remainder of this page has intentionally been left blank]

194
 INDEPENDENT AUDITOR’S EXAMINATION REPORT ON RESTATED FINANCIAL
INFORMATION

The Board of Directors

Chemcon Speciality Chemicals Limited
Block Number 355, Manjusar Kunpad Road
Manjusar Village, Taluka Savli
Vadodara 391 775

Dear Sirs,

1. We have examined the attached Restated Financial Information of Chemcon Speciality Chemicals
Limited (Formerly known as Chemcon Speciality Chemicals Private Limited) (the “Company” or the
“Issuer”), comprising the Restated Statement of Assets and Liabilities as at March 31, 2020, March 31,
2019 and March 31, 2018, the Restated Statements of Profit and Loss (including other comprehensive
income), the Restated Statement of Changes in Equity, the Restated Cash Flow Statement for the
f in a ncial years ended M arch 3 1, 2 0 20 , March 31, 2019 and March 31, 2018, the Summary Statement
of Significant Accounting Policies, and other explanatory information (collectively, the “Restated
Financial Information”), as approved by the Board of Directors of the Company at their meeting held
on 19 th August 2020, for the purpose of inclusion in the Red Herring Prospectus/ Prospectus
(“RHP/Prospectus”) prepared by the Company in connection with its proposed Initial Public Offer of
equity shares (“IPO”) prepared in terms of the requirements of:

a) Section 26 of Part I of Chapter III of the Companies Act, 2013 (the “Act");

b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018, as amended ("ICDR Regulations"); and

c) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of
Chartered Accountants of India (“ICAI”), as amended from time to time (the “Guidance Note”).

2. The Company’s Board of Directors is responsible for the preparation of the Restated Financial Information
for the purpose of inclusion in the RHP/Prospectus to be filed with Securities and Exchange Board of
India, BSE Limited and National Stock Exchange of India Limited (collectively, the “Stock Exchanges”)
and Registrar of Companies, Gujarat, Dadra and Nagar Haveli in connection with the proposed IPO. The
Restated Financial Information have been prepared by the management of the Company on the basis of
preparation stated in note 2.3 to the Restated Financial Information. The company’s Board of Directors’
responsibility includes designing, implementing and maintaining adequate internal control relevant to
the preparation and presentation of the Restated Financial Information. The Board of Directors are also
responsible for identifying and ensuring that the Company complies with the Act, ICDR Regulations and
the Guidance Note.

3. We have examined such Restated Financial Information taking into consideration:

a) The terms of reference and terms of our engagement agreed upon with you in accordance with our
engagement letter dated 21 st October 2019 in connection with the proposed IPO of equity shares of
the company;

b) The Guidance Note. The Guidance Note also requires that we comply with the ethical requirements
of the Code of Ethics issued by the ICAI;

c) Concepts of test checks and materiality to obtain reasonable assurance based on verification of
evidence supporting the Restated Financial Information; and

d) The requirements of Section 26 of the Act and the ICDR Regulations. Our work was performed
solely to assist you in meeting your responsibilities in relation to your compliance with the Act, the
ICDR Regulations and the Guidance Note in connection with the IPO.

195
4. These Restated Financial Information have been compiled by the management from:

a) Audited Ind AS financial statements of the company as at and for the year ended March 31, 2020,
prepared in accordance with the Indian Accounting Standards (referred to as “Ind AS”) as
prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules
2015, as amended, and other accounting principles generally accepted in India, which have been
approved by the Board of Directors at their meeting held on 19 th August 2020.

b) Audited Ind AS financial statements of the company as at and for the year ended March 31, 2019,
prepared in accordance with the Indian Accounting Standards (referred to as “Ind AS”) as
prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules
2015, as amended, and other accounting principles generally accepted in India, which have been
approved by the Board of Directors at their meeting held on 14 th June 2019. The comparative
information for the year ended March 31, 2018 included in such financial statements have been
prepared by making Ind AS adjustments to the audited financial statements of the Company as at
and for the year ended March 31, 2018, prepared in accordance with the accounting standards
notified under the section 133 of the Act (“Indian GAAP”) which was approved by the Board of
directors at their meeting held on 16th August 2018.

5. For the purpose of our examination, we have relied on:

a) Our Report dated 19 th August 2020 on the audited financial statements of the company for the
financial year ended March 31, 2020 as referred in Paragraph 4 above; and

b) Auditors’ Report issued by the Previous Auditors dated 14 th June 2019 a n d 16 th August 2018 on
the financial statements of the Company as at and for the years ended March 31, 2019 and 2018, as
referred in Paragraph 4 above.

The audits for the financial years ended March 31, 2019 and 2018 were conducted by the Company’s
previous auditors, M/s Shah Mehta & Bakshi, Chartered Accountants, (the “Previous Auditors”),
and accordingly reliance has been placed on the restated statement of assets and liabilities and the
restated statements of profit and loss (including other comprehensive income), statements of
changes in equity and cash flow statements, the Summary Statement of Significant Accounting
Policies, and other explanatory information and (collectively, the “2019 and 2018 Restated
Financial Information”) examined by them for the said years. The examination report included
for the said years is based solely on the report submitted by the Previous Auditors. They have
also confirmed that the 2019 and 2018 Restated Financial Information:

a) have been prepared after incorporating adjustments for the changes in accounting policies,
material errors and regrouping/reclassifications retrospectively in the financial year ended March
31, 2019 and 2018 to reflect the same accounting treatment as per the accounting policies and
grouping/classifications followed for the financial year ended March 31, 2019;

b) do not require any adjustments for the matters giving rise to modifications mentioned in paragraph
6 below; and

c) have been prepared in accordance with the Act, ICDR Regulations and the Guidance Note.

6. The audit reports on the financial statements issued by us and the previous auditors were not modified.

7. The audit report on the financial statements issued by us also included emphasis of matter paragraph as at 31
March 2020 where by attention was drawn to Note 44 of the financial Statements (reproduced in the Restated
Financial Information as Note 44), which describes the impact of Coronavirus disease 2019 (COVID19) on
the operations and financials of the Company. Our opinion is not modified in respect of this matter.

8. Based on our examination and according to the information and explanations given to us and also as
per the reliance placed on the examination report submitted by the Previous Auditors for the respective
years, we report that the Restated Financial Information:

196
 a) have been prepared after incorporating adjustments for the changes in accounting policies,
material errors and regrouping/reclassifications retrospectively in the financial years ended March
31, 2019 and 2018 to reflect the same accounting treatment as per the accounting policies and
grouping/classifications followed for the financial year ended March 31, 2020;

b) do not require any adjustments for the matter(s) giving rise to modifications mentioned in paragraph
6 above; and

c) have been prepared in accordance with the Act, ICDR Regulations and the Guidance Note.

9. The Restated Financial Information do not reflect the effects of events that occurred subsequent to
the respective dates of the reports on the audited financial statements for the financial years ended
March 31, 2 0 20 , 2019 and 2018 mentioned in paragraph 4 above.

10. This report should not in any way be construed as a reissuance or re-dating of any of the previous audit
reports issued by us or the Previous Auditors, nor should this report be construed as a new opinion
on any of the financial statements referred to herein.

11. We have no responsibility to update our report for events and circumstances occurring after the date of
the report.

12. Our report is intended solely for use of the Board of Directors for inclusion in the RHP/Prospectus to
be filed with Securities and Exchange Board of India, BSE Limited and National Stock Exchange of
India Limited (collectively, the “Stock Exchanges”) and Registrar of Companies, Gujarat, Dadra and
Nagar Haveli in connection with the proposed IPO. Our report should not be used, referred to, or
distributed for any other purpose except with our prior consent in writing. Accordingly, we do not accept
or assume any liability or any duty of care for any other purpose or to any other person to whom this
report is shown or into whose hands it may come without our prior consent in writing.

For K. C. Mehta & Co.

Chartered Accountants
Firm’s Registration No.106237W

Vishal P. Doshi
Partner
Membership No. 101533
UDIN: 20101533AAAAD13094
Place: Vadodara
Date: 19 th August 2020

197
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure I : Restated Statement of Assets and Liabilities
(INR in Millions)
As at As at As at
Particulars Note No.
31-Mar-20 31-Mar-19 31-Mar-18

I ASSETS
Non-Current Assets
a) Property, Plant & Equipment 3.1 474.20 395.42 296.41
b) Capital Work-in-Progress 37.42 6.70 -
c) Right-Of-Use Asset 3.2 13.32 - -
d) Intangible assets 3.3 0.20 0.26 -
e) Financial Assets
i) Other Financial Assets 4 4.78 5.15 2.33
f) Other Non-Current Assets 5 2.40 11.89 17.11
Total Non- Current Assets 532.32 419.42 315.84

Current Assets
a) Inventories 6 480.75 459.14 210.36
b) Financial Assets
i) Trade Receivables 7 889.47 641.18 295.56
ii) Cash and Cash Equivalents 8.1 10.74 6.84 9.28
iii) Bank Balances Other than ii) above 8.2 130.28 109.06 5.62
iv) Other Financial Assets 9 14.01 14.41 14.79
c) Other Current Assets 10 200.34 80.27 119.20
Total Current Assets 1,725.60 1,310.91 654.81

TOTAL ASSETS 2,257.92 1,730.33 970.65

II EQUITY AND LIABILITIES
Equity
a) Equity Share Capital 11 317.78 317.78 79.44
b) Other Equity 12 1,145.92 652.52 456.78
Total Equity 1,463.69 970.30 536.22

Liabilities
Non-Current Liabilities
a) Financial Liabilities
i) Borrowings 13 145.99 24.66 24.95
ii) Lease Liabilities 14 8.22 - -
b) Non current Provisions 15 0.56 4.92 7.21
c) Deferred Tax Liabilities (Net) 16 22.57 24.34 16.20
Total Non- Current Liabilities 177.34 53.92 48.36

Current Liabilities
a) Financial Liabilities
i) Borrowings 17 286.75 297.38 136.12
ii) Trade Payables 18
-Total outstanding dues of micro and small enterprises 38.72 25.28 34.09
-Total outstanding dues of creditors other than micro enterprises
and small enterprises 218.50 263.44 138.68
iii) Other Financial Liabilities 19 45.01 112.03 27.20
iv) Lease Liabilities 14 4.11 - -
c) Other current Liabilities 20 23.77 6.71 11.68
d) Short term Provisions 21 0.03 1.29 38.29
Total Current Liabilities 616.89 706.12 386.06

TOTAL EQUITY AND LIABILITIES 2,257.92 1,730.33 970.65

Notes:
a) The above statement should be read with the Company Overview and significant accounting policies appearing in Annexure V , Notes to the Restated Ind AS Financial Information appearing in Annexure VI,
Restated Statements of Accounting Ratios appearing in Annexure VII and Restated Statement of Capitalisation appearing in Annexure VIII.
b) The accompanying Notes 1-46 forming part of the Restated Financial Information.

As per our examination report of even date attached

For K C Mehta & Co For and on behalf of the Board of Directors
Chartered Accountants CHEMCON SPECIALITY CHEMICALS LIMITED
Firm Registration No: 106237W

Vishal P. Doshi Kamal Aggrawal Navdeep Goyal

Partner Chairman & Managing Director Deputy Managing Director
Membership No. 101533 DIN: 00139199 DIN: 02604876

Place: Vadodara Rajesh Gandhi Shahilkumar Kapatel

Date: 19th August, 2020 Chief Financial Officer & Director Company Secretary
DIN: 03296784 ACS : 52211

198
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure II : Restated Statement of Profit and Loss
(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars Note No.
31-Mar-20 31-Mar-19 31-Mar-18

Income
I Revenue from Operations 22 2,620.52 3,033.41 1,576.42
II Other Income 23 39.65 19.86 7.49

III Total Income (I+II) 2,660.17 3,053.26 1,583.91

IV Expenses
Cost of Materials Consumed 24 1,533.71 1,947.39 793.82
Changes in inventories of finished goods and work-in-progress 25 (44.64) (98.23) (20.67)
Excise Duty - - 4.86
Employee Benefit expenses 26 140.50 241.12 188.04
Finance costs 27 46.84 40.02 30.36
Depreciation and Amortisation expenses 28 46.20 28.64 22.59
Other expenses 29 288.33 282.29 159.40

Total expenses (IV) 2,010.94 2,441.23 1,178.40

V Profit before tax (III-IV) 649.23 612.03 405.51

VI Tax Expense: 31
a) Current tax
- Current tax 163.80 174.60 141.64
- Taxes for earlier years 0.31 0.69 0.87
b) Deferred Tax (Credit)/Charge (3.41) 6.33 (0.81)

Total tax expense (VI) 160.70 181.62 141.70

VII Profit for the year (V-VI) 488.53 430.41 263.81

VIII OTHER COMPREHENSIVE INCOME

Items that will not be reclassified subsequently to Profit and Loss

Remeasurement of Gains/(Losses) on defined benefit Plans 6.50 5.48 2.71
Deferred tax (1.64) (1.81) (0.90)

Other Comprehensive Income(expense)/ income, Net of Tax (VIII) 4.87 3.67 1.81

IX Total Comprehensive Income for the year (VII+VIII) 493.40 434.08 265.62

X Earnings Per Equity Share 40

a) Basic (Rs.) 15.37 13.54 8.30
b) Diluted (Rs.) 15.37 13.54 8.30

Notes:
a) The above statement should be read with the Company Overview and significant accounting policies appearing in Annexure V , Notes to the Restated Ind AS Financial Information
appearing in Annexure VI, Restated Statements of Accounting Ratios appearing in Annexure VII and Restated Statement of Capitalisation appearing in Annexure VIII.
b) The accompanying Notes 1-46 forming part of the Restated Financial Information.

As per our examination report of even date attached

For K C Mehta & Co For and on behalf of the Board of Directors
Chartered Accountants CHEMCON SPECIALITY CHEMICALS LIMITED
Firm Registration No: 106237W

Vishal P. Doshi Kamal Aggrawal Navdeep Goyal

Partner Chairman & Managing Director Deputy Managing Director
Membership No. 101533 DIN: 00139199 DIN: 02604876

Place: Vadodara Rajesh Gandhi Shahilkumar Kapatel

Date: 19th August, 2020 Chief Financial Officer & Director Company Secretary
DIN: 03296784 ACS : 52211

199
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure III : Restated Statement of Cash Flows
(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax 649.23 612.03 405.51
Adjustment for:
Depreciation and Amortization expense 42.93 28.64 22.59
Depreciation on Right of use assets 3.26 - -
(Profit)/ Loss on assets sold 0.56 0.51 (0.55)
Finance Cost 46.84 40.02 30.36
Interest received from Banks/ Others (7.98) (1.48) (1.10)

Operating Profit before Working Capital Changes 734.84 679.72 456.81

Adjustment for:
Change in Trade receivables (248.28) (345.63) (71.68)
Change in Other Non-current financial assets 0.38 (2.83) (0.08)
Change in Other current financial assets 0.40 0.37 (8.63)
Change in Other assets (104.66) 58.86 (81.06)
Change in Inventories (21.61) (248.78) (119.95)
Change in Trade payables (31.50) 115.95 85.09
Change in Other financial liabilities (70.33) 83.62 (22.20)
Change in Other current liabilities and provisions 17.95 (2.18) 17.32

Cash generated from Operations 277.17 339.12 255.62

Less : Income tax paid/(Refund) (including TDS) (net) 172.15 228.54 114.29

Net Cash generated from Operating Activities (A) 105.02 110.58 141.33

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Property, Plant & Equipment, Investment Property & Intangibles, (165.62) (142.73) (80.68)
Term deposits with maturity 3 to 12 months (21.22) (103.44) (0.40)
Sale proceeds of Property, Plant & Equipment 12.69 7.60 1.66
Interest received from Banks/ Others 7.98 1.48 1.10

Net Cash used in Investing Activities (B) (166.17) (237.09) (78.33)

C. CASH FLOW FROM FINANCING ACTIVITIES

Finance cost (43.83) (38.10) (24.14)
Proceeds/(Repayment) of Short term Borrowings (10.63) 161.26 (35.09)
Proceeds of Long term Borrowings 139.59 9.83 12.45
(Repayment) of Long term Borrowings (14.94) (8.92) (10.31)
Payments of interest portion of lease liabilities (0.89) - -
Payments of principal portion of lease liabilities (4.26) - -

Net Cash used in Financing Activities (C ) 65.05 124.07 (57.08)

Net (Decrease)/ Increase in Cash & Cash Equivalents (A) + (B) + (C) 3.90 (2.44) 5.92
Cash & Cash Equivalents at the beginning of the year 6.84 9.28 3.35
Cash & Cash Equivalents at the end of the year (Refer Note : 8.1) 10.74 6.84 9.28

Notes:
a) The above statement should be read with the Company Overview and significant accounting policies appearing in Annexure V , Notes to the Restated Ind AS Financial Information
appearing in Annexure VI, Restated Statements of Accounting Ratios appearing in Annexure VII and Restated Statement of Capitalisation appearing in Annexure VIII.
b) The accompanying Notes 1-46 forming part of the Restated Financial Information.

a) Cash and cash equivalents comprises of :-

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Balance with Banks 10.23 6.43 8.78

Cash on hand 0.51 0.41 0.50

10.74 6.84 9.28

As per our examination report of even date attached

For K C Mehta & Co For and on behalf of the Board of Directors
Chartered Accountants CHEMCON SPECIALITY CHEMICALS LIMITED
Firm Registration No: 106237W

Vishal P. Doshi Kamal Aggrawal Navdeep Goyal

Partner Chairman & Managing Director Deputy Managing Director
Membership No. 101533 DIN: 00139199 DIN: 02604876

Place: Vadodara Rajesh Gandhi Shahilkumar Kapatel

Date: 19th August, 2020 Chief Financial Officer & Director Company Secretary
DIN: 03296784 ACS : 52211

200
 CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure IV : Restated Statement of Change in Equity

A. Equity Share Capital

(INR in Millions)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

(A) Equity Share Capital

Balance at the beginning of the year 317.78 79.44 79.44
Changes during the year (Refer Note no : 11) - 238.33 -
Balance at the end of the year 317.78 317.78 79.44

B. Other Equity
(INR in Millions)
Reserves & Surplus
Particulars Total
Securities Premium
General Reserve Retained Earnings
Reserve

Balance as at 31st March 2017 - - 191.16 191.16

Profit for the Year - - 263.81 263.81

Re-measurements of Defined Benefit Plans (Net of Tax) - - 1.81 1.81
Balance as at 31st March 2018 - - 456.78 456.78

Profit for the Year - - 430.41 430.41

Bonus Issue - - (238.33) (238.33)
Re-measurements of Defined Benefit Plans (Net of Tax) - - 3.67 3.67
Balance as at 31st March 2019 - - 652.52 652.52

Profit for the Year - - 488.53 488.53

Re-measurements of Net Defined Benefit Plans (Net of Tax) - - 4.87 4.87
Balance as at 31st March 2020 - - 1,145.92 1,145.92
Notes:
a) The above statement should be read with the Company Overview and significant accounting policies appearing in Annexure V , Notes to the Restated Ind AS Financial Information
appearing in Annexure VI, Restated Statements of Accounting Ratios appearing in Annexure VII and Restated Statement of Capitalisation appearing in Annexure VIII.
b) The accompanying Notes 1-46 forming part of the Restated Financial Information.

As per our examination report of even date attached

For K C Mehta & Co For and on behalf of the Board of Directors
Chartered Accountants CHEMCON SPECIALITY CHEMICALS LIMITED
Firm Registration No: 106237W

Vishal P. Doshi Kamal Aggrawal Navdeep Goyal

Partner Chairman & Managing Director Deputy Managing Director
Membership No. 101533 DIN: 00139199 DIN: 02604876

Place: Vadodara Rajesh Gandhi Shahilkumar Kapatel

Date: 19th August, 2020 Chief Financial Officer & Director Company Secretary
DIN: 03296784 ACS : 52211

201
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

RESTATED STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

1. Company information

Chemcon Speciality Chemicals Limited ('the Company) is a limited company incorporated in India and registered with the ROC,
Gujarat, Dadra and Nagar Haveli at Ahmedabad under having Corporate Identification number (CIN) U24231GJ1988PLC011652.
Registered office of the Company is situated at Block No 355, Manjusar Kunpad Road Vill: Manjusar, Tal:Salvi Baroda Gujarat.

The company is in Pharmaceutical intermediates, Silanes and Oilfield Chemicals (Completion Fluids) Industry. The company is
leading manufacturer of specialised chemicals, such as HMDS and CMIC which are predominantly used in the pharmaceuticals
industry and inorganic bromides, predominantly used as completion fluids in the oilfield industry.

2. Significant accounting policies

2.1. Statement of compliance

The restated financial information has been prepared in accordance with Indian Accounting Standards (Ind AS) specified
under section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards) Rules, 2015
(as amended). The restated financial information has also been prepared in accordance with the relevant presentation
requirements of the Companies Act, 2013.

2.2. Application of New Indian Accounting Standard

All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian
Accounting Standards) Rules, 2015 (as amended) till restated financial information is authorized have been considered in
preparing the restated financial information. There is no other Indian Accounting Standard that has been issued as of that
date but was not mandatorily effective.

2.3. Basis of preparation

The Restated Financial Information of the Company comprises of the Restated Statement of Assets and Liabilities as at
March 31, 2020, March 31, 2019 and March 31, 2018, the Restated Statement of Profit and Loss (including Other
Comprehensive Income), Restated Statement of changes inequity and the Restated Statement of Cash Flows for the
years ended March 31, 2020, March 31, 2019 and March 31, 2018, and the Summary of Significant Accounting Policies
and explanatory notes (collectively, the ‘Restated Financial Information’). The restated financial information of the
company have been specifically prepared for inclusion in the document to be filed by the Company with the Securities
and Exchange Board of India (“SEBI”), Registrar of Companies (“RoC”) and Stock Exchanges in connection with the
proposed Initial Public Offering ('IPO') of equity shares of the Company (referred to as the "Issue").

The restated financial information has been prepared to comply in all material respects with the requirements of Section
26 of Part I of Chapter III of the Companies Act, 2013 (“the Act”), the Securities and Exchange Board of India (Issue of
Capital and Disclosure requirements) Regulations, 2018 (“ICDR Regulations”) and The Guidance Note on Reports in
Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India (ICAI) (the “Guidance
Note”).

For the year ended March 31, 2020 and March 31, 2019, the Company prepared its financial statements in accordance
with the Indian Accounting Standards ('Ind AS') notified under Section 133 of the Companies Act, 2013 read with the
Companies (Indian Accounting Standards) Rules, 2015 as amended, to the extent applicable, and the presentation
requirements of the Companies Act, 2013. For all years upto and including the year ended March 31, 2018, the Company
prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India and
complied with the accounting standards (Previous GAAP) as notified under Section 133 of the Companies Act, 2013 read
together with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable, and the presentation
requirements of the Companies Act, 2013. The Company has elected to present the financial information of all the years
in these Restated Financial Information, as per the Indian Accounting Standards ('Ind AS') notified under Section 133 of
the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.

202
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

The Company has adopted Ind AS for the financial year ended March 31, 2019 onwards. In accordance with the transition
provision specified under Ind AS 101, the date of transition to Ind AS is April 01, 2017.

These Restated Financial Statements have been extracted by the Management from the Audited Financial Statements
and:

a. There were no audit qualifications on these restated financial statements,

b. Material amounts relating to adjustments for previous years in arriving at profit/loss of the years to which they
relate, have been appropriately adjusted,
c. Adjustments for remeasurement, reclassification and regrouping of the corresponding items of income,
expenses, assets and liabilities in order to bring them in line with the Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting Standard) Rules, 2015 read with Section 133 of the Companies
Act, 2013, and the requirements of the SEBI regulations and
d. The resultant material tax impact on above adjustments has been appropriately adjusted in deferred taxes in the
respective years to which they relate.

The financial information is prepared in accordance with Ind ASs, under the historical cost convention on the accrual basis
except for certain assets and liabilities which are measured at fair value/amortized cost/net present value at the end of
each reporting period; as explained in the accounting policies below. These accounting policies have been applied
consistently over all periods presented in the financial information.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

The Company's functional currency is Indian Rupees (INR) and the restated financial statements are presented in INR and
all values are presented in million (INR 000,000), except when otherwise indicated.

2.4. Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their best economic interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable
inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.

203
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

2.5. Property Plant and Equipment (PPE)

Property, Plant & Equipment (PPE) comprises of Tangible assets and Capital Work in progress. PPE are stated at cost, net
of tax/duty credit availed, if any, after reducing accumulated depreciation and accumulated impairment losses, if any;
until the date of the Balance Sheet. The cost of PPE comprises of its purchase price or its construction cost (net of
applicable tax credit, if any), any cost directly attributable to bring the asset into the location and condition necessary for
it to be capable of operating in the manner intended by the management and decommissioning costs. Direct costs are
capitalized until the asset is ready for use and includes borrowing cost capitalised in accordance with the Company’s
accounting policy.

Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases
the future benefits from its previously assessed standard of performance. All other expenses on existing property, plant
and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the
statement of profit and loss for the period during which such expenses are incurred.

Depreciation of these PPE commences when the assets are ready for their intended use.

Freehold Land is not depreciated. Depreciation on PPE other than Land has been provided on Straight line method over
the useful lives of the assets as per Schedule II to the Companies Act

Useful lives of each class of PPE as prescribed under Part C of Schedule II to the Companies Act, 2013:

Description Years
Building other than Factory Building 60
Factory Building 30
Plant & Machinery 15
Storage Tank 20

Computers 3

Factory Road 10

Electrical Installations and Equipment 10

Furniture and Fixtures 10

Office Equipment 5

Vehicles 8

The estimated useful lives and residual values are reviewed on an annual basis and if necessary, changes in estimates are
accounted for prospectively.

Depreciation on additions/deletions to PPE during the year is provided for on a pro-rata basis with reference to the date
of additions/deletions.

Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other factors is provided
for prospectively over the remaining useful life.

An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the
difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit
and Loss.

204
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

2.6. Intangible Assets

Intangible assets with finite useful life acquired separately, are recognized only if it is probable that future economic
benefits that are attributable to the assets will flow to the enterprise and the cost of assets can be measured reliably. The
intangible assets are recorded at cost and are carried at cost less accumulated amortization and accumulated impairment
losses, if any.

Intangible assets including Computer software are amortized on straight-line basis over a period of three years.

The estimated useful life is reviewed at the end of each reporting period and the effect of any changes in estimate is
accounted for prospectively.

Intangible assets are derecognised on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from derecognition of an intangible asset are determined as the difference between the net
disposal proceeds and the carrying amount of the asset, and recognised in the Statement of Profit and Loss when the
asset is derecognised.

2.7. Non-Current Assets held for Sale

Non-current assets or disposal groups are classified as held for sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is
highly probable and the asset or disposal group is available for immediate sale in its present condition subject only to
terms that are usual and customary for sales of such assets. Management must be committed to the sale, which should
be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale,
and actions required to complete the plan of sale should indicate that it is unlikely that significant changes to the plan will
be made or that the plan will be withdrawn.

Non-current assets or disposal groups classified as held for sale are measured at the lower of carrying amount and fair
value less costs to sell.

Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale.

The Company classifies Non-Current Assets as held for sale if their carrying amounts will be recovered principally through
a sale rather than through continuing use of the assets and actions required to complete such sale indicate that it is
unlikely that significant changes to the plan to sell will be made or that the decision to sell will be withdrawn. Also, such
assets are classified as held for sale only if the management expects to complete the sale within one year from the date of
classification.

Non-current assets or disposal groups classified as held for sale are measured at the lower of carrying amount and fair
value less costs to sell.

2.8. Impairment of tangible assets and intangible assets

The Company reviews at each reporting period whether there is any indication that an asset may be impaired. If any such
indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or
the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in
the Statement of Profit & Loss. If at the reporting period, there is an indication that there is change in the previously
assessed impairment loss, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash
flows have not been adjusted.

An assessment is made at the end of each reporting period to see if there are any indications that impairment losses
recognized earlier may no longer exist or may have decreased. The impairment loss is reversed, if there has been a
change in the estimates used to determine the asset’s recoverable amount since the previous impairment loss was
recognized. If it is so, the carrying amount of the asset is increased to the lower of its recoverable amount and the
carrying amount that have been determined, net of depreciation, had no impairment loss been recognized for the asset in
205
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

prior years. After a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life. Reversals of Impairment loss are
recognized in the Statement of Profit and Loss.

2.9. Inventories
The inventories are valued at cost or net realizable value whichever is lower. The basis of determining the value of each
class of inventory is as follows:

Inventories Cost Formula

Raw material First in first out basis

Raw Material (Goods in transit) At invoice value
Work in Progress Raw material, labour and appropriate proportion of
manufacturing expenses and overheads as per stage of
completion.
Finished Goods (Including in Transit) Raw material, labour and appropriate proportion of
manufacturing expenses and overheads.
Stores, spares, packing materials First in first out basis

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.

The net realizable value of work-in-progress is determined with reference to the selling prices of related finished
products. Raw materials and other supplies held for use in production of finished products are not written down below
cost except in cases where material prices have declined and it is estimated that the cost of the finished products will
exceed their net realizable value.

2.10. Revenue recognition

The company recognises revenue from contracts with customers based on a five step model as set out in Ind AS 115:

Step 1. Identify the contract(s) with a customer: A contract is defined as an agreement between two or more parties that
creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2. Identify the performance obligations in the contract: A performance obligation is a promise in a contract with a
customer to transfer a good or service to the customer.

Step 3. Determine the transaction price: The transaction price is the amount of consideration to which the company
expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected
on behalf of third parties.

Step 4. Allocate the transaction price to the performance obligations in the contract: For a contract that has more than
one performance obligation, the company will allocate the transaction price to each performance obligation in an amount
that depicts the amount of consideration to which the company expects to be entitled in exchange for satisfying each
performance obligation.

Step 5. Recognise revenue when (or as) the entity satisfies a performance obligation.

The Company earns revenue primarily from sale of products and sale of services.

Sale of Products and Services

Revenues are recognized when the Company satisfies the performance obligation by transferring a promised product or
service to a customer. A product is transferred when the customer obtains control of that product, which is at the point
of transfer of custody to customers where usually the title is passed, provided that the contract price is fixed or
determinable and collectability of the receivable is reasonably assured.

206
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

Revenue is measured at the transaction price of the consideration received or receivable duly adjusted for variable
consideration and represents amounts receivable for goods and services provided in the normal course of business, net
off Goods and Services Tax (GST), etc. Any retrospective revision in prices is accounted for in the year of such revision.

Interest Income:
Interest on investments is booked on a time proportion basis taking into account the amounts invested and the rate of
interest.

Export Incentives and Other Income:

Export Incentives and Other Income is recognized on accrual basis except when realisation of such income is uncertain.
Insurance Claim:
Insurance and other claims are recognised only when it is reasonably certain that the ultimate collection will be made.

2.11. Leases

The Company as a Lessee:

The Company’s lease asset classes primarily consist of leases for immovable properties. The company assesses whether a
contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the company assesses whether: (1) the contact involves the use
of an identified asset (2) the company has substantially all of the economic benefits from use of the asset through the
period of the lease and (3) the company has the right to direct the use of the asset.

At the date of commencement of the lease, the company recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases. For these short-term and low value leases, the company recognizes the lease
payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU
assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease
term and useful life of the underlying asset.

Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher
of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is
determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the company changes its assessment if whether it will exercise an extension
or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows.

Transition

Effective April 1, 2019, the company adopted Ind AS 116 “Leases” applied to all lease contracts existing on April 1, 2019
using the modified retrospective method. Lease contracts existing as on April 1, 2019 were low value and short-term
207
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

leases, and accordingly there were no lease contracts which were required to be accounted for under Ind AS 116 as on
transition date.

2.12. Foreign Exchange Transactions

The functional currency of the Company is Indian Rupees which represents the currency of the primary economic
environment in which the Company operates.

Transactions in currencies other than the Company’s functional currency (foreign currencies) are recognized at the rates
of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated
in foreign currencies are translated using closing exchange rate prevailing on the last day of the reporting period.

Exchange differences on monetary items are recognized in the Statement of Profit and Loss in the period in which they
arise.

Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured at cost are translated
at the exchange rate at the date of the transaction.

2.13. Employee Benefits

Defined contribution plans

Contributions to defined contribution schemes such as provident fund, superannuation scheme, employee pension
scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services
are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has
no further defined obligations beyond the monthly contributions

Defined benefit plans

The liabilities towards defined benefit schemes are determined using the Projected Unit Credit method. Actuarial
valuations under the Projected Unit Credit method are carried out at the balance sheet date. Actuarial gains and losses
are recognized in the Statement of Profit and Loss in the period of occurrence of such gains and losses. Past service cost is
recognized immediately to the extent that the benefits are already vested and otherwise it is amortized on straight-line
basis over the remaining average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit
obligation as reduced by plan assets.

Short-term employee Benefits

Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised,
undiscounted, during the period the employee renders services. These benefits include salary, wages, bonus,
performance incentives etc.

Other long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the
employee renders the related services are recognized as an actuarially determined liability at present value of the defined
benefit obligation at the balance sheet date.

2.14. Taxes on Income

Income tax expense represents the sum of the current tax and deferred tax.
(i) Current tax
The tax currently payable is based on taxable profit for the year / period. Taxable profit differs from ‘profit before
tax’ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or
deductible in other years and items that are never taxable or deductible. The Company’s current tax is calculated
using tax rates and laws that have been enacted or substantively enacted by the end of the reporting period.
208
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised
for all deductible temporary differences to the extent that it is probable that taxable profits will be available against
which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred
tax asset to be utilized.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.

Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is
likely to give future economic benefits in the form of availability of set off against future income tax liability.
Accordingly, MAT is recognised as deferred tax asset in the Balance sheet when the asset can be measured reliably,
and it is probable that the future economic benefit associated with asset will be realised.

(iii) Current and deferred tax expense for the year / period
Current and deferred tax expense is recognised in the Statement of Profit and Loss, except when they relate to
items that are recognised in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognised in other comprehensive income or directly in equity respectively.

2.15. Borrowing Costs

Borrowing costs are interest and ancillary costs incurred in connection with the arrangement of borrowings.
General and specific borrowing costs attributable to acquisition and construction of qualifying assets is added to the cost
of the assets upto the date the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a
substantial period of time to get ready for its intended use Capitalisation of borrowing costs is suspended and charged to
the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is
interrupted. All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are
incurred.

2.16. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it
is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at
the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows (when the effect of the time value of money is material).

Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of economic
benefits is probable.

Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an
outflow of resources embodying economic benefit is remote.

209
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

2.17. Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions
of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial
liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial
recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial
assets and financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit
and loss.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future
cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

(i) Financial assets

Cash and bank balances

Cash and bank balances consist of:
- Cash and cash equivalents - which includes cash in hand, deposits held at call with banks and other short term deposits
which are readily convertible into known amounts of cash, are subject to an insignificant risk of change in value and
have maturities of less than one year from the date of such deposits. These balances with banks are unrestricted for
withdrawal and usage.
- Other bank balances - which includes balances and deposits with banks that are restricted for withdrawal and usage.

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model
whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.

Financial assets measured at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within
a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these
financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value
through other comprehensive income on initial recognition.

Impairment of financial assets

The Company assesses at each balance sheet date whether a financial asset or a group of financial assets is impaired.
Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime
expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all
other financial assets, expected credit losses are measured at an amount equal to 12 month expected credit losses or
at an amount equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly since
initial recognition..

De-recognition of financial assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire,
or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity. If
the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control
the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts
it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company
continues to recognise the financial asset.

210
 CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of
the consideration received and receivable is recognized in statement of profit and loss.

(ii) Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of
its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs, if any.

Financial Liabilities
Trade and other payables are initially measured at fair value, net of directly attributable costs, and are subsequently
measured at amortised cost, using the effective interest rate method where the time value of money is significant.
Interest bearing issued debt are initially measured at fair value and are subsequently measured at amortised cost using
the effective interest rate method.

De-recognition of financial liabilities

The Company de-recognises financial liabilities when, and only when, the Company’s obligations are discharged,
cancelled or they expire.

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously

2.18. Earnings per share

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the
weighted average number of equity shares considered for deriving the basic earnings per share and the weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

2.19. Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or
expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and
financing activities.

2.20. Cash And Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits, which are
subject to insignificant risk of changes in value.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short-term
deposit, as defined above.

2.21. Segment reporting

Operating segments are identified and reported taking into account the different risks and returns, the organization
structure and the internal reporting systems.

2.22. Current/non current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is
treated as current when it is:

211
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

-Expected to be realised or intended to be sold or consumed in normal operating cycle

-Held primarily for the purpose of trading
-Expected to be realised within twelve months after the reporting period, or
-Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period

All other assets are classified as non-current.

A liability is current when:

-It is Expected to be settled in normal operating cycle
-It is Held primarily for the purpose of trading
-is due to be settled within twelve months after the reporting period, or
-There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period

The company classifies all other liabilities as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash
Equivalents. The Company has identified twelve months as its operating cycle.

2.23. Critical accounting judgements, assumptions and Key sources of estimation uncertainty:

The preparation of the Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are
continuously evaluated and are based on management’s experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future
periods.

Key source of judgments, assumptions and estimates in the preparation of the Financial Statements which may cause a
material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in respect of useful
lives of Property, Plant and Equipment, impairment, employee benefit obligations, provisions, provision for income tax,
measurement of deferred tax assets and contingent assets & liabilities.

2.23.1 Critical judgments in applying accounting policies

The following are the critical judgements, apart from those involving estimations (Refer note 3.2), that the
Management have made in the process of applying the Company's accounting policies and that have the significant
effect on the amounts recognized in the Financial Statements.

a. Determination of functional currency

Currency of the primary economic environment in which the Company primarily generates and expends cash (“the
functional currency”) is Indian Rupee (`). Accordingly, the Management has assessed its functional currency to be Indian
Rupee (`).

b. Determining whether an arrangement contain leases and classification of leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any
option to extend or terminate the lease, if the use of such option is reasonably certain. The company makes an
assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain
that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company
considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the
termination of the lease and the importance of the underlying asset to operations taking into account the location of
the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to
ensure that the lease term reflects the current economic circumstances.

212
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652

c. Evaluation of indicators for impairment of Property, Plant and Equipment

The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant
decline in asset’s value, significant changes in the technological, market, economic or legal environment, market
interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of
the asset etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment.

2.23.2 Key sources of estimates and assumptions

Information about estimates and assumptions that have the significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates.

a. Defined benefit obligation (DBO)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, future salary increases and mortality
rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the
management considers the interest rates of government bonds in currencies consistent with the currencies of the post-
employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific
countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary
increases and gratuity increases are based on expected future inflation rates for the respective countries.

b. Contingent Liabilities and Assets

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company,
including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one
or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of
contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome
of future events.

c. Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal
and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded subsidiaries or other available fair value indicators.

d. Recognition of Deferred tax assets

Deferred Tax Assets (DTA) are recognised for the unused tax losses/ credits to the extent that it is probable that taxable
profit will be available against which the losses will be utilised. Management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable
profits together with future tax planning strategies.

e. Allowance for impairment of trade receivables

The expected credit loss is mainly based on the ageing of the receivable balances and historical experience. The
receivables are assessed on an individual basis assessed for impairment collectively, depending on their significance.
Moreover, trade receivables are written off on a case-to-case basis if deemed not to be collectible on the assessment of
the underlying facts and circumstances.
213
 CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 3.1 : Property, Plant & Equipment and Capital work in progress (INR in Millions)

Property, Plant & Equipment

Particulars
Freehold Land Buildings Plant and Equipment Furniture and Fixtures Vehicles Office Equipment Factory RCC Road Computer Total
Gross Carrying Value

As at 1st April, 2017 34.20 79.61 207.72 10.18 56.52 10.40 - 2.72 401.35
Additions during the year - 18.97 45.05 0.09 13.83 2.36 - 0.39 80.68
Deductions during the year - (5.10) (10.49) - (5.19) - - - (20.77)
As at 31st March 2018 34.20 93.49 242.28 10.27 65.16 12.76 - 3.11 461.26

As at 1st April, 2018 34.20 93.49 242.28 10.27 65.16 12.76 - 3.11 461.26
Additions during the year - 24.55 79.78 6.76 20.73 1.94 1.75 0.23 135.75
Disposal during the year - - (5.41) - (6.78) - - - (12.19)
As at 31st March 2019 34.20 118.04 316.65 17.03 79.11 14.70 1.75 3.34 584.82

As at 1st April, 2019 34.20 118.04 316.65 17.03 79.11 14.70 1.75 3.34 584.82
Additions during the Period - 15.51 85.05 1.90 30.29 0.88 1.06 0.21 134.90
Disposal during the Period - - (10.09) - (12.97) (0.08) - - (23.14)
As at 31st March 2020 34.20 133.55 391.61 18.92 96.43 15.50 2.82 3.55 696.58

Depreciation

As at 1st April, 2017 - 11.30 110.35 4.85 19.95 7.74 - 2.19 156.38
Provided for the year - 2.14 13.14 0.79 5.43 0.80 - 0.28 22.59
Disposal during the year - (2.83) (7.19) - (4.08) - - - (14.11)
As at 31st March 2018 - 10.61 116.30 5.64 21.30 8.54 - 2.47 164.85

As at 1st April, 2018 - 10.61 116.30 5.64 21.30 8.54 - 2.47 164.85
Provided for the year - 2.48 18.35 0.76 5.72 1.00 0.01 0.29 28.61
Disposal during the year - - (0.04) - (4.03) - - - (4.07)
As at 31st March 2019 - 13.09 134.61 6.41 22.99 9.54 0.01 2.75 189.40

As at 1st April, 2019 - 13.09 134.61 6.41 22.99 9.54 0.01 2.75 189.40
Provided for the Period - 3.20 25.85 1.43 10.81 1.12 0.18 0.28 42.87
Disposal during the Period - - (1.06) - (8.82) (0.01) - - (9.89)
As at 31st March 2020 - 16.29 159.40 7.84 24.98 10.65 0.19 3.03 222.38

Net Carrying Value

As at 1st April, 2017 34.20 68.31 97.37 5.33 36.57 2.67 - 0.53 244.97

As at 31st March 2018 34.20 82.88 125.97 4.62 43.86 4.23 - 0.64 296.41

As at 31st March 2019 34.20 104.95 182.04 10.62 56.12 5.16 1.75 0.59 395.42

As at 31st March 2020 34.20 117.26 232.20 11.09 71.45 4.85 2.63 0.51 474.20

Notes:
a) Refer note 17 & 13 for information on property, plant and equipment given as security.

214
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 3.2 : Right-Of-Use Asset

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Addition during the year 16.59 - -

Deductions during the year - - -
Closing Gross Carrying Value 16.59 - -

Amortisation charged during the year 3.26 - -

Reversal of depreciation during the year - - -
Closing Depreciation/amortisation 3.26 - -

Net Carrying Value 13.32 - -

Note 3.3 : Intangible Assets

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

-Computer Software

Opening Gross Carrying Value 0.28 - -

Addition during the year - 0.28 -
Deductions during the year - - -
Closing Gross Carrying Value 0.28 0.28 -

Opening Depreciation/amortisation 0.02 - -

Amortisation charged during the year 0.06 0.02 -
Reversal of depreciation during the year - - -
Closing Depreciation/amortisation 0.08 0.02 -

Net Carrying Value 0.20 0.26 -

Note 4 : Other Financial Assets

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

(Unsecured, Considered Good)

Security Deposits 4.78 5.15 2.33

Total 4.78 5.15 2.33

Note 5 : Other Non-Current Assets

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

(Unsecured, Considered Good)

Capital Advances to Related Party * - 10.31 10.31
Capital Advances to Others 2.40 1.58 6.80

Total 2.40 11.89 17.11

*Refer Note 35 - Related Party Disclosures

Note 6 : Inventories *
(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

(Valued at lower of Cost and net Realisable value)

Raw Materials 258.18 143.71 59.72
Goods in Transit (Raw Materials) 31.55 169.30 107.83
Packing Material 2.83 1.08 0.39
Work-in-progress 49.09 84.63 34.88
Finished goods @ 134.77 54.59 6.12
Other (Fuel) 0.31 0.20 0.21
Consumables and Stores 4.03 5.63 1.22

Total 480.75 459.14 210.36

* Refer note 17 for information on Inventories given as security.
@ Finished goods include Finished goods in transit.

215
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 7 : Trade Receivables *

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Trade Receivables considered good - Unsecured 890.36 641.18 295.56

Total 890.36 641.18 295.56

Less: Allowance for expected credit losses (Refer Note 7.1) 0.89 - -

Total 889.47 641.18 295.56

* Refer note 17 for information on Trade Receivables given as security.
*Receivables from related party refer Note: 35

7.1 Movement in Expected Credit Loss Allowance :

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Balance at beginning of the year - - -

Movement in Expected Credit Loss Allowance on trade receivables calculated at lifetime expected credit losses 0.89 - -

Balance at end of the year 0.89 - -

Note 8 : Cash and Cash Equivalents & Other Bank Balances

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

8.1 Cash & Cash Equivalents

Balance with Banks:
- In Current Accounts 3.43 1.85 8.78
- In Exchange earners' foreign currency account (EEFC) Account 6.80 4.58 0.00

Cash on hand 0.51 0.41 0.50

Sub-Total (A) 10.74 6.84 9.28

8.2 Other Bank Balances

- Earmarked bank deposits * 130.28 109.06 5.62

Sub-Total (B) 130.28 109.06 5.62

Total (A+B) 141.02 115.90 14.90

* The Company has pledge above deposits with the bank as margin money for Bank guarantee & Letter of Credit.

Note 9 : Other Financial Assets

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

(Unsecured, Considered Good)

Other Receivables * 13.80 13.46 13.87
Advances to Employees 0.22 0.96 0.91

Total 14.01 14.41 14.79

* Other Receivables include Insurance claim receivable amounting Rs. 13.31 Million. Refer Note : 38

Note 10 : Other Current Assets

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

(Unsecured, Considered Good)

Advances to suppliers 69.46 4.01 92.79
Balances with Revenue Authorities 67.34 41.46 22.41
Income Tax refundable 20.64 14.72 -
Prepaid Expenses 5.69 7.53 4.00
Transaction costs of an equity transaction (Refer Note 10.1) 36.59 12.56 -
Gratuity # 0.61 - -

Total 200.34 80.27 119.20

#Refer Note 33.2 - Defined benefit plans

10.1 Transaction costs of an equity transaction

Under Ind AS 32, the transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that
otherwise would have been avoided. Since the company has not received proceeds from issue of share capital, the company has accounted transaction costs of an equity transaction under the head
"Other current assets". Once company receives the proceeds from issue of share, the transaction costs of an equity transaction accumulated will be adjusted with the retained earning under "Reserve
& surplus".

216
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 11 : Equity Share Capital

(INR in Millions)
Particulars As at As at As at
31-Mar-20 31-Mar-19 31-Mar-18

Authorised Capital
As at 31-Mar-20 : 50 Million Equity Shares of Rs. 10/- each 500.00 500.00 80.00
As at 31-Mar-19 : 50 Million Equity Shares of Rs. 10/- each
As at 31-Mar-18 : 8 Million Equity Shares of Rs. 10/- each

Issued, Subscribed & Fully Paid-up Capital

As at 31-Mar-20 : 31.78 Million Equity Shares of Rs. 10/- each fully paid up 317.78 317.78 79.44
As at 31-Mar-19 : 31.78 Million Equity Shares of Rs. 10/- each fully paid up
As at 31-Mar-18 : 7.94 Million Equity Shares of Rs. 10/- each fully paid up

Total Share Capital 317.78 317.78 79.44

a) Reconciliation of the number of Equity shares

(No of shares in Million)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

Equity Share Capital

Balance at the beginning of the year 31.78 7.94 7.94

Add: Issued during the year

- Bonus Equity Shares allotted during the year - 23.83 -

Balance at the end of the year 31.78 31.78 7.94

b) Rights, Preferences & Restrictions of each class of 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. Any dividend declared by the company shall be paid to each holder
of Equity shares in proportion to the number of shares held to total equity shares outstanding as on that date.

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

c) Particulars of shares issued/allotted as fully paid-up by way of consideration other than cash

The Company had allotted 23.83 Million number of fully paid Bonus shares on November 3, 2018 in the ratio of three equity share of Rs. 10 each fully paid up for every one existing equity shares of Rs. 10 each fully paid
up.

217
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

d) Details of Equity Shareholders holding more than 5% shares in the company:

(No of shares in Million)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18
% of Holding No of Shares % of Holding No of Shares % of Holding No of Shares

1 Kamal Aggarwal 37.53% 11.93 37.53% 11.93 37.53% 2.98

2 Nareshkumar Goyal 16.63% 5.29 37.02% 11.76 37.02% 2.94
3 Kamal Aggarwal - HUF 0.00% - 7.97% 2.53 7.97% 0.63
4 Naresh Goyal - HUF 0.00% - 7.81% 2.48 7.81% 0.62
5 Navdeep Goyal & Shubharangana Goyal * 19.62% 6.23 0.00% - 0.00% -
6 Rajveer Aggarwal 7.97% 2.53 0.00% - 0.00% -
7 Shubharangana Goyal 6.23% 1.98 1.71% 0.54 1.71% 0.14
8 Navdeep Goyal 7.47% 2.37 1.71% 0.54 1.71% 0.14

Total 95.45% 30.33 93.76% 29.79 93.76% 7.45

* Joint Holding

Note 12 : Other Equity (INR in Millions)

Particulars Reserves & Surplus

Securities Premium Total
General Reserve Retained Earnings
Reserve

Balance as at 31st March 2017 - - 191.16 191.16

Profit for the Year - - 263.81 263.81

Re-measurements of Defined Benefit Plans (Net of Tax) - - 1.81 1.81
Balance as at 31st March 2018 - - 456.78 456.78

Profit for the Year - - 430.41 430.41

Bonus Issue - - (238.33) (238.33)
Re-measurements of Defined Benefit Plans (Net of Tax) - - 3.67 3.67
Balance as at 31st March 2019 - - 652.52 652.52

Profit for the Year - - 488.53 488.53

Re-measurements of Defined Benefit Plans (Net of Tax) - - 4.87 4.87
Balance as at 31st March 2020 - - 1,145.92 1,145.92

A) Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to
shareholders.

B) Re-measurements of Net Defined Benefit Plans: Differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities
over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in ‘Other comprehensive income’ and subsequently not
reclassified to the Statement of Profit and Loss.

218
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 13 : Borrowings
(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Secured
Term Loans:
- From Banks 157.29 26.64 23.22
- From Financial institutions 1.07 7.07 9.58
158.36 33.71 32.80

Less: Current 12.37 9.05 7.85

Total 145.99 24.66 24.95

As at As at As at
13.1 Name of Institution/ Bank/ Others
31-Mar-20 31-Mar-19 31-Mar-18
1 HDFC Bank - Property Loan #
Outstanding Amount 6.83 8.40 9.80
Current 1.77 1.57 1.40
Non-Current 5.06 6.83 8.40
Repayment terms
Repayable in 120 equal monthly instalments each of Rs. 0.21 Million.
Rate of interest 12% p.a.
No. of Instalments due after balance sheet date 40.00 52.00 64.00
2 Daimler Financial Services India Pvt Ltd- Vehicle Loan*
Outstanding Amount 1.07 2.26 3.35
Current 1.07 1.19 1.09
Non-Current - 1.07 2.26
Repayment terms
Repayable in 48 equal monthly instalments each of Rs. 0.11 Million.
Rate of interest 8.81% p.a.
No. of Instalments due after balance sheet date 10.00 22.00 34.00
3 Volkswagen Finance Pvt Ltd - Vehicle loan*
Outstanding Amount - 4.81 6.23
Current - 1.62 1.49
Non-Current - 3.19 4.74
Repayment terms
Repayable in 60 equal monthly instalments each of Rs. 0.17 Million.
Rate of interest 8.75% p.a.
No. of Instalments due after balance sheet date - 33.00 45.00
4 HDFC Bank - Vehicle loan*
Outstanding Amount - - 0.09
Current - - 0.09
Non-Current - - -
Repayment terms
Repayable in 36 equal monthly instalments each of Rs. 0.04 Million.
Rate of interest 12.01% p.a.
No. of Instalments due after balance sheet date - - 2.00
5 HDFC Bank - Vehicle loan*
Outstanding Amount - - 0.23
Current - - 0.23
Non-Current - - -
Repayment terms
Repayable in 60 equal monthly instalments each of Rs. 0.12 Millions.
Rate of interest 9.6% p.a.
No. of Instalments due after balance sheet date - - 2.00
6 HDFC Bank - Vehicle loan*
Outstanding Amount - - 0.26
Current - - 0.26
Non-Current - - -
Repayment terms
Repayable in 36 equal monthly instalments each of Rs. 0.07 Million.
Rate of interest 9.8% p.a.
No. of Instalments due after balance sheet date - - 4.00
7 HDFC Bank - Vehicle loan*
Outstanding Amount - - 0.26
Current - - 0.26
Non-Current - - -
Repayment terms
Repayable in 36 equal monthly instalments each of Rs. 0.07 Million.
Rate of interest 9.8% p.a.
No. of Instalments due after balance sheet date - - (12.00)
8 HDFC Bank - Vehicle loan*
Outstanding Amount - - 0.51
Current - - 0.51
Non-Current - - -
Repayment terms
Repayable in 36 equal monthly instalments each of Rs. 0.09 Million.
Rate of interest 9.7% p.a.
No. of Instalments due after balance sheet date - - (12.00)
9 HDFC Bank - Vehicle loan*
Outstanding Amount 0.72 1.74 2.68
Current 0.72 1.02 0.94
Non-Current - 0.72 1.74
Repayment terms
Repayable in 37 equal monthly instalments each of Rs. 0.09 Million.
Rate of interest 8% p.a.
No. of Instalments due after balance sheet date 8.00 20.00 32.00
219
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

As at As at As at
13.1 Name of Institution/ Bank/ Others
31-Mar-20 31-Mar-19 31-Mar-18

10 HDFC Bank - Vehicle loan*

Outstanding Amount 6.08 7.81 9.40
Current 1.87 1.72 1.59
Non-Current 4.21 6.08 7.81
Repayment terms
Repayable in 60 equal monthly instalments each of Rs. 0.19 Million .
Rate of interest 8% p.a.
No. of Instalments due after balance sheet date 36.00 48.00 60.00
11 HDFC Bank - Vehicle loan*
Outstanding Amount 4.61 5.73 -
Current 1.21 1.12 -
Non-Current 3.40 4.61 -
Repayment terms
Repayable in 60 equal monthly instalments each of Rs. 0.13 Million.
Rate of interest 8.5% p.a.
No. of Instalments due after balance sheet date 41.00 53.00 -
12 HDFC Bank - Vehicle loan*
Outstanding Amount 1.75 2.43 -
Current 0.74 0.68 -
Non-Current 1.01 1.75 -
Repayment terms
Repayable in 48 equal monthly instalments each of Rs. 0.07 Million.
Rate of interest 8.5% p.a.
No. of Instalments due after balance sheet date 27.00 39.00 -
13 HDFC Bank - Vehicle loan*
Outstanding Amount 0.40 0.53 -
Current 0.15 0.13 -
Non-Current 0.25 0.40 -
Repayment terms
Repayable in 48 equal monthly instalments each of Rs. 0.01 Million.
Rate of interest 9.5% p.a.
No. of Instalments due after balance sheet date 30.00 42.00 -
14 YES Bank - Vehicle loan*
Outstanding Amount 13.00 - -
Current 4.83 - -
Non-Current 8.17 - -
Repayment terms
Repayable in 37 equal monthly instalments each of Rs. 0.04 Million.
Rate of interest 9.11% p.a.
No. of Instalments due after balance sheet date 30.00 - -
15 HDFC Bank - Term Loan @
Outstanding Amount 123.89 -
Current - -
Non-Current 123.89 -
Repayment terms
60 months including 18 months of moratorium [ interest - By way of 60 monthly instalments; Principal -By way of 14
quarterly instalments post moratorium period ]
Rate of interest 10.55% p.a.
No. of quarterly Instalments due after balance sheet date 14.00 -

Total Borrowings 158.36 33.71 32.80

Current 12.37 9.05 7.85
Non-Current 145.99 24.66 24.95

Nature of securities:
# HDFC Bank - Property Loan secured by way of Equitable Mortgage of property.
* All vehicle loans secured by way of Hypothecation such vehicles.
@ HDFC Bank - Term Loan : For Capital Expenditure Primarily Secured against First and exclusive hypothecation charge on entire fixed asset (Both movable and Immovable assets) of the company both
present and future.Secondary Collateral security : 1st & Exclusive Charge on entire current assets of the Comapny. There is personal guarantee of promoter directors. 1st Exclusive charge by the way of
lien over Fixed Deposits parked with HDFC Bank Ltd.

Note 14 : Lease Liabilities

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Non-Current:
Lease Liabilities ((refer Note 41) 8.22 - -
- -
8.22 - -
Current:
Lease Liabilities ((refer Note 41) 4.11 - -

4.11 - -

Changes in liabilities arising from financing activities

New leases 16.59 - -
Accretion of interest 0.89
Cash outflows (5.14) - -
End of the year/period 12.33 - -

220
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 15 : Non current Provisions

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Provision for Employee Benefits

-Gratuity - 4.64 7.05
-Unavailed Leave 0.56 0.28 0.16

Total 0.56 4.92 7.21

Note 16 : Deferred Tax Liabilities (Net)

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Deferred Tax Liability

Temporary difference in the carrying amount of property, plant and equipment 22.99 26.69 19.53
Expenses allowed on payment basis 0.01 - -

Net Deferred Tax Liability (A) 23.00 26.69 19.53

Deferred Tax Asset

Lease Transaction 0.06 - -
Provision for doubtful debts 0.22
Expenses allowed on payment basis - 2.05 2.94
On Account of Preliminary Expenses 0.15 0.30 0.40

Net Deferred Tax Assets (B) 0.43 2.35 3.33

Net Deferred Tax Liability/(Assets) (A-B) 22.57 24.34 16.20

16.1 Movement in deferred tax Liabilities/(assets)

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Opening balance 24.34 16.20 16.11

Tax (income)/expense during the period recognised in Statement of profit and loss (3.41) 6.33 (0.81)
Tax (income)/expense during the period recognised in Other Comprehensive Income 1.64 1.81 0.90

Closing balance 22.57 24.34 16.20

Note 17 : Borrowings
(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Secured Loans from banks

- Working Capital Loan 286.69 260.28 82.40
- Export Packing Credit Loan - - 26.62
Sub-Total (A) 286.69 260.28 109.02

Unsecured
- From Directors and Others 0.06 37.10 27.10
Sub-Total (B) 0.06 37.10 27.10

Total (A+B) 286.75 297.38 136.12

Rate of interest on working capital loans 1 Year MCLR + 1.85% Base Rate + 1.55%
Rate of interest on Buyer Credit Loan and Export Packing Credit Loan As mutually agreed at the time of disbursement

Nature of security :
HDFC Bank Cash Credit Account, working capital demand loan, Buyer Credit Loan and Export Packing Credit Loan is secured against First and exclusive hypothecation charge on all the current assets of the
company & entire fixed asset (Both movable and Immovable assets) of the company both present and future. Extension of Charge on the property located at 901 & 902, 9th Floor, ONYX Business Center,
Akshar Chowk - Baroda -390020 . There is personal guarantee of promoter directors.

Note 18 : Trade Payables

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Trade Payables
- Total outstanding dues of micro and small enterprises * 38.72 25.28 34.09
- Total outstanding dues of creditors other than micro enterprises and small enterprises 218.50 263.44 138.68

Total 257.22 288.72 172.77

* The details of amounts outstanding to Micro and Small Enterprises as identified by the management, under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) are as
under:

221
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

(INR in Millions)
As at As at As at
Trade payables -Total outstanding dues to Micro & Small enterprises*
31-Mar-20 31-Mar-19 31-Mar-18
Sr. No.
1 Principal amount and the interest due thereon remaining unpaid at the end of accounting year;
- Principal 38.72 25.28 34.09
- Interest - - -
2 Interest paid by the Company in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006, along
with the amount of the payment made to the supplier beyond the appointed day during the year. - - -
3 Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day
during the year) but without adding the interest specified under Micro, Small and Medium Enterprises Development Act,
2006 - - -
4 Interest accrued and remaining unpaid as at year end - - -
5 Further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are
actually paid to the small enterprise - - -

* This information has been determined to the extent parties have been identified based on confirmation received from parties. Based on current information/confirmations available with the company, there
are no overdue payable to suppliers who are registered under the relevant Act.

Note 19 : Other Financial Liabilities

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Current Maturities of Long term Borrowings (Refer Note 13 ) 12.37 9.05 7.85
Creditor for capital goods 9.64 7.62 5.00
Salary & Wages Payable 21.94 93.86 13.51
Other expenses Payable 1.06 1.50 0.85

Total 45.01 112.03 27.20

Note 20 : Other current Liabilities

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Advance from Customers 18.25 2.35 9.11

Statutory dues 5.52 4.36 2.58

Total 23.77 6.71 11.68

Note 21 : Short term Provisions

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Provision for Employee Benefits

-Gratuity - 1.27 1.66
-Unavailed Leave 0.03 0.02 0.01
Income Tax Payable (Net of advance tax and TDS) - - 36.61

Total 0.03 1.29 38.29

222
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 22 : Revenue From Operations

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Disaggregation of revenue from contracts with customers based on geography :

REVENUE FROM SALE OF PRODUCTS

- Domestic 1,400.27 1,966.93 764.11
- Export 934.19 658.88 438.31
- Deemed Export 108.25 311.42 315.83
ADD : Excise duty Collected on Domestic sales - - 4.86
2,442.71 2,937.23 1,523.11

REVENUE FROM SALE OF SERVICES

- Domestic - Job Work 168.01 88.30 46.96

Other Operating Revenues

- Domestic
Export Incentives 7.93 4.64 3.38
Lifting Charges Received 0.45 0.22 2.21
Sales Commission Received 1.43 1.08 0.49
Miscellaneous Income - 1.92 0.27

Total 2,620.52 3,033.41 1,576.42

Consequent to introduction of Goods and Service Tax (“GST”) with effect from 1 July 2017, central excise and value added tax have been subsumed into GST. In accordance with Ind
AS, GST is not considered a part of revenue unlike excise duties which used to be included in revenue in period before 1 July 2017. Accordingly, the figures for the year ending March
31, 2018 are not comparable with the current year and previous fiscal year(s).

Note 23 : Other Income

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Interest income on financial assets carried at amortised cost

- Deposit with bank and others 7.98 1.48 1.10

Profit on sale of Property, Plant & Equipment (Net) - - 0.55

Net gain on Foreign Currency Transactions 31.45 18.38 5.84

Other Non-operating Income 0.22 - -

Total 39.65 19.86 7.49

Note 24 : Cost of Materials Consumed

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Opening Stock of Raw Materials 314.09 167.94 66.26

(+) Purchase of Raw Materials 1,512.17 2,093.54 895.50
(-) Closing Stock of Raw Materials 292.56 314.09 167.94

Total cost of Raw Materials Consumed 1,533.71 1,947.39 793.82

24.1 Value of imported and indigenous raw materials Purchase

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Indigenous 904.46 1,023.11 567.61

Imported* 607.71 1,070.43 327.89

Total cost of Raw Materials Purchased 1,512.17 2,093.54 895.50

24.2 Percentage of imported and indigenous raw materials Purchase

For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Indigenous 59.81% 48.87% 63.38%

Imported 40.19% 51.13% 36.62%

223
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 25 : Changes in inventories of finished goods and work-in-progress

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Opening Stock
Finished goods 54.59 6.12 0.00
Work-in-progress 84.63 34.88 20.33
Sub- Total (A) 139.22 41.00 20.33

Less: Closing Stock

Finished goods 134.77 54.59 6.12
Work-in-progress 49.09 84.63 34.88
Sub- Total (B) 183.86 139.22 41.00

Net (A-B) (44.64) (98.23) (20.67)

Note 26 : Employee Benefit expenses

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Salaries, Wages, Bonus, Benefits and Amenities 130.61 231.50 176.16

Contribution to Provident & Other Funds 4.87 5.62 9.02
Employee Welfare Expenses 5.02 4.00 2.87

Total 140.50 241.12 188.04

Note 27 : Finance Costs

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Interest
- On Loans for Fixed Period 3.22 3.22 2.77
- On Other Loans / Liabilities 29.58 25.43 18.36
- On Lease Liabilities 0.89 - -

Other Borrowing Cost 13.16 11.36 9.23

Total 46.84 40.02 30.36

Note 28 : Depreciation and Amortisation

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Depreciation
- On Property Plant & Equipment 42.87 28.61 22.59
- On Right to Use Assets 3.26 - -

Amortisation
- Of Intangible assets 0.06 0.02 -

Total 46.20 28.64 22.59

Note 29 : Other expenses

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

- DIRECT EXPENSES
Consumable Stores 13.88 5.74 12.34
Import Expenses 69.95 46.59 15.41
Freight Inward 10.73 4.82 6.70
Power Charges 28.05 20.92 16.10
Fuel Consumption 21.56 17.62 18.24
Repairs & maintenance - Machinery 7.70 4.20 4.24
Factory & Godown Expense 3.87 4.06 2.50
Jobwork Charges 19.04 91.90 15.84
Electrical Expenses 1.58 0.44 0.38
Security Service Expense 1.48 1.60 1.68
Laboratory & Testing Expense 1.39 0.46 0.31
Lifting Charges 3.06 6.78 4.43
Sub- Total (A) 182.29 205.15 98.18

224
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

- SELLING,MARKETING & DISTRIBUTION EXPENSES

Freight Outward 21.51 23.06 16.63
Export Expense 17.67 10.61 11.99
Travelling & Conveyance 7.86 5.15 5.48
Exhibition Exp 4.61 3.46 3.46
Sales Commission 2.83 2.64 1.35
Other Selling, Marketing & Distribution expenses 0.14 0.37 0.56
Sub- Total (B) 54.62 45.29 39.46

- ADMINISTRATIVE & OTHER EXPENSES

Legal, Professional / Consultancy 10.78 8.66 5.68
Insurance Expense 8.44 4.41 2.87
Petrol & Vehicle Expense (Motor Car) 4.12 3.25 2.02
Transportation for employees 2.23 2.09 1.99
Repairs & Maintenance - Other 5.67 1.92 2.07
Rent Expense 4.75 3.85 1.18
Preliminary Expenses w/o - - 1.50
Donation 2.45 1.18 1.00
Contribution to CSR 1.75 4.58 -
Director Sitting Fees 0.55 - -
Loss on disposal of Assets (Net) 0.56 0.51 -
Payment to Auditors 0.30 0.25 0.13
Impairment and write off 3.20 - 0.54
Rates & Taxes 0.27 0.16 0.52
Other Administrative Expenses 6.36 0.98 2.25
Sub- Total (C) 51.42 31.85 21.75

Net (A+B+C) 288.33 282.29 159.40

Note 30 : Commitments and Contingent liabilities (INR in Millions)

AS at AS at AS at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Contingent Liability

a) Claims against the Company/ disputed demands not acknowledged as debt:-

- Excise 0.35 0.35 0.35
- GST 2.34 - 0
b) Letters of Credit issued for purchase of Raw Materials 50.03 20.24 16.56

Capital Commitments

Estimated amount of purchase order/contracts remaining to be executed and not provided for
(net of advances):
- Property, plant and equipment 6.13 - -

Note 31 : Income tax expense

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Current Tax :
- Current tax 163.80 174.60 141.64
- Taxes for earlier years 0.31 0.69 0.87
164.11 175.29 142.51

Deferred tax : (3.41) 6.33 (0.81)

Deferred tax adjustments (3.41) 6.33 (0.81)

Total income tax expense recognised in the current year 160.70 181.62 141.70

Deferred Tax on OCI 1.64 1.81 0.90

Deferred Tax on OCI 1.64 1.81 0.90

Total Tax expense 162.34 183.43 142.60

225
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

31.1 The Income Tax Expense for the Year can be Reconciled to the Accounting Profit as Follows:
(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

1 Profit before tax 649.23 612.03 405.51

2 Income tax rate (%) applicable to the Company 25.17% 29.12% 34.61%
3 Income tax expense calculated 163.40 178.22 140.34

Expenses not allowed in Income Tax 1.81 1.95 2.38

Effect on deferred tax due to the change in income tax rate (5.81) - -
Effect on deferred tax due to difference between current tax rate and deferred tax rate - 0.75 (0.05)
Effect of recognition of Prior year tax 0.31 0.69 0.87
Other Adjustments 1.00 - (1.84)
4 Total effect of tax adjustments (2.70) 3.40 1.36

5 Income Tax recognised in Statement of Profit and Loss (3+4) 160.70 181.62 141.70

6 Effective tax Rate 24.75% 29.68% 34.94%

7 OTHER COMPREHENSIVE INCOME 6.50 5.48 2.71

Income tax rate (%) applicable to the Company 25.17% 29.12% 34.61%
Income tax expense calculated 1.64 1.59 0.94

Effect on deferred tax due to difference between current tax rate and deferred tax rate - 0.22 (0.04)
8 Total income tax recognised in other comprehensive income 1.64 1.81 0.90

Total Tax expense (5+8) 162.34 183.43 142.60

Note 32 : Payment to auditors

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

For Audit Fees 0.30 0.18 0.10

For Certification Fees * 1.75 - -
For Tax Audit Fees - 0.08 0.03
Total 2.05 0.25 0.13

* The amount disclosed for the year ended March 31, 2020 (of which Rs.1.15 Million has been paid to current auditors and Rs. 0.60 Million has been paid to previous auditors) is
shown as "transaction costs of an equity transaction" under the head "Other Current Assets" in Note 10.

226
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 33 : EMPLOYEE BENEFIT PLANS

33.1 Defined contribution plans

Contribution are made to statutory provident fund which covers all regular employees. While both the employees and the company make predetermined contributions to the Provident fund. The contributions are normally
based on a certain percentage of the employee's salary.

The Company has recognised expenses towards defined contribution plan as under:
(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Employer's Contribution to provident fund 2.94 1.39 1.27

33.2 Defined benefit plans

The Company has defined benefit plans that provide gratuity benefit. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or
termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the member’s length of service and salary at the time of retirement/termination age. The
most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2020 by a member firm of the Institute of Actuaries of India. The present value of the
defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method. Each year, the Company reviews the level of funding in gratuity fund. The Company
decides its contribution based on the results of its review.

(A) Gratuity (Funded)

(INR in Millions)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

I - Expenses recognized in the Statement of Profit and Loss:

Current Service Cost 0.71 3.35 3.70
Past service Cost - - 3.70
Net Interest Cost 0.37 0.62 0.12
Expenses recognized during the year 1.08 3.97 7.52

II- Expenses recognized in other comprehensive income (OCI)

Actuarial (gain)/losses on obligation for the period (6.55) (5.57) (2.98)
Return on Plan Assets, Excluding Interest Income 0.05 0.09 0.27
Net (Income)/Expenses For the year Recognised in OCI (6.50) (5.48) (2.71)

III - Changes in the present value of defined benefit obligation representing reconciliation of
opening and closing balances thereof:
As at the beginning of the year 10.47 11.84 7.12
Current service cost 0.71 3.35 3.70
Interest Cost 0.71 0.91 0.55
Past service Cost - - 3.70
Benefit paid from the fund (0.08) (0.06) (0.24)
Actuarial losses/(gains) (6.55) (5.57) (2.98)
As at the end of the year 5.27 10.47 11.84

IV - Movement in net liability recognized in Balance Sheet

As at the beginning of the year - (liability)/Asset (5.91) (8.72) (4.57)
Expenses recognized during the year in Statement of Profit and Loss (1.08) (3.97) (7.52)
Expenses recognized during the year in OCI 6.50 5.48 2.71
Contributions made 1.10 1.30 0.67
As at the end of the year - (liability)/Asset 0.61 (5.91) (8.72)
-Current portion of the above - (1.27) (1.66)
-Non-Current portion of the above 0.61 (4.64) (7.05)

V - Changes in the fair value of plan assets representing reconciliation of the opening and
closing balances thereof:
As at the beginning of the year 4.57 3.13 2.54
Interest Income 0.35 0.29 0.42
Contributions made 1.10 1.30 0.67
Benefit paid from the fund (0.08) (0.06) (0.24)
Return on Plan Assets, Excluding Interest Income (0.05) (0.09) (0.27)
As at the end of the year 5.88 4.57 3.13

VI - Net (Liability) recognized in the balance sheet

Present Value of Benefit Obligations at the end of the year (5.27) (10.47) (11.84)
Fair Value of Plan Assets at the end of the year 5.88 4.57 3.13
Net (Liability)/Asset recognized in the Balance Sheet 0.61 (5.91) (8.72)

VII - Return on Plan Assets

Expected return on plan assets 0.35 0.29 0.42
Actuarial (loss)/gain (0.05) (0.09) (0.27)
Actuarial return on plan assets 0.29 0.20 0.16

VIII - The major categories of plan assets as a percentage of total plan assets
Insurer Managed Funds 100% 100% 100%

IX - Principal actuarial assumptions

Indian Assured Lives Indian Assured Lives Indian Assured Lives
Mortality Mortality (2006-08) Mortality (2006-08) Mortality (2006-08)

Discount rate 6.80% 7.70% 7.70%

Attrition Rate 1 to 5% 1 to 5% 1 to 5%
Salary Escalation Rate 227 7.00% 7.00% 7.00%
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

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

Employee benefit plan typically exposes the company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.

Investment Risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is
below this rate, it will create a plan deficit.

Interest Risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity Risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan
participants will increase the plan's liability.

Salary Risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and employee turnover.

Maturity Analysis :
(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Projected Benefit payable in future years from the date of reporting

1st Following Year 0.35 2.25 2.26
2nd Following Year 0.25 2.36 0.36
3rd Following Year 0.19 0.29 2.38
4th Following Year 0.26 0.24 0.31
5th Following Year 0.14 0.28 0.27
Sum of Years 6 To 10 2.49 1.74 1.44

Sensitivity Analysis :

The sensitivity analysis below have been determined based on reasonable possible changes of the respective assumptions occurring at the end of reporting period, while holding all other assumptions constant. The result of
sensitivity analysis is given below:
(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Projected Benefit Obligation on Current Assumptions

+1% Change in Rate of Discounting 4.77 9.74 10.92
-1% Change in Rate of Discounting 5.85 11.35 12.93
+1% Change in Rate of Salary Increase 5.84 11.35 12.93
-1% Change in Rate of Salary decrease 4.77 9.73 10.91
+1% Change in Rate of Employee Turnover 5.27 10.50 11.87
-1% Change in Rate of Employee Turnover 5.27 10.45 11.81

(B) Leave encashment

The leave obligations cover the Company's liability for sick and earned leaves. The Company does not have an unconditional right to defer settlement for the obligation shown as current provision balance above. However based
on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months, therefore based on the independent actuarial report, only a certain
amount of provision has been presented as current and remaining as non-current.

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

I - Expenses recognized in the Statement of Profit and Loss:

Current Service Cost 0.38 0.19 0.07
Interest Cost 0.02 0.01 0.01
Actuarial losses/(gains) (0.11) 0.04 0.00
Expenses recognized during the year 0.29 0.24 0.08

III - Changes in the present value of defined benefit obligation representing reconciliation of
opening and closing balances thereof:
As at the beginning of the year - (liability)/Asset (0.30) (0.17) (0.11)
Current service cost (0.38) (0.19) (0.07)
Interest Cost (0.02) (0.01) (0.01)
Benefit paid 0.01 0.11 0.02
Actuarial (losses)/gains 0.11 (0.04) (0.00)
As at the end of the year - (liability)/Asset (0.58) (0.30) (0.17)

-Current portion of the above (0.03) (0.02) (0.01)

-Non-Current portion of the above (0.56) (0.28) (0.16)

228
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Sensitivity Analysis

The sensitivity analysis below have been determined based on reasonable possible changes of the respective assumptions occurring at the end of reporting period, while holding all other assumptions constant.

(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Projected Benefit Obligation on Current Assumptions

+1% Change in Rate of Discounting 5,15,881.00 0.19 0.15
-1% Change in Rate of Discounting 6,60,422.00 0.24 0.19
+1% Change in Rate of Salary Increase 6,59,459.00 0.24 0.19
-1% Change in Rate of Salary Decrease 5,15,430.00 0.19 0.15
+1% Change in Rate of Employee Turnover 5,82,108.00 0.21 0.17
-1% Change in Rate of Employee Turnover 5,82,108.00 0.21 0.17

Note 34 : SEGMENT REPORTING

The Company's opera ons falls under single segment namely "Manufacturing of Specialised Chemicals", taking into account the risks and returns, the organiza on structure and the internal repor ng systems.

Segment revenue from “Manufacturing of Specialised Chemicals” represents revenue generated from external customers which is attributable to the Company’s country of domicile i.e. India and external customers outside India
as under:
(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Revenue from:

Outside India 934.19 658.88 438.31

In India 1,686.33 2,374.53 1,138.11

- Deemed Export (SEZ) 108.25 311.42 315.83
- Other than Deemed Export (SEZ) 1,578.08 2,063.11 822.28

2,620.52 3,033.41 1,576.42

All assets are located in the Company’s country of domicile i.e. India.
Two customers (2018-19: two customers and 2017-18 three customers) individually contribute more than 10% of entity's revenues. The total revenue from such entities is given below:

(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Customer - 1 487.15 330.63 353.78

Customer - 2 - 403.30 -
Customer - 3 682.24 - 160.10
Customer - 4 - - 181.93

1,169.39 733.93 695.81

Note 35 : RELATED PARTY DISCLOSURES

(i) List of related parties as per the requirements of Ind-AS 24 - Related Party Disclosures

Name of Related Party Nature of Relationship

Kamal Aggrawal
Navdeep Goyal
Himanshu Purohit
Rajesh Gandhi
Rajveer Aggarwal
Shahilkumar Kapatel
Naresh Goyal ( Up to 15/02/2019 ) Key Management Personnel
Devendra R.Mangla
Lalit D. Chaudhary
Neelu Atulkumar Shah
Samir Chandrakant Patel
Bharat Chunilal Shah

Name of Related Party Nature of Relationship

Naresh Goyal (From 16/02/2019)

Minal Aggrawal
Relative of Key Management Personnel
Puja Shah
Parul Gupta

Super Industrial Lining Private Limited

Super Chemical Industries Other Parties which significantly Influence/are
Supertech Fabrics Private Limited influenced by the Company (either individually
Shivam Petrochem Industries or with others)
Kana Real Estate Pvt. Ltd.

229
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

(ii) Disclosure in respect of Transactions with related parties during the year.
(INR in Millions)
For the Year ended For the year ended For the year ended
Name of the related party and nature of transactions
31-Mar-20 31-Mar-19 31-Mar-18

(a) Key Management Personnel

Director Remuneration
Kamal Aggrawal 23.58 66.03 51.51
Naresh Goyal ( Up to 15/02/2019 ) - 61.12 45.87
Navdeep Goyal 25.98 22.19 16.17
Himanshu Purohit 2.16 2.34 1.92
Rajesh Gandhi 2.16 2.34 1.92
Rajveer Aggarwal 2.40 17.27 10.52

Remuneration
Shahilkumar Kapatel 0.25 0.14 -

Director Sitting Fees

Devendra R.Mangla 0.12 - -
Lalit D. Chaudhary 0.11 - -
Neelu Atulkumar Shah 0.16 - -
Samir Chandrakant Patel 0.11 - -
Bharat Chunilal Shah 0.06 - -

Rent Expense
Kamal Aggrawal 0.18 0.18 0.19

Unsecured loan repaid

Kamal Aggrawal 9.65 - -
Navdeep Goyal 3.90 - -
Rajveer Aggarwal 3.90 - -
Naresh Goyal ( Director up to 15/02/2019 ) 19.65 - -

Unsecured loan received

Naresh Goyal ( Director up to 15/02/2019 ) - 10.00 9.65
Kamal Aggrawal - - 9.65
Navdeep Goyal - - 3.90
Rajveer Aggarwal - - 3.90

(b) Relative of Key Management Personnel

Rent Expense
Minal Aggrawal 0.18 0.18 0.18
Puja Shah 0.18 0.18 0.18
Parul Gupta 0.18 0.18 0.18

(c) Other Parties which significantly Influence/are influenced by the

Company (either individually or with others)

Purchase Consumable & Stores

Super Industrial Lining Private Limited 1.36 0.91 1.23
Supertech Fabrics Private Limited 0.09 - -

Purchase of Property, Plant and Equipment's

Super Industrial Lining Private Limited 9.24 9.46 7.54
Shivam Petrochem Industries 0.50 - -

Purchase of Raw Material

Shivam Petrochem Industries 0.03 1.12 4.22
Supertech Fabrics Private Limited - 0.01 -
Super Chemical Industries 0.59 - 0.52

Repairs & Maintenance of Plant & Machinery

Super Industrial Lining Private Limited 1.50 - -

Job work Charges Paid

Shivam Petrochem Industries 16.51 80.77 7.08

Lifting Charges Paid

Super Chemical Industries 0.41 0.83 1.18

Sale of Property, Plant and Equipment's

Shivam Petrochem Industries 7.41 2.81 -

Sales commission Received

Super Chemical Industries 1.43 1.08 0.49

Revenue from Operation

Super Industrial Lining Private Limited 0.13 0.32 0.40
Super Chemical Industries 2.10 0.96 0.05
Shivam Petrochem Industries 0.94 1.47 0.09

230
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

(ii) Disclosure in respect of Outstanding Balances at the end of year.

(INR in Millions)
As at As at As at
Name of the related party and Outstanding Balances
31-Mar-20 31-Mar-19 31-Mar-18

(a) Key Management Personnel

Remuneration payable
Kamal Aggrawal 3.16 35.13 4.87
Navdeep Goyal 12.33 14.43 1.60
Rajveer Aggarwal 0.13 11.28 1.60
Himanshu Purohit 0.14 0.13 -
Rajesh Gandhi 0.15 0.12 -
Shahilkumar Kapatel 0.02 0.02 -
Naresh Goyal ( Director up to 15/02/2019 ) 12.23 28.24 2.72

Director Sitting Fees payable

Devendra R.Mangla (0.01) - -
Lalit D. Chaudhary (0.01) - -
Neelu Atulkumar Shah (0.01) - -
Samir Chandrakant Patel (0.01) - -
Bharat Chunilal Shah (0.01) - -

Unsecured Loan Payable

Kamal Aggrawal - 9.65 9.65
Navdeep Goyal - 3.90 3.90
Rajveer Aggarwal - 3.90 3.90
Naresh Goyal ( Director up to 15/02/2019 ) - 19.65 9.65

Rent Payable
Kamal Aggrawal 0.02 0.02 0.02

(b) Relative of Key Management Personnel

Rent Payable
Minal Aggrawal 0.01 0.01 0.01
Puja Shah 0.01 0.01 0.01
Parul Gupta 0.01 0.01 0.01

(c) Other Parties which significantly Influence/are influenced by the

Company (either individually or with others)

Trade Payable
Super Industrial Lining Private Limited 6.03 3.14 3.46
Shivam Petrochem Industries 0.07 20.36 0.17
Super Chemical Industries - - 1.04

Trade Receivable
Super Chemical Industries 1.75 0.36 -
Shivam Petrochem Industries 8.56 1.63 -

Capital Advances
Kana Real Estate Pvt. Ltd. - 10.31 10.31

Note 36 : CAPITAL MANAGEMENT

The primary objective of the company's capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual planning and budgeting and its plan for working capital and long-term borrowings. The funding requirements are met through equity, internal accruals
and a combination of both long-term and short-term borrowings.

GEARING RATIO
(INR in Millions)
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

Gross Debt (Long term and short term borrowings including current maturities) 445.11 331.09 168.92
Less: Cash and bank balances 141.02 115.90 14.90

Net Debt (A) 304.09 215.19 154.02

Total Equity (B) 1,463.69 970.30 536.22

Net Debt to equity Ratio ( A/B ) 0.21 0.22 0.29

Note 37 : DISCLOSURE ON FINANCIAL INSTRUMENTS

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and
equity instrument are disclosed in note 2.1 (E) to the financial statements.

231
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

37.1 Financial assets and liabilities:

The following table presents the carrying amounts and fair value of each category of financial assets and liabilities :
(INR in Millions)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

Assets
Financial Assets

At Amortised Cost
Other Financial Assets (Non-Current and Current) 18.79 19.57 17.12
Trade Receivables 889.47 641.18 295.56
Cash and cash Equivalents 10.74 6.84 9.28
Other Bank balance 130.28 109.06 5.62
Total 1,049.28 776.65 327.57

Liabilities
Financial Liabilities

At Amortised Cost
Borrowings (Non-Current and Current) 432.74 322.03 161.07
Trade Payables 257.22 288.72 172.77
Other Financial Liabilities 45.01 112.03 27.20
Lease Liabilities 12.33 -
Total 747.30 722.78 361.04

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31, 2020 and years March 31, 2019, and 2018.

The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

37.2 : FINANCIAL RISKS MANAGEMENT

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial
instruments.

These risks may be caused by the internal and external factors resulting into impairment of the assets of the Company causing adverse influence on the achievement of Company’s strategies, operational and financial objectives,
earning capacity and financial position.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy
is approved by the board of directors. The risk management framework aims to:
(a) Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company’s business plan.
(b) Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(A) MARKET RISK

Market risk is the risk that changes in market prices- such as foreign exchange rates, interest rates and equity prices- will affect the Company’s income or the value of its holdings of financial instrument. The objective of market risk

management is to manage and control market risk exposures within acceptable parameters while optimising the return. The major components of market risk are foreign currency risk, interest rate risk and price risk.

(1) 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. The Company undertakes transactions denominated in foreign currencies;
consequently, exposures to exchange rate fluctuations arise.

The carrying amount of the Company's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
(INR in Millions)
As at As at As at
Foreign Currency Exposure
31-Mar-20 31-Mar-19 31-Mar-18

Assets 210.63 53.06 55.32

Liabilities 22.78 123.19 60.56

Foreign Currency Sensitivity:

The Company is principally exposed to foreign currency risk against USD. Sensitivity of profit or loss arises mainly from USD denominated receivables and payables.

As per management’s assessment of reasonable possible changes in the exchange rate of +/- 5% between USD-INR, EURO-INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary
items at the period end is presented below:

(INR in Millions)
As at As at As at
Foreign Currency Exposure
31-Mar-20 31-Mar-19 31-Mar-18

Assets :
Weakening of INR by 5% 10.53 2.65 2.77
Strengthening of INR by 5% (10.53) (2.65) (2.77)

Liabilities :
Weakening of INR by 5% (1.14) (6.16) (3.03)
Strengthening of INR by 5% 1.14 6.16 3.03

232
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

(2) INTEREST RATE RISK

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs.

The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company’s interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial
instruments to manage the liquidity and fund requirements for its day to day operations like short-term loans.

As at March 31, 2020, March 31, 2019 and March 31, 2018 financial liability of Rs. 286.69 Million, Rs. 260.3 Million and Rs. 109.02 Million respectively, was subject to variable interest rates. Increase/decrease of 100 basis points in
interest rates at the balance sheet date would result in decrease/increase in profit/(loss) before tax of Rs. 2.87 Million, Rs. 2.60 Million and Rs. 1.09 Million for the year ended March 31, 2020, March 31, 2019 and March 31, 2018
respectively.

The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not react correspondingly to

changes in market interest rates. Also, the interest rates on some types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may change with a lag.

The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. 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 year.

This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

(Note: The impact is indicated on the profit/(loss) before tax basis).

(B) CREDIT RISK

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of
mitigating the risk of financial loss from defaults. The Company's exposure and wherever appropriate, the credit ratings of its counterparties are continuously monitored and spread amongst various counterparties. Credit exposure is
controlled by counterparty limits that are reviewed and approved by the management of the Company. Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, trade receivables
and loans and advances.

The Company has concentration of credit risk due to the fact that the Company has significant receivables from two customers which is reputed and creditworthy undertaking.

Balances with banks were not past due or impaired as at the year end. In other financial assets that are not past dues and not impaired, there were no indication of default in repayment as at the year end.

As at March 31, 2020, the Company had (number) 4 customers (31 March 2019: 8 customers and 31 March 2018: 6 customers) having outstanding more than 5% of total trade receivables that accounted for approximately 47.25%
(31 March 2019: 68.51% and 31 March 2018 66.79%) of total trade receivables outstanding.

(1) TRADE RECEIVABLES:

Concentration of credit risk with respect to trade receivables are limited, due to the Company’s customer base being large and diverse. All trade receivables are reviewed and assessed for default on a quarterly basis.

Our historical experience of collecting receivables indicate a low credit risk. Hence, trade receivables are considered to be a single class of financial assets.

(C) LIQUIDITY RISK

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors
rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet
obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the

undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The contractual maturity is based on the earliest date on which the Company may be required to pay.

(INR in Millions)

Particulars As at
Total Amount Less than 1 year Above 1 Years

Borrowings
31-Mar-20 432.74 286.75 145.99
31-Mar-19 322.03 297.38 24.66
31-Mar-18 161.07 136.12 24.95

Trade Payables
31-Mar-20 257.22 257.22 -
31-Mar-19 288.72 288.72 -
31-Mar-18 172.77 172.77 -

Other Financial Liability

31-Mar-20 45.01 45.01 -
31-Mar-19 112.03 112.03 -
31-Mar-18 27.20 27.20 -
Lease Liabilities
31-Mar-20 12.33 4.11 8.22
31-Mar-19 - - -
31-Mar-18 - - -

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the
undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date
on which the Company may be required to pay.

233
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

(INR in Millions)

Particulars
As at Total Amount Less than 1 year Above 1 Years

Trade Receivables
31-Mar-20 889.47 889.47 -
31-Mar-19 641.18 641.18 -
31-Mar-18 295.56 295.56 -

Cash and Cash Equivalents

31-Mar-20 10.74 10.74 -
31-Mar-19 6.84 6.84 -
31-Mar-18 9.28 9.28 -

Bank Balances Other than Cash and Cash Equivalents

31-Mar-20 130.28 130.28 -
31-Mar-19 109.06 109.06 -
31-Mar-18 5.62 5.62 -
Other Financial Assets
31-Mar-20 18.79 14.01 4.78
31-Mar-19 19.57 14.41 5.15
31-Mar-18 17.12 14.79 2.33

(D) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company has access to committed credit facilities as described below, of which Rs. 243.31 Million were unused at the end of the reporting period (as at March 31, 2019 Rs. 89.72 Million and March 31, 2018 Rs. 40.98 Million ). The
Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.

(INR in Millions)
As at As at As at
Secured bank Working capital facility, reviewed annually and payable at call
31-Mar-20 31-Mar-19 31-Mar-18

Amount used 286.69 260.28 109.02

Amount unused 243.31 89.72 40.98

Note 38 INSURANCE CLAIM RECEIVABLE

The fire took place on 9th January 2018 damaging the company's property, plant and equipment and also raw material, packing material and stores and consumables resulting into loss amounting to Rs. 13.31 Million. These assets are
fully secured through insurance. The company has recognised insurance receivable of Rs. 13.31 Million against such loss. No amount has been received from insurance company till end of the reporting period. The management has

estimated amount receivable from insurance company of Rs. 21.92 Million being Reinstatement Value and it is under process with the insurance company. However this event does not affect the concept of going concern.

Note 39 CORPORATE SOCIAL RESPONSIBILITES (CSR)

a) As required by Section 135 read with Schedule VII of the Companies Act 2013, corporate social responsibility (CSR) expenditure required to be spent by the Company during the year is Rs. 7.11 Million ( 2018-19 Rs. 3.30 Million
and 2017-18 Nil), respectively, computed at 2% of its average net profit before tax for the immediately preceding three financial years.

a) Expenditure related to corporate social responsibility spend during the period is Rs. 0.77 Million ( 2018-19. 4.58 Million and 2017-18 Nil)

Details of Amount spent towards CSR given below :

(INR in Millions)
For the Year ended For the year ended For the year ended
31-Mar-20 31-Mar-19 31-Mar-18
Particulars
In cash Yet to be paid in cash In cash Yet to be paid in cash In cash Yet to be paid in cash

Construction | Acquisition of any asset - - - - - -

On purposes other than (i) above 1.75 - 4.58 - - -

1.75 - 4.58 - - -

Note 40 EARNING PER SHARE (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity share holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity share holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that
would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:
(INR in Millions except per share data)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Earnings Per Share has been computed as under:

Profit attributable to equity holders of the Company (Numerator) 488.53 430.41 263.81
Weighted average number of equity shares outstanding (Denominator) 31.78 31.78 31.78

Earnings Per Share (Equity Shares, Par Value of Rs. 10/- each)

Basic (Rs.) 15.37 13.54 8.30

Diluted (Rs.) 15.37 13.54 8.30

Notes:
1. Earnings per share calculations are in accordance with Indian Accounting Standard 33 - Earnings Per Share ('Ind AS 33') , notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies
(Accounts) Rules, 2015. As per Ind AS 33 paragraph 28, in case of bonus share , the number of shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event
has occurred at the beginning of the earliest period reported. 234
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 41 Leases

Company as a lessee

The company has lease contracts for rented premises used in its operations. The company's obligations under its lease are secured by the lessor's title to the leased asset.

(a) Amounts recognised in the Balance Sheet (INR in Millions)

As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

(i) Right-of-use Asset - Rented Premises

Cost 16.59 - -
Accumulated Depreciation 3.26 - -
Net Carrying Amount 13.32 - -

(ii) Lease liabilities - Borrowings

Beginning of the year/period - - -

Additions 16.59 - -
Accretion of interest 0.89 - -
Payments (5.14) - -
Deletion - - -
Closing of the year/period 12.33 - -

Current 4.11 - -
Non-Current 8.22 - -

(b) Amounts recognised in the Statement Of Profit And Loss

(INR in Millions)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

(i) Finance Cost

Interest Expense On Lease Liability 0.89 - -

(ii) Depreciation
Depreciation on right of use lease asset 3.26 - -

(c) Amounts recognised in Cash Flow Statement

(INR in Millions)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

Total cash outflow for leases 5.14 - -

(d) Expense relating to short-term leases and Low-value

(INR in Millions)
As at As at As at
Particulars 31-Mar-20 31-Mar-19 31-Mar-18

Amount recognised in statement of Profit and Loss 1.54 - -

Note 42 In accordance with the Indian Accounting Standard (Ind AS-36) on “Impairment of Assets” the Company has, during the year, carried out an exercise of identifying
the assets that may have been impaired in respect of cash generating unit in accordance with the said Indian Accounting Standard. Based on the exercise, no
impairment loss is required as at 31st March, 2020.

Note 43 The figures of previous year have been re-arranged and regrouped wherever necessary to make them comparable with those of the current year and according to
requirements of the schedule III of the Companies Act, 2013.

Note 44 Impact of COVID-19 Outbreak

The outbreak of COVID-19 in many countries has brought about disruptions to businesses around the world and uncertainty to the global economy, which had some
impact on the Company’s supply chain during March, 2020. The Company is closely monitoring the impact of the pandemic on all aspects of it’s business, including
how it will impact its customers, employees, vendors and business partners. The Company based on the information available to date, both internal and external,
considered the uncertainty relating to the COVID-19 pandemic in assessing the impact. Based on the current estimates, the Company expects to fully recover the
carrying amount of assets and do not foresee any impact on its operations. As the outbreak continues to evolve, the Company will continue to closely monitor any
material changes to future economic conditions.

Note 45 The Company has elected to exercise the option permitted under section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Law (Amendment)
Ordinance, 2019. Accordingly, the Company has recognised provision for income tax for the year ended March 31, 2020 and remeasured its deferred tax assets and
liabilities basis the reduced tax rate prescribed in the said section.

235
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION

Note 46 Disclosure relating to Transition to Ind AS under Ind AS 101 and Restatements as per SEBI (ICDR) Regulations

The Company's financial statements for the year ended March 31, 2019, are the first financial statements that has been prepared in accordance with Ind AS together with the comparative period data as
at and for the year ended March 31, 2018, as described in the summary of significant accounting policies. The transition to IND AS has been carried out in accordance with Ind AS 101 - First time adoption
of Indian Accounting Standards, with April 1, 2017 as the transition date.

A) Exemptions and exceptions availed in accordance with Ind-AS 101 (First Time Adoption of Indian Accounting Standards)

a) Ind AS optional exemptions

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from IGAAP to Ind AS.

i) Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the Financial Statements as at the date of transition to
Ind AS, measured under IGAAP and use that as its deemed cost as at the 1-April-2017. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets
and investment properties at their IGAAP carrying value in their Financial Statements.

b) Ind AS mandatory exceptions

The Company has applied the following exceptions from full retrospective application of Ind AS as mandatorily required under Ind AS 101:

i) Estimates
Estimates in accordance with Ind AS at the transition date will be consistent with estimates made for the same date in accordance with IGAAP (after adjustments to reflect any difference in
Accounting Policies) unless there is objective evidence that those estimates were in error.

The estimates at April 01, 2017 and at March 31, 2018 are consistent with those made for the same dates in accordance with Indian GAAP .

ii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

I Reconciliation of Balance sheet as at 31st March, 2018

(INR in Millions)
Note to Ind AS and Regroup Regroup Restated
IGAAP Audited Ind AS
Particulars Reconcili Adjustment Adjustments Ind AS
ations A B C=A+B D E=C+D
I ASSETS
Non-Current Assets
a) Property, Plant & Equipment 296.41 - 296.41 (0.00) 296.41
b) Capital Work-in-Progress - - - - -
c) Right-Of-Use Asset - - - - -
d) Intangible assets - - - - -
e) Financial Assets
i) Other Financial Assets f) 24.73 (22.41) 2.33 - 2.33
f) Other Non-Current Assets f) - 6.80 6.80 10.31 17.11
Total Non- Current Assets 321.14 (15.61) 305.53 10.31 315.84

Current Assets
a) Inventories 210.36 - 210.36 - 210.36
b) Financial Assets
i) Trade Receivables 295.56 - 295.56 - 295.56
ii) Cash and Cash Equivalents 9.28 - 9.28 (0.00) 9.28
iii) Bank Balances Other than ii) above 5.62 - 5.62 - 5.62
iv) Other Financial Assets f) 13.87 - 13.87 0.91 14.79
c) Other Current Assets f) 17.24 113.19 130.43 (11.22) 119.20
Total Current Assets 551.93 113.19 665.13 (10.31) 654.81

TOTAL ASSETS 873.07 97.58 970.66 (0.00) 970.65

II EQUITY AND LIABILITIES
Equity
a) Equity Share Capital 79.44 - 79.44 - 79.44
b) Other Equity b), c) 462.73 (5.95) 456.78 (0.00) 456.78
Total Equity 542.17 (5.95) 536.22 (0.00) 536.22

Liabilities
Non-Current Liabilities
a) Financial Liabilities
i) Borrowings f) 52.07 (27.12) 24.95 - 24.95
ii) Lease Liabilities - - - - -
b) Non current Provisions c) - 7.21 7.21 - 7.21
c) Deferred Tax Liabilities(Net) b) 19.14 (2.94) 16.20 0.00 16.20
Total Non- Current Liabilities 71.20 (22.84) 48.36 0.00 48.36
Current Liabilities
a) Financial Liabilities
i) Borrowings f) 109.02 27.12 136.14 (0.02) 136.12
ii) Trade Payables f)
-Total outstanding dues of micro and small enterprises - 34.09 34.09 - 34.09
-Total outstanding dues of creditors other than micro -
enterprises and small enterprises f) 90.96 47.70 138.67 0.02 138.68
iii) Other Financial Liabilities f) 11.41 12.22 23.63 3.57 27.20
iv) Lease Liabilities - - - - -
b) Other current Liabilities f) 11.68 36.61 48.30 (36.61) 11.68
c) Short term Provisions c) 36.61 (31.38) 5.24 33.05 38.29
Total Current Liabilities 259.70 126.37 386.07 0.00 386.06

TOTAL EQUITY AND LIABILITIES 873.07 97.58 970.66 (0.00) 970.65

236
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION
II Reconciliation of Statement of Profit and loss for the year ended 31st March, 2018
(INR in Millions)
Note to Ind AS and Regroup Regroup Restated
IGAAP Audited Ind AS
Particulars Reconcili Adjustment Adjustments Ind AS
ations A B C=A+B D E=C+D

I Revenue from Operations a), g) 1,578.21 4.86 1,583.07 (6.65) 1,576.42

II Other Income g) 1.65 - 1.65 5.84 7.49

Total Income 1,579.85 4.86 1,584.71 (0.80) 1,583.92

III Expenses
Cost of Materials Consumed g) 794.63 - 794.63 (0.80) 793.82

Changes in inventories of finished goods and work-in-progress (20.67) - (20.67) - (20.67)

Excise Duty a) - 4.86 4.86 - 4.86
Employee Benefit expenses c), f) 53.22 6.91 60.13 127.92 188.04
Finance costs f) 24.14 6.22 30.36 - 30.36
Depreciation and Amortization expenses 22.59 - 22.59 - 22.59
Other expenses f) 287.32 - 287.32 (127.92) 159.40

IV Total Expenses 1,161.21 17.99 1,179.21 (0.80) 1,178.41

V Profit before tax 418.64 (13.13) 405.51 0.00 405.51

(Less)/ Add: Tax expenses:

a) Current Tax
- Current tax f) 147.86 (5.35) 142.51 (0.87) 141.64
- Taxes for earlier years f) 0.87 (0.87) - 0.87 0.87
VI b) Deferred Tax credit/(Charge) b) 1.48 (2.28) (0.81) - (0.81)

VII Profit/(Loss) After Tax 268.43 (4.63) 263.81 0.00 263.81

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified subsequently to Profit or Loss

Remeasurement of gains/(Losses) on defined benefit Plans c) - 2.71 2.71 - 2.71
Income Tax relating to items that will not be reclassified to b) - (0.90) (0.90) - (0.90)
Profit & Loss

VIII Other Comprehensive Income (Net of Tax) - 1.81 1.81 - 1.81

IX Total Comprehensive Income for the Year/Period 268.43 (2.81) 265.62 0.00 265.62

III Reconciliation of Cash Flow for the Year ended March 31, 2018
(INR in Millions)
Note to Ind AS / Regroup Restatement/Regroup Restated
Particulars IGAAP Ind AS
Reconcili Adjustment Adjustments Ind AS
ations A B C=A+B D E=C+D

a) Net Cash flow from Operating activities f) 58.18 81.79 139.97 1.36 141.33

b) Net Cash flow from Investing activities e) (59.39) (12.98) (72.37) (5.96) (78.33)

c) Net Cash flow from Financing activities f) 7.14 (68.41) (61.27) 4.18 (57.08)

d) Net Increase/(Decrease) In Cash & CashEquivalents 5.93 0.40 6.33 (0.41) 5.92

f) Cash & Cash Equivalents as on April 01, 2017 e) 3.35 5.22 8.57 (5.22) 3.35

g) Cash & Cash Equivalents as on March 31, 2018 9.29 5.62 14.91 (5.63) 9.28

IV Reconciliation of Cash Flow for the Year ended March 31, 2019
(INR in Millions)
Restatement/Regroup Restated
Particulars Ind AS
Note to Reconciliations Adjustments Ind AS
A B C=A+B

a) Net Cash flow from Operating activities f) 113.72 (3.14) 110.58

b) Net Cash flow from Investing activities e) (133.65) (103.44) (237.09)

c) Net Cash flow from Financing activities f) 120.92 3.15 124.07

d) Net Increase/(Decrease) In Cash & CashEquivalents 100.99 (103.43) (2.44)

f) Cash & Cash Equivalents as on April 01, 2018 e) 14.90 (5.62) 9.28

g) Cash & Cash Equivalents as on March 31, 2019 115.89 (109.05) 6.84

237
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION
V Statement of Reconciliation of Other Equity
(INR in Millions)
As at As at
Particulars
Note to Reconciliations 31-Mar-18 1-Apr-17

A Reconciliations between previous GAAP and Ind AS Ind AS 101 requires an entity to reconcile equity
for prior periods.

Other equity as per previous GAAP (A) 462.73 194.30

Provision for Gratuity as per actuarial calculation c) (8.72) (4.57)

Provision for leave encashment as per actuarial calculation c) (0.17) (0.11)
Deferred tax impact on account of Ind AS adjustments b) 2.94 1.55

Total Adjustment as per Audited Ind AS (B) (5.95) (3.14)

Other equity as per Audited Ind AS (A)+(B) 456.78 191.16

VI Statement of Reconciliation of Net Profit

Note For the Year ended

Particulars
31-Mar-18

A Reconciliation of Profits

Total Comprehensive Income as per Indian GAAP (A) 268.43

Provision for Gratuity as per actuarial calculation c) (4.14)

Provision for leave encashment as per actuarial calculation c) (0.06)
Deferred tax impact on account of Ind AS adjustments b) 1.39
Total Impact on account of restatement (B) (2.81)

Total Comprehensive Income as per Audited Ind AS (A)+(B) 265.62

* Notes to the reconciliations

a) Excise duty

Under IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty paid is presented on
the face of the Statement of Profit and Loss as part of expenses. There is no impact on the total equity and profit due to the said change.

b) Deferred Tax

Under Ind AS, the deferred tax asset and liabilities are required to be accounted based on the balance sheet approach. The Company has remeasured its deferred tax assets and liabilities as aforesaid
and accounted in the Ind AS financial statements.

c) Remeasurements of post-employment benefit obligations

Under IGAAP, the management has accounted for employee defined benefit plan with respect to Gratuity by debiting profit and loss statement to the extent of actual premium paid to Life Insurance
Corporation . Under Ind AS, the management has accounted for Gratuity and on the basis of actuarial calculation from 1st April, 2017 and accordingly the effect of differences has been accounted for
in the profit and loss statement and other comprehensive income as required.

Under Ind AS, remeasurements that is actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are
recognized in Other Comprehensive Income instead of profit or loss.

Under IGAAP, the management has accounted for employee defined benefit plan with respect to leave encashment by debiting statement of profit and loss on the basis of unpaid leave and its

financial impact estimated by the management for employees calculated during the year . Under Ind AS, the management has accounted for Leave encashment on the basis of actuarial calculation

from 1st April, 2017 and accordingly the effect of differences has been accounted for in the profit and loss statement and other comprehensive income as required.

Under Ind AS, remeasurements that is actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are
recognized in Other Comprehensive Income instead of profit or loss.

d) Other Comprehensive Income

Under Ind AS, all items of income and expense recognized in a period are to be included in profit or loss for the period, unless a standard requires or permits otherwise. In accordance with Ind AS
remeasurement of defined benefit plans is accounted in Other Comprehensive Income , net of taxes.

e) Statement of Cash flows

Restatment of Other Bank Balances from Cash & Cash Equivalents to Cash flow from Investing activities.

f) Appropriate adjustments have been made in the respective years of Restated Statements of Assets and Liabilities, Profits and Losses and Cash flows, wherever required,by reclassification of the
corresponding items of income, expenses, assets and liabilities, in order to bring them in line with Indian Accounting Standards ('Ind AS') notified under Section 133 of the Companies Act, 2013 (‘the
Act’) read with the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standard) Rules, 2016 and other relevant provisions of the Act,to the
extent applicable., and the requirements of the Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2018 (as amended).

g) Appropriate adjustments have been made in the respective years of Profits and Losses, wherever required,by reclassification of Net gain on Foreign Currency Transactions to the corresponding items
of income, expenses in order to bring them in line with Indian Accounting Standards ('Ind AS') notified under Section 133 of the Companies Act, 2013 (‘the Act’) read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standard) Rules, 2016 and other relevant provisions of the Act,to the extent applicable., and the requirements
of the Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2018 (as amended).

238
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
Annexure VI : NOTES TO RESTATED FINANCIAL INFORMATION
VII Statement on Adjustments to Audited Financial Statements

Summarized below are the restatement adjustments made to the audited financial statements for the financial year ended March 31, 2019 and March 31, 2018 and their impact on the profit / (loss) of the
Company:
(INR in Millions)
For the Year ended For the Year ended For the Year ended
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

Net profit after tax as per Previous GAAP - - 268.43

(i) Material Ind AS restatement adjustments

Aggregate impact of all Ind AS adjustments (refer notes 46 (VI) for detailed explanation of transition
-
from Previous GAAP to Ind AS), net of tax - (2.81)

Net profit after tax as per Ind AS 493.40 434.08 265.62

(i) Other adjustments - - -

Net profit, as restated 493.40 434.08 265.62

Material Regroupings

Appropriate adjustments have been made in the respective years of Restated Statements of Assets and Liabilities, Profits and Losses and Cash flows, wherever required,by reclassification of the corresponding
items of income, expenses, assets and liabilities, in order to bring them in line with Indian Accounting Standards ('Ind AS') notified under Section 133 of the Companies Act, 2013 (‘the Act’) read with the
Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standard) Rules, 2016 and other relevant provisions of the Act,to the extent applicable., and the
requirements of the Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2018 (as amended).

As per our examination report of even date attached

For K C Mehta & Co For and on behalf of the Board of Directors
Chartered Accountants CHEMCON SPECIALITY CHEMICALS LIMITED
Firm Registration No: 106237W

Vishal P. Doshi Kamal Aggrawal Navdeep Goyal

Partner Chairman & Managing Director Deputy Managing Director
Membership No. 101533 DIN: 00139199 DIN: 02604876

Place: Vadodara Rajesh Gandhi Shahilkumar Kapatel

Date: 19th August, 2020 Chief Financial Officer & Director Company Secretary
DIN: 03296784 ACS : 52211

239
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
ANNEXURE VII: RESTATED STATEMENT OF ACCOUNTING RATIOS
(INR in Millions)
As at As at As at
Particulars
31-Mar-20 31-Mar-19 31-Mar-18

A Net Worth 1,427.10 957.74 536.22

B Profit attributable to the owners of the company 488.53 430.41 263.81

Weighted average number of equity shares outstanding during the year

C For basic earnings per share 31.78 31.78 31.78

D For diluted earnings per share 31.78 31.78 31.78

E Number of shares outstanding at the end of the year (Prior to bonus issue) 31.78 31.78 7.94

F Number of shares outstanding at the end of the year -Refer Note 1 below 31.78 31.78 31.78

G Restated basic earnings per share (INR) (B/C) 15.37 13.54 8.30

H Restated diluted earnings per share (INR) (B/D) 15.37 13.54 8.30

I Return on net worth (%) (B/A) 34.23% 44.94% 49.20%

J Net assets value per share of Rs. 10 each (Prior to bonus issue)(A/E) 44.91 30.14 67.50

K Net assets value per share of Rs. 10 each (A er bonus issue)(A/C) 44.91 30.14 16.87

L EBITDA (INR) 702.61 660.83 450.96

M Face value (INR) 10.00 10.00 10.00

Basic earnings per share (Rs) Net Profit as restated, attributable to the owners of the company
Weighted average number of equity shares outstanding during the year/
period

Diluted Earnings per share (Rs) Net Profit as restated, attributable to the owners of the company
Weighted average number of dilutive equity shares outstanding during the
year/ period

Return on Net Worth (%) Net Profit as restated, attributable to the owners of the company
Net Worth as restated, including Share Capital and Reserves & Surplus, as
restated at the end of the year/ period

Net Asset Value (NAV) per equity share (Rs.) Net Worth as restated, including Share Capital and Reserves & Surplus, as
restated at the end of the year/ period
Number of equity shares outstanding at the end of the year/ period

Earnings before interest, Tax, Depreciation and Amortisation (EBITDA ) (Rs.) Profit before tax + Finance costs + Depreciation and amortisation expense - Other Income

Notes:
1 Earnings per share calculations are in accordance with Indian Accounting Standard 33 - Earnings Per Share ('Ind AS 33') , notified under Section 133 of the Companies Act, 2013, read together with
paragraph 7 of the Companies (Accounts) Rules, 2015. As per Ind AS 33 paragraph 28, in case of bonus share , the number of shares outstanding before the event is adjusted for the proportionate
change in the number of equity shares outstanding as if the event has occurred at the beginning of the earliest period reported.
2 Net worth means the aggregate value of the paid up share capital of the Company and all reserves created out of profits and securities premium account, net of pre-issue expenses, as per Restated
Statement of Assets and Liabilities of the Company.
3 The amounts disclosed above are based on the Restated Financial Information of the Company.

For K C Mehta & Co For and on behalf of the Board of Directors

Chartered Accountants CHEMCON SPECIALITY CHEMICALS LIMITED
Firm Registration No: 106237W

Vishal P. Doshi Kamal Aggrawal Navdeep Goyal

Partner Chairman & Managing Director Deputy Managing Director
Membership No. 101533 DIN: 00139199 DIN: 02604876

Place: Vadodara Rajesh Gandhi Shahilkumar Kapatel

Date: 19th August, 2020 Chief Financial Officer & Director Company Secretary
DIN: 03296784 ACS : 52211

240
CHEMCON SPECIALITY CHEMICALS LIMITED
(formerly known as chemcon speciality chemicals private limited)
CIN: U24231GJ1988PLC011652
ANNEXURE VIII : RESTATED STATEMENT OF CAPITALISATION
(INR in Millions)
Particulars Pre issue As at
As adjusted for the Issue
31-Mar-20
(Post issue) *

Borrowings:
Current borrowings A 286.75 -
Non-Current borrowings B 158.36 -
Total Borrowings C= A+B 445.11 -

Shareholders' fund (Net worth)

Share capital E 317.78 -
Other Equity (refer note 4 below) F 1,109.32 -
Total shareholders' fund (Net worth) G= E+F 1,427.10

Non-Current borrowings/shareholders' fund (Net worth) ratio B/G 0.11 -

Total borrowings/shareholders' fund (Net worth) ratio C/G 0.31 -

Notes :
1 Non-Current borrowings are considered as borrowings other than short-term borrowings and include current maturities of long term borrowings.
2 The amounts disclosed above are based on the Restated Financial Information of the Company.
3 On November 03, 2018, the shareholders of the Company approved the issuance of the Bonus shares in the ratio of 3:1 (3 bonus shares for every 1 equity
share held). Consequently, the number of equity shares has increased from 7.94 Million equity shares to 31.78 Million equity shares. Accordingly, the share
capital has increased from Rs. 79.44 million to Rs. 317.78 million and the Reserves and Surplus has decreased by Rs. 238.33 million.
* These amounts (as adjusted for issue) are not determinable at this stage pending the completion of the book building process and hence have not been
furnished. To be updated upon finalization of the Offer Price.
4 Other equity is net of pre-issue expenses.

For K C Mehta & Co For and on behalf of the Board of Directors

Chartered Accountants CHEMCON SPECIALITY CHEMICALS LIMITED
Firm Registration No: 106237W

Vishal P. Doshi Kamal Aggrawal Navdeep Goyal

Partner Chairman & Managing Director Deputy Managing Director
Membership No. 101533 DIN: 00139199 DIN: 02604876

Place: Vadodara Rajesh Gandhi Shahilkumar Kapatel

Date: 19th August, 2020 Chief Financial Officer & Director Company Secretary
DIN: 03296784 ACS : 52211

241
 CAPITALISATION STATEMENT

The following table sets forth our capitalisation as at March 31, 2020, on the basis of our Restated Financial
Statements:
(in ₹ million)
Pre-Issue as at As adjusted
Particulars
March 31, 2020 for the Issue*
Borrowings:
Current borrowings A 286.75 -
Non-Current borrowings B 158.36 -
Total Borrowings C= A+B 445.11 -

Shareholders' fund (Net worth)

Share capital C 317.78 -
Other Equity (refer note 4 below) D 1,109.32 -
Total shareholders' fund (Net worth) E= C+D 1,427.10

Non-Current borrowings/shareholders' fund (Net worth) ratio B/E 0.11 -

Total borrowings/shareholders' fund (Net worth) ratio C/E 0.31 -
* These amounts (as adjusted for Issue) are not determinable at this stage pending the completion of the book building process and hence have
not been furnished. To be updated upon finalization of the Issue Price.

Notes :
1. Non-Current borrowings are considered as borrowings other than short-term borrowings and include current maturities of long term
borrowings.
2. The amounts disclosed above are based on the Restated Financial Information of the Company.
3. On November 03, 2018, the shareholders of the Company approved the issuance of the Bonus shares in the ratio of 3:1 (3 bonus shares
for every 1 equity share held). Consequently, the number of equity shares has increased from ₹ 7.94 Million equity shares to 31.78
Million equity shares. Accordingly, the share capital has increased from ₹ 79.44 million to ₹ 317.78 million and the Reserves and Surplus
has decreased by ₹ 238.33 million.
4. Other equity is net of pre-issue expenses.

242
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF
OPERATIONS

The following discussion is intended to convey management’s perspective on our financial condition and results
of operations for the Fiscals 2020, 2019 and 2018. You should read the following discussion and analysis of our
financial condition and results of operations in conjunction with our Restated Financial Statements included in
“Restated Financial Statements” including the schedules, annexures and notes thereto and the reports thereon,
beginning on page 194.

Some of the information in the following discussion, including information with respect to our plans and
strategies, contain forward-looking statements that involve risks and uncertainties. You should read the chapter
“Forward-Looking Statements” beginning on page 16 for a discussion of the risks and uncertainties related to
those statements and also the section “Risk Factors” on page 23 for a discussion of certain factors that may affect
our business, financial condition or results of operations. Our actual results may differ materially from those
expressed in or implied by these forward-looking statements. Our fiscal year ends on March 31 of each year, and
references to a particular Fiscal are to the twelve-month period ended March 31 of that year.

Unless otherwise indicated, industry and market data used in this chapter has been obtained or derived from
publicly available information as well as industry publications and other sources. For details, see “Certain
Conventions, Use of Financial Information and Market Data and Currency of Presentation” on page 14.

Overview

We are a manufacturer of specialised chemicals, such as HMDS and CMIC which are predominantly used in the
pharmaceuticals industry (the “Pharmaceutical Chemicals”), and inorganic bromides, namely Calcium Bromide,
Zinc Bromide and Sodium Bromide, which are predominantly used as completion fluids in the oilfields industry
(the “Oilwell Completion Chemicals”). We were the only manufacturer of HMDS in India and were the third
largest manufacturer of HMDS worldwide in terms of production in the calendar year 2019 (source: Frost &
Sullivan Report). We were the largest manufacturer of CMIC in India and the second largest manufacturer of
CMIC worldwide, in terms of production and capacity in calendar year 2019 (source: Frost & Sullivan Report).
Further, we were the only manufacturer of Zinc Bromide and the largest manufacturer of Calcium Bromide in
India, in terms of production in calendar year 2019 (source: Frost & Sullivan Report).

We supply our products to domestic customers and also export our products to countries including United States
of America, Italy, South Korea, Germany, People’s Republic of China, Japan, United Arab Emirates, Serbia,
Russia, Spain, Thailand and Malaysia. In Fiscals 2020, 2019 and 2018, our revenue from exports (including
Deemed Exports) contributed 39.78%, 31.99% and 47.84%, respectively of our revenue from operations. Our
revenues from exports (including Deemed Exports) have grown at a CAGR of 17.57% between Fiscals 2018 and
2020.

The key customers of our Pha rmaceutical Chemicals include Hetero Labs Limited, Laurus Labs Limited,
Aurobindo Pharma Limited, Sanjay Chemicals (India) Private Limited, Lantech Pharmaceuticals Limited, Ind-
Swift Laboratories Limited, Vivin Drugs & Pharmaceuticals Limited and Macleods Pharmaceuticals Limited and
the key customers of our Oilwell Completion Chemicals include Shree Radha Overseas, Water Systems Specialty
Chemical DMCC and CC Gran Limited Liability Company.

We are an ISO 9001:2015 and ISO 14001:2015 certified company for the “Manufacture and supply of
pharmaceutical intermediates, silanes and oilfield chemicals”. Our manufacturing facility is located at Manjusar
near Vadodara in Gujarat (our “Manufacturing Facility”). As on the date of this Red Herring Prospectus, within
our Manufacturing Facility, we currently have seven operational plants of which two plants are dedicated to the
manufacturing of HMDS and ancillary products (including one plant dedicated to the manufacturing of hi-purity
HMDS), one multipurpose plant, currently being used for manufacturing of HMDS and other pharmaceutical
chemicals, two plants are dedicated to the manufacturing of CMIC and two plants dedicated to the manufacturing
of our Oilwell Completion Chemicals, along with three warehouses for the storage of our products and raw
materials. We also have an in-house laboratory at our Manufacturing Facility to test our raw materials procured,
as well as our products at the various stages of the manufacturing process. Further, we have five leased warehouses
located outside our Manufacturing Facility, in Manjusar, Vadodara. Our Corporate Office (which is owned by us)
is located in Vadodara and our sales and marketing offices are located in Hyderabad and Mohali, which are on a
leasehold basis.

243
For Fiscals 2020, 2019 and 2018, our revenue from operations was ₹ 2,620.52 million, ₹3,033.41 million and
₹1,576.42 million, respectively, growing at a CAGR of 28.93% between Fiscal 2018 and Fiscal 2020. Our
EBITDA for Fiscals 2020, 2019 and 2018 was ₹ 702.61 million, ₹660.83 million and ₹450.96 million respectively,
growing at a CAGR of 24.82% between Fiscal 2018 and Fiscal 2020, while our profit after tax for Fiscals 2020,
2019 and 2018 was ₹ 488.53 million, ₹430.41 million and ₹263.81 million respectively, growing a t a CAGR of
36.08% between Fiscal 2018 and Fiscal 2020.

In Fiscals 2020, 2019 and 2018, our Pharmaceutical Chemicals, contributed 63.75%, 63.14% and 62.18% of our
total revenue from operations respectively, while our Oilwell Completion Chemicals, contributed 33.47%, 35.30%
and 35.63% respectively of our total revenue from operations.

Impact of COVID-19

The outbreak of COVID-19 was recognized as a public health emergency of international concern on January 30,
2020 and as a pandemic by the WHO on March 11, 2020. In response to the COVID-19 outbreak, the governments
of many countries, including India have taken preventive or protective actions, such as imposing country-wide
lockdowns, as well as restrictions on travel and business operations.

However, since some of the chemicals manufactured by us find application in the pharmaceuticals industry, our
Pharmaceutical Chemicals were categorized as ‘essential goods’ and our Manufacturing Facility was only
temporarily shut during the pandemic from March 24, 2020 till March 31, 2020. We resumed manufacturing our
Pharmaceutical Chemicals on April 1, 2020. We have implemented greater safety procedures and requirements at
our Manufacturing Facility. Due to limited availability of labour, logistics and supply chain constraints, our
Manufacturing Facility was initially operating at sub-optimal capacity utilization in the current Fiscal.

We have resumed operations in a phased manner as per the Government of India and state government’s directives.
Our plant utilization has improved, raw material suppliers have resumed operations and supply and logistics have
become more regular. We have not terminated any lease deed or laid-off any employees and have not withheld
any payments to employees as a consequence of the COVID-19. We have continued to source raw materials from
our suppliers and have been able to continue to supply our Pharmaceutical Chemicals to our customers.

The reduced demand for oil and gas in Fiscal 2021 has resulted in a reduced demand for our Oilwell Completion
Chemicals. Accordingly, as on the date of this Red Herring Prospectus, we are yet to resume manufacturing new
batches of Oilwell Completion Chemicals since the country-wide lockdown was lifted.

The future impact of COVID-19 or any other severe communicable disease on our business and results of
operations depends on several factors including those discussed in “Risk Factors – Internal Risk Factors –The
recent outbreak of the novel coronavirus could have a significant effect on our operations, and could negatively
impact our business, revenues, financial condition and results of operations.” on page 24 and “Risk Factors –
External Risk Factors- Natural disasters, fires, epidemics, pandemics, acts of war, terrorist attacks, civil unrest
and other events could materially and adversely affect our business.” on page 46. We are continuously monitoring
the economic conditions and have outlined certain measures to combat the pandemic situation and to minimize
the impact on our business. For more details, see “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” on page 243.

Significant Factors Affecting our Results of Operations

Demand for our products in the Pharmaceuticals and Oilfields Industry

As on the date of this Red Herring Prospectus, our product portfolio comprises of our Pharmaceutical Chemicals,
majorly HMDS and CMIC and our Oilwell Completion Chemicals, namely Calcium Bromide (solution and
powder), Zinc Bromide (solution) and Sodium Bromide (solution and powder). The Pharmaceuticals Chemicals
and our Oilwell Completion Chemicals are targeted to and largely marketed and supplied to industries operating
in the pharmaceuticals and the oilfields industries respectively.

Our Pharmaceuticals Chemicals business contributed 63.75%, 63.14% and 62.18% of our revenue from operations
in the Fiscals 2020, 2019 and 2018, respectively. The Pharmaceuticals Chemicals manufactured and supplied by
us are primarily utilised for the manufacture of certain pharmaceuticals and related products. For details see “Our
Business - Our Products” on page 141. The demand for our Pharmaceutical Chemicals from our customers
determines our revenue levels and results of operations, and our sales are directly affected by t he production and

244
inventory levels of our customers. Our customers in turn are dependent on demand of their products from end use
customers and government buyers, as well as general trends in the global pharmaceutical industry.

Our Oilwell Completion Chemicals business contributed 33.47%, 35.30% and 35.63% of our revenue from
operations in the Fiscals 2020, 2019 and 2018, respectively. The Oilwell Completion Chemicals manufactured
and supplied by us are used as completion fluids in the oilfields industry. Accordingly, demand for our Oilwell
Completion Chemicals from our customers determines our revenue levels and results of operations, and our sales
are directly affected by the level of oil and gas exploration, development and production activities which have
historically been cyclical in nature characterized by significant changes in the levels of exploration and
development activities, requiring significant financing.

Any changes in the regulations governing the development of our products and their usage by our customers,
including the development of licensing requirements and technical standards and specifications or the imposition
of onerous requirements, will have an impact on demand for our products and will impact our revenues and results
of operations. Our Company may be required to increase our capacity or to alter our manufacturing and/or
distribution process and target markets and incur capital expenditure to achieve compliance with such new
regulatory requirements applicable to us and our customers which may have an impact on our profitability in the
long run.

Further, while our Company has a large number of customers, as a result of the specialised nature of the chemicals
we manufacture and the specific industries we target, we are dependent on a limited number of customers for a
significant portion of our revenue. In the Fiscals 2020, 2019 and 2018, 59.35%, 45.94% and 60.01%, respectively,
of our revenue from operations were derived from our top five customers. Further, in Fiscals 2020, 2019 and 2018,
57.22%, 53.68% and 64.68% of our revenue from Pharmaceutical Chemicals were derived from our top five
customers for our Pharmaceutical Chemicals, while 95.39%, 90.78% and 97.23% of our revenue from our Oilwell
Completion Chemicals were derived from our top five customers from our Oilwell Completion Chemicals. We
do not have long-term agreements or exclusivity arrangements with such customers and it is difficult for us to
predict with certainty when our customers will decide to increase or reduce inventory levels or levels of production
or exploration activities, which strategic direction they will pursue, when they might launch new products or open
new facilities or venture into newer avenues, or whether future inventory levels will be co nsistent with historical
levels.

Availability and cost of raw materials

The success of our operations depends on, among other things, our ability to source raw materials at competitive
prices. Raw materials are subject to supply disruptions and price volatility caused by various factors such as
commodity market fluctuations, the quality and availability of raw materials, currency fluctuations, consumer
demand, changes in government policies and regulatory sanctions.

Certain of our key raw materials have witnessed volatility in their prices. For instance, the global price of TMCS,
a key raw material in the manufacturing of HMDS, fell from $3.6 per kg to $1.1 per kg between first quarter of
calendar year 2013 and fourth quarter of calendar year 2014, rose to $10.3 per kg by the third quarter of calendar
year 2018 and subsequently fell to approximately $2.4 per kg in the fourth quarter of calendar year 2019 (source:
Frost & Sullivan Report). Likewise, the price of MCF, a key raw material in the manufacturing of CMIC, has
witnessed numerous rises and falls between 2013 and 2019, with the global price for such period, ranging from
approximately $1.90 per kg to approximately $3.10 per kg (Source: Frost & Sullivan Report).

We typically do not enter into long term supply contracts with any of our vendors and instead place purchase
orders with them from time to time. As we continue to grow our product portfolio and increase our production
capacities, we would need to procure additional volumes of raw materials. We are thus exposed to fluctuations in
availability and prices of our raw materials. Any inability on our part to procure sufficient quantities of raw
materials and on commercially acceptable terms, could lead to a change in our manufacturing and sales volumes.
If we are unable to purchase the raw materials from such suppliers for any reason and on commercially acceptable
terms, it will impact our revenue levels and results of operations

Additionally, certain of our key raw materials suppliers are based in China. Our ability to purchase such raw
materials from our suppliers in China, may be hampered due to inter alia supply chain issues, change in
government policies (including anti-dumping measures) and prevalent international geo-political situations. In the
Fiscals 2020, 2019 and 2018, the cost of raw materials imported from China was 20.45%, 18.63% and 22.70%,

245
of our total cost of raw materials, respectively. We may not be able to find suitable alternative suppliers providing
the raw materials at similar or acceptable prices and other terms of purchase.

Capacity utilisation

One of the key drivers in the growth of our revenue from operations has been the volume of products manufactured
and sold by us. Our revenues and, consequently, our profits are dependent on our ability to optimise and maximise
our capacity utilisation which has helped us meet the demands of our customers and deliver our products in an
efficient, reliable and timely manner. As on the date of this Red Herring Prospectus, our Company had seven
operational plants at our Manufacturing Facility which includes two recently commissioned plants – Plant “P-7”
(commissioned on March 16, 2020) and Plant “P-2” (commissioned on July 6, 2020). While “P-7” is a
multipurpose plant for manufacture of pharmaceutical chemicals, it is being currently utilized for manufacturing
of HMDS. Plant “P-2” is for manufacturing of high purity HMDS, which which finds application in the
pharmaceuticals, semiconductors and rubber industries. The total volumetric reactor capacity at our
Manufacturing Facility as on July 31, 2020, was 374.85 KL. For further details in relation to our Manufacturing
Facility and plant-wise capacity details, see Manufacturing Facility, see “Our Business - Our Manufacturing
Facility” on page 145. Our Company further intends to build two additional plants (proposed plants “P8” and
“P9”) with a total volumetric reactor capacity of 251.00 KL, which shall be utilised for the manufacturing of
chemicals used in the pharmaceutical industry.

With the completion of such expansion our total volumetric reactor capacity at the Manufacturing Facility shall
increase from our current capacity of 374.85 KL to 625.85 KL and will enable us to significantly benefit from
economies of scale. Our prospects and growth in revenue would inter alia be dependent on the effective
installation, commencement and utilisation of the additional plants being constructed.

The details of the installed production capacity, available capacity, actual production and capacity utilisation at
our Manufacturing Facility as at and for the Fiscal ended March 31, 2020, is set forth below:

Installed production
Available Capacity Actual Production Capacity
capacity as at
Product for the Fiscal 2020 for Fiscal 2020 Utilization
March 31, 2020
(MT) (B) (MT)* (C) (%)*
(MT per annum) (A)
HMDS 4,200 2,475 2,915.01* 117.78%
HMDS hi-purity - - - -
CMIC 1,800 1,800 807.82* 44.88%
Calcium Bromides (solution), 14,400 14,400 6,038.56 41.93%
Sodium Bromide (solution)
and Zinc Bromide (solution)
Calcium Bromide (Powder) 600 600 199.55 33.26%
* Our plant “P-4”/”P-6” dedicated to the manufacture of CMIC being versatile in nature were utilised for the manufacturing
of HMDS due to additional demand in Fiscal 2020.

The details of the installed production capacity, available capacity, actual production and capacity utilisation at
our Manufacturing Facility as at July 31, 2020 and the for the four months ended July 31, 2020 is as set forth
below:

Installed production Available Capacity Actual Production

Capacity
capacity as at July (MT) for the 4 (MT) for the 4
Product Utilization
31, 2020 month period ended month period ended
(%)*
(MT per annum) (A) July 31, 2020 (B) July 31, 2020 (C)
HMDS 4,200 1,400 696.36 49.74%
HMDS hi-purity 600 42 - -
CMIC 1,800 600 451.45 75.24%
Calcium Bromides (solution), 14,400 4,800 87.96 1.83%
Sodium Bromide (solution)
and Zinc Bromide (solution)
Calcium Bromide (Powder) 600 200 - -

246
For further details in relation to capacity utilisation at our Manufacturing Facility for the four months ended July
31, 2020 and for Fiscals 2020, 2019 and 2018, respectively, see “Our Business - Our Manufacturing Facility” on
page 145.

Global movement in price of our Products

One of the key drivers in the growth of our revenue from operations has been increase in global prices of our
products. There has been volatility in the global price of certain of our products including HMDS and CMIC with
the global prices of HMDS having increased from $3.5 per kg in first quarter of calendar year 2017 to $8.2 per kg
in last quarter of calendar year 2019 (Source: Frost & Sullivan Report). Similarly, the global prices of CMIC have
increased from $6.00 per kg in third quarter of calendar year 2017 to $7.10 per kg in last quarter of calendar year
2019 (Source: Frost & Sullivan Report), resulting in significant increase in our revenue from operations.

Our ability to maintain as well as expand our international operations is dependent on us providing ou r products
at prices competitive with international as well as local manufacturers. Our volatility to the global price of our
products as against competitors whose manufacturing operations are less centralised. Our inability to price our
products at the applicable prices in the international markets, may affect the demand for our products and
consequently have a material adverse effect on our results of operations and financial condition.

Currency exchange rate fluctuations

A substantial part of our revenue from operations is generated from the export of our Products. In the Fiscals 2020
2019 and 2018, 39.78%, 31.99% and 47.84% of our revenue from operations was from exports (including Deemed
Exports). Further in the Fiscals 2020, 2019 and 2018, 40.19%, 51.13% and 36.62% of the raw materials purchased
by us, were imported by us. Consequently, we are exposed to exchange rate fluctuations between the Indian Rupee
and certain foreign currencies. For these reasons, our financial condition and results of operat ions are influenced
by fluctuations in the relative values of the relevant currencies, especially between the Indian Rupee and the U.S.
Dollar. We anticipate that a significant portion of our revenue from operations and raw materials purchased will
continue to be in foreign currencies.

Impact of COVID-19

The outbreak of COVID-19 was recognized as a public health emergency of international concern on January 30,
2020 and as a pandemic by the WHO on March 11, 2020. In response to the COVID-19 outbreak, the governments
of many countries, including India have taken preventive or protective actions, such as imposing country-wide
lockdowns, as well as restrictions on travel and business operations. Since some of the chemicals manufactured
by us find application in the pharmaceuticals industry, our Pharmaceutical Chemicals were categorized as
‘essential goods’ and our Manufacturing Facility was only temporarily shut during the pandemic from March 24,
2020 till March 31, 2020.

However, since some of the chemicals manufactured by us find application in the pharmaceuticals industry, our
Pharmaceutical Chemicals were categorized as ‘essential goods’ and our Manufacturing Facility was only
temporarily shut during the pandemic from March 24, 2020 till March 31, 2020. We resumed manufacturing our
Pharmaceutical Chemicals on April 1, 2020. We have implemented greater safety procedures and requirements at
our Manufacturing Facility. Due to limited availability of labour, logistics and supply chain constraints, our
Manufacturing Facility was initially operating at sub-optimal capacity utilization in the current Fiscal. We have
resumed operations in a phased manner as per the Government of India and state government’s directives. Our
plant utilization has improved, raw material suppliers have resumed operations and supply and logistics have
become more regular. We have not terminated any lease deed or laid-off any employees and have not withheld
any payments to employees as a consequence of the COVID-19. We have continued to source raw materials from
our suppliers and have been able to continue to supply our Pharmaceutical Chemicals to our customers.

The reduced demand for oil and gas in Fiscal 2021 has resulted in a reduced demand for our Oilwell Completion
Chemicals. Accordingly, as on the date of this Red Herring Prospectus, we are yet to resume manufacturing new
batches of Oilwell Completion Chemicals since the country-wide lockdown was lifted.

SARS-CoV-2 is a respiratory virus responsible for Covid-19 and globally, antibiotics are used on a large scale to
cure Covid-19 patients for bacterial infections generated out of Covid-19 virus. During the course of study, it was
reported that addition of azithromycin to hydroxychloroquine resulted superior viral clearance. Globally,
azithromycin combined with amoxicillin is widely used for treatment of Covid-19. In India doctors are treating

247
the Sars-Cov-2 virus with a combination of three-drug - anti-viral, anti-bacterial and anti-malarial. The doctors
are using anti-bacterial drugs like Azithromycin and Amoxicillin Clavulanate. Covid -19 pandemic has led to
growth in consumption of Amoxicillin and other derivatives of penicillin -type antibiotic. (source: Frost &
Sullivan Report)

HMDS manufactured by us is one of the ingredients used for manufacture of vital antibiotics. We were the only
manufacturer of HMDS in India and were the third largest manufacturer of HMDS worldwide in terms of
production in calendar year 2019 (source: Frost & Sullivan Report). Further, India has high dependence on China
for Imports of HMDS to manufacture vital antibiotics resulting on a strong impact on the industry. Local supply
of HMDS will be crucial in pandemic and times ahead (source: Frost & Sullivan Report).

HMDS also finds wide application in semiconductor processing. The semiconductor industry is among the many
sectors that have had to adjust their production as COVID-19 impacts demand for major semiconductor end
applications (source: Frost & Sullivan Report).

CMIC is mainly used in pharmaceutical industry as a key intermediate for anti-AIDS and anti-hepatitis B drug
Tenofovir. There are also many chemicals which are used for manufacturing of Anti-Retroviral (ARV) drugs.
During the pandemic situation also, the consumption of Anti-viral medicines have grown in general, resulting in
a favourable situation for raw material producers of these drugs including companies manufacturing CMIC and
other chemicals used in manufacturing of Anti-Viral Drugs (source: Frost & Sullivan Report). However, the use
of Anti-Viral Drugs for the treatment of COVID-19 has not yet been established and thus no significant demand
surge is expected for the ARV drugs, keeping the demand for CMIC muted during the pandemic.

The oil and gas industry is experiencing its third price collapse in a decade. This time it is a combination of supply
shock with an unprecedented demand drop. Globally there is a wide scale destruction of demand associated with
COVID-19. Global level travel ban and grounding of international flights resulted in substantial reduction in
consumption of aviation turbine fuel (ATF) across the globe. Demand for fuels except LPG and domestic natural
gas has also recorded tremendous drop. Since the beginning of the Coronavirus pandemic, there has been a loss
of 1/3rd global demand. Following the major downfall in demand, the refiners are forced to cut down their
throughput to an extent of 25-30%. With crude oil prices at their lowest levels in nearly two decades, oil companies
are safeguarding themselves by resorting to production cuts. Many companies have also redu ced their operations
and cut-down on explorations. Many oil exploration companies’ have demobilised their technical staff and shut
down operations due to the spread of Covid-19. Several new projects have been stalled across the globe to curtail
spreading of pandemic. This has resulted in lower oil exploration and thereby impacting demand for Oil Well
Completion Chemicals (source: Frost & Sullivan Report).

Since then, we have resumed operations in a phased manner as per the Government of India and state
government’s directives. Our plant utilization has improved, raw material suppliers have resumed operations and
supply and logistics have become more regular. We have not terminated any lease deed or laid-off any employees
and have not withheld any payments to employees as a consequence of the COVID-19.

We are continuously monitoring the economic conditions and have outlined certain measures to combat the
pandemic situation and to minimize the impact on our business.

Basis of Preparation and Presentation

The Restated Financial Information comprises of the Restated Statement of Assets and Liabilities as at March 31,
2020, March 31, 2019 and March 31, 2018, the Restated Statement of Profit and Loss (including Other
Comprehensive Income), Restated Statement of changes inequity and the Restated Statement of Cash Flows for
the years ended March 31, 2020, March 31, 2019 and March 31, 2018, and the Summary of Significant Accounting
Policies and explanatory notes (collectively, the ‘Restated Financial Information’).

The Restated Financial Information has been prepared to comply in all material respects with the requirements of
Section 26 of Part I of Chapter III of the Companies Act, 2013, SEBI ICDR Regulations and the Guidance Note
on Reports in Company Prospectuses (Revised 2019).

For the years ended March 31, 2020 and March 31, 2019, our Company prepared its financial statements in
accordance with Ind AS notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended, to the extent applicable, and the presentation requirements of the
Act. For all years upto and including the year ended March 31, 2018, our Company prepared its financial

248
statements in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the
accounting standards (Previous GAAP) as notified under Section 133 of the Act read together with Rule 7 of the
Companies (Accounts) Rules, 2014, to the extent applicable, and the presentation requirements of t he Companies
Act, 2013. Our Company has elected to present the financial information of all the years in these Restated
Financial Information, as per the Ind AS notified under Section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended.

Our Company has adopted Ind AS for the financial year ended March 31, 2019 onwards. In accordance with the
transition provision specified under Ind AS 101, the date of transition to Ind AS is April 1, 2017.

These Restated Financial Statements have been extracted by the Management from the Audited Financial
Statements and:

(a) There were no audit qualifications on these restated financial statements,

(b) Material amounts relating to adjustments for previous years in arriving at profit/loss of the years to which
they relate, have been appropriately adjusted,

(c) Adjustments for remeasurement, reclassification and regrouping of the corresponding items of income,
expenses, assets and liabilities in order to bring them in line with the Indian Accou nting Standards (Ind
AS) notified under the Companies (Indian Accounting Standard) Rules, 2015 read with Section 133 of the
Companies Act, 2013, and the requirements of the SEBI regulations and

(d) The resultant material tax impact on above adjustments has been appropriately adjusted in deferred taxes
in the respective years to which they relate.

The financial information are prepared in accordance with Ind AS, under the historical cost convention on the
accrual basis except for certain assets and liabilities which are measured at fair value/amortized cost/net present
value at the end of each reporting period; as explained in the accounting policies below. These accounting policies
have been applied consistently over all periods presented in the financial information.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Our Company's functional currency is Indian Rupees and the restated financial statements are presented in Indian
Rupees and all values are presented in million (1,000,000), except when otherwise indicated.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by our Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their best economic interest.

Our Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

249
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.

For the purpose of fair value disclosures, our Company has determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained
above.

Property Plant and Equipment (PPE)

PPE comprises of Tangible assets and Capital Work in progress. PPE are stated at cost, net of tax/duty credit
availed, if any, after reducing accumulated depreciation and accumulated impairment losses, if any; until the date
of the Balance Sheet. The cost of PPE comprises of its purchase price or its construction cost (net of applicable
tax credit, if any), any cost directly attributable to bring the asset into the location and condition necessary for it
to be capable of operating in the manner intended by the management and decommissioning costs. Direct costs
are capitalized until the asset is ready for use and includes borrowing cost capitalised in accordance with our
Company’s accounting policy.

Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it
increases the future benefits from its previously assessed standard of performance. All other expenses on existing
property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing
parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Depreciation of these PPE commences when the assets are ready for our intended use.

Freehold Land is not depreciated. Depreciation on PPE other than Land has been provided on Straight line method
over the useful lives of the assets as per Schedule II to the Companies Act.

Useful lives of each class of PPE as prescribed under Part C of Schedule II to the Companies Act, 2013:

Description Years
Building other than Factory Building 60
Factory Building 30
Plant & Machinery 15
Storage Tank 20
Computers 3
Factory Road 10
Electrical Installations and Equipment 10
Furniture and Fixtures 10
Office Equipment 5
Vehicles 8

The estimated useful lives and residual values are reviewed on an annual basis and if necessary, changes in
estimates are accounted for prospectively.

Depreciation on additions/deletions to PPE during the year is provided for on a pro-rata basis with reference to
the date of additions/deletions.

Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other factors is
provided for prospectively over the remaining useful life.

An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from
the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of PPE is determined
as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the
Statement of Profit and Loss.

250
Intangible Assets

Intangible assets with finite useful life acquired separately, are recognized only if it is probable th at future
economic benefits that are attributable to the assets will flow to the enterprise and the cost of assets can be
measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortization
and accumulated impairment losses, if any.

Intangible assets including Computer software are amortized on straight-line basis over a period of three years.

The estimated useful life is reviewed at the end of each reporting period and the effect of any changes in estimate
is accounted for prospectively.

Intangible assets are derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset are determined as the difference between
the net disposal proceeds and the carrying amount of the asset and recognised in the Statement of Profit and Loss
when the asset is derecognised.

Non-Current Assets held for Sale

Non-current assets or disposal groups are classified as held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met only
when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present
condition subject only to terms that are usual and customary for sales of such assets. Management must be
committed to the sale, which should be expected to qualify for recognition as a completed sale within one year
from the date of classification as held for sale, and actions required to complete the plan of sale should indicate
that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Non-current assets or disposal groups classified as held for sale are measured at the lower of carrying amount and
fair value less costs to sell.

Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for
sale.

Our Company classifies Non-Current Assets as held for sale if their carrying amounts will be recovered principally
through a sale rather than through continuing use of the assets and actions required to complete such sale indicate
that it is unlikely that significant changes to the plan to sell will be made or that the decision to sell will be
withdrawn. Also, such assets are classified as held for sale only if the management expects to complete the sale
within one year from the date of classification.

Non-current assets or disposal groups classified as held for sale are measured at the lower of carrying amount and
fair value less costs to sell.

Impairment of tangible assets and intangible assets

Our Company reviews at each reporting period whether there is any indication that an asset may be impaired. If
any such indication exists, our Company estimates the recoverable amount of the asset. If such recoverable amount
of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss
and is recognized in the Statement of Profit & Loss. If at the reporting period, there is an indication that there is
change in the previously assessed impairment loss, the recoverable amount is reassessed, and the asset is reflected
at the recoverable amount.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.

An assessment is made at the end of each reporting period to see if there are any indications that impairment losses
recognized earlier may no longer exist or may have decreased. The impairment loss is reversed, if there has been
a change in the estimates used to determine the asset’s recoverable amount since the previous impairment loss

251
was recognized. If it is so, the carrying amount of the asset is increased to the lower of its recoverable amount and
the carrying amount that have been determined, net of depreciation, had no impairment loss been recognized for
the asset in prior years. After a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its remainin g useful life. Reversals of
Impairment loss are recognized in the Statement of Profit and Loss.

Inventories

The inventories are valued at cost or net realizable value whichever is lower. The basis of determining the value
of each class of inventory is as follows:

Inventories Cost Formula

Raw material First in first out basis
Raw Material (Goods in transit) At invoice value
Work in Progress Raw material, labour and appropriate proportion of manufacturing
expenses and overheads as per stage of completion.
Finished Goods (Including in Transit) Raw material, labour and appropriate proportion of manufacturing
expenses and overheads.
Stores, spares, packing materials First in first out basis

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.

The net realizable value of work-in-progress is determined with reference to the selling prices of related finished
products. Raw materials and other supplies held for use in production of finished products are not written down
below cost except in cases where material prices have declined, and it is estimated that the cost of the finished
products will exceed their net realizable value.

Revenue recognition

Our Company recognises revenue from contracts with customers based on a five step model as set out in Ind AS
115:

Step 1. Identify the contract(s) with a customer: A contract is defined as an agreement between two or more parties
that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2. Identify the performance obligations in the contract: A performance obligation is a promise in a contract
with a customer to transfer a good or service to the customer.

Step 3. Determine the transaction price: The transaction price is the amount of consideration to which our
Company expects to be entitled in exchange for transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties.

Step 4. Allocate the transaction price to the performance obligations in the contract: For a contract that has more
than one performance obligation, our Company will allocate the transaction price to each performance
obligation in an amount that depicts the amount of consideration to which our Company expects to be
entitled in exchange for satisfying each performance obligation.

Step 5. Recognise revenue when (or as) the entity satisfies a performance obligation.

Our Company earns revenue primarily from sale of products and sale of services.

Sale of Products and Services

Revenues are recognized when our Company satisfies the performance obligation by transferring a promised
product or service to a customer. A product is transferred when the customer obtains control of that product, which
is at the point of transfer of custody to customers where usually the title is passed, provided that the contract price
is fixed or determinable and collectability of the receivable is reasonably assured.

252
Revenue is measured at the transaction price of the consideration received or receivable duly adjusted for variable
consideration and represents amounts receivable for goods and services provided in the normal course of business,
net off Goods and Services Tax (GST), etc. Any retrospective revision in prices is accounted for in the year of
such revision.

Interest Income:

Interest on investments is booked on a time proportion basis taking into account the amounts invested and the rate
of interest.

Export Incentives and Other Income:

Export Incentives and Other Income is recognized on accrual basis except when realisation of such income is
uncertain.

Insurance Claim:

Insurance and other claims are recognised only when it is reasonably certain that the ultimate collection will be
made.

Leases

The Company as a Lessee:

Our Company’s lease asset classes primarily consist of leases for immovable properties. Our Company assesses
whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To
assess whether a contract conveys the right to control the use of an identified asset, our Company assesses whether:

(1) the contact involves the use of an identified asset (2) our Company has substantially all of the economic
benefits from use of the asset through the period of the lease and (3) our Company has the right to direct the use
of the asset.

At the date of commencement of the lease, our Company recognizes a right-of-use asset (“ROU”) and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of
twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, our
Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the
lease term and useful life of the underlying asset.

Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis
unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases,
the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The
lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the
incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a
corresponding adjustment to the related right of use asset if our Company changes its assessment if whether it will
exercise an extension or a termination option.

253
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows.

Transition

Effective April 1, 2019, our Company adopted Ind AS 116 “Leases” applied to all lease contracts existing on
April 1, 2019 using the modified retrospective method. Lease contracts existing as on April 1, 2019 were low
value and short-term leases, and accordingly there were no lease contracts which were required to be accounted
for under Ind AS 116 as on transition date.

Foreign Exchange Transactions

The functional currency of our Company is Indian Rupees which represents the currency of the primary economic
environment in which our Company operates.

Transactions in currencies other than our Company’s functional currency (foreign currencies) are recognized at
the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary
items denominated in foreign currencies are translated using closing exchange rate prevailing on the last day of
the reporting period.

Exchange differences on monetary items are recognized in the Statement of Profit and Loss in the period in which
they arise.

Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured at cost are
translated at the exchange rate at the date of the transaction.

Employee Benefits

Defined contribution plans

Contributions to defined contribution schemes such as provident fund, superannuation scheme, employee pension
scheme etc. are charged as an expense based on the amount of contribution required to be made as a nd when
services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as our
Company has no further defined obligations beyond the monthly contributions

Defined benefit plans

The liabilities towards defined benefit schemes are determined using the Projected Unit Credit method. Actuarial
valuations under the Projected Unit Credit method are carried out at the balance sheet date. Actuarial gains and
losses are recognized in the Statement of Profit and Loss in the period of occurrence of such gains and losses. Past
service cost is recognized immediately to the extent that the benefits are already vested and otherwise it is
amortized on straight-line basis over the remaining average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit
obligation as reduced by plan assets.

Short-term employee Benefits

Short-term employee benefits expected to be paid in exchange for the services rendered by employees are
recognised, undiscounted, during the period the employee renders services. These benefits include salary, wages,
bonus, performance incentives etc.

Other long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which
the employee renders the related services are recognized as an actuarially determined liability at present value of
the defined benefit obligation at the balance sheet date.

254
Taxes on Income

Income tax expense represents the sum of the current tax and deferred tax.

(i) Current tax

The tax currently payable is based on taxable profit for the year / period. Taxable profit differs from ‘profit before
tax’ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or
deductible in other years and items that are never taxable or deductible. Our Company’s current tax is calculated
using tax rates and laws that have been enacted or substantively enacted by the end of the reporting period.

(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred
tax asset to be utilized.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which our Company expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.

Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which
is likely to give future economic benefits in the form of availability of set off against f uture income tax liability.
Accordingly, MAT is recognised as deferred tax asset in the Balance sheet when the asset can be measured
reliably, and it is probable that the future economic benefit associated with asset will be realised.

(iii) Current and deferred tax expense for the year / period

Current and deferred tax expense is recognised in the Statement of Profit and Loss, except when they relate to
items that are recognised in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognised in other comprehensive income or directly in equity respectively.

Borrowing Costs

Borrowing costs are interest and ancillary costs incurred in connection with the arrangement of borrowings.

General and specific borrowing costs attributable to acquisition and construction of qualifying assets is added to
the cost of the assets upto the date the asset is ready for its intended use. A qualifying asset is an asset that
necessarily takes a substantial period of time to get ready for its intended use Capitalisation of borrowing costs is
suspended and charged to the Statement of Profit and Loss during extended periods when active development
activity on the qualifying assets is interrupted. All other borrowing costs are recognised in the Statement of Profit
and Loss in the period in which they are incurred.

Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when our Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that our Company will be required to settle the obligation and a reliable estimate can be made
of the amount of the obligation.

255
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of
economic benefits is probable.

Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of
an outflow of resources embodying economic benefit is remote.

Financial Instruments

Financial assets and financial liabilities are recognised when our Company becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial liabilities (othe r than
financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair
value measured on initial recognition of financial asset or financial liability. The transaction costs directly
attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are
immediately recognised in the statement of profit and loss.

(i) Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of
allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly
discounts future cash receipts or payments through the expected life of the financial instrument, or where
appropriate, a shorter period.

(ii) Financial assets

Cash and bank balances

Cash and bank balances consist of:

• Cash and cash equivalents - which includes cash in hand, deposits held at call with banks and other short term
deposits which are readily convertible into known amounts of cash, are subject to an insignificant risk of
change in value and have maturities of less than one year from the date of such deposits. These balances with
banks are unrestricted for withdrawal and usage.

• Other bank balances - which includes balances and deposits with banks that are restricted for withdrawal and
usage.

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business
model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms
of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.

Financial assets measured at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held
within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell
these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair
value through other comprehensive income on initial recognition.

256
Impairment of financial assets

Our Company assesses at each balance sheet date whether a financial asset or a group of financial assets is
impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. Our Company
recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a
financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12
month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the financial
asset has increased significantly since initial recognition.

De-recognition of financial assets

Our Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another
entity. If our Company neither transfers nor retains substantially all the risks and rewards of ownership and
continues to control the transferred asset, our Company recognises its retained interest in the assets and an
associated liability for amounts it may have to pay.

If our Company retains substantially all the risks and rewards of ownership of a transferred financial asset, our
Company continues to recognise the financial asset.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the
sum of the consideration received and receivable is recognized in statement of profit and loss.

(iii) Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by our Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of our Company after deducting
all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs, if any.

Financial Liabilities

Trade and other payables are initially measured at fair value, net of directly attributable costs, and are subsequently
measured at amortised cost, using the effective interest rate method where the time value of money is significant.
Interest bearing issued debt are initially measured at fair value and are subsequently measured at amortised cost
using the effective interest rate method.

De-recognition of financial liabilities

Our Company de-recognises financial liabilities when, and only when, our Company’s obligations are discharged,
cancelled or they expire.

Offsetting Financial Instruments

Financial assets and liabilities are offset, and the net amount is included in the Balance Sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise
the asset and settle the liability simultaneously

Earnings per share

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of
equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after
tax by the weighted average number of equity shares considered for deriving the basic earnings per share and the
weighted average number of equity shares that could have been issued upon conversion of all dilutive potential
equity shares.

257
Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments
and item of income or expenses associated with investing or financing cash flows. The cash flows are segregated
into operating, investing and financing activities.

Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits, which
are subject to insignificant risk of changes in value.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and
short-term deposit, as defined above.

Segment reporting

Operating segments are identified and reported taking into account the different risks and returns, the organization
structure and the internal reporting systems.

Current/non-current classification

Our Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An
asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period, or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is Expected to be settled in normal operating cycle

• It is Held primarily for the purpose of trading
• is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period

Our Company classifies all other liabilities as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and
cash Equivalents. Our Company has identified twelve months as its operating cycle.

Critical accounting judgements, assumptions and Key sources of estimation uncertainty:

The preparation of our Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and
assumptions are continuously evaluated and are based on management’s experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
assets or liabilities affected in future periods.

Key source of judgments, assumptions and estimates in the preparation of the Financial Statements which may
cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in
respect of useful lives of Property, Plant and Equipment, impairment, employee benefit obligations, provisions,
provision for income tax, measurement of deferred tax assets and contingent assets & liabilities.

258
Critical judgments in applying accounting policies

The following are the critical judgements, apart from those involving estimations (Refer note 3.2), that the
Management have made in the process of applying our Company's accounting policies and that have the
significant effect on the amounts recognized in the Financial Statements.

(a) Determination of functional currency

Currency of the primary economic environment in which our Company primarily generates and expends cash
(“the functional currency”) is Indian Rupee (₹). Accordingly, the Management has assessed its functional
currency to be Indian Rupee (₹).

(b) Determining whether an arrangement contain leases and classification of leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with
any option to extend or terminate the lease, if the use of such option is reasonably certain. Our Company
makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is
reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the
lease term, our Company considers factors such as any significant leasehold improvements undertaken over
the lease term, costs relating to the termination of the lease and the importance of the underlying asset to
operations taking into account the location of the underlying asset and the availability of suitable alternatives.
The lease term in future periods is reassessed to ensure that the lease term reflects the current economic
circumstances.
(c) Evaluation of indicators for impairment of Property, Plant and Equipment

The evaluation of applicability of indicators of impairment of a ssets requires assessment of external factors
(significant decline in asset’s value, significant changes in the technological, market, economic or legal
environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset,
poor economic performance of the asset etc.) which could result in significant change in recoverable amount
of the Property, Plant and Equipment.

Key sources of estimates and assumptions

Information about estimates and assumptions that have the significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Actual results may differ from these estimates.

(a) Defined benefit obligation (DBO)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate, future salary increases
and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the
management considers the interest rates of government bonds in currencies consistent with the currencies of
the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for
the specific countries. Those mortality tables tend to change only at interval in response to demographic
changes. Future salary increases and gratuity increases are based on expected future inflation rates for the
respective countries.

(b) Contingent Liabilities and Assets

Contingent liabilities may arise from the ordinary course of business in relation to claims against our
Company, including legal, contractor, land access and other claims. By their nature, contingencies will be
resolved only when one or more uncertain future events occur or fail to occur. The assessment of the
existence, and potential quantum, of contingencies inherently involves the exercise of significant judgment
and the use of estimates regarding the outcome of future events.

259
(c) Impairment of non-financial assets

Our Company assesses at each reporting date whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, our Company estimates the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value
less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or groups of assets. Where the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available
fair value indicators.

(d) Recognition of Deferred tax assets

Deferred Tax Assets (DTA) are recognised for the unused tax losses/ credits to the extent that it is probable
that taxable profit will be available against which the losses will be utilised. Management judgement is
required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing
and the level of future taxable profits together with future tax planning strategies.

(e) Allowance for impairment of trade receivables

The expected credit loss is mainly based on the ageing of the receivable balances and historical experience.
The receivables are assessed on an individual basis assessed for impairment collectively , depending on their
significance. Moreover, trade receivables are written off on a case-to-case basis if deemed not to be collectible
on the assessment of the underlying facts and circumstances.

Principal components of our Statement of Profit and Loss Account

The following description sets forth information on the key components of our Restated Statement of Profit and
Loss for the Fiscals 2020, 2019 and 2018, included in the Restated Financial Statements.

Income

Our total Income consists of Revenue from Operations and Other Income

Revenue from operations

Our revenue includes revenue from sale of products, revenue from sale of services and other operating revenues.

1. Revenue from sale of products

Our revenue generated from the sale of our products includes sale of Pharmaceutical Chemicals and Oilwell
Completion Chemicals, domestically and through exports (including deemed exports).

The details of our revenue from operations from sale of products is as follows:

% of Revenue % of Revenue % of Revenue

Amount Amount Amount
from from from
Particulars (in ₹ million) (in ₹ million) (in ₹ million)
Operations Operations Operations
Fiscal 2020 Fiscal 2019 Fiscal 2018
REVENUE FROM SALE OF PRODUCTS
- Pharmaceutical Chemicals 1,504.77 57.42% 1,827.03 60.23% 933.27 59.20%
(A)
HMDS (including ancillary 1,147.46 43.79% 1,224.42 40.36% 606.38 38.47%
products)

260
 % of Revenue % of Revenue % of Revenue
Amount Amount Amount
from from from
Particulars (in ₹ million) (in ₹ million) (in ₹ million)
Operations Operations Operations
Fiscal 2020 Fiscal 2019 Fiscal 2018
CMIC 338.55 12.92% 475.39 15.67% 326.88 20.74%
Other Pharmaceutical 18.75 0.72% 127.22 4.19% - 0.00%
Chemicals
- Oilwell Completion 877.18 33.47% 1,070.89 35.30% 561.75 35.63%
Chemicals (B)
- Others (C) 60.76 2.32% 39.31 1.30% 28.10 1.78%
Total Revenue from Sale of 2,442.71 93.21% 2,937.23 96.83% 1,523.11 96.62%
Products (A+B+C)

2. Revenue from job work services

We also derive revenue from sale of services in the form of job work services to our customers in India for the
pharmaceutical sector. The details of the revenue generated from job work services provided in the last three
Fiscals is as follows:

% of Revenue % of Revenue % of Revenue

Amount Amount Amount
from from from
Particulars (in ₹ million) (in ₹ million) (in ₹ million)
Operations Operations Operations
Fiscal 2020 Fiscal 2019 Fiscal 2018
REVENUE FROM SALE OF SERVICES – JOB WORK CHARGES
- Pharmaceutical Chemicals 165.77 6.33% 88.30 2.91% 46.96 2.98%
(A)
HMDS (including ancillary 164.96 6.29% 80.05 2.64% 45.73 2.90%
products)
Other Pharmaceutical 0.81 0.03% 8.25 0.27% 1.23 0.08%
Chemicals
- Others (B) 2.24 0.09% - - - -
Total Revenue from Sale of 168.01 6.41% 88.30 2.91% 46.96 2.98%
Services – Job work
Charges (A+B)

3. Other operating revenues

Our other operating revenues primarily includes export incentives received by our Company. Our other
operational revenues for the Fiscals 2020, 2019 and 2018 were ₹9.80 million, ₹7.87 million and ₹6.35 million,
respectively.

Our revenue from operations for the Fiscals 2020, 2019 and 2018 were ₹2,620.52 million, ₹3,033.41 million and
₹1,576.42 million, respectively. Our revenue from operations represented 98.51%, 99.35% and 99.53% of our
total income in the Fiscals 2020, 2019 and 2018, respectively.

Other income

Our other income primarily comprises of gain on foreign currency transaction, interest income generated from
deposits with banks along with profit on the sale of property, plant and equipment.

Expenses

Our expenses include the cost of materials consumed, changes in inventories of finished goods and work-in
progress, excise duty on sale of goods (till June 30, 2017), employee benefit expenses, finance costs, depreciation
and amortisation expenses and other expenses.

Cost of materials consumed

The cost of the materials consumed comprises of the cost of the raw materials (indigenous and imported) and
packing materials consumed for the production and packing of our products.

261
Changes in inventories of finished goods and work-in progress

Changes in inventories of finished goods and work-in-progress/semi-finished goods comprise increases or

decreases in inventory levels of finished goods and work-in progress/semi-finished goods.

Excise duty

Excise duty relates to such duty on goods manufactured during the relevant fiscal period. Since GST was
introduced in India effective July 1, 2017 and it replaced all excise duties that were applicable to our products as
a result of which excise duty was only applicable for three months in Fiscal 2018 as compared to full year in Fiscal
2017.

Employee benefit expenses

Employee benefit expenses comprise of salaries, wages, bonus, benefits, amenities, directors remunerations,
contributions to provident fund and other funds, gratuity expenses, leave encashment expenses and employee
welfare expenses.

Finance costs

Finance costs comprise of: (a) interest on fixed period loans and other loans and liabilities availed; and (b)
discounting and other bank charges.

Depreciation and amortisation expenses

Depreciation and amortisation expenses comprise of depreciation on property, plant and equipment and
amortisation of intangible assets

Other expenses

Our other expenses comprise of: (a) direct expenses primarily comprising of job work charges, expense on
consumable stores, import expenses, power charges, fuel consumption, freight inward and lifting charges; (b)
selling, marketing and distribution expenses primarily comprising of freight outward, export expenses, travelling
and conveyance expenses, exhibition expenses and sales commission paid; and (c) administrative and other
expenses primarily comprising of legal, professional and consultancy fees paid, insurance expenses, petrol and
motor vehicle expenses, rent expenses, other repair and CSR contributions made.

Results of Operations

The table below sets forth our results of operation derived from our Restated Financial Statements for the Fiscals
2020, 2019 and 2018, expressed in absolute terms and as a percentage of our total income for the relevant Fiscal:

Amount (in % of total Amount (in % of total Amount (in % of total

Particulars ₹ million) income ₹ million) income ₹ million) income
Fiscal 2020 Fiscal 2019 Fiscal 2018
Income
Revenue from operations
Revenue from sale of products 2,442.71 91.83 2,937.23 96.20 1523.11 96.16
Revenue from sale of services (job 168.01 6.32 88.30 2.89 46.96 2.96
work)
Other operating revenue:
Export incentives 7.93 0.30 4.64 0.15 3.38 0.21
Lifting charges received 0.45 0.02 0.22 0.01 2.21 0.14
Sales commission received 1.43 0.05 1.08 0.04 0.49 0.03
Miscellaneous income 0.00 - 1.92 0.06 0.27 0.02
Total Other operating revenue 9.80 0.37 7.87 0.26 6.35 0.40
Total Revenue from operations 2,620.52 98.51 3,033.41 99.35 1576.42 99.53
Other Income 39.65 1.49 19.86 0.65 7.49 0.47
Total income 2,660.17 100.00 3,053.26 100.00 1,583.91 100.00

262
 Amount (in % of total Amount (in % of total Amount (in % of total
Particulars ₹ million) income ₹ million) income ₹ million) income
Fiscal 2020 Fiscal 2019 Fiscal 2018
Expenses
Cost of materials consumed 1533.71 57.65 1,947.39 63.78 793.82 50.12
Changes in inventories of finished (44.64) (1.68) (98.23) (3.22) (20.67) (1.30)
goods and work-in progress
Excise duty - - - - 4.86 0.31
Employee benefit expenses 140.50 5.28 241.12 7.90 188.04 11.87
Finance costs 46.84 1.76 40.02 1.31 30.36 1.92
Depreciation and amortisation 46.20 1.74 28.64 0.94 22.59 1.43
expenses
Other expenses 288.33 10.84 282.29 9.25 159.40 10.06
Total expenses 2,010.94 75.59 2,441.23 79.95 1,178.40 74.40

Profit before tax 649.23 24.41 612.03 20.05 405.51 25.60

Tax Expenses
Current tax 163.80 6.16 174.60 5.72 141.64 8.94
Tax for earlier years 0.31 0.01 0.69 0.02 0.87 0.06
Deferred tax (credit)/charge (3.41) (0.13) 6.33 0.21 (0.81) (0.05)
Total tax expenses 160.70 6.04 181.62 5.95 141.70 8.95

Profit after tax 488.53 18.36 430.41 14.10 263.81 16.66

Other comprehensive income
Items that will not be reclassified subsequently to Profit and Loss
Remeasurement of Gains/ (Losses) 6.50 0.24 5.48 0.18 2.71 0.17
on defined benefit Plans
Income Tax relating to items that (1.64) (0.06) (1.81) (0.06) (0.90) (0.06)
will not be reclassified to Profit &
Loss
Other comprehensive income, net 4.87 0.18 3.67 0.12 1.81 0.11
of tax
Total comprehensive 493.40 18.55 434.08 14.22 265.62 16.77
income for the year

Fiscal 2020 compared to Fiscal 2019

Total income

Our total income decreased by 12.87% to ₹2,660.17 million in Fiscal 2020 from ₹3,053.26 million in Fiscal 2019,
due to a decrease in our revenue from operations, which was nominally offset by an increase in our other income,
for the reasons mentioned below.

Revenue from operations

Our revenue from operations decreased by 13.61% to ₹2,620.52 million in Fiscal 2020 from ₹3,033.41 million in
Fiscal 2019, predominantly as a result of decrease in our revenue from the sale of our products for the reasons
mentioned below.

Revenue from sale of products - Our revenue from the sale of products decreased by 16.84% to ₹2,442.71 million
in Fiscal 2020 from ₹2,937.23 million in Fiscal 2019, primarily as a result of decrease in sales of our
Pharmaceutical Chemicals as well as our Oilwell Completion Chemicals. Our revenue from the sale of products
of Pharmaceutical Chemicals, decreased by 17.64% to ₹1,504.77 million in Fiscal 2020 from ₹1,827.03 million
in Fiscal 2019, as a result of decrease in sales of CMIC and HMDS. The decrease in sales of HMDS and CMIC
has been primarily due to decrease in the prices of these products in Fiscal 2020 which was partially offset by an
increase in sales volume of our Pharmaceutical products. Our revenue from the sale of products of Oilwell
Completion Chemicals, decreased by 18.09% to ₹877.18 million in Fiscal 2020 from ₹1,070.89 million in Fiscal
2019, primarily as a result of decrease in sales volume of Oilwell Completion Chemicals.

263
Revenue from sale of services - Our revenue from the sale of our services increased by 90.27% to ₹168.01 million
in Fiscal 2020 from ₹88.30 million in Fiscal 2019, primarily as a result of increase in volume of the job-work.

Other income

Our other income increased to ₹39.65 million in Fiscal 2020 from ₹19.86 million in Fiscal 2019, due to increase
in interest income and gain on foreign currency transaction.

Expenses

Our total expenses decreased by 17.63% to ₹2,010.94 million in Fiscal 2020 from ₹2,441.23 million in Fiscal
2019, primarily due to decrease in cost of the raw material consumed and employee cost for the reasons mentioned
below. As a percentage of our total income, our expenses decreased to 75.59% in Fiscal 2020 from 79.95% in
Fiscal 2019.

Cost of materials consumed

Our cost of raw materials consumed decreased by 21.24% to ₹1,533.71 million in Fiscal 2020 from ₹1,947.39
million in Fiscal 2019. Further, as a percentage of our total income, the cost of raw materials consumed reduced
to 57.65% in Fiscal 2020 from 63.78% in Fiscal 2019. This decrease in cost of raw materials con sumed was
primarily due to reduction in the prices of our key raw materials.

Changes in inventories of finished goods and work-in progress

Increase in inventories of finished goods and work-in-progress was ₹44.64 million in Fiscal 2020 as compared to
₹98.23 million in Fiscal 2019. The change in inventory of finished goods and work -in-progress was lower for
Fiscal 2020 as compared to Fiscal 2019 due to (a) Decrease in revenue from operations; (b) Decrease in the price
of raw materials.

Employee benefit expenses

Our employee benefit expenses decreased by 41.73% to ₹140.50 million in Fiscal 2020 from ₹241.12 million in
Fiscal 2019, primarily due to decrease in remuneration paid to our directors. Further, as a percentage of our total
income, the cost of employee benefit expenses reduced to 5.28% in Fiscal 2020 from 7.90% in Fiscal 2019.

Finance costs

Our finance costs increased by 17.06% to ₹46.84 million in Fiscal 2020 from ₹40.02 million in Fiscal 2019, due
to increase in borrowings. However, as a percentage of our total income, our finance costs marginally increased
to 1.76% in Fiscal 2020 from 1.31% in Fiscal 2019.

Depreciation and amortisation expenses

Our depreciation and amortisation expense collectively increased by 61.30% to ₹46.20 million in Fiscal 2020
from ₹28.64 million in Fiscal 2019. Our depreciation expense for property, plant and equipment and leased assets
increased by 61.24% to ₹46.14 million in Fiscal 2020 from ₹28.61 million in Fiscal 2019, primarily due to
commissioning of new capacities and resulting increase in gross block of fixed assets.

Other expenses

Our other expenses increased marginally by 2.14% to ₹288.33 million in Fiscal 2020 from ₹282.29 million in
Fiscal 2019. Further, as a percentage of our total income, other expenses increased to 10.84% in Fiscal 2020 from
9.25% in Fiscal 2019, primarily due to increase in selling, marketing and distribution expenses and administrative
expenses as mentioned below.

Direct expenses - Our direct expenses decreased by 11.15% to ₹182.29 million in Fiscal 2020 from ₹205.15
million in Fiscal 2019, primarily due to decrease in job work charges and lifting charges. However, as a percentage
of our total income, our manufacturing expenses marginally increased to 6.85% in Fiscal 2020 from 6.72% in
Fiscal 2019.

264
Selling, marketing and distribution expenses - Our selling, marketing and distribution expenses increased by
20.60% to ₹54.62 million in Fiscal 2020 from ₹45.29 million in Fiscal 2019, primarily due to inter alia an increase
export expenses, exhibition expenses and travelling expenses incurred by our Company. However, as a percentage
of our total income, our Selling, marketing and distribution expenses increased to 2.05% in Fiscal 2020 from
1.48% in Fiscal 2019.

Administrative and other expenses - Our administrative and other expenses increased by 61.48% to ₹51.42 million
in Fiscal 2020 from ₹31.85 million in Fiscal 2019, primarily due to inter alia an increase in legal, professional
/consultancy expenses, insurance expenses, repairs and maintenance expenses and membership/subscription
expenses. However, as a percentage of our total income, our administrative and other expenses increased to 1.93%
in Fiscal 2020 from 1.04% in Fiscal 2019.

Profit before tax

As a result of the foregoing factors, our profit before tax increased by 6.08% to ₹649.23 million in Fiscal 2020
from ₹612.03 million in Fiscal 2019, which constituted 24.41% and 20.05% of our total income in Fiscal 2020
and 2019 respectively.

Tax expenses

Our tax expenses decreased by 11.52% to ₹160.70 million in Fiscal 2020 from ₹181.62 million in Fiscal 2019,
due to decrease in corporate tax rates applicable to our Company.

Profit after tax

As a result of the foregoing factors, our profit after tax increased by 13.50% to ₹488.53 million in Fiscal 2020
from ₹430.41 million in Fiscal 2019, comprising 18.36% and 14.10% of our total income in Fiscal 2020 and Fiscal
2019, respectively.

Fiscal 2019 compared to Fiscal 2018

Total income

Our total income increased by 92.77% to ₹3,053.26 million in Fiscal 2019 from ₹1,583.91 million in Fiscal 2018,
due to an increase in our revenue from operations, which was nominally offset by a decrease in our oth er income,
for the reasons mentioned below.

Revenue from operations

Our revenue from operations increased by 92.42% to ₹3,033.41 million in Fiscal 2019 from ₹ 1,576.42 million in
Fiscal 2018, predominantly as a result of an increase in our revenue from the sale of our products for the reasons
mentioned below.

Revenue from sale of products - Our revenue from the sale of our products increased by 92.84% to ₹2,937.23
million in Fiscal 2019 from ₹1,5239.11 million in Fiscal 2018, primarily as a result of increase in sales of our
Pharmaceutical Chemicals as well as our Oilwell Completion Chemicals. Our revenue from the sale of products
of Pharmaceutical Chemicals, increased by 95.77% to ₹1,827.03 million in Fiscal 2019 from ₹933.27 million in
Fiscal 2018, as a result of increase in sales of HMDS and CMIC. The increase in sales of HMDS and CMIC has
been primarily due to an increase in the prices of these products in Fiscal 2019. Our revenue from the sale of
products of Oilwell Completion Chemicals, increased by 90.64% to ₹1,070.89 million in Fiscal 2019 from
₹561.75 million in Fiscal 2018, primarily as a result of increase in both the volume as well as the prices of these
products in Fiscal 2019.

Revenue from sale service - Our revenue from the sale of our services increased by 88.04% to ₹88.30 million in
Fiscal 2019 from ₹46.96 million in Fiscal 2018, primarily as a result of increase in both volume as well as prices
of the job-work.

265
Other income

Our other income increased to ₹19.86 million in Fiscal 2019 from ₹7.49 million in Fiscal 2018, due to increase in
interest income and gain on foreign currency transaction.

Expenses

Our total expenses increased by 107.16% to ₹2,441.23 million in Fiscal 2019 from ₹1,178.40 million in Fiscal
2018, primarily due to an increase in the cost of the raw materials consumed and other expenses for the reasons
mentioned below. As a percentage of our total income, our expenses increased to 79.95% in Fiscal 2019 from
74.40% in Fiscal 2018

Cost of materials consumed

Our cost of raw materials consumed increased by 145.32% to ₹1,947.39 million in Fiscal 2019 from ₹793.82
million in Fiscal 2018. Further, as a percentage of our total income, the cost of raw materials consumed increased
to 63.78% in Fiscal 2019 from 50.12% in Fiscal 2018. This increase in cost of raw materials consumed as well as
value of raw materials consumed as a percentage of our total income was primarily due to (a) increase in volume
of production and (b) increase in prices of our key raw materials. Further, our Company had benefited from higher
value in sales in Fiscal 2018 due to a sharp increase in prices of our Products during Fiscal 2018, while our
Company had been holding inventory of raw material at the beginning of Fiscal 2018 which was procured at a
low cost, which was not available to our Company in Fiscal 2019 resulting in increase in value of raw materials
consumed as a percentage of our total income.

Changes in inventories of finished goods and work-in progress

Increase in inventories of finished goods and work-in-progress was ₹98.23 million in Fiscal 2019 as compared to
₹20.67 million in Fiscal 2018. The change in inventory of finished goods and work-in-progress was higher for
Fiscal 2019 as compared to Fiscal 2018 due to (a) Increase in revenue from operations; (b) Increase in the price
of raw materials; (c) Increase in inventory holding period (number of days).

Employee benefit expenses

Our employee benefit expenses increased by 28.23% to ₹241.12 million in Fiscal 2019 from ₹188.04 million in
Fiscal 2018, primarily due to an increase in remunerations paid to our directors. Further, as a percentage of our
total income, the cost of employee benefit expenses reduced to 7.90% in Fiscal 2019 from 11.87% in Fiscal 2018.

Finance costs

Our finance costs increased by 31.82% to ₹40.02 million in Fiscal 2019 from ₹30.36 million in Fiscal 2018, due
to increase in borrowings. However, as a percentage of our total income, our finance costs reduced to 1.31% in
Fiscal 2019 from 1.92% in Fiscal 2018.

Depreciation and amortisation expenses

Our depreciation and amortisation expense collectively increased by 26.81% to ₹28.64 million in Fiscal 2019
from ₹22.59 million in Fiscal 2018. Our depreciation expense for property, plant and equipment increased by
26.70% to ₹28.61 million in Fiscal 2019 from ₹22.59 million in Fiscal 2018, primarily due to new capital
expenditure and resulting increase in fixed assets.

Other expenses

Our other expenses increased by 77.09% to ₹282.29 million in Fiscal 2019 from ₹159.40 million in Fiscal 2018,
primarily due to an increase in our manufacturing expenses and administrative and other expenses as mentioned
below.

Direct expenses - Our direct expenses increased by 108.94% to ₹205.15 million in Fiscal 2019 from ₹98.18 million
in Fiscal 2018, primarily due to an increase in job work charges and an increase in import expenses. However, as
a percentage of our total income, our manufacturing expenses increased to 6.72% in Fiscal 2019 from 6.20% in
Fiscal 2018.

266
Selling, marketing and distribution expenses - Our selling, marketing and distribution expenses increased by
14.77% to ₹45.29 million in Fiscal 2019 from ₹39.46 million in Fiscal 2018, primarily due to inter alia an increase
freight outward expenses incurred by our Company. However, as a percentage of our total income, our Selling,
marketing and distribution expenses reduced to 1.48% in Fiscal 2019 from 2.49% in Fiscal 2018.

Administrative and other expenses - Our administrative and other expenses increased by 46.40% to ₹31.85 million
in Fiscal 2019 from ₹21.75 million in Fiscal 2018, primarily due to inter alia an increase in legal, professional
/consultancy expenses, insurance expenses and contribution to CSR. However, as a percentage of our total income,
our administrative and other expenses reduced to 1.04% in Fiscal 2019 from 1.37% in Fiscal 2018.

Further, as a percentage of our total income, other expenses reduced to 9.25% in Fiscal 2019 from 10.06% in
Fiscal 2018.

Profit before tax

As a result of the foregoing factors, our profit before tax increased by 50.93% to ₹612.03 million in Fiscal 2019
from ₹405.51 million in Fiscal 2018, which constituted 20.05% and 25.60% of our total income in Fiscal 2019
and 2018, respectively.

Tax expenses

Our tax expenses increased by 28.17% to ₹181.62 million in Fiscal 2019 from ₹141.70 million in Fiscal 2018,
due to an increase in our profit resulting increase in current tax and deferred tax liability.

Profit after tax

As a result of the foregoing factors, our profit after tax increased by 63.15% to ₹430.41 million in Fiscal 2019
from ₹263.81 million in Fiscal 2018, comprising 14.10% and 16.66% of our total income in Fiscal 2019 and Fiscal
2018, respectively.

Liquidity and Capital Resources

As on March 31, 2020, our cash and cash equivalents comprising bank balances (current and deposit accounts)
were ₹141.02 million. Historically, our liquidity requirements have been to finance the working capital and capital
expenditure, primarily financed through cash flow from operations as well as from financing facilities availed
from banks and financial institutions.

Cash Flow

The following table sets out a summary of our cash flows for the periods indicated:
(in ₹ million)
Particulars Fiscal 2020 Fiscal 2019 Fiscal 2018
Net cash generated from operating activities 105.02 110.58 141.33
Net cash used in investing activities (166.17) (237.09) (78.33)
Net cash generated from/(used in) financing activities 65.05 124.07 (57.08)
Net increase/(decrease) in cash and cash equivalents 3.90 (2.44) 5.92

Net cash generated from operating activities

Fiscal 2020

Our net cash generated from operating activities in Fiscal 2020 was ₹105.02 million. Our net profit before tax for
Fiscal 2020 was ₹649.23 million, our operating profit before working capital changes was ₹ 734.84 million,
working capital adjustments were ₹457.67 million and tax paid was ₹172.15 million. The working capital
adjustments were primarily due to increases in trade receivables by ₹248.28 million, and other assets by ₹104.66
million, decreases in other financial liabilities by ₹70.33 million and trade payables by ₹31.50 million, which were
partially offset by increases in other current liabilities and provision by ₹17.95 million.

267
Fiscal 2019
Our net cash generated from operating activities in Fiscal 2019 was ₹110.58 million. Our net profit before tax for
Fiscal 2019 was ₹612.03 million, operating profit before working capital changes was ₹679.72 million, working
capital adjustments were ₹340.60 million and tax paid was ₹228.54 million. The working capital adjustments were
primarily due to increases in trade receivables by ₹345.63 million and inventories by ₹248.78 million and decrease
in other current liabilities and provisions by ₹2.18 million, which were partially offset by increases in trade
payables by ₹115.95 million and other financial liabilities by ₹83.62 million and decrease in other assets by ₹58.86
million.
Fiscal 2018
Our net cash generated from operating activities in Fiscal 2018 was ₹141.33 million. Our net profit before tax for
Fiscal 2018 was ₹405.51 million, our operating profit before working capital changes was ₹456.81 million,
working capital adjustments were ₹201.18 million and tax paid was ₹114.29 million. The working capital
adjustments were primarily due to increases in trade receivables by ₹71.68 million, inventories by ₹119.95 million,
other current financial assets by ₹8.63 million, other assets by ₹81.06 million and a decrease in other financial
liabilities by ₹22.20 million, which were partially offset by increases in trade payables by ₹85.09 million and other
current liabilities and provisions by ₹17.32 million.
Net cash used in investing activities

Fiscal 2020
Our net cash used in investing activities in Fiscal 2020, was ₹166.17 million, primarily on account of expenditure
incurred on the purchase of property, plant and equipment, investment property and intangibles of ₹165.62 million
and used in Term Deposit of ₹21.22 million, which was partially offset by the proceeds from the sale of property,
plant and equipment of ₹12.69 million and interest received from banks and others of ₹7.98 million.

Fiscal 2019

Our net cash used in investing activities in Fiscal 2019, was ₹237.09 million, primarily on account of expenditure
incurred on the purchase of property, plant and equipment, investment property and intangibles of ₹142.73 million
and used in Term Deposits of ₹103.44 million, which was partially offset by the proceeds from the sale of property,
plant and equipment of ₹7.60 million and interest received from banks and others of ₹1.48 million.

Fiscal 2018

Our net cash used in investing activities in Fiscal 2018, was ₹78.33 million, primarily on account of expenditure
incurred on the purchase of property, plant and equipment, investment property and intangibles of ₹80.68 million
and used in Term Deposit of ₹0.40 million, which was partially offset by the proceeds from the sale of property,
plant and equipment of ₹1.66 million and interest received from banks and others of ₹1.10 million.

Net cash generated from/(used in) financing activities

Fiscal 2020

Our net cash generated from financing activities in Fiscal 2020 was ₹65.05 million, primarily on account of
increase in long-term borrowings amounting to ₹124.65 million, which were partially offset by repayment of short
term borrowings amounting to ₹10.63 million and finance cost of ₹43.83 million.

Fiscal 2019

Our net cash generated from financing activities in Fiscal 2019 was ₹124.07 million, primarily on account of
increase in short-term borrowings amounting to ₹161.26 million and Long term borrowing to ₹0.91 million ,
which were partially offset by finance costs of ₹38.10 million.
Fiscal 2018

Our net cash used financing activities in Fiscal 2018 was ₹57.08 million, primarily on account of finance costs of
₹24.14 million and repayment of short-term borrowings amounting to ₹35.09 million, which were partially offset
by increase of long-term borrowings amounting to ₹2.14 million.

268
Indebtedness

As on June 30, 2020 and March 31, 2020, our total outstanding indebtedness was ₹469.35 million and ₹445.11
million, respectively, comprising of non-current financial borrowings of₹143.20 million and ₹145.99 million,
respectively and current financial borrowings (including current portion of non- current borrowings) of ₹326.15
million and ₹299.12 million, respectively.

See “Financial Indebtedness” on page 273 for a description of the broad items of our indebtedness as on June 30,
2020.

In the event our lenders declare an event of default, such current and any future defaults could lead to acceleration
of our obligations, termination of one or more of our financing agreements or force us to sell our assets, which
may adversely affect our business, results of operations and financial condition.

Capital and Other Commitments

As of March 31, 2020, capital commitments, as disclosed in the notes to our Restated Financial Statements are as
follows:
(in ₹ million)
Particulars As of March 31, 2020
Capital Commitments
Estimated amount of purchase order/ contracts remaining to be executed and not 6.13
provided for (net of advances): - Property, plant and equipment

The following table sets forth a summary of the maturity profile of our contractual obligations as of March 31,
2020:
(in ₹ million)
Due within 12 months Due beyond 12 months from
Particulars Total amount
from March 31, 2020 March 31, 2020
Borrowings 286.75 145.99 432.74
Trade payables 257.22 - 257.22
Other financial liabilities* 45.01 - 45.01
Lease Liabilities 4.11 8.22 12.33
Total 593.09 154.21 747.30
*includes current portion of non-current borrowings.

Capital Expenditure

In Fiscal 2020, we acquired property, plant and equipment for ₹134.90 million, primarily in the form of plant and
equipment, buildings, vehicles and furniture and fixtures. In Fiscal 2019, we acquired property, plant and
equipment for ₹135.75 million, primarily in the form of plant and equipment, buildings, vehicles and furniture
and fixtures. In Fiscal 2018, we acquired property, plant and equipment for ₹80.68 million, primarily in the form
of plant and equipment, buildings and vehicles. Further, in Fiscal 2020 and 2019, we added capital work-in
progress of ₹37.42 million and ₹6.70 million, respectively.

Contingent liabilities and off-balance sheet arrangements

Our contingent liabilities as on March 31, 2020 were as below:

(in ₹ million)
Particulars Amount
Letters of credit issued for purchase of raw material 50.03
Claims against the Company/ disputed demands not acknowledged as debt 2.69

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect
on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that we believe are material to investors.

269
NON GAAP MEASURES

EBITDA and EBITDA Margin

The following table sets forth our earnings before interest, taxes, depreciation and amortisation expenses
(“EBITDA”) from our profit before tax, as restated, and the manner in which it is calculated for the Fiscals
2020, 2019 and 2018. We define our EBITDA Margin as EBITDA divided by revenue from operations.

(in ₹ million except for EBITDA Margin)

Particulars Fiscal 2020 Fiscal 2019 Fiscal 2018
Profit Before Tax, as restated 649.23 612.03 405.51
Add: Finance costs 46.84 40.02 30.36
Add: Depreciation and amortization expense 46.20 28.64 22.59
Less: Other Income (39.65) (19.86) (7.49)
EBITDA 702.61 660.83 450.96
EBITDA Margin 26.81 21.79 28.61
(EBITDA as a percentage of revenue from operations)

Related Party Transactions

We have entered into transactions with a number of related parties. For further information regarding our related
party transactions, please refer to “Restated Financial Statements- Annexure VI- Note 35: Related Party
Disclosures” at page 229.

Quantitative and qualitative analysis of market risks

In the course of business, amongst others, our Company is exposed to several financial risks such as market risk,
credit risk, liquidity risk and commodity price risk. These risks may be caused by the internal and external factors
resulting into impairment of the assets of our Company causing adverse influence on the achievement of our
Company’s strategies, operational and financial objectives, earning capacity and financial position.

Our Company has formulated an appropriate policy and established a risk management framework, the objectives
of which are: (a) embedding the management of risk as an integral part of our business processes; (b) establishing
an effective system of risk identification, analysis, evaluation and treatment within all areas and levels of our
Company; (c) avoiding exposure to significant financial loss; (d) contributing to the achievement of our
Company’s objectives; and (e) accessing the benefits and cost of implementation of available options and controls
to manage risk.

Commodity price risk

Our company is exposed to the foreign currency risk from transactions. Transactional exposures are arising from
the transactions entered into foreign currency. Our management keeps a close watch of the maturity of the financial
assets in foreign currency and payment obligations of the financial liabilities.

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. Our Company’s fixed rate borrowings are 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 ra tes. Further, our Company's investments in
deposits is with banks and electricity authorities and therefore do not expose our Company to significant interest
rates risk. Our Company's variable rate borrowing is subject to interest rate risk. However, the m anagement
considers the impact of fair value interest rate risk on variable rate borrowings to be immaterial.

Credit Risk

Credit Risk refers to the risks that arise on default by the counterparty on its contractual obligation resulting into
financial loss to our Company. Our Company may carry this risk on trade and other receivables, liquid assets and
some of the non-current financial assets. In case of trade receivables, our Company has framed an appropriate

270
policy for extending credits period & limit to each customer based on their profile, financial position and their
external rating etc. The collections of trade dues are strictly monitored.

The credit risk on cash & cash equivalent, investment in fixed deposits and deposits are insignificant as
counterparties are banks with high credit ratings assigned by the trading agencies of international repute.

Liquidity Risk
Liquidity risk arises when our Company is unable to meet its short term financial obligations as and when they
fall due. Our Company maintains adequate liquidity in the system so as to meet its all financial liabilities timely.

In addition to this, our Company’s overall financial position is very strong so as to meet any eventuality of liquidity
tightness.

Total turnover of each major industry segment in which our company operated
Our Company is engaged in the manufacturing of specialised chemical and has only one operating segment.

Seasonality
Seasonality does not have a material impact on our operations.

Unusual or Infrequent Events or Transactions

Other than as described in this chapter and the chapters “Our Business”, “Risk Factors” and “History and Certain
Corporate Matters” beginning on pages 136, 23 and 162 there have been no events or transactions which may be
described as “unusual” or “infrequent”.

Known trends or uncertainties

Other than as described in this Chapter and the section “Risk Factors” starting on page 23, to our knowledge there
are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our
sale, revenues or income from continuing operations.

Significant economic changes that materially affected or are likely to affect income from operations
Other than as described in this chapter and the chapters “Our Business”, Risk Factors” and “Industry Overview”
on pages 136, 23 and 92, there have been no significant economic changes that materially affected or are likely to
affect our Company's income from operations.

Material increases in net income and sales

Material increases in our Company's net income and sales are primarily due to the reasons described in “- Results
of Operations” above on page 244.

Significant dependence on a single or few customers or suppliers

Other than as described in this Red Herring Prospectus, particularly in sections “Risk Factors” and
“Management’s Discussion and Analysis of Financial Position and Results of Operations” on pages 23 and 243,
respectively, to our knowledge, there is no significant dependence on a single or few customers or suppliers.

New products or business segments

Other than as described in the chapter “Our Business” on page 136, we do intend to enter into any new product
or business segments.

Future relationship between cost and income

Other than as described elsewhere in the sections “Risk Factors”, “Our Business” and “Management’s Discussion
and Analysis of Financial Position and Results of Operations” beginning on pages 23, 136 and 243, respectively,
to our knowledge there are no known factors that will have a material adverse impact on our operations and
finances.

271
Competitive Conditions

For a description of the competitive conditions in which our Company operates, see “Our Business—Competitors”
and “Industry Overview” on pages 156 and 92, respectively.

Significant Developments after March 31, 2020

Other than as disclosed in the “Risk Factors”, particularly “Risk Factors – The recent outbreak of the novel
coronavirus could have a significant effect on our results of operations, and could negatively impact our business,
revenues, financial condition and results of operations.” and as described below, there has been no subsequent
development after the date of the Restated Financial Statements, which materially and adversely affects, or is
likely to affect, our operations or profitability, or the value of our assets, or our ability to pay our material liabilities
within the next 12 months.

Since first being reported in December 2019, the outbreak of COVID-19 has spread globally. The World Health
Organization declared the outbreak of COVID-19 to be a public health emergency of international concern on
January 30, 2020, and a global pandemic on March 11, 2020.

The COVID-19 pandemic has had repercussions across regional and global economies and financial markets. The
outbreak of COVID-19 in many countries, including India and the United States, has significantly and adversely
impacted economic activity and has contributed to significant volatility and negative pressure in financial markets,
and it is possible that the outbreak of COVID-19 will cause a prolonged global economic crisis, recession or
depression, despite monetary and fiscal interventions by governments and central banks globally.

The impact of the outbreak has been rapidly evolving all across the globe. As cases of COVID-19 have continued
been increasing across countries, many jurisdictions, including the governments of India, the UAE and the other
markets in which we conduct business, have reacted by instituting restrictive measures including invoking lock
downs and quarantines, requiring the closure of non-essential businesses and placing restrictions on the types of
businesses that may continue to operate, mandating restrictions on travel, implementing “shelter-in-place” rules
and “stay-at-home” orders, and enforcing remote working regulations.

Our Manufacturing Facility was temporarily shut down during this pandemic from March 24, 2020. However, as
we are engaged in manufacturing of speciality chemicals primarily finding application in pharmaceuticals Industry
and Oil & Gas Exploration Industry, our products in Pharmaceuticals Chemicals were categorized under the
‘essential goods’ we could resume manufacturing operations on April 1, 2020. Due to limited availability of
labour, logistics and supply chain constraints, our Manufacturing Facility was initially operating at sub-optimal
capacity utilization in the current Fiscal.

Since then, we have resumed operations in a phased manner as per the Government of India and state
government’s directives. Our plant utilization has improved, raw material suppliers have resumed operations and
supply and logistics have become more regular. We have not terminated any lease deed or laid-off any employees
and have not withheld any payments to employees as a consequence of the COVID-19.

The global pandemic has heavily affected global movement of goods and services to and from China, has also
adversely affected and is likely to continue adversely affecting companies which are dependent on raw material
imports from China, including our Company. We have continued to source raw materials from our suppliers and
have been able to continue to supply our Pharmaceutical Chemicals to our customers.

272
 FINANCIAL INDEBTEDNESS

Our Company avails loans and bank facilities in the ordinary course of its business. As on the date of this Red
Herring Prospectus, such indebtedness is primarily availed to fund our working capital requirements, to finance
the purchase of certain vehicles by our Company and to finance the purchase of a commercial property by our
Company.

Our Company has obtained the necessary consents required under the relevant financing documentation for
undertaking the Issue.

Pursuant to a resolution passed by our Shareholders at their extra-ordinary general meeting held on June 14, 2019,
our Board has been authorised to borrow any sum or sums of monies in excess of our Company’s aggregate paid-
up capital and free reserves, provided that the total amount which may be so borrowed and outstanding shall not
exceed a sum of ₹ 8,000 million.

The details of the indebtedness of our Company as on June 30, 2020 is provided below:
(in ₹ million)
Category of borrowing Sanctioned amount Outstanding amount as on June 30, 2020
Secured
Letter of Credit backed Bill 400.00 1.42
Discounting Facility
Pre-shipment Finance Facility 300.00 0.00
Other working capital facilities
-Fund Based Facility 530.00 271.82
-Non-Fund Based Facility 33.23
Vehicle loans 42.48 24.94
Commercial property loan 14.50 6.41
Term loan 300.00 123.89
Total secured facilities (A) 1,586.98 461.71
Unsecured
Sales Bill Discounting Facility 50.00 7.64
Total unsecured facilities (B) 50.00 7.64
Total borrowings (A + B) 1,636.98 469.35
Pursuant to the certificate dated September 10, 2020, issued by M/s K.C. Mehta & Co, Chartered Accountants.

Principal terms of the borrowings availed by us:

The details provided below are indicative and there may be additional terms, conditions and requirements under
the various loan documentation executed by our Company in relation to our indebtedness.

1. Interest: In terms of the working capital facilities availed by us, the interest rate (with respect to fund based
facilities) and rate of commission (with respect to non-fund based facilities) is mutually decided between
HDFC and our Company and is linked to the base rate of a specific lender and margin of the specific lender
is linked. The interest rates for our vehicle loans are decided by the relevant lender and typically ranges from
8% to 9.50% per annum. The interest rate for the commercial property loan availed by us, is 12.00% per
annum.

2. Penal Interest: The terms of certain financing facilities availed by us prescribe penalties f or non-compliance
with certain obligations by our Company. The terms of the working capital facilities availed by us, prescribe
a 3% penalty per annum over and above the applicable interest rate. In terms of the vehicle loans availed by
us from HDFC and Yes Bank, the rate of penalty over and above the applicable interest rate, is 2% per month,
of the outstanding instalment amount.

3. Pre-payment penalty: Certain of the vehicle loans availed by us carry a pre-payment penalty of up to 6% on
the outstanding principal amount, as on the date of foreclosure of the loan. The commercial property loan
availed by us carries a pre-payment penalty of 4% p.a. on the outstanding principal amount, in the event that
our Company makes a pre-payment of an amount greater than 25% of the outstanding principal amount.

273
4. Validity/Tenor: The working capital facilities availed by us are available for a period of twelve (12) months,
subject to periodic review by the relevant lender. The tenor of the vehicle loans availed by us typically ranges
from three (3) to five (5) years. The tenor of the commercial property loan availed by us is ten (10) years.

5. Security: In terms of our borrowings where security needs to be created, such security typically includes:
(a) With respect to the working capital facilities, first exclusive charge on certain movable and immovable
assets and all current assets of our Company and a guarantee provided by one of our Promoters,
Kamalkumar Rajendra Aggarwal and a member of our Promoter Group, Naresh Vijaykumar Goyal;
and
(b) With respect to the vehicle and commercial property loans availed by us, exclusive charge over the
vehicles and commercial property purchased using such loans.

6. Repayment: The working capital facilities availed by us are payable on demand. Further, the vehicle loans
and commercial property loan availed by us are typically required to be repaid to the relevant lender in
monthly instalments.

7. Key Covenants: The financing documentation executed by our Company in relation to our working capital
facilities and certain of our vehicle financing facilities, entail certain restrictive covenants and conditions
restricting certain corporate actions, and for which we are required to take the prior approval of the respective
lender before carrying out such actions, including for:

(a) effectuating any change in the shareholding pattern and management control in the Company;

(b) diversifying into non-core areas of business;

(c) resorting to any additional borrowing in the Company;

(d) undertaking or permitting inter alia any merger, de-merger, consolidation, re-organisation or
permitting any company to become a subsidiary of the Company;

(e) undertaking further capital expenditure unless the same is funded by the Company’s own resources;
(f) undertaking guarantee obligations or extending letters of comfort on behalf of any other
company/person/trust/any third party; and

(g) selling, assigning, mortgaging, or otherwise disposing any of its fixed assets.

274
 SECTION VIII – LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS
Except as stated below there are no outstanding (1) criminal proceedings involving our Company, Directors, or
Promoters; (2) actions by statutory or regulatory authorities involving our Company, Directors, or Promoters;
(3) claims involving our Company, Directors, or Promoters for any direct or indirect tax liabilities (disclosed in
a consolidated manner giving the total number of claims and total amounts involved); (4) proceeding involving
our Company, Directors or Promoters (other than proceedings covered under (1) to (3) above) which has been
determined to be material pursuant to the Materiality Policy (as disclosed herein below).

In terms of the Materiality Policy, other than outstanding criminal proceedings, statutory or regulatory actions
and claims for any direct or indirect tax liabilities mentioned in point (1) to (3) above, all other pending litigation:

A. involving our Company:

(i) where the aggregate monetary claim made by or against our Company, in any such pending litigation
proceeding is in excess of (i) five percent of our profit after tax; or (ii) one percent of our total income of our
Company, whichever is lower, in the most recently completed Fiscal as per the Restated Financial Statements.

The profit after tax of our Company for Fiscal 2020 as per the Restated Financial Statements was ₹488.53
million while the total income of our Company for Fiscal 2020 was ₹2,660.17 million. Accordingly, we have
disclosed all such outstanding litigation proceedings where the aggregate monetary claim made by or against
our Company, in any such pending litigation proceeding is in excess of ₹24.43 million (being five per cent of
our total profit after tax in Fiscal 2020 as per the Restated Financial Statements); and

(ii) where the monetary liability is not quantifiable, or which does not fulfil the threshold specified in (i) above,
but the outcome of which could, nonetheless have a material adverse effect on the position, business,
operations, prospects or reputation of our Company have been considered “material” and accordingly have
been disclosed in this Red Herring Prospectus.

B. involving our Promoter(s) and/or our Director(s), the outcome of which could have a material adverse effect
on the position, business, operations, prospects or reputation of our Company, irrespective of the amount
involved in such litigation, shall be considered “material” and accordingly have been disclosed in this Red
Herring Prospectus.

Further, except as disclosed in this section, there are no (i) disciplinary action taken against any of our Promoters
by SEBI or any Stock Exchange in the five Fiscals preceding the date of this Red Herring Prospectus; and (ii) any
litigation involving any Group Company which may have a material impact on our Company;

Further, in accordance with the Materiality Policy, our Company considers such creditors ‘material’ to whom
the amount due exceeds five percent of the trade payables of our Company as of the end of the most recent period
covered in the Restated Financial Statements. The trade payables of our Company as on March 31, 2020 was
₹257.22 million. Accordingly, a creditor has been considered ‘material’ if the amount due to such creditor exceeds
₹12.86 million as on March 31, 2020.

For the purposes of the above, pre-litigation notices received by our Company, Directors, Group Companies or
Promoters from third parties (excluding those notices issued by statutory/regulatory/tax authorities or notices
threatening criminal action) have not and shall not, unless otherwise decided by our Board, be considered
material until such time that the Company, or such Director, Group Company or Promoters, as the case may be,
is impleaded as a defendant in litigation before any judicial/arbitral forum.

Unless stated to the contrary, the information provided below is as of the date of this Red Herring Prospectus.
All terms defined in a particular litigation disclosure below are for that particular litigation only.

A. Litigation proceedings involving our Company

I. Litigation proceedings initiated against our Company

(a) Criminal proceedings

As on the date of this Red Herring Prospectus, there are no pending criminal proceedings initiated
against our Company.

275
 (b) Statutory or regulatory proceedings

As on the date of this Red Herring Prospectus, there are no pending actions taken by statutory or
regulatory authorities initiated against our Company.

(c) Other pending proceedings

As on the date of this Red Herring Prospectus there are no other proceedings pending against our
Company, which have been considered material by our Company in accordance with the Litigation
Materiality Policy.

(d) Claims related to direct and indirect taxes

(in ₹ million)
Sr. No. Type of tax No. of Cases Amount demanded/ in dispute*
1. Direct tax Nil Not applicable
2. Indirect tax 2 2.69
* To the extent quantified.

II. Litigation proceedings initiated by our Company

(a) Criminal proceedings

As on the date of this Red Herring Prospectus, there are no pending criminal proceedings initiated
by our Company.

(b) Other pending proceedings

As on the date of this Red Herring Prospectus there are no other pending proceedings initiated by
our Company, which have been considered material by our Company in accordance with the
Litigation Materiality Policy.

B. Litigation proceedings involving our Directors

I. Litigation proceedings initiated against our Directors

(a) Criminal proceedings

As on the date of this Red Herring Prospectus, there are no pending criminal proceedings against
any of our Directors.

(b) Statutory or regulatory proceedings

As on the date of this Red Herring Prospectus, other than as disclosed in “-Litigation proceedings
involving our Promoters- Litigation proceedings initiated against our Promoters- Statutory or
regulatory proceedings” on page 277, there are no pending actions taken by statutory or regulatory
authorities initiated against our Directors.

(c) Claims related to direct and indirect taxes

(in ₹ million)
Sr. No. Type of tax No. of Cases Amount demanded/ in dispute
1. Direct tax Nil Not Applicable
2. Indirect tax Nil Not Applicable

(d) Other pending proceedings

As on the date of this Red Herring Prospectus there are no other pending proceedings initiated
against any of our Directors, which have been considered material by our Company in accordance
with the Litigation Materiality Policy.

276
 II. Litigation proceedings initiated by our Directors

(a) Criminal proceedings

As on the date of this Red Herring Prospectus, there are no pending criminal proceedings initiated
by any of our Directors.

(b) Other pending proceedings

As on the date of this Red Herring Prospectus there are no other pending proceedings initiated by
any of our Directors, which have been considered material by our Company in accordance with the
Litigation Materiality Policy.

C. Litigation proceedings involving our Promoters

I. Litigation proceedings initiated against our Promoters

(a) Criminal proceedings

As on the date of this Red Herring Prospectus, there are no pending criminal proceedings initiated
against any of our Promoters.

(b) Statutory or regulatory proceedings

Other than as disclosed below, as on the date of this Red Herring Prospectus, there are no pending
actions by statutory or regulatory authorities initiated against our Promoters.

Our Promoters, Kamalkumar Rajendra Aggarwal, Shubharangana Goyal and Navdeep Naresh Goyal
and certain members of our Promoter Group, namely, Naresh Vijaykumar Goyal and Minal Kamal
Aggarwal, have filed a settlement application dated March 10, 2019 with SEBI in relation to their
inadvertent failure to make certain disclosures required under Regulation 29 of the Takeover
Regulations and Regulation 7 of the SEBI Insider Trading Regulations in relation to their holdings
in Overseas Synthetics Limited, a company listed on BSE Limited, which was a member of the
Promoter Group at the time the Company had filed its Draft Red Herring Prospectus.

(c) Claims related to direct and indirect taxes

(in ₹ million)
Sr. No. Nature of tax No. of Cases Amount demanded/ in dispute
1. Direct tax Nil Not Applicable
2. Indirect tax Nil Not Applicable

(d) Other pending proceedings

As on the date of this Red Herring Prospectus there are no other pending proceedings initiated
against any of our Promoters, which have been considered material by our Company in accordance
with the Litigation Materiality Policy.
(e) Disciplinary action taken against our Promoters in the five Fiscals preceding the date of this Red
Herring Prospectus by SEBI or any stock exchange

No disciplinary action has been taken against our Promoter in the five Fiscals preceding the date of
this Red Herring Prospectus either by SEBI or any stock exchange.

II. Litigation initiated by our Promoters

A. Criminal proceedings

As on the date of this Red Herring Prospectus, there are no pending criminal proceedings initiated
by any of our Promoters.

277
 B. Other pending proceedings

As on the date of this Red Herring Prospectus there are no other pending proceedings initiated by
any of our Promoters, which have been considered material by our Company in accordance with the
Litigation Materiality Policy.

III. Litigation proceedings involving our Group Companies

There is no litigation proceeding involving any Group Company which may have a material impact on
our Company.

IV. Micro, small and medium enterprises or any other creditors

In terms of the Materiality Policy, our Board considers such creditors ‘material’ to whom the amount due
by our Company exceeds five per cent of the trade payables of our Company as on March 31, 2020 as
per the Restated Financial Statements i.e. ₹12.86 million (the “Material Creditors”).

The details of outstanding dues (trade payables) owed to micro, small and medium enterprises, Material
Creditors and other creditors as on March 31, 2020 is as set forth below:

Particulars Number of creditors ₹ in million

Due to micro, small and medium enterprises 10* 38.72*
Dues to Material Creditors 6* 157.56*
Dues to other creditors 201 94.54
Total dues to creditors 216* 257.22*
* One creditor to whom on aggregate amount of ₹ 33.59 million was payable on March 31, 2020, is both a Material Creditor (in
accordance with the Materiality Policy) and a micro small and medium enterprise.

The details pertaining to outstanding dues to Material Creditors as on March 31, 2020, along with the
name and amount involved for each such Material Creditor, are available on the website of our Company
at http://www.cscpl.com/financials.html.

278
 GOVERNMENT AND OTHER APPROVALS

Except as disclosed herein, we have obtained all material consents, licenses, registrations, permissions and
approvals from various governmental, statutory and regulatory authorities, which are necessary for undertaking
our Company’s current business activities and operations. Except as disclosed below, no further material
approvals are required for carrying on the present business operations of our Company. In the event any of the
approvals and licenses that are required for our business operations expire in the ordinary course, we make
applications for their renewal from time to time. Unless otherwise stated, these approvals are valid as on the date
of this Red Herring Prospectus. For details in connection with the regulatory and legal framework within which
our Company operates, see “Key Regulations and Policies in India” on page 158.

For Issue related approvals, see “Other Regulatory and Statutory Disclosures” on page 281 and for
incorporation details of our Company, see “History and Certain Corporate Matters” on page 162.

Material approvals in relation to our business and operations

Business related approvals

1. Factories License issued by the Directorate of Industrial Safety & Health (Gujarat) under the Factories Act,
to enable our Company to operate a factory within the Manufacturing Facility.
2. License issued by the office of the Deputy Chief Controller of Explosives (Vadodara), Petroleum &
Explosives Safety Organization, Ministry of Commerce & Industry, GoI, under the Explosives Act to
enable our Company to store compressed gas in pressure vehicles.

3. Certificate for use of a boiler issued by the office of the Assistant Director of Boilers, Gujarat Boiler
Inspection Department under the Boilers Act, to enable our Company to operate a boiler within for its
operations within its premises.

4. No objection and consent to abstract ground water issued by the Central Ground Water Authority, Ministry
of Water Resources, River Development and Ganga Rejuvenation, to enable our Company to gain access
to water for its operations.

5. Consolidated consent and authorization to (i) operate a facility for the collection and storage of hazardous
wastes under the Hazardous Wastes Rules; (ii) operate an industrial plant for the manufacture of certain
items capable of causing air emission; and (iii) operate an industrial plant for the manufacture of certain
items capable of discharging industrial effluent, issued by the Gujarat Pollution Control Board, under the
Environment Protection Act.

6. Certificate of Importer-Exporter Code issued by the office of the Joint Director General of Foreign Trade,
Ministry of Commerce and Industry, Government of India, under the Foreign Trade (Development and
Regulation) Act, 1992, to enable our Company to carry out its export and import operations.
7. Registration-cum-Membership certificate, issued by the Basic Chemicals, Cosmetics and Dyes Export
Promotion Council, established by the Ministry of Commerce and Industry, Government of India, under
the Foreign Trade (Development and Regulation) Act, 1992 read with Notification 18/2015-Customs,
issued by the Ministry of Finance, Government of India, as a small scale manufacturer cum merchant
exporter with respect to basic inorganic and organic chemicals (including agrochemicals).

8. UN certificate, issued by the Indian Institute of Packaging, under the International Maritime Dangerous
Goods Code- Volume 1, allowing our Company to transport certain chemicals, namely, TMCS and HMDS.

Labour/employment related approvals

1. Shops and establishments registration under the applicable provisions of the shops and establishments
legislation of the State of Gujarat, for our Corporate Office, issued by Vadodara Municipal Corporation.
This license is periodically renewed.

2. Certificates for contract labor under the Contract Labor (Regulation & Abolition) Act, 1970 for our
Manufacturing Facility, issued by relevant registering officer. These approvals are periodically renewed,
whenever applicable.

279
3. Registration for employees’ provident fund issued by the Employees’ Provident Fund Organization under
the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

4. Registration for employees’ insurance issued by the Regional Office, Employees State Insurance
Corporation of different states in India under the Employees' State Insurance Act, 1948.

Tax related approvals

1. Permanent account number issued by the Income Tax Department under the Income Tax Act, 1961.

2. Tax deduction account number issued by the Income Tax Department under th e Income Tax Act, 1961.

3. Goods and services tax registration issued by the GoI, under the Goods and Service Tax Act, 2017.

Material approvals which have expired for which renewal applications have been made

Date of acknowledgement of renewal

Nature of approval Issuing authority
application / date of renewal application
No objection certificate Central Ground Water Authority, April 3, 2018
to abstract ground water Ministry of Water Resources, River
Development and Ganga Rejuvenation

Intellectual property rights

Our Company has obtained a trademark registration of its “Chemcon” logo with the Registrar of Trademarks
under Class 1 of the Trademarks Act, 1999. For details, see “Our Business-Intellectual Property” on page 156.

280
 OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Issue has been authorized by a resolution of our Board dated June 14, 2019 and the Fresh Issue has been
authorized by a special resolution of our Shareholders, dated June 14, 2019. The final size of the Offer for Sale
was noted by our Board at its meeting held on September 9, 2020.

Our Board has approved this Red Herring Prospectus pursuant to their resolution dated September 12, 2020.
Kamalkumar Rajendra Aggarwal has consented to participate in the Offer for Sale pursuant to his consent letter
dated September 9, 2020 and has consented to offer up to 2,250,000 Equity Shares in the Offer for Sale.
Naresh Vijaykumar Goyal has consented to participate in the Offer for Sale pursuant to his consent letter dated
September 9, 2020 and has consented to offer up to 2,250,000 Equity Shares in the Offer for Sale.
Prohibition by SEBI or other Governmental Authorities
Our Company, our Promoters, our Directors, the members of the Promoter Group and each of the Selling
Shareholders have not been prohibited from accessing the capital markets and have not been debarred from
buying, selling or dealing in securities under any order or direction passed by SEBI or any securities market
regulator in any jurisdiction or any other authority/court.
Compliance with the Companies (Significant Beneficial Ownership) Rules, 2018
Our Company, our Promoters, the members of the Promoter Group and each of the Selling Shareholders are in
compliance with the Companies (Significant Beneficial Ownership) Rules, 2018, to the extent in force and
applicable.

Directors associated with the Securities Market

None of the Directors are, in any manner, a ssociated with the securities market. Other than as disclosed in
“Outstanding Litigation and Other Material Developments-Litigation proceedings involving our Promoters” on
page 277, there are no outstanding action(s) initiated by SEBI against the Directors of our Company in the five
years preceding the date of this Red Herring Prospectus.
Eligibility for the Issue
Our Company is eligible for the Issue in accordance with Regulation 6(1) of the SEBI ICDR Regulations, and is
in compliance with the conditions specified therein in the following manner:

• Our Company has had net tangible assets of at least ₹30 million, calculated on a restated basis, in each of the
preceding three full years (of 12 months each), of which not more than 50% are held in monetary assets;
• Our Company has an average operating profit of at least ₹150 million, calculated on a restated basis, during
the preceding three years (of 12 months each), with operating profit in each of these preceding three years;
• Our Company has a net worth of at least ₹10 million in each of the preceding three full years (of 12 months
each), calculated on a restated basis; and
• Our Company has not changed its name in the last one year.

Our Company’s net tangible assets, monetary assets, monetary assets as a percentage of the net tangible assets,
operating profits and net worth, derived from the Restated Financial Statements included in this Red Herring
Prospectus for the last three Fiscals ended March 31, 2020, 2019 and 2018 are set forth below:

(in ₹million, unless otherwise stated)

As at March 31, 2020 As at March 31, 2019 As at March 31, 2018
and for the Fiscal and for the Fiscal and for the Fiscal
ended March 31, 2020 ended March 31, 2019 ended March 31, 2018
Net tangible assets, as restated 1 1,449.47 981.83 552.42
Monetary assets, as restated 2 141.02 115.90 14.90
Monetary assets, as a percentage 9.73% 11.80% 2.70%
of net tangible assets, as restated
Operating profit/ (loss), as 656.42 632.19 428.38
restated3

281
 As at March 31, 2020 As at March 31, 2019 As at March 31, 2018
and for the Fiscal and for the Fiscal and for the Fiscal
ended March 31, 2020 ended March 31, 2019 ended March 31, 2018
Net worth, as restated 4 1,427.10 957.74 536.22
Notes:
1
Net tangible assets’ means the sum of all net assets of the Company excluding intangible assets as defined in Indian
Accounting Standard (Ind AS) 38 issued by Institute of Chartered Accountants of India.
2 ‘Monetary assets’ is the aggregate of cash on hand and balance with banks (including the bank deposits and interest accrued

thereon).
3
‘Operating Profit’ has been calculated as profit before tax excluding other income and finance costs, each on a restated
basis.
4
‘Net worth' means the aggregate value of the paid -up share capital of our Company and all reserves created out of profits
and securities premium account, net of pre-issue expenses, as per the restated statement of assets and liabilities of our
Company in the Restated Financial Statements .

Our Company has operating profits in each of Fiscal 2018, 2019 and 2020 in terms of our Restated Financial
Statements.

Our Company confirms that it is in compliance with the conditions specified in Regulation 7(1) of the SEBI ICDR
Regulations, to the extent applicable, and will ensure compliance with the conditions specified in Regulation 7(2)
of the SEBI ICDR Regulations, to the extent applicable.

Further, our Company confirms that it is not ineligible to make the Issue in terms of Regulation 5 of the SEBI
ICDR Regulations, to the extent applicable. The details of our compliance with Regulation 5 of the SEBI ICDR
Regulations are as follows:

(a) None of our Company, our Promoters, members of our Promoter Group, our Directors or any of the Selling
Shareholders are debarred from accessing the capital markets by the SEBI.
(b) None of our Promoters or Directors are promoters or directors of companies which are debarred from
accessing the capital markets by the SEBI.

(c) None of our Company, our Promoters or Directors is a Wilful Defaulter.

(d) None of our Promoters or Directors has been declared a fugitive economic offender in accordance with the
Fugitive Economic Offenders Act, 2018.

(e) There are no fully paid up convertible securities that are required to be converted on or before the filing of
this Red Herring Prospectus;

(f) There are no outstanding warrants, options or rights to convert debentures, loans or other instruments
convertible into, or which would entitle any person any option to receive Equity Shares, as on the date of this
Red Herring Prospectus.

Each of the Selling Shareholders confirms that it is in compliance with Regulation 8 of the SEBI ICDR
Regulations.

DISCLAIMER CLAUSE OF SEBI

IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED HERRING

PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE
SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY
RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE
PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS
OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING
PROSPECTUS. THE BRLMS, INTENSIVE FISCAL SERVICES PRIVATE LIMITED AND AMBIT
CAPITAL PRIVATE LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE
DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN
CONFORMITY WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL
AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018. THIS REQUIREMENT IS TO
FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT
IN THE PROPOSED ISSUE.

282
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY
RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT
INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BRLMS ARE EXPECTED TO
EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY AND THE SELLING
SHAREHOLDERS DISCHARGE THEIR RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND
TOWARDS THIS PURPOSE, THE BRLMs HAVE FURNISHED TO SEBI, A DUE DILIGENCE
CERTIFICATE DATED AUGUST 7, 2019 IN THE FORMAT PRESCRIBED UNDER SCHEDULE V(A)
OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2018.

THE FILING OF THIS RED HERRING PROSPECTUS DOES NOT, HOWEVER, ABSOLVE THE
COMPANY FROM ANY LIABILITIES UNDER THE COMPANIES ACT, 2013 OR FROM THE
REQUIREMENT OF OBTAINING SUCH STATUTORY AND/OR OTHER CLEARANCES AS MAY
BE REQUIRED FOR THE PURPOSE OF THE ISSUE. SEBI FURTHER RESERVES THE RIGHT TO
TAKE UP, AT ANY POINT OF TIME, WITH THE BRLMS, ANY IRREGULARITIES OR LAPSES IN
THIS RED HERRING PROSPECTUS.

Disclaimer from our Company, the Selling Shareholders and the BRLMs

Our Company, the Directors, the Selling Shareholders and the BRLMs accept no responsibility for statements
made otherwise than in this Red Herring Prospectus or in the advertisements or any other material issued by or at
our Company’s instance and anyone placing reliance on any other source of information, including our Company’s
website www.cscpl.com, would be doing so at his or her own risk.

The BRLMs accept no responsibility, save to the limited extent as provided in the Issue Agreement and the
Underwriting Agreement to be entered into between the Underwriters, the Selling Shareholders and our Company.

All information shall be made available by our Company, the Selling Shareholders and the BRLMs to the public
and investors at large and no selective or a dditional information would be available for a section of the investors
in any manner whatsoever, including at road show presentations, in research or sales reports, at Bidding centres
or elsewhere.

None among our Company, the Selling Shareholders or any member of the Syndicate is liable for any failure in
downloading the Bids due to faults in any software/ hardware system or otherwise.

Investors who Bid in the Issue will be required to confirm and will be deemed to have represented to our Company,
the Selling Shareholders, Underwriters and their respective directors, officers, agents, affiliates, and
representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to
acquire the Equity Shares and will not issue, sell, pledge, or transfer the Equity Shares to any person who is not
eligible under any applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares. Our
Company, the Selling Shareholders, Underwriters and their respective directors, officers, agents, affiliates, and
representatives accept no responsibility or liability for advising any investor on whether such investor is eligible
to acquire the Equity Shares.

The BRLMs and their respective associates and affiliates may engage in transactions with, and perform services
for, our Company, the Selling Shareholders and their respective group companies, affiliates or associates or third
parties in the ordinary course of business and have engaged, or may in the future engage, in commercial banking
and investment banking transactions with our Company, the Selling Shareholders and their respective group
companies, affiliates or associates or third parties, for which they have received, and may in the future receive,
compensation.

Disclaimer in respect of Jurisdiction

Any dispute arising out of the Issue will be subject to the jurisdiction of appropriate court(s) in Vadodara only.

Eligibility and Transfer Restrictions

The Issue is being made in India to persons resident in India (including Indian nationals resident in India who are
competent to contract under the Indian Contract Act, 1872, HUFs, companies, corporate bodies and societies

283
registered under the applicable laws in India and authorised to invest in shares, Indian Mutual Funds registered
with the SEBI, Indian financial institutions, commercial banks, regional rural banks, co -operative banks (subject
to RBI permission), or trusts under applicable trust law and who are authorised under their constitution to hold
and invest in shares, permitted insurance companies and pension funds, insurance funds set up and managed by
the army and navy and insurance funds set up and managed by the Department of Posts, India) and permitted Non-
Residents including FPIs and Eligible NRIs, AIFs and other eligible foreign investors, if any, provided that they
are eligible under all applicable laws and regulations to purchase the Equity Shares.

Invitations to subscribe to or purchase the Equity Shares in the Issue will be made only pursuant to this Red
Herring Prospectus if the recipient is in India or the preliminary offering memorandum for the Issue, which
comprises this Red Herring Prospectus and the preliminary international wrap for the Issue, if the recipient is
outside India. No person outside India is eligible to Bid for Equity Shares in the Issue unless that person has
received the preliminary offering memorandum for the Offer, which contains the selling restrictions for the Issue
outside India.

The Equity Shares offered in the Issue have not been and will not be registered, listed or otherwise qualified in
any jurisdiction except India and may not be offered or sold to persons outside of India except in compliance with
the applicable laws of each such jurisdiction. In particular, the Equity Shares offered in the Issue have not been
and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or the
laws of any state of the United States and may not be offered or sold in the United States (as defined in Regulation
S under the U.S. Securities Act (“Regulation S”)) except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. The Equity
Shares are being offered and sold only outside the United States pursuant to Regulation S.

Each purchaser of the Equity Shares offered in the Issue (referred to as “it” below) shall be deemed to have
represented, warranted, agreed and acknowledged as follows:

• It understands that the Equity Shares offered in the Issue have not been and will not be registered under the
U.S. Securities Act or the laws of any state of the United States and are being offered and sold to it in reliance
on Regulation S.

• It was outside the United States at the time the offer of the Equity Shares offered in the Issue was made to it
and it was outside the United States when its buy order for the Equity Shares offered in the Issue was
originated.

• It did not purchase the Equity Shares offered in the Issue as a result of any “directed selling efforts” (as
defined in Regulation S).

• It is buying the Equity Shares offered in the Issue for investment purposes and no t with a view to the
distribution thereof. If in the future it decides to offer, resell, pledge or otherwise transfer any of the Equity
Shares offered in the Issue, it agrees that it will not offer, sell, pledge or otherwise transfer the Equity Shares
offered in the Issue except in transactions complying with Rule 903 or Rule 904 of Regulation S or pursuant
to any other available exemption from registration under the U.S. Securities Act and in accordance with all
applicable securities laws of the states of the United States and any other jurisdiction, including India.

• Where it is subscribing to the Equity Shares offered in the Issue as fiduciary or agent for one or more investor
accounts, it has sole investment discretion with respect to each such account a nd it has full power to make
the representations, warranties, agreements and acknowledgements herein.

• Where it is subscribing to the Equity Shares offered in the Issue for one or more managed accounts, it
represents and warrants that it was authorised in writing by each such managed account to subscribe to the
Equity Shares offered in the Issue for each managed account and to make (and it hereby makes) the
representations, warranties, agreements and acknowledgements herein for and on behalf of each such account,
reading the reference to “it” to include such accounts.

• It agrees to indemnify and hold our Company, the Selling Shareholders and the Syndicate Members harmless
from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or
in connection with any breach of these representations, warranties or agreements. It agrees that the indemnity
set forth in this paragraph shall survive the resale of the Equity Shares purchased in the Issue.

284
• It acknowledges that our Company, the Selling Shareholders, the Syndicate Members, their respective
affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties,
agreements and acknowledgements.

Bidders are advised to ensure that any Bid from them does not exceed investment limits or maximum
number of Equity Shares that can be held by them under applicable law.
Disclaimer Clause of BSE
BSE Limited (“the Exchange”) has given vide its letter dated September 9, 2019, permission to this Company to
use the Exchange’s name in this offer document as one of the stock exchanges on which this company’s securities
are proposed to be listed. The Exchange has scrutinised this offer document for its limited internal purpose of
deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any
manner:

(a) warrant, certify or endorse the correctness or completeness of any of the contents of th is offer document; or
(b) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or
(c) take any responsibility for the financial or other soundness of this Company, its promoters, its management
or any scheme or project of this Company;

and it should not for any reason be deemed or construed that this offer document has been cleared or approved by
Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so
pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange
whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such
subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason
whatsoever.

Disclaimer Clause of the NSE

As required, a copy of this Offer Document has been submitted to National Stock Exchange of India Limited
(hereinafter referred to as NSE). NSE has given vide its letter Ref.: NSE/LIST/656 dated September 13, 2019
permission to the Issuer to use the Exchange’s name in this Offer Document as one of the Stock Exchanges on
which this Issuer’s securities are proposed to be listed. The Exchange has scrutinized this draft offer document
for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is
to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or
construed that the offer document has been cleared or approved by NSE; nor does it in any manner warrant, certify
or endorse the correctness or completeness of any of the contents of this offer document; nor does it warrant that
this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take any
responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or
project of this Issuer.

Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to
independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by
reason of any loss which may be suffered by such person consequent to or in connection with such subscription
/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

Listing
BSE Limited will be the Designated Stock Exchange with which the Basis of Allotment will be finalised.
Applications have been made to the BSE and NSE for permission to deal in and for an official quotation of the
Equity Shares.

Consents
Consents in writing of the Selling Shareholders, our Directors, our Company Secretary and Compliance Officer,
Statutory Auditors, our previous Statutory Auditor, M/s Shah Mehta and Bakshi, Chartered Accountants, Legal
Counsel to the Issue, Banker to our Company, the BRLMs, the Registrar to the Issue, Frost & Sullivan and N.G.
Vithalani, Chartered Engineer have been obtained; and consents in writing of the Syndicate Members, Sponsor
Bank, Escrow Collection Bank(s) and Refund Bank(s) to act in their respective capacities, will be obtained and
filed along with a copy of this Red Herring Prospectus with the RoC as required under the Companies Act and
such consents shall not be withdrawn up to the time of delivery of this Red Herring Prospectus for filing with the
RoC.

285
Expert to the Issue

Except as stated below, our Company has not obtained any expert opinions:
Our Company has received written consent from the Statutory Auditors namely, K.C. Mehta & Co., Chartered
Accountants, holding a valid peer review certificate from ICAI, to include their name as required under Section
26 of the Companies Act, 2013 in this Red Herring Prospectus and as an ‘expert’ as defined under Section 2(38)
of Companies Act, 2013 in respect of the: (i) Restated Financial Statements and their examination report dated
August 19, 2020 on the Restated Financial Statements; and (ii) the statement of possible special tax benefits dated
August 26, 2020 included in this Red Herring Prospectus. Such consent has not been withdrawn up to the time of
delivery of this Red Herring Prospectus.

Our Company has received written consent from N. G. Vithalani, a chartered engineer, to include his name as an
“expert” as defined under Section 2(38) of the Companies Act, 2013 to the extent and in his capacity as a chartered
engineer and with respect to the: (a) certificate dated August 26, 2020, issued by him on the capacity details of
the existing plants at our Manufacturing Facility; and (b) certificate dated August 26, 2020, issued by him on inter
alia the estimated cost and capacity details of the additional plants to be constructed at our Manufacturing Facility.
Further, N.G. Vithalani has also confirmed that he is an independent person with no direct or indirect interest in
our Company, and he is not related in any manner to the Promoters or Directors of our Company.

Particulars regarding public or rights issues by our Company during the last five years

Our Company has not made any public or rights issues (as defined under the SEBI ICDR Regulations) during the
five years preceding the date of this Red Herring Prospectus.

Underwriting Commission, Brokerage and Selling Commission paid on previous issues of the Equity Shares

Since this is the initial public issue of Equity Shares, no sum has been paid or is payable as commission or
brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares in the
five years preceding the date of this Red Herring Prospectus.

Capital issue during the previous three years by our Company

Other than as disclosed in “Capital Structure-Notes to the Capital Structure”, our Company has not undertaken a
capital issue in the last three years preceding the date of this Red Herring Prospectus.

Performance vis-à-vis objects – Public/ rights issue of our Company

Our Company has not undertaken any public or rights issue in the five years preceding the date of this Red Herring
Prospectus.

Capital issue during the previous three years by our listed Group Companies of our Company

None of the securities of any of Group Companies are listed on any stock exchange.
Price information of past issues handled by the BRLMs (during the current Fiscal and two Fiscals
preceding the current Fiscal)

A. Intensive Fiscal Services Private Limited

1. Price information of past issues handled by Intensive Fiscal Services Private Limited
Nil
2. Summary statement of price information of past issues handled by Intensive Fiscal Services Private Limited
Nil
B. Ambit Capital Private Limited
1. Price information of past issues handled by Ambit Capital Private Limited
Nil

286
2. Summary statement of price information of past issues handled by Ambit Capital Private Limited
Nil
Track record of past issues handled by the BRLMs
The BRLMs have not handled any public issues in the current Fiscal (Fiscal 2021) and the last two Fiscals (Fiscal
2020 and 2019).
Stock Market Data of Equity Shares
This being an initial public issue of the Equity Shares of our Company, the Equity Shares are not listed on any
stock exchange and accordingly, no stock market data is available for the Equity Shares.

Redressal of Investor Grievances

The agreement between the Registrar to the Issue, our Company and the Selling Shareholders provides for
retention of records with the Registrar to the Issue for a period of at least eight years from the last date of dispatch
of the letters of allotment and demat credit to enable the investors to approach the Registrar to the Issue for
redressal of their grievances.

All grievances in relation to the Bidding process may be addressed to the Registrar to the Issue with a copy to the
relevant Designated Intermediary to whom the Bid cum Application Form was submitted. The Bidder should give
full details such as name of the sole or first Bidder, Bid cum Application Form number, Bidder DP ID, Client ID,
PAN, date of the submission of Bid cum Application Form, address of the Bidder, number of the Equity Shares
applied for and the name and address of the Designated Intermediary where the Bid cum Application Form was
submitted by the Bidder.

Anchor Investors are required to address all grievances in relation to the Issue to the BRLMs.Further, the Bidder
shall also enclose a copy of the Acknowledgment Slip duly received from the concerned Designated Intermediary
in addition to the information mentioned hereinabove.

The Registrar to the Issue shall obtain the required information from the SCSBs for addressing any clarifications
or grievances of ASBA Bidders. Our Company, the BRLMs and the Registrar to the Issue accept no responsibility
for errors, omissions, commission or any acts of SCSBs including any defaults in complying with its obligations
under applicable SEBI ICDR Regulations. Investors can contact the Compliance Officer or the Registrar to the
Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of Allotment, non-credit
of allotted Equity Shares in the respective beneficiary account, non-receipt of refund intimations and non-receipt
of funds by electronic mode.

We have obtained authentication on the SCORES in compliance with the SEBI circular (CIR/OIAE/1/2014) dated
December 18, 2014 in relation to redressal of investor grievances through SCORES. Our Company has also
constituted a Stakeholders Relationship Committee to review and redress the shareholders and investor grievances
such as transfer of Equity Shares, non-recovery of balance payments, declared dividends, approve subdivision,
consolidation, transfer and issue of duplicate shares.
Our Company has also appointed Shahilkumar Maheshbhai Kapatel, Company Secretary of our Company, as the
Compliance Officer for the Issue. For details, “General Information- Company Secretary and Compliance
Officer” beginning on page 58.Our Company has not received any investor complaint during the three years
preceding the date of this Red Herring Prospectus. Further, no investor complaint in relatio n to our Company is
pending as on the date of filing of this Red Herring Prospectus.

None of our Group Companies are listed on any stock exchange.

Disposal of Investor Grievances by our Company

Our Company estimates that the average time required by our Company or the Registrar to the Issue or the relevant
Designated Intermediary, for the redressal of routine investor grievances shall be 10 Working Days from the date
of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are
involved, our Company will seek to redress these complaints as expeditiously as possible.

287
 SECTION XI - ISSUE INFORMATION

TERMS OF THE ISSUE

The Equity Shares being offered and transferred pursuant to this Issue are subject to the provisions of the
Companies Act, the SCRA, SCRR, SEBI ICDR Regulations, the SEBI Listing Regulations, our Memorandum
and Articles of Association, the terms of this Red Herring Prospectus, the Prospectus, the Abridged Prospectus,
the Bid cum Application Form, the Revision Form, CAN, the Allotment Advice and other terms and conditions
as may be incorporated in the Allotment Advice and other documents or certificates that may be executed in
respect of this Issue. The Equity Shares shall also be subject to all applicable laws, guidelines, rules, notifications
and regulations relating to the offer of capital and listing and trading of securities offered from time to time by the
SEBI, the GoI, the Stock Exchanges, the RoC, the RBI, and/or other authorities, as in force on the date of this
Issue and to the extent applicable or such other conditions as may be prescribed by such governmental, regulatory
or statutory authority while granting its approval for the Issue.

The Issue

The Issue comprises a Fresh Issue and an Offer for Sale by the Selling Shareholders.

The listing fees shall be borne by our Company. Other Issue-related expenses shall be shared be borne by each
Selling Shareholder in proportion to the Equity Shares to be offered by each Selling Shareholder.

Provided that all Issue-related expenses shall initially be borne by our Company. Upon successful completion of
the Issue, each of Selling Shareholder shall reimburse our Company their proportionate share of the Issue-related
expenses.

Ranking of the Equity Shares

The Equity Shares being offered and transferred in the Issue shall be subject to the provisions of the Companies
Act, our Memorandum and Articles of Association and shall rank pari passu in all respects with the existing
Equity Shares including rights in respect of dividend and other corporate benefits if any, declared by our Company
after the date of Allotment. For further details, see “Main Provisions of the Articles of Association” beginning on
page 312.

Mode of Payment of Dividend

Our Company shall pay dividends, if declared, to Shareholders of our Company as per the provisions of the
Companies Act, 2013, our Memorandum and Articles, the SEBI Listing Regulations and other applicable law. All
dividends, if any, declared by our Company after the date of Allotment, will be payable to the Bidders who have
been Allotted Equity Shares in the Issue, for the entire year, in accordance with applicable law. For further details
in relation to dividends, see “Dividend Policy” and “Main Provisions of the Articles of Association” beginning
on pages 192 and 312, respectively.

Face Value , Issue Price and Price Band

The face value of the Equity Shares is ₹ 10. The Floor Price of Equity Shares is ₹ [●] per Equity Share and the
Cap Price is ₹ [●] per Equity Share. The Anchor Investor Issue Price is ₹ [●] per Equity Share. The Price Band
and minimum Bid Lot for the Issue will be decided by our Company and the Selling Shareholders, in consultation
with the BRLMs, and advertised in the English editions of the English national daily newspaper Financial Express,
all editions of the Hindi national daily newspaper Jansatta, and the Gujarati editions of the Gujarati daily newspaper
Financial Express (Gujarati being the regional language of Gujarat, where our Registered Office is located), each
with wide circulation, respectively, at least two Working Days prior to the Bid/ Issue Opening Date and shall be
made available to the Stock Exchanges for the purpose of uploading on their websites. The Price Band, along with
the relevant financial ratios calculated at the Floor Price and at the Cap Price, shall be pre-filled in the Bid cum
Application Forms available at the websites of the Stock Exchanges. The Issue Price shall be determined by our
Company and the Selling Shareholders in consultation with the BRLMs, after the Bid/Issue Closing Date, on the
basis of assessment of market demand for the Equity Shares offered by way of Book Building Process.

At any given point of time there shall be only one denomination for the Equity Shares.

288
Compliance with disclosure and accounting norms

Our Company shall comply with all applicable disclosure and accounting norms as specified by SEBI from time
to time.

Rights of the Equity Shareholders

Subject to applicable laws, rules, regulations and guidelines and the provisions of our Articles, the equity
shareholders of our Company shall have the following rights:

• The right to receive dividend, if declared;

• The right to attend general meetings and exercise voting powers, unless prohibited by law;

• The right to vote on a poll either in person or by proxy or ‘e-voting’;

• The right to receive offers for rights shares and be allotted bonus shares, if announced;

• The right to receive any surplus on liquidation subject to any statutory and other preferential claims being
satisfied;

• The right to freely transfer their Equity Shares, subject to foreign exchange regulations and other applicable
laws; and

• Such other rights, as may be available to a shareholder of a listed public company under applicable law,
including the Companies Act, 2013, the terms of the SEBI Listing Regulations, and our Memorandum and
Articles.

For a detailed description of the main provisions of our Articles relating to voting rights, dividend, forfeiture and
lien, transfer and transmission, and/ or consolidation/ splitting, see “Main Provisions of the Articles of
Association” beginning on page 312.

Allotment of Equity Shares in dematerialised form

Pursuant to Section 29 of the Companies Act, 2013, the Equity Shares shall be Allotted only in dematerialised
form. Hence, the Equity Shares offered through this Red Herring Prospectus can be applied for in the
dematerialised form only.

Market Lot and Trading Lot

Further, the trading of our Equity Shares on the Stock Exchanges shall only be in dematerialised form, consequent
to which, the tradable lot is one Equity Share. Allotment of Equity Shares will be only in electronic form in
multiples of [●] Equity Shares, subject to a minimum Allotment of [●] Equity Shares.

Joint Holders

Subject to provisions contained in our Articles, where two or more persons are registered as the holders of any
Equity Share, they shall be deemed to hold such Equity Shares as joint tenants with benefits of survivorship.

Jurisdiction

The courts of Vadodara, India will have exclusive jurisdiction in relation to this Issue.

Period of operation of subscription list

See “Issue Structure – Bid/Issue Programme” beginning on page 294

Nomination facility to investors

In accordance with Section 72 of the Companies Act, 2013 read with the Companies (Share Capital and
Debentures) Rules, 2014, as amended, the sole or first Bidder, along with other joint Bidders, may nominate any

289
one person in whom, in the event of the death of the sole Bidder or in case of joint Bidders, the death of all the
Bidders, as the case may be, the Equity Shares Allotted, if any, shall vest to the exclusion of all other persons,
unless the nomination is varied or cancelled in the prescribed manner. A person, being a nominee, entitled to the
Equity Shares by reason of death of the original holder(s), shall be entitled to the same advantages to which such
person would be entitled if such person were the registered holder of the Equity Share(s). Where the nominee is a
minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled
to the Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded
upon a sale, transfer of Equity Share(s) by the person nominating. A nomination may be cancelled or varied by
nominating any other person in place of the present nominee by the holder of the Equity Shares who has made the
nomination by giving a notice of such cancellation. A buyer will be entitled to make a fresh nomination in the
manner prescribed. A fresh nomination can be made only on the prescribed form, which is available on request at
our Registered Office or with the registrar and transfer agents of our Company.

Any person who becomes a nominee by virtue of Section 72 of the Companies Act, 2013 as mentioned above,
shall, upon the production of such evidence as may be required by our Board, elect either:

• to register himself or herself as the holder of the Equity Shares; or

• to make such transfer of the Equity Shares, as the deceased holder could have made.

Further, our Board may at any time give notice requiring any nominee to choose either to be registered himself or
herself or to transfer the Equity Shares, and if the notice is not complied with within a period of 90 days, our
Board may thereafter withhold payment of all dividend, bonuses or other monies payable in respect of the Equity
Shares, until the requirements of the notice have been complied with.

Since the Allotment will be made only in dematerialised form, there shall be no requirement for a separate
nomination with our Company. Nominations registered with the respective Depository Participant of the applicant
will prevail. If investors wish to change their nomination, they are requested to inform their respective Depository
Participant.

Minimum Subscription

In the event our Company does not receive (i) a minimum subscription of 90% of the Fresh Issue, and (ii) a
subscription in the Issue as specified under Rule 19(2)(b) of the SCRR, including through devolvement of
Underwriters, as applicable, within sixty (60) days from the date of Bid Closing Date, or if the subscription level
falls below the thresholds mentioned above after the Bid Closing Date, on account of withdrawal of applications
or after technical rejections, or if the listing or trading permission is not obtained from the Stock Exchanges for
the Equity Shares being offered under this Red Herring Prospectus, our Company shall forthwith refund the entire
subscription amount received. If there is a delay beyond fifteen days after the issuer becomes liable to pay the
amount, the issuer and every director of the issuer who are officers in default, shall pay int erest at the rate of
fifteen percent per annum.

In the event of under-subscription in the Issue, subject to receiving minimum subscription for 90% of the Fresh
Issue and compliance with Rule 19(2)(b) of the SCRR, Allotment will be first made towards the Fresh Issue from
the valid Bids.

Further, in accordance with Regulation 49(1) of the SEBI ICDR Regulations, our Company shall ensure that the
number of prospective Allottees to whom the Equity Shares will be Allotted will be not less than 1,000.

Arrangements for disposal of odd lots

Since our Equity Shares will be traded in dematerialised form only and the market lot for our Equity Shares will
be one Equity Share, no arrangements for disposal of odd lots are required.

290
Restriction on transfer and transmission of shares

Except for the lock-in of the pre-Issue Equity Shares, the Promoters’ Contribution and Equity Shares allotted to
Anchor Investors pursuant to the Issue, as detailed in “Capital Structure” beginning on page 65 and except as
provided in our Articles, there are no restrictions on transfers and transmission of Equity Shares or on their
consolidation or splitting. See, “Main Provisions of the Articles of Association” at page 312.

Equity Shares to be Allotted in Dematerialized Form

Allotment of Equity Shares to successful Bidders will only be in the dematerialized form. Bidders will not have
the option of Allotment of the Equity Shares in physical form. The Equity Shares on Allotment will be traded only
in the dematerialized segment of the Stock Exchanges.

Withdrawal of the Issue

Our Company and the Selling Shareholders in consultation with the BRLMs, reserve the right not to proceed with
the entire or portion of the Issue for any reason at any time after the Bid/Issue Opening Date b ut before the
Allotment. In such an event, our Company would issue a public notice in the same newspapers, in which the pre-
Issue advertisements were published, within two days of the Bid/Issue Closing Date, providing reasons for not
proceeding with the Issue. Further, the Stock Exchanges shall be informed promptly in this regard by our Company
and the BRLMs, through the Registrar to the Issue, shall notify the SCSBs and the Sponsor Bank to unblock the
bank accounts of the ASBA Bidders within one Working Da y from the date of receipt of such notification. In the
event of withdrawal of the Issue and subsequently, plans of a fresh offer by our Company, a fresh draft red herring
prospectus will be submitted again to SEBI.

Notwithstanding the foregoing, this Issue is also subject to obtaining the final listing and trading approvals of the
Stock Exchanges, which our Company shall apply for after Allotment and within six Working Days or such other
period as may be prescribed, and the final RoC approval of the Prospectus after it is filed with the RoC.

291
 ISSUE STRUCTURE

The Issue is being made through the Book Building Process. Issue is of up to [●] Equity Shares for cash at price
of ₹ [●] per Equity Share (including a premium of ₹ [●] per Equity Share) aggregating up to ₹ [●] million
comprising of a Fresh Issue of up to [●] Equity Shares aggregating up to ₹ 1,650 million by our Company and an
Offer of Sale of up to 4,500,000 Equity Shares aggregating to ₹ [●] million by the Selling Shareholders. The Issue
will constitute [●] % of the post-Issue paid-up Equity Share capital of our Company.

Particulars QIBs (1) Non-Institutional Bidders Retail Individual Bidders

Number of Equity Not more than [●] Equity Not less than [●] Equity Not less than [●] Equity
Shares available Shares Shares available for Shares available for
for Allotment/ allocation or offer less allocation or offer less
allocation* (2) allocation to QIB Bidders allocation to QIB Bidders
and Retail Individual and Non-Institutional
Bidders Bidders
Percentage of Not more than 50% of the Not less than 15% of the Not less than 35% of the
Issue Size Issue size shall be allocated to Issue, or the Issue less Issue, or the Issue less
available for QIB Bidders. However, up to allocation to QIB Bidders allocation to QIB Bidders
Allotment/ 5% of the QIB Portion and Retail Individual and Non-Institutional
allocation (excluding the Anchor Bidders. Bidders
Investor Portion) will be
available for allocation
proportionately to Mutual
Funds only. Mutual Funds
participating in the Mutual
Fund Portion will also be
eligible for allocation in the
remaining balance QIB
Portion. The unsubscribed
portion in the Mutual Fund
portion will be available to
QIBs.
Basis of Proportionate as follows Proportionate The allotment to each Retail
Allotment/ (excluding the Anchor Individual Bidder shall not
allocation if Investor Portion): be less than the minimum Bid
respective a. Up to [●] Equity Shares Lot, subject to availability of
category is shall be available for Equity Shares in the Retail
oversubscribed* allocation on a Portion and the remaining
proportionate basis to available Equity Shares if
Mutual Funds only; and any, shall be allotted on a
b. [●] Equity Shares shall be proportionate basis. For
Allotted on a proportionate details see, “Issue
basis to all QIBs, including Procedure” beginning on
Mutual Funds receiving page 296.
allocation as per (a) above

Up to [●] Equity Shares may

be allocated on a discretionary
basis to Anchor Investors
Minimum Bid Such number of Equity Shares Such number of Equity [●] Equity Shares
in multiples of [●] Equity Shares that the Bid Amount
Shares, that the Bid Amount exceeds ₹200,000 and in
exceeds ₹200,000 multiples of [●] Equity
Shares thereafter
Maximum Bid Such number of Equity Shares Such number of Equity Such number of Equity
in multiples of [●] Equity Shares in multiples of [●] Shares in multiples of [●]
Shares not exceeding the size Equity Shares not exceeding Equity Shares so that the Bid
of the Issue, subject to the size of the Amount does not exceed
applicable limits Issue(excluding QIB ₹200,000
Portion), subject to

292
 Particulars QIBs (1) Non-Institutional Bidders Retail Individual Bidders
applicable limits
Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter
Mode of allotment Compulsorily in dematerialised form
Allotment Lot [●] Equity Shares and in multiples of one Equity Share thereafter
Trading Lot One Equity Share
Who can apply (3) Public financial institutions as Resident Indian individuals, Resident Indian individuals,
specified in Section 2(72) of Eligible NRIs, HUFs (in the Eligible NRIs and HUFs (in
the Companies Act, scheduled name of the karta), the name of the karta)
commercial banks, multilateral companies, corporate bodies,
and bilateral development scientific institutions,
financial institutions, Mutual societies, trusts and any
Funds, FPIs (other than Individual corporate bodies
individuals, corporate bodies and family office which are
and family offices), VCFs, registered as category II FPI
AIFs, FVCIs, state industrial and registered with SEBI
development corporation,
insurance company registered
with IRDAI, provident funds
with minimum corpus of ₹250
million, pension funds with
minimum corpus of ₹250
million, National Investment
Fund set up by the GoI,
insurance funds set up and
managed by army, navy or air
force of the Union of India,
insurance funds set up and
managed by the Department of
Posts, India and Systemically
Important NBFCs
Terms of Payment In case of Anchor Investors: Full Bid Amount shall be payable by the Anchor Investors at
the time of submission of their Bids(4)
In case of all other Bidders: Full Bid Amount shall be blocked by the SCSBs in the bank
account of the ASBA Bidder (other than Anchor Investors) that is specified in the ASBA
Form at the time of submission of the ASBA Form , or by the Sponsor Bank through the UPI
mechanism (only for Retail Individual Investors)
Mode of Bidding Only through the ASBA Only through the ASBA Only through the ASBA
process (except for Anchor process. process
Investors).
* Assuming full subscription in the Issue
(1)
Our Company and the Selling Shareholders may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion
to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations. One -third of the Anchor
Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual
Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription or non-Allotment in the Anchor
Investor Portion, the balance Equity Shares in the Anchor Investor Portion shall be added to the Net QIB Portion. For
further details, see “Issue Procedure” beginning on page 296.

(2) Subject to valid Bids being received at or above the Issue Price. The Issue is being made in terms of Rule 19(2)(b) of the
SCRR read with Regulation 45 of the SEBI ICDR Regulations. The Issue is being made through the Book Building Process
in accordance with Regulation 6(1) of the SEBI ICDR Regulations, wherein not more than 50% of the Issue shall be available
for allocation on a proportionate basis to Qualified Institutional Buyers. Such number of Equity Shares representing 5% of
the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the
Net QIB Portion shall be available for allocation on a proportionate basis to QIBs (other than Anchor Investors), including
Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. However, if the aggregate demand
from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual
Fund Portion will be added to the remaining Net QIB Portion for proportionate allocation to all QIBs. Further, not less than
15% of the Issue shall be available for allocation on a proportionate basis to Non -Institutional Bidders and not less than 35%
of the Issue shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations,
subject to valid Bids being received from them at or above the Issue Price.

293
 Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in the Non-Institutional Portion
or the Retail Portion would be allowed to be met with spill-over from other categories or a combination of categories at
the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs and the Designated Stock
Exchange, on a proportionate basis. However, under-subscription, if any, in the QIB Portion will not be allowed to be met
with spill-over from other categories or a combination of categories. For further details, please see “Terms of the Issue”
beginning on page 288.

(3)
In the event that a Bid is submitted in joint names, the relevant Bidders should ensure that the depository account is also
held in the same joint names and the names are in the same sequence in which they appear in the Bid cum Application
Form. The Bid cum Application Form should contain only the name of the First Bidder whose name should also appear
as the first holder of the beneficiary account held in joint names. The signature of only such First Bidder would be required
in the Bid cum Application Form and such First Bidder would be deemed to have signed on behalf of the joint holders.
Our Company reserves the right to reject, in its absolute discretion, all or any multiple Bids in any or all categories.
(4)
Anchor Investors shall pay the entire Bid Amount at the time of submission of the Anchor Investor Bid, provided that any
positive difference between the Anchor Investor Allocation Price and the Issue Price, shall be payable by the Anchor
Investor Pay-in Date as mentioned in the CAN.

Bid/Issue Programme

BID/ ISSUE OPENS ON * September 21, 2020

**
BID/ ISSUE CLOSES ON September 23, 2020
*
Our Company and the Selling Shareholders may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion to
Anchor Investors on a discretionary basis, in accordance with the SEBI ICDR Regulations. Anchor Investors shall Bid on the
Anchor Investor Bidding Date, being September 18, 2020.
**Our Company and the Selling Shareholders may, in consultation with the BRLMs, consider closing the Bid/Issue Period for

QIBs one day prior to the Bid/Issue Closing Date in accordance with the SEBI ICDR Regulations.

An indicative timetable in respect of the Issue is set out below:

Event Indicative Date

Finalisation of Basis of Allotment with the Designated Stock Exchange On or about September
28, 2020
Initiation of refunds (if any, for Anchor Investors) / unblocking of funds On or about September
from ASBA Account 29, 2020
Credit of the Equity Shares to depository accounts of Allottees On or about September
30, 2020
Commencement of trading of the Equity Shares on the Stock Exchanges On or about October 1,
2020

The above timetable is indicative and does not constitute any obligation on our Company, the Selling
Shareholders or the BRLMs. While our Company and the Selling Shareholders shall ensure that all steps
for the completion of the necessary formalities for the listing and the commencement of trading of the
Equity Shares on the Stock Exchanges are taken within six Working Days of the Bid/ Issue Closing Date or
such period as may be prescribed, the timetable may change due to various factors, such as extension of the
Bid/ Issue Period by our Company and the Selling Shareholders, revision of the Price Band or any delays
in receiving the final listing and trading approval from the Stock Exchanges. The commencement of trading
of the Equity Shares will be entirely at the discretion of the Stock Exchanges and in accordance with the
applicable laws. Each Selling Shareholder confirms that it shall extend complete co-operation required by
our Company and the BRLMs for the completion of the necessary formalities for listing and
commencement of trading of the Equity Shares at the Stock Exchanges within six Working Days from the
Bid/Issue Closing Date, or within such other period as may be prescribed.

Except in relation to the Bids received from the Anchor Investors, Bids and any revision in Bids shall be accepted
only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time (“IST”)) during the Bid/Issue Period (except on
the Bid/Issue Closing Date) at the Bidding Centres as mentioned on the Bid cum Application Form except that:
(i) on the QIB Bid/Issue Closing Date, in case of Bids by QIBs under the Net QIB Portion, the Bids and the
revisions in Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) and
uploaded until 4.00 p.m. (IST);

294
(ii) on the Bid/Issue Closing Date:

(a) in case of Bids by Non-Institutional Bidders, the Bids and the revisions in Bids shall be accepted only
between 10.00 a.m. and 3.00 p.m. (IST) and uploaded until 4.00 p.m. (IST); and

(b) in case of Bids by Retail Individual Bidders, the Bids and the revisions in Bids shall be accepted only
between 10.00 a.m. and 3.00 p.m. (IST) and uploaded until 5.00 p.m. (IST), which may be extended up
to such time as deemed fit by the Stock Exchanges after taking into account the total number of
applications received up to the closure of timings and reported by the BRLMs to the Stock Exchanges.

For the avoidance of doubt, it is clarified that Bids not uploaded on the electronic bidding system or in respect of
which full Bid Amount is not blocked by SCSBs will be rejected.

Due to limitation of the time available for uploading the Bids on the Bid/Issue Closing Date, the Bidders are
advised to submit their Bids one day prior to the Bid/Issue Closing Date and, in any case, no later than 1.00 p.m.
(Indian Standard Time) on the Bid/Issue Closing Date. Bidders are cautioned that, in the event a large number of
Bids are received on the Bid/Issue Closing Date, as is typically experienced in public offerings in India, it may
lead to some Bids not being uploaded due to lack of sufficient time to upload. Such Bids that cannot be uploaded
on the electronic bidding system will not be considered for allocation under this Issue. Bids will only be accepted
on Working Days. Investors may please note that as per letter no. List/smd/sm/2006 dated July 3, 2006 and letter
no. NSE/IPO/25101- 6 dated July 6, 2006 issued by BSE and NSE respectively, Bids and any revision in Bids
shall not be accepted on Saturdays and public holidays as declared by the Stock Exchanges. Bids by ASBA
Bidders shall be uploaded by the relevant Designated Intermediary in the electronic system to be provided by the
Stock Exchanges. Neither our Company, nor the Selling Shareholders, nor any member of the Syndicate is liable
for any failure in uploading or downloading the Bids due to faults in any software / hardware system or otherwise.

Our Company and the Selling Shareholders, in consultation with the BRLMs, reserve the right to revise the Price
Band during the Bid/Issue Period in accordance with the SEBI ICDR Regulations. In such an event, the Cap Price
shall not be more than 120% of the Floor Price. Subject to compliance with the immediately preceding sentence,
the Floor Price can move up or down to the extent of 20% of the Floor Price, as advertised at least five Working
Days before the Bid/Issue Opening Date.

In case of any revision in the Price Band, the Bid/Issue Period shall be extended for at least three additional
Working Days after such revision of the Price Band, subject to the total Bid/Issue Period not exceeding 10
Working Days. Any revision in the Price Band, and the revised Bid/Issue Period, if a pplicable, shall be
widely disseminated by notification to the Stock Exchanges by issuing a press release and also by indicating
the change on the websites of the BRLMs and at the terminals of the Syndicate Members.

In case of discrepancy in the data entered in the electronic book vis-à-vis the data contained in the physical Bid
cum Application Form for a particular Bidder, the details as per the Bid file received from the Stock Exchanges
may be taken as the final data for the purpose of Allotment.

295
 ISSUE PROCEDURE

All Bidders should review the General Information Document for Investing in Public Issues prepared and issued
in accordance with the SEBI circular bearing reference number SEBI/HO/CFD/DIL1/CIR/P/2020/37, dated
March 17, 2020 and the 2018 Circular on Streamlining of Public Issues notified by SEBI (“General Information
Document”), which highlights the key rules, processes and procedures applicable to public issues in general in
accordance with the provisions of the Companies Act, the SCRA, the SCRR and the SEBI ICDR Regulations. The
General Information Document is also available on the websites of the Stock Exchanges and the BRLMs. Please
refer to the relevant provisions of the General Information Document which are applicable to the Issue.

Additionally, all Bidders may refer to the General Information Document for information in relation to (i)
Category of investor eligible to participate in the Issue; (ii) maximum and minimum Bid size; (iii) price discovery
and allocation; (iii) Payment Instructions for ASBA Bidders/Applicants; (iv)Issuance of CAN and Allotment in the
Issue; (v) General instructions (limited to instructions for completing the Bid Form); (vi) Submission of Bid Form;
(vii) Other Instructions (limited to joint bids in cases of individual, multiple bids and instances when an
application would be rejected on technical grounds); (viii) applicable provisions of the Companies Act, 2013
relating to punishment for fictitious applications; (vi) mode of making refunds; and (vii) interest in case of delay
in Allotment or refund.

SEBI through the UPI Circulars has proposed to introduce an alternate payment mechanism using Unified
Payments Interface (“UPI”) and consequent reduction in timelines for listing in a phased manner. UPI has been
introduced in a phased manner as a payment mechanism in addition to ASBA for applications by Retail Individual
Investors through intermediaries from January 1, 2019. The UPI Mechanism for Retail Individual Investors
applying through Designated Intermediaries, in phase I, was effective along with the prior process and existing
timeline of T+6 days (“UPI Phase I”), until June 30, 2019. Subsequently, for applications by Retail Individual
Investors through Designated Intermediaries, the process of physical movement of forms from Designated
Intermediaries to SCSBs for blocking of funds has been discontinued and RIIs submitting their ASBA Forms
through Designated Intermediaries (other than SCSBs) can only use UPI Mechanism with existing timeline of
T+6 days until further notice pursuant to SEBI circular (SEBI/HO/CFD/DIL2/CIR/P/2020/50) dated March 30,
2020(“UPI Phase II”). The final reduced timeline will be made effective using the UPI Mechanism for
applications by Retail Individual Investors (“UPI Phase III”), as may be prescribed by SEBI. The Offer will be
made under UPI Phase II of the UPI Circular, subject to any circulars, clarification or notification issued by the
SEBI from time to time.

Our Company, the Selling Shareholder and the BRLMs do not accept any responsibility for the completeness and
accuracy of the information stated in this section and the General Information Document and are not liable for
any amendment, modification or change in the applicable law which may occur after the date of this Red Herring
Prospectus. Bidders are advised to make their independent investigations and ensure that their Bids are submitted
in accordance with applicable laws and do not exceed the investment limits or maximum number of Equity Shares
that can be held by them under applicable law or as specified in this Red Herring Prospectus and the Prospectus.

Further, the Company and the BRLMs are not liable for any adverse occurrences consequent to the
implementation of the UPI Mechanism for application in this Issue.

Book Building Procedure

The Issue is being made through the Book Building Process wherein not more than 50% of the Issue shall be
Allotted to QIBs on a proportionate basis, provided that our Company and the Selling Shareholders, in
consultation with the BRLMs, may allocate up to 60% of the QIB Category to Anchor Investors, on a discretionary
basis in accordance with the SEBI ICDR Regulations, of which one-third shall be reserved for domestic Mutual
Funds, subject to valid Bids being received from them at or above the price at which allocation is made to Anchor
Investors. In case of under-subscription or non-allocation in the Anchor Investor Portion, the remaining Equity
Shares will be added back to the QIB Category (other than Anchor Investor Portion). 5% of th e QIB Category
shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB
Category shall be available for allocation on a proportionate basis to all QIBs (other than Anchor Investors),
including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than
15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not
less than 35% of the Issue shall be available for allocation to Retail Individual Bidders in accordance with the
SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price.

296
Under-subscription, if any, in any category, except the QIB Category, would be allowed to be met with spill-over
from any other category or categories, as applicable, at the discretion of our Company and the Selling Shareholders
in consultation with the BRLMs and the Designated Stock Exchange, subject to applicable laws.

The Equity Shares, on Allotment, shall be traded only in the dematerialized segment of the Stock Exchanges.

Bidders should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialised
form. The Bid cum Application Forms which do not have the details of the Bidders’ depository account,
including DP ID, Client ID and PAN and UPI ID (for RIBs using the UPI Mechanism), shall be treated as
incomplete and will be rejected. Bidders will not have the option of being Allotted Equity Shares in physical
form.

Phased implementation of Unified Payments Interface

SEBI has issued the 2018 Circular on Streamlining of Public Issues in relation to streamlining the process of
public issue of inter alia equity shares. Pursuant to the 2018 Circular on Streamlining of Public Issues, the UPI
Mechanism has been introduced in a phased manner as a payment mechanism (in addition to mechanism of
blocking funds in the account maintained with SCSBs under ASBA) for applications by RIBs through Designated
Intermediaries with the objective to reduce the time duration from public issue closure to listing from six Working
Days to upto three Working Days. Considering the time required for making necessary changes to the systems
and to ensure complete and smooth transition to the UPI payment Mechanism, the 2018 Circular on Streamlining
of Public Issues have introduced the UPI Mechanism in three phases in the following manner:

Phase I: This pha se was applicable from January 1, 2019 until March 31, 2019 or floating of five main board
public issues, whichever was later. Subsequently, the timeline for implementation of Phase I was extended till
June 30, 2019. Under this phase, an RIB had the option to submit the ASBA Form with any of the Designated
Intermediary and use his/ her UPI ID for the purpose of blocking of funds. The time duration from public issue
closure to listing continued to be six Working Days.

Phase II: This phase has become applicable from July 1, 2019 and was to initially continue for a period of three
months or floating of five main board public issues, whichever is later. SEBI vide its circular no.
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019 has decided to extend the timeline for
implementation of UPI Phase II until March 31, 2020. Subsequently, SEBI vide its circular no.
SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 2020 extended the timeline for implementation of UPI
Phase II till further notice. Under this phase, submission of the ASBA Form by RIBs through Designated
Intermediaries (other than SCSBs) to SCSBs for blocking of funds has been discontinued and replaced by the UPI
Mechanism. However, the time duration from public issue closure to listing continues to be six Working Days
during this phase.

Phase III: The commencement period of Phase III is yet to be notified. In this phase, the time duration from
public issue closure to listing is proposed to be reduced to three Working Days.

For further details, refer to the General Information Document available on the websites of the Stock Exchanges
and the BRLMs.

All SCSBs offering facility of making application in public issues shall also provide facility to make application
using the UPI Mechanism. The issuers are to appoint one of the SCSBs as a sponsor bank to act as a conduit
between the Stock Exchanges and NPCI in order to facilitate collection of requests and / or payment instructions
of the Retail Individual Bidders into the UPI Mechanism.

For further details, refer to the General Information Document available on the websites of the Stock Exchanges
and the Lead Managers.

Bid cum Application Form

Bidders (other than Anchor Investors) must compulsorily use the ASBA process to participate in the Issue. Anchor
Investors are not permitted to participate in this Issue through the ASBA process.

Copies of the ASBA Forms and the abridged prospectus will be available with the Designated Intermediaries at
relevant Bidding Centres and at our Registered Office. The ASBA Forms will also be available for download on

297
the websites of NSE (www.nseindia.com) and BSE (www.bseindia.com) at least one day prior to the Bid/Issue
Opening Date. Anchor Investor Application Forms shall be available at the offices of the BRLMs at least one day
prior to the Anchor Investor Bidding Date.

Bidders (other than RIBs using the UPI Mechanism and Anchor Investors) must provide bank account details and
authorisation by the ASBA bank account holder to block funds in their respective ASBA Accounts in the relevant
space provided in the Bid cum Application Form and the Bid cum Application Form that does not contain such
detail are liable to be rejected. The Sponsor Bank shall provide details of the UPI linked bank account of the
Bidders to the Registrar to the Issue for purpose of reconciliation.

RIBs using the UPI Mechanism must provide the UPI ID in the relevant space provided in the Bid cum Application
Form and the Bid cum Application Form that does not contain the UPI ID are liable to be rejected.

RIBs submitting a Bid-cum Application Form to any Designated Intermediary (other than SCSBs) should ensure
that only the UPI ID is mentioned in the Field Number 7 i.e. Payment Details in the Bid cum Application Form.
ASBA Forms submitted by RIBs to Designated Intermediary (other than SCSBs) with ASBA Account details in
Field Number 7, are liable to be rejected.

Further, such Bidders (other than Anchor Investors), including RIBs using the UPI Mechanism, shall ensure that
the Bids are submitted at the Bidding Centres only on Bid cum Application Forms bearing the stamp of the relevant
Designated Intermediary (except in case of electronic Bid-cum-Application Forms) and Bid cum Application
Forms (except electronic Bid-cum-Application Forms) not bearing such specified stamp may be liable for
rejection. Bidders must ensure that the ASBA Account has sufficient credit balance such that an amount equivalent
to the full Bid Amount can be blocked by the SCSB or the Sponsor Bank, as applicable, at the time of submitting
the Bid. Designated Intermediaries (other than SCSBs) shall not accept any ASBA Form from a RIB who is not
Bidding using the UPI Mechanism.

The prescribed colour of the Bid cum Application Forms for various categories is as follows:

Colour of Bid cum

Category
Application Form*
Resident Indians including resident QIBs, Non-Institutional Bidders, Retail Individual White
Bidders and Eligible NRIs applying on a non-repatriation basis
Non-Residents including FPIs and Eligible NRIs, FVCIs and registered bilateral and Blue
multilateral development financial institutions applying on a repatriation basis
Anchor Investors** White
* Excluding electronic Bid cum Application Forms
**Bid cum Application Forms for Anchor Investors will be made available at the office of the BRLMs .

In case of ASBA Forms, Designated Intermediaries shall upload the relevant bid details in the electronic bidding
system of the Stock Exchanges. Designated Intermediaries (other than SCSBs) shall submit/deliver the Bid cum
Application Form (except a Bid cum Application Form from RIBs using the UPI Mechanism) to the respective
SCSB, where the Bidder has a bank account and shall not submit it to any non-SCSB bank or any escrow bank.
Designated Intermediaries (other than SCSBs) shall not accept any ASBA Form from a RIB who is not Bidding
using the UPI Mechanism.

For RIBs using UPI Mechanism, the Stock Exchanges shall share the bid details (including UPI ID) with the
Sponsor Bank on a continuous basis to enable the Sponsor Bank to initiate UPI Mandate Request to RIBs for
blocking of funds.

Participation by associates and affiliates of the BRLMs and the Syndicate Members, Promoters, Promoter
Group and persons related to Promoters/Promoter Group

The BRLMs and the Syndicate Members shall not be allowed to purchase the Equity Shares in any manner, except
towards fulfilling their underwriting obligations. However, the respective associates and affiliates of the BRLMs
and the Syndicate Members may purchase Equity Shares in the Issue, either in the Net QIB Portion or in the Non-
Institutional Portion as may be applicable to such Bidders, and such Bid subscription may be on their own account
or on behalf of their clients. All categories of investors, including respective associates or affiliates of the BRLMs
and Syndicate Members, shall be treated equally for the purpose of allocation to be made on a proportionate basis.
Neither the BRLMs or any associate of BRLMs (except Mutual Funds sponsored by entities which are associates

298
of the BRLMs or insurance companies promoted by entities which are associate of BRLMs or AIFs sponsored by
the entities which are associate of the BRLMs or FPIs (other than individuals, corporate bodies and family offices)
sponsored by the entities which are associate of the BRLMs) nor any "person related to the Promoters or Promoter
Group” shall apply in the Issue under the Anchor Investor Portion.

For the purposes of this section, a QIB who has any of the following rights shall be deemed to be a “person related
to the Promoters or Promoter Group”: (a) rights under a shareholders’ agreement or voting agreement entered
into with the Promoters or members of the Promoter Group; (b) veto rights; or (c) right to appoint any nominee
director on our Board.

Further, an Anchor Investor shall be deemed to be an associate of a BRLM, if: (a) either of them controls , directly
or indirectly through its subsidiary or holding company, not less than 15% of the voting rights in the other; or (b)
either of them, directly or indirectly, by itself or in combination with other persons, exercises control over the
other; or (c) there is a common director, excluding a nominee director, amongst the Anchor Investor and the
BRLM.

The Selling Shareholders and the Members of the Promoter Group will not participate in the Issue except to the
extent of the Offered Shares.

Bids by Mutual Funds

With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be lodged with
the Bid cum Application Form. Failing this, our Company reserves the right to reject any Bid without assigning
any reason therefore.

Bids made by asset management companies or custodians of Mutual Funds shall specifically state names of the
concerned schemes for which such Bids are made. In case of a Mutual Fund, a separate Bid may be made in
respect of each scheme of a Mutual Fund registered with the SEBI and such Bids in respect of more than one
scheme of a Mutual Fund will not be treated as multiple Bids, provided that such Bids clearly indicate the scheme
for which the Bid is submitted.

No Mutual Fund under all its schemes should own more than 10% of any company’s paid-up share capital carrying
voting rights. No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity
related instruments of any single company provided that the limit of 10% shall not be applicable for investments
in case of index funds or sector or industry specific scheme.

Bids by HUFs

Bids by HUFs Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder/Applicant
should specify that the Bid is being made in the name of the HUF in the Bid cum Application Form/Application
Form as follows: “Name of sole or first Bidder/Applicant: XYZ Hindu Undivided Family applying through XYZ,
where XYZ is the name of the Karta”. Bids/Applications by HUFs may be considered at par with
Bids/Applications from individuals;

Bids by Eligible NRIs

Eligible NRIs may obtain copies of Bid cum Application Form from the BRLMs, Syndicate Members and sub-
syndicate members at select locations as specified in the Bid cum Application Form. Eligible NRI Bidders bidding
on a repatriation basis by using the Non-Resident Forms should authorise their SCSB or should confirm/accept
the UPI Mandate Request (in case of RIBs using the UPI Mechanism) to block their Non -Resident External
(“NRE”) accounts or Foreign Currency Non-Resident (“FCNR”) Accounts, and eligible NRI Bidders bidding on
a non-repatriation basis by using Resident Forms should authorise their SCSB or should confirm/accept the UPI
Mandate Request (in case of RIBs Bidding using the UPI Mechanism) to block their Non-Resident Ordinary
(“NRO”) accounts for the full Bid Amount, at the time of the submission of the Bid cum Application Form.
However, NRIs applying in the Issue through the UPI Mechanism, are advised to enquire with the relevant bank
where their account is UPI linked prior to submitting their Bid cum Application Form.

Eligible NRIs Bidding on non-repatriation basis are advised to use the Bid cum Application Form for residents.

Eligible NRIs Bidding on a repatriation basis are advised to use the Bid cum Application Form meant for Non-

299
Residents.

Bids by FPIs

In terms of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 (“SEBI
FPI Regulations”), investment in the Equity Shares by a single FPI or an investor group (which means multiple
entities registered as foreign portfolio investors and directly and indirectly having common ownership of more
than 50% of common control) shall be below 10% of our post-Issue Equity Share capital. Further, in terms of the
FEMA Rules, the total holding by each FPI or an investor group shall be below 10% of the total paid -up Equity
Share capital of our Company on a fully diluted basis and the aggregate limit for FPI investments, with effect
from April 1, 2020, shall be the sectoral cap applicable to our Company. Bids by FPIs which utilise the multi
investment manager structure, submitted with the same PAN but with different beneficiary account numbers,
Client IDs and DP IDs may not be treated as multiple Bids.

In case of Bids made by FPIs, a certified copy of the certificate of registration issued under the SEBI FPI
Regulations is required to be attached to the Bid cum Application Form, failing which our Company reserves the
right to reject any Bid without assigning any reason. FPIs who wish to participate in the Issue are advised to use
the Bid cum Application Form for Non-Residents. In terms of applicable FEMA Rules and the SEBI FPI
Regulations, investments by FPIs in the capital of an Indian company is subject to certain limits, i.e. the individual
holding of an FPI (including its investor group) is restricted to below 10% of the capital of the company. In case
the total holding of an FPI or investor group increases beyond 10% of the total paid -up equity capital of our
Company, on a fully diluted basis or 10% or more of the paid-up value of any series of debentures or preference
shares or share warrants that may be issued by our Company, the total investment made by the FPI or investor
group will be re-classified as FDI subject to the conditions as specified by SEBI and the RBI in this regard and
our Company and the investor will be required to comply with applicable reporting requirements.

Further, the total holdings of all FPIs put together, with effect from April 1, 2020, can be up to the sectoral cap
applicable to the sector in which our Company operates. The aggregate limit may be decreased below the sectoral
cap to a threshold limit of 24% or 49% or 74% as deemed fit by way of a resolution passed by our Boa rd followed
by a special resolution passed by the Shareholders of our Company. In terms of the FEMA Rules, for calculating
the aggregate holding of FPIs in a company, holding of all registered FPIs shall be included.

To ensure compliance with the above requirement, SEBI, pursuant to its circular dated July 13, 2018, has directed
that at the time of finalisation of the Basis of Allotment, the Registrar shall (i) use the PAN issued by the Income
Tax Department of India for checking compliance for a single FPI; and (ii) obtain validation from Depositories
for the FPIs who have invested in the Issue to ensure there is no breach of the investment limit, within the timelines
for issue procedure, as prescribed by SEBI from time to time.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 21 of the SEBI FPI Regulations, an FPI may issue or otherwise deal in offshore derivative instruments
(as defined under the SEBI FPI Regulations as any instrument, by whatever name called, which is issued overseas
by a FPI against securities held by it in India, as its underlying, and all such offshore derivative instruments are
referred to herein as “P-Notes”), for which they may receive compensation from the purchasers of such
instruments. In terms of Regulation 21 of SEBI FPI Regulations, P-Notes may be issued only by such persons
who are registered as Category I FPIs and they may be issued only to persons eligible for registration as Category
I FPIs subject to exceptions provided in the SEBI FPI Regulations and compliance with ‘know your client’
requirements, specified by SEBI. An FPI shall also ensure that no transfer of any instrument referred to above is
made to any persons unless such FPIs are registered as Category I FPIs and such instrument is being issued or
transferred only to person eligible for registration as Category I FPIs subject to requisite consents being obtained
in terms of Regulation 21 of SEBI FPI Regulations. P-Notes have not been and are not being offered or sold
pursuant to this Red Herring Prospectus. This Red Herring Prospectus does not contain any information
concerning P-Notes or the issuer(s) of any P-Notes, including any information regarding any risk factors relating
thereto.

Subject to certain relaxations provided under Regulation 22(4) of the SEBI FPI Regulations, investment by a
single FPI including its investor group (multiple entities registered as FPIs and directly or indirectly, having
common ownership of more than fifty per cent or common control, shall be treated as part of the same investor
group) in our Company under the FPI route is not permitted to be 10% or more than 10% of our post -Issue paid-
up Equity Share capital on a fully diluted basis. In the event an investor has investments as an FPI and also holds
positions as an offshore derivative instrument subscriber, the investment restrictions referenced above shall apply

300
on the aggregate of the FPI and offshore derivative instruments investments held. Two or more subscribers of
offshore derivative instruments having common ownership, directly or indirectly, of more than fifty percent or
common control shall be considered together as a single subscriber of offshore derivative instruments.

All non-resident investors should note that refunds (in case of Anchor Investors), dividends and other
distributions, if any, will be payable in Indian Rupees only and net of bank charges and commission.

Bids by following FPIs, submitted with the same PAN but with different beneficiary a ccount numbers, Client IDs
and DP IDs shall not be treated as multiple Bids:

• FPIs which utilise the multi investment manager structure;

• Offshore derivative instruments which have obtained separate FPI registration for ODI and proprietary
derivative investments;

• Sub funds or separate class of investors with segregated portfolio who obtain separate FPI registration;

• FPI registrations granted at investment strategy level/sub fund level where a collective investment scheme or
fund has multiple investment strategies/sub-funds with identifiable differences and managed by a single
investment manager.

• Multiple branches in different jurisdictions of foreign bank registered as FPIs;

• Government and Government related investors registered as Category 1 FPIs; and

• Entities registered as collective investment scheme having multiple share classes.

The Bids belonging to any of the above mentioned seven structures and having same PAN may be collated and
identified as a single Bid in the Bidding process. The Equity Shares allotted in the Bid may be proportionately
distributed to the applicant FPIs (with same PAN).

In order to ensure valid Bids, FPIs making multiple Bids using the same PAN, and with different beneficiary
account numbers, Client IDs and DP IDs, are required to provide a confirmation along with each of their Bid cum
Application Forms that the relevant FPIs making multiple Bids utilize any of the above-mentioned structures and
indicate the name of their respective investment managers in such confirmation. In the absence of such
confirmation from the relevant FPIs, such multiple Bids shall be rejected.

Bids by SEBI registered VCFs, AIFs and FVCIs

The SEBI FVCI Regulations and the SEBI AIF Regulations, inter-alia, prescribe the respective investment
restrictions on the FVCIs, VCFs and AIFs registered with SEBI. Accordingly, the holding by any individual VCF
or FVCI registered with SEBI, in any company should not exceed 25% of the corpus of the VCF. Further, VCFs
can invest only up to 33.33% of the investible funds in various prescribed instruments, including in public
offerings.

Category I and II AIFs cannot invest more than 25% of the corpus in one investee company. A category III AIF
cannot invest more than 10% of the corpus in one investee company. A VCF registered as a category I AIF, as
defined in the SEBI AIF Regulations, cannot invest more than one-third of its investible funds by way of
subscription to an initial public offering of a venture capital undertaking. Additionally, the VCFs which have not
re-registered as an AIF under the SEBI AIF Regulations shall continue to be regulated by the SEBI VCF
Regulations until the existing fund or scheme managed by the fund is wound up and such fund shall not launch
any new scheme after the notification of the SEBI AIF Regulations.

All non-resident investors should note that refunds (in case of Anchor Investors), dividends and other distributions,
if any, will be payable in Indian Rupees only and net of bank charges and commission. Neither o ur Company, nor
the Selling Shareholders nor the BRLMs will be responsible for loss, if any, incurred by the Bidder on account of
conversion of foreign currency.

Bids by limited liability partnerships

301
In case of Bids made by limited liability partnerships registered under the Limited Liability Partnership Act, 2008,
a certified copy of certificate of registration issued under the Limited Liability Partnership Act, 2008, must be
attached to the Bid cum Application Form. Failing this, our Company reserves the right to reject any Bid without
assigning any reason thereof.

Bids by banking companies

In case of Bids made by banking companies registered with RBI, certified copies of: (i) the certificate of
registration issued by RBI, and (ii) the approval of such banking company’s investment committee are required
to be attached to the Bid cum Application Form, failing which our Company reserves the right to reject any Bid
without assigning any reason.

The investment limit for banking companies in non-financial services companies as per the Banking Regulation
Act, 1949, as amended (“Banking Regulation Act”), and the Reserve Bank of India (Financial Services provided
by Banks) Directions, 2016 (the "Financial Services Directions"), is 10% of the paid-up share capital of the
investee company, not being its subsidiary engaged in non-financial services, or 10% of the bank’s own paid-up
share capital and reserves, whichever is lower. However, a banking company would be permitted to invest in
excess of 10% but not exceeding 30% of the paid-up share capital of such investee company if (i) the investee
company is engaged in non-financial activities permitted for banks in terms of Section 6(1) of the Banking
Regulation Act, or (ii) the additional acquisition is through restructuring of debt/corporate debt
restructuring/strategic debt restructuring, or to protect the bank’s interest on loans/investments made to a
company. The bank is required to submit a time-bound action plan for disposal of such shares within a specified
period to the RBI. A banking company would require a prior approval of the RBI to inter alia make (i) investment
in a subsidiary and a financial services company that is not a subsidiary (with certain exceptions prescribed under
5(b)(i) of the Financial Services Directions), and (ii) investment in a non-financial services company in excess of
10% of such investee company’s paid-up share capital as stated in 5(a) (v) (c) (i) of the Financial Services
Directions. Further, the aggregate investment by a banking company in subsidiaries and other entities engaged in
financial and non-financial services company cannot exceed 20% of the investee company’s paid-up share capital
and reserves.

Bids by SCSBs

SCSBs participating in the Issue are required to comply with the terms of the circulars dated September 13, 2012
and January 2, 2013 issued by the SEBI. Such SCSBs are required to ensure that for making applications on their
own account using ASBA, they should have a separate account in their own name with any other SEBI registered
SCSBs. Further, such account shall be used solely for the purpose of making application in public issues and clear
demarcated funds should be available in such account for such applications.

Bids by systemically important non-banking financial companies

In case of Bids made by NBFC-SI, a certified copy of the certificate of registration issued by the RBI, a certified
copy of its last audited financial statements on a standalone basis and a net worth certificat e from its statutory
auditor(s), must be attached to the Bid cum Application Form. Failing this, our Company reserves the right to
reject any Bid, without assigning any reason thereof. NBFC-SIs participating in the Issue shall comply with all
applicable regulations, guidelines and circulars issued by RBI from time to time.

Bids by insurance companies

In case of Bids made by insurance companies registered with the IRDAI, a certified copy of certificate of
registration issued by IRDAI must be attached to the Bid cum Application Form. Failing this, our Company
reserves the right to reject any Bid without assigning any reason thereof.

The exposure norms for insurers is prescribed in Regulation 9 of the Insurance Regulatory and Development
Authority of India (Investment) Regulations, 2016 (“IRDAI Investment Regulations”) are set forth below:

(i) equity shares of a company: the lower of 10% * of the investee company’s outstanding equity shares (face
value) or 10% of the respective fund in case of a life insurer/investment assets in case of a general insurer
or a reinsurer;
(ii) the entire group of the investee company: not more than 15% of the resp ective fund in case of a life insurer
or 15% of investment assets in case of a general insurer or a reinsurer or 15% of the investment assets in

302
 all companies belonging to the group, whichever is lower; and

(iii) the industry sector in which the investee company operates: not more than 15% of the respective fund of a
life insurer or general insurance or 15% of the investment assets, whichever is lower.

The maximum exposure limit, in the case of an investment in equity shares, cannot exceed the lower of an amount
of 10% of the investment assets of a life insurer or general insurer and the amount calculated under points (i), (ii)
or (iii) above, as the case may be.
*
The above limit of 10% shall stand substituted as 15% of outstanding equity shares (face value) f or insurance
companies with investment assets of ₹ 2,500,000 million or more and 12% of outstanding equity shares (face
value) for insurers with investment assets of ₹ 500,000 million or more but less than ₹ 2,500,000 million.

Insurer companies participating in this Issue shall comply with all applicable regulations, guidelines and circulars
issued by the IRDAI from time to time to time including the IRDAI Investment Regulations.

Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney by limited companies, corporate bodies, registered societies,
eligible FPIs, AIFs, Mutual Funds, insurance companies, insurance funds set up by the army, navy or air force of
the Union of India, insurance funds set up by the Department of Posts, India or the National Investment Fund and
provident funds with minimum corpus of ₹ 250 million and pension funds with a minimum corpus of ₹ 250
million, in each case, subject to applicable law and in accordance with their respective constitutional documents
a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a
certified copy of the memorandum of association and articles of association and/or bye laws as applicable must
be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or
reject any Bid in whole or in part, in either case, without assigning any reason thereof.

Our Company in consultation with the BRLMs, in its absolute discretion, reserves the right to relax the above
condition of simultaneous lodging of the power of attorney along with the Bid cum Application Form, subject to
such terms and conditions that our Company, in consultation with the BRLMs, may deem fit, without assigning
any reasons thereof.

Bids by provident funds/pension funds

In case of Bids made by provident funds/pension funds, subject to applicable laws, with minimum corpus of ₹
250 million, a certified copy of certificate from a chartered accountant certifying the corpus of the provident
fund/pension fund must be attached to the Bid cum Application Form. Failing this, our Company reserves the
right to reject any Bid, without assigning any reason therefor.

The Equity Shares offered in the Issue have not been and will not be registered, listed or otherwise qualified
in any jurisdiction except India and may not be offered or sold to persons outside of India except in
compliance with the applicable laws of each such jurisdiction. In particular, the Equity Shares have not
been and will not be registered under the U.S. Securities Act or the laws of any state of the United States
and may not be offered or sold in the United States (as defined in Regulation S) except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act
and applicable state securities laws. The Equity Shares are being offered and sold only outside the United
States pursuant to Regulation S.

The above information is given for the benefit of the Bidders. Our Company, the Selling Shareholders and
the Syndicate Members are not liable for any amendments or modification or changes in applicable laws
or regulations, which may occur after the date of this Red Herring Prospectus. Bidders are advised to make
their independent investigations and ensure that Bid from them does not exceed the applicable investment
limits or maximum number of the Equity Shares that can be held by them under applicable laws or
regulation or as specified in this Red Herring Prospectus and Prospectus.

In accordance with existing regulations issued by the RBI, OCBs cannot participate in the Issue.

Information for Bidders

303
The relevant Designated Intermediary will enter each Bid option into the electronic Bidding system as a separate
Bid and generate an acknowledgement slip (Acknowledgement Slip), for each price and demand option and give
the same to the Bidder. Therefore, a Bidder can receive up to three Acknowledgement Slips for each Bid cum
Application Form. It is the Bidder’s responsibility to obtain the Acknowledgment Slip from the relevant
Designated Intermediary. The registration of the Bid by the Designated Intermediary does not guarantee that the
Equity Shares shall be allocated/Allotted. Such Acknowledgement Slip will be non-negotiable and by itself will
not create any obligation of any kind. When a Bidder revises his or her Bid, he /she shall surrender the earlier
Acknowledgement Slip and may request for a revised Acknowledgment Slip from the relevant Designated
Intermediary as proof of his or her having revised the previous Bid.
In relation to electronic registration of Bids, the permission given by the Stock Exchanges to use their network
and software of the electronic bidding system should not in any way be deemed or construed to mean that the
compliance with various statutory and other requirements by our Company and/or the BRLMs are cleared or
approved by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or
completeness of compliance with the statutory and other requirements, nor does it take any responsibility for the
financial or other soundness of our Company, the management or any scheme or project of our Company; nor
does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this
Red Herring Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on
the Stock Exchanges.

In the event of an upward revision in the Price Band, RIBs who had Bid at Cut-off Price could either (i) revise
their Bid or (ii) shall make additional payment based on the cap of the revised Price Band (such that the total
amount i.e. original Bid Amount plus additional payment does not exceed ₹ 200,000 with respect to RIBs if the
Bidder wants to continue to Bid at Cut-off Price). The revised Bids must be submitted to the same Designated
Intermediary to whom the original Bid was submitted. If the total amount (i.e. the original Bid Amount plus
additional payment) exceeds ₹ 200,000 with respect to RIBs, the Bid will be considered for allocation under the
Non-Institutional Portion. If, however, the Retail Individual Bidder does not either revise the Bid or make
additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the number of
Equity Shares Bid for shall be adjusted downwards for the purpose of allocation, such that no additional payment
would be required from the Retail Individual Bidder and the Retail Individual Bidder is deemed to have approved
such revised Bid at Cut-off Price.

In the event of a downward revision in the Price Band, Retail Individual Bidders who have bid at Cut-off Price
may revise their Bid; otherwise, the excess amount paid at the time of Bidding would be unblocked after Allotment
is finalised.

Any revision of the Bid shall be accompanied by instructions to block the incremental amount, if any, to be paid
on account of the upward revision of the Bid.

Pre-Issue Advertisement

Subject to Section 30 of the Companies Act, 2013, our Company will, after filing this Red Herring Prospectus
with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI ICDR Regulations, in the
English editions of Financial Express (a widely circulated English national daily newspaper), all editions of
Jansatta (a widely circulated Hindi national daily newspaper) and the Gujarati editions of Financial Express (a
widely circulated Gujarati newspaper, Gujarati being the regional language of Gujarat where our Registered Office
is located). Our Company shall, in the pre-Issue advertisement state the Bid/Issue Opening Date, the Bid/Issue
Closing Date and the QIB Bid/Issue Closing Date. This advertisement, subject to the provisions of Section 30 of
the Companies Act, 2013, shall be in the format prescribed under the SEBI ICDR Regulations.

Signing of Underwriting Agreement and filing of Prospectus with the RoC

Our Company and the Selling Shareholders will enter into an Underwriting Agreement with the Underwriters on
or immediately after the finalisation of the Issue Price. After signing the Underwriting Agreement, our Company
will file the Prospectus with the RoC, in accordance with applicable law. The Prospectus will contain details of
the Issue Price, Anchor Investor Issue Price, Issue size and underwriting arrangements and will be complete in all
material respects.

GENERAL INSTRUCTIONS

304
Please note that QIBs and Non-Institutional Bidders are not permitted to withdraw their Bid(s) or lower the size
of their Bid(s) (in terms of quantity of Equity Shares or the Bid Amount) at any stage. Retail Individual Bidders
can revise their Bid(s) during the Bid/Issue Period and withdraw their Bid(s) until Bid/I ssue Closing Date. Anchor
Investors are not allowed to withdraw their Bids after the Anchor Investor Bidding Date.

Do’s:

1. Check if you are eligible to apply as per the terms of this Red Herring Prospectus and under applicable law,
rules, regulations, guidelines and approvals;

2. Ensure that you have Bid within the Price Band;

3. Read all the instructions carefully and complete the Bid cum Application Form;

4. Ensure that the details about the PAN, DP ID and Client ID are correct and the Bidders depository account is
active, as Allotment of the Equity Shares will be in the dematerialised form only;

5. Ensure that your Bid cum Application Form bearing the stamp of the relevant Designated Intermediary is
submitted to the Designated Intermediary at the Bidding Centre within the prescribed time;

6. In case of joint Bids, ensure that first Bidder is the ASBA Account holder (or the UPI -linked bank account
holder, as the case may be) and the signature of the first Bidder is included in the Bid cum Application Form;

7. Bidders (other than RIIs bidding through the non-UPI Mechanism) should submit the Bid cum Application
Form only at the Bidding Centers, i.e. to the respective member of the Syndicate at the Specified Locations,
the SCSBs, the Registered Broker at the Broker Centres, the CRTA at the Designated RTA Locations or CDP
at the Designated CDP Locations. RIIs bidding through the non-UPI Mechanism should either submit the
physical Bid cum Application Form with the SCSBs or Designated Branches of SCSBs under Channel I
(described in the 2018 Circular on Streamlining of Public Issues) or submit the Bid cum Application Form
online using the facility of 3-in 1 type accounts under Channel II (described in the 2018 Circular on
Streamlining of Public Issues).

8. Ensure that you have mentioned the correct ASBA Account number (for all Bidders other than RIBs using
the UPI Mechanism) in the Bid cum Application Form;

9. RIBs using the UPI Mechanism should ensure that the correct UPI ID is mentioned in the Bid cum
Application Form;

10. RIBs bidding using the UPI Mechanism should ensure that they use only their own bank account linked UPI
ID to make an application in the issue;

11. RIBs submitting a Bid cum Application Form using the UPI Mechanism, should ensure that: (a) the bank
where the bank account linked to their UPI ID is maintained; and (b) the Mobile App and UPI handle being
used for making the Bid is listed on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40;
12. RIBs submitting a Bid-cum Application Form to any Designated Intermediary (other than SCSBs) should
ensure that only UPI ID is included in the Field Number 7: Payment Details in the Bid cum Application Form;

13. RIBs using the UPI Mechanism shall ensure that the bank, with which it has its bank account, where the funds
equivalent to the application amount are available for blocking is UPI 2.0 certified by NPCI;

14. All Bidders (other than Anchor Investors) should submit their Bids through the ASBA process only;
15. Ensure that the signature of the First Bidder in case of joint Bids, is included in the Bid cum Application
Forms;

16. Ensure that the name(s) given in the Bid cum Application Form is/are exactly the same as the name(s) in
which the beneficiary account is held with the Depository Participant. In case of joint Bids, t he Bid cum
Application Form should contain only the name of the First Bidder whose name should also appear as the
first holder of the beneficiary account held in joint names;

305
17. Ensure that you request for and receive a stamped acknowledgement of the Bid cum Application Form for
all your Bid options from the concerned Designated Intermediary;

18. Bidders, other than RIBs using the UPI Mechanism, shall ensure that they have funds equal to the Bid Amount
in the ASBA Account maintained with the SCSB before submitting the ASBA Form to the relevant
Designated Intermediaries;

19. Ensure that you submit revised Bids to the same Designated Intermediary, through whom the original Bid
was placed and obtain a revised acknowledgment;

20. With respect to Bids by SCSBs, ensure that you have a separate account in your own name with any other
SCSB having clear demarcated funds for applying under the ASBA process and that such separate account
(with any other SCSB) is used as the ASBA Account with respect to your Bid;

21. Except for Bids (i) on behalf of the Central or State Governments and the officials appointed by the courts,
who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for
transacting in the securities market and (ii) Bids by persons resident in the state of Sikkim, who, in terms of
a SEBI circular dated July 20, 2006, may be exempted from specifying their PAN for transacting in the
securities market. The exemption for the Central or the State Government and officials appointed by the
courts and for investors residing in the State of Sikkim is subject to (a) the Demographic Details received
from the respective depositories confirming the exemption granted to the beneficiary owner by a suitable
description in the PAN field and the beneficiary account remaining in “active status”; and (b) in the case of
residents of Sikkim, the address as per the Demographic Details evidencing the same. All other applications
in which PAN is not mentioned will be rejected;

22. Ensure that Anchor Investors submit their Anchor Investor Application Form only to the BRLMs;

23. Ensure that the Demographic Details are updated, true and correct in all respects;

24. Ensure that thumb impressions and signatures other than in the languages specified in the Eighth Schedule to
the Constitution of India are attested by a Magistrate or a Notary Public or a Special Executive Magistrate
under official seal;

25. Ensure that the correct investor category and the investor status is indicated in the Bid cum Application Form;

26. Ensure that in case of Bids under power of attorney or by limited companies, corporates, trust etc., relevant
documents, including a copy of the power of attorney, are submitted;
27. Ensure that Bids submitted by any person outside India should be in compliance with applicable f oreign and
Indian laws;

28. Ensure that the depository account is active, the correct DP ID, Client ID and the PAN are mentioned in their
Bid cum Application Form and that the name of the Bidder, the DP ID, Client ID and the PAN entered into
the online IPO system of the Stock Exchanges by the relevant Designated Intermediary, as applicable,
matches with the name, DP ID, Client ID and PAN available in the Depository database;
29. Ensure that where the Bid cum Application Form is submitted in joint names, the beneficiary account is also
held in the same joint names and such names are in the same sequence in which they appear in the Bid cum
Application Form;

30. Ensure that while Bidding through a Designated Intermediary, the Bid cum Application Form (other than for
Anchor Investors) is submitted to a Designated Intermediary in a Bidding Centre and in case of Bidding
through a Designated Intermediary (other than for Anchor Investors and RIBs ) the SCSB where the ASBA
Account, as specified in the ASBA Form, is maintained has named at least one branch at that location for the
Designated Intermediary to deposit ASBA Forms (a list of such branches is available on the website of SEBI
at www.sebi.gov.in) or such other websites as updated from time to time;

31. Ensure that you have correctly signed the authorisation/undertaking box in the Bid cum Application Form or
have otherwise provided an authorisation to the SCSB or Sponsor Bank, as applicable, via the electronic
mode, for blocking funds in the ASBA Account equivalent to the Bid Amount mentioned in the Bid cum
Application Form at the time of submission of the Bid;

306
32. For RIBs using the UPI Mechanism, ensure that you approve the Mandate Request generated by the Sponsor
Bank to authorise blocking of funds equivalent to application amount and subsequent debit of funds in case
of Allotment, in a timely manner;

33. RIBs shall ensure that details of the Bid are reviewed and verified by opening the attachment in the UPI
Mandate Request and then proceed to authorise the UPI Mandate Request using his/her UPI PIN. Upon the
authorization of the mandate using his/her UPI PIN, an RIB may be deemed to have verified the attachment
containing the application details of the RIB in the UPI Mandate Request and have agreed to block the entire
Bid Amount and a uthorized the Sponsor Bank to block the Bid Amount mentioned in the Bid Cum
Application Form;

34. RIBs using the UPI Mechanism should mention valid UPI ID of only the Applicant (in case of single account)
and of the first Applicant (in case of joint account) in the Bid cum Application Form;

35. RIBs using the UPI Mechanism, who have revised their Bids subsequent to making the initial Bid, should
also approve the revised Mandate Request generated by the Sponsor Bank to authorise blocking of funds
equivalent to the revised Bid Amount and subsequent debit of funds in case of Allotment in a timely manner;
and

36. Bids by Eligible NRIs and HUFs for a Bid Amount of less than ₹ 200,000 would be considered under the
Retail Portion, and Bids for a Bid Amount exceeding ₹ 200,000 would be considered under the Non-
Institutional Portion, for the purposes of allocation in the Issue.

Don’ts:

1. Do not Bid for lower than the minimum Bid size;

2. Do not Bid/revise Bid Amount to less than the Floor Price or higher than the Cap Price;
3. Do not Bid on another Bid cum Application Form or the Anchor Investor Application Form, as the case
maybe, after you have submitted a Bid to a Designated Intermediary;
4. RIB should not submit a Bid using the UPI Mechanism, unless the name of the bank where the bank
account linked to your UPI ID is maintained, is listed on the website of the SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40;

5. RIB should not submit a Bid using the UPI Mechanism, using a Mobile App or UPI handle, n ot listed on
the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40;

6. Do not pay the Bid Amount in cash, by money order, cheques or demand drafts or by postal order or by stock
invest;

7. Do not send Bid cum Application Forms by post; instead submit the same to the Designated Intermediary
only;

8. Anchor Investors should not Bid through the ASBA process;

9. Do not submit the Bid cum Application Forms to any non-SCSB bank or our Company or at a location other
than the Bidding Centres. Provided that RIBs not using the UPI Mechanism should not submit Bid cum
Application Forms with Designated Intermediaries (other than SCSBs);

10. Do not Bid on a physical ASBA Form that does not have the stamp of the relevant Designated Intermediary;

11. Do not Bid at Cut-off Price in case of Bids by QIBs and Non-Institutional Bidders;
12. Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the Issue size and/or
investment limit or maximum number of the Equity Shares that can be held under the applicable laws or
regulations or maximum amount permissible under the applicable regulations or under the terms of this Red
Herring Prospectus;
13. If you are a Non-Institutional Bidder or a Retail Individual Bidder, do not submit your Bid after 3.00 pm on

307
 the Bid/Issue Closing Date;

14. If you are a QIB, do not submit your Bid after 3.00 p.m. on the QIB Bid/ Issue Closing Date;

15. Do not instruct your respective banks to release the funds blocked in the ASBA Account under the ASBA
process;

16. Do not Bid for a Bid Amount exceeding ₹ 200,000 for Bids by Retail Individual Bidders;

17. Do not submit the General Index Register (GIR) number instead of the PAN;

18. Do not submit incorrect UPI ID details if you are a RIB Bidding through the UPI Mechanism;

19. Do not submit incorrect details of the DP ID, Client ID and PAN or provide details for a beneficiary account
which is suspended or for which details cannot be verified by the Registrar to the Issue;

20. Do not submit the Bid without ensuring that funds equivalent to the entire Bid Amount are available for
blocking in the relevant ASBA Account;

21. Do not submit more than one Bid cum Application Form for each UPI ID in case of RIBs using the UPI
Mechanism;

22. Do not submit Bids to a Designated Intermediary at a location other than Specified Locations;

23. Do not withdraw your Bid or lower the size of your Bid (in terms of quantity of the Equity Shares or the Bid
Amount) at any stage, if you are a QIB or a Non-Institutional Bidder;
24. Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms or on Bid cum
Application Forms in a colour prescribed for another category of Bidder;

25. Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable law or your relevant
constitutional documents or otherwise;

26. Do not link the UPI ID with a bank account maintained with a bank that is not UPI 2.0 certified by the NPCI
in case of Bids submitted by RIB Bidders using the UPI Mechanism;

27. Do not Bid on another Bid cum Application Form and the Anchor Investor Application Form, as the case
may be, after you have submitted a Bid to any of the Designated Intermediaries;
28. Do not Bid if you are not competent to contract under the Indian Contract Act, 1872 (other than minors having
valid depository accounts as per Demographic Details provided by the depository);
29. Do not submit a Bid cum Application Form using a third party bank account or using third party linked bank
account UPI ID (in case of in case of Bids submitted by RIBs using the UPI Mechanism); and

30. Do not Bid if you are an OCB.

The Bid cum Application Form is liable to be rejected if any of the above instructions or any other condition
mentioned in this Red Herring Prospectus, as applicable, is not complied with.

Method of allotment as may be prescribed by SEBI from time to time

Our Company will not make any Allotment in excess of the Equity Shares through the Offer Document except in
case of oversubscription for the purpose of rounding off to make Allotment, in consultation with the Designated
Stock Exchange. Further, upon oversubscription, an allotment of not more than one per cent. of the Issue may be
made for the purpose of making Allotment in minimum lots.

The Allotment of Equity Shares to applicants other than to the Retail Individual Bidders and Anchor Investors
shall be on a proportionate basis within the respective investor categories and the number of securities allotted
shall be rounded off to the nearest integer, subject to minimum allotment being equal to the minimum application
size as determined and disclosed.

308
The Allotment of Equity Shares to each Retail Individual Bidders shall not be less than the minimum bid lot,
subject to the availability of shares in Retail Individual Bidders Portion, and the remaining available Equity
Shares, if any, shall be Allotted on a proportionate basis. The Allotment of Equity Shares to Anchor Investors
shall be on a discretionary basis.

Payment into Escrow Account

Anchor Investors are not permitted to Bid in the Issue through the ASBA process. Instead, Anchor Investors
should transfer the Bid Amount (through direct credit, RTGS or NEFT) to the Escrow Accounts. The payment
instruments for payment into the Escrow Accounts should be drawn in favour of:

(i) In case of resident Anchor Investors: “CHEMCON SPECIALITY CHEMICALS LTD – ANCHOR R”;
and
(ii) In case of non-resident Anchor Investors: “CHEMCON SPECIALITY CHEMICALS LTD – ANCHOR
NR”

Depository Arrangements

The Allotment of the Equity Shares in the Issue shall be only in a dematerialised form, (i.e., not in the form of
physical certificates but be fungible and be represented by the statement issued through the electronic mode). In
this context, tripartite agreements had been signed among our Company, the respective Depositories and the
Registrar to the Issue:

• Tripartite Agreement dated December 31, 2018 among NSDL, our Company and the Registrar to the Issue.

• Tripartite Agreement dated February 11, 2019 among CDSL, our Company and Registrar to the Issue.

Undertakings by our Company

Our Company undertakes the following:

(i) that the complaints received in respect of the Issue shall be attended to by our Company expeditiously
and satisfactorily;
(ii) that if the Allotment is not made within the prescribed time period under applicable law, the entire
subscription amount received will be refunded/unblocked within the time prescribed under applicable
law, failing which interest will be due to be paid to the Bidders at the rate prescribed under applicable
law for the delayed period;
(iii) that all steps will be taken for completion of the necessary formalities for listing and commencement of
trading at all the Stock Exchanges where the Equity Shares are proposed to be listed within six Working
Days of the Bid/Issue Closing Date or such other time as may be prescribed ;

(iv) that funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be
made available to the Registrar to the Issue by our Company;

(v) where refunds (to the extent applicable) are made through electronic transfer of funds, a suitable
communication shall be sent to the applicant within the time prescribed under applicable law, giving
details of the bank where refunds shall be credited along with amount and expected date of electronic
credit of refund;

(vi) that if our Company does not proceed with the Issue after the Bid/Issue Closing Date but prior to
Allotment, the reason thereof shall be given as a public notice within two days of the Bid/Issue Closing
Date. The public notice shall be issued in the same newspapers where the pre-Issue advertisements were
published. The Stock Exchanges on which the Equity Shares are proposed to be listed shall also be
informed promptly;

(vii) that if our Company and the Selling Shareholders, in consultation with the BRLMs, withdraw the Issue
after the Bid/Issue Closing Date, our Company shall be required to file a fresh draft offer document with
the SEBI, in the event our Company subsequently decides to proceed with the Issue thereafter;

309
(viii) that adequate arrangements shall be made to collect all Bid cum Application Forms submitted by Bidders
and Anchor Investor Application Form from Anchor Investors; and

(ix) that no further issue of Equity Shares shall be made until the Equity Shares offered through this Red
Herring Prospectus are listed or until the Bid monies are refunded/unblocked in the ASBA Accounts on
account of non-listing, under-subscription etc.

Undertakings by each Selling Shareholder

Each Selling Shareholder, severally and not jointly, undertakes the following in respect of itself as a Selling
Shareholder and its respective portion of the Offered Shares:

(i) that the Offered Shares are free and clear of any pre-emptive rights, liens, mortgages, charges, pledges
or encumbrances and are eligible to be a part of the Offer for Sale, in accordance with Regulation 8 of
the SEBI ICDR Regulations and shall continue to be in dematerialised form at the time of transfer;

(ii) that it is the legal and beneficial owner of and has full title to its respective portion of the Offered Shares;

(iii) that it shall provide all support and cooperation as may be reasonably requested by our Company and the
BRLMs to the extent such support and cooperation is in relation to its Offered Shares and in relation to
the completion of the Allotment and dispatch of the Allotment Advice and CAN, if required, and refund
orders (as applicable) to the requisite extent of its respective portion of the Offered Shares;

(iv) that each Selling Shareholder specifically confirms that it shall not have any recourse to the proceeds of
the Issue, until final listing and trading approvals have been received from the Stock Exchanges;
(v) that it shall not offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or
services or otherwise to any Bidder for making a Bid in the Issue, and shall not make any payment, direct
or indirect, in the nature of discounts, commission, allowance or otherwise to any person who makes a
Bid in the Issue, except as permitted under applicable law;
(vi) that it shall not offer, lend, pledge, create lien, charge, encumber, sell, contract to sell or otherwise transfer
or dispose of, directly or indirectly, any of the Equity Shares offered in the Issue;
(vii) that it will provide such assistance as may be required by our Company and BRLMs acting reasonably,
in redressal of such investor grievances that pertain to the Equity Shares being offered pursuant to the
Issue and statements specifically made or confirmed by it in relation to itself as a Selling Shareholder;
and
(viii) that it shall transfer its portion of the Offered Shares to an escrow demat account in accordance with the
share escrow agreement to be executed between the parties to such share escrow agreement.

The Selling Shareholders have authorised the Compliance Officer of our Company and the Registrar to the Issue
to redress any complaints received from Bidders in respect of their respective portion of Offered Shares.

Utilisation of Issue Proceeds

Our Company and the Selling Shareholders, severally and not jointly, specifically confirm and declare (i) that all
monies received from the Issue shall be transferred to separate bank account other than the bank account referred to
in sub-section (3) of Section 40 of the Companies Act, 2013; and (ii) details of all monies utilised out of the proceeds
from the Fresh Issue shall be disclosed, and continue to be disclosed till all the time any part of the proceeds from
the Fresh Issue remains unutilised, under an appropriate head in the balance sheet of our Company indicating the
purpose for which such monies have been utilised, or the form in which such unutilised monies have been invested.

310
 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is governed through the Industrial Policy, 1991 of the Government of India
and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign
investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which
such investment may be made. The Union Cabinet, as provided in the Cabinet Press Release dated May 24, 2017,
has given its approval for phasing out the FIPB. Accordingly, the process for foreign direct investment (“FDI”)
and approval from the Government of India will now be handled by the concerned ministries or departments, in
consultation with the DIPP, the Ministry of Finance, the Department of Economic Affairs, FIPB section, through
a memorandum dated June 5, 2017 has notified the specific ministries handling relevant sectors.

The Government of India has from time to time made policy pronouncements on FDI through press notes and
press releases. The DIPP issued the Consolidated Foreign Direct Investment Policy notified by the D/o IPP F. No.
5(1)/2017-FC-1 dated August 28, 2017, with effect from August 28, 2017 (the “FDI Policy”), which consolidates
and supersedes all previous press notes, press releases and clarifications on FDI issued by the DIPP that were in
force and effect prior to August 28, 2017. The Government of India proposes to update the consolidated circular
on FDI Policy once every year and therefore, the FDI Policy will be valid until the DIPP issues an updated circular.

The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the
RBI, provided that (i) the activities of the investee company are under the automatic ro ute under the foreign direct
investment policy and transfer does not attract the provisions of the Takeover Regulations; (ii) the non -resident
shareholding is within the sectoral limits under the FDI policy; (iii) the pricing is in accordance with the guid elines
prescribed by the SEBI/RBI; and (iv) documentation, reporting requirements and other conditions as may be
specified by the RBI in consultation with the Central Government, are adhered for such transfers.

In terms of Press Note 3 of 2020, dated April 17, 2020, issued by the DPIIT, the FDI Policy has been recently
amended to state that all investments under the foreign direct investment route by entities of a country which
shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen
of any such country will require prior approval of the Government of India. Further, in the event of transfer of
ownership of any existing or future foreign direct investment in an entity in India, directly or in directly, resulting
in the beneficial ownership falling within the aforesaid restriction/ purview, such subsequent change in the
beneficial ownership will also require approval of the Government of India. Furthermore, on April 22, 2020, the
Ministry of Finance, Government of India has also made similar amendment to the FEMA Rules.

As per the existing policy of the Government of India, OCBs cannot participate in this Issue.

For further details, see “Issue Procedure” beginning on page 296.

The above information is given for the benefit of the Bidders. Our Company, the Selling Shareholders and the
BRLMs are not liable for any amendments or modification or changes in applicable laws or regulations, which
may occur after the date of this Red Herring Prospectus. Bidders are advised to make their independent
investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits under laws
or regulations.

311
 SECTION X - MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

1. PRELIMINARY

Save as provided herein, the regulations contained in Table "F" in Schedule I to the Companies Act, 2013, or
in the Schedule to any previous Act (as defined below) shall not apply to the Company, except in regard to
matters not specifically provided in these Articles.

These Articles shall be binding on the Company and its Members as if the same constituted the terms of
anagreement between them.

The regulation for the management of the Company and for the observance of the Members thereof and their
representatives shall be such as are contained in these Articles, subject however to the exercise of the statutory
powers of the Company in respect of repeal, additions, alterations, substitution, modifications and variations
thereto by Resolution as prescribed or permitted by the Act, be such as are contained in these Articles.

2. SHARE CAPITAL

(a) The authorised Share Capital of the Company shall be as set forth in Clause 5 of the Memorandum of
Association of the Company and shall have the rights, privileges, and conditions attached herewith, as
are provided by these Articles with power to increase and/or reduce the Share Capital and divide the
Share Capital into several classes and to attach thereto respectively such differential, preferential,
qualified or special rights, privileges, or conditions, as may be determined by or in accordance with these
Articles and to modify the conditions in such manner as may be permitted by Applicable Laws and these
Articles.

(b) Subject to the provisions of these Articles, the Company may by a resolution passed at a General Meeting
increase the authorised or issued or paid up Share Capital or reduce the Share Capital or otherwise amend
the Memorandum and these Articles in accordance with the provisions of the Act and the provisions of
these Articles.

(c) The paid up Share Capital shall be at all times at least a minimum of such amount as may be prescribed
under the Act.

(d) The Company may issue the following kinds of Shares in accordance with these Articles, the Act, the
Rules and other Applicable Laws:

(i) Equity Share Capital-

(a) with voting rights; or

(b) with differential rights as to dividend, voting or otherwise in accordance with such rules as
may be prescribed; and

(ii) Preference Share Capital.

(e) If at any time Share Capital is divided into different classes of Shares, the rights attached to any class
(unless otherwise provided by the terms of the issue of the Shares of that class) may, subject to these
Articles and the provisions of section 48 of the Act, and whether or not the Company is being wound-
up, be varied with the consent in writing of the holders of three-fourth of the issued Shares of that class,
or with the sanction of a special resolution passed at a separate meeting of the holders of the Shares of
that class, as prescribed by the Act.

(f) To every such separate meetings as referred in 4(e) above, the provisions of these Article relating to
General Meetings shall mutatis mutandis apply.

(g) The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall
not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to
be varied by the creation or issue of further Shares ranking pari passu therewith.

312
(h) Subject to these Articles and the provisions of section 55 of the Act, any preference shares may, with the
sanction of a special resolution, be issued or re-issued on the terms that they are, or at the option of the
Company are liable, to be redeemed on such terms and in such manner as the Company before the issue
of the Shares may, determine.

(i) The Board may allot and issue Shares of the Company as payment or part payment for any property
purchased by the Company or in respect of goods sold or transferred or machinery or appliances supplied
or for services rendered to the Company in or about the formation of the Company or the acquisition
and/or in the conduct of its business or for any goodwill provided to the Company; and any Shares which
may be so allotted may be issued as fully/partly paid up Shares and if so issued shall be deemed as
fully/partly paid up Shares. However, the aforesaid shall be subject to the approval of Shareholders under
the relevant provisions of the Act and Rules.
(j) The amount payable on application on each Share shall not be less than five percent of the nominal value
of the Share or, as may be specified by SEBI.

(k) Nothing herein contained shall prevent the Directors from issuing fully paid up Shares either on payment
of the entire nominal value thereof in cash or in satisfaction of any outstanding debt or obligation of the
Company.

(l) The fully paid Shares shall be free from all lien and that in the case of partly paid Shares the Company’s
lien shall be restricted to moneys called or payable at a fixed time in respect of such Shares.

(m) Except so far as otherwise provided by the conditions of issue or by these presents, any capital raised by
the creation of new Equity Shares, shall be considered as part of the existing capital and shall be subject
to the provisions herein contained with reference to the payment of calls and instalments, forfeiture, lien,
surrender, transfer and transmission, voting and otherwise.

(n) Any application signed by or on behalf of an applicant for Shares in the Company, followed by an
allotment of any Equity Shares therein, shall be an acceptance of Shares within the meaning of these
Articles and every person who thus or otherwise accepts any Shares and whose name is on the Register
of Members shall for the purposes of these Articles be a Shareholder.

(o) The money, (if any), which the Board shall, on the allotment of any Shares being made by them, require
or direct to be paid by way of deposit, call or otherwise, in respect of any Shares allot ted by them, shall
immediately on the insertion of the name of the allottee, in the Register of Members as the name of the
holder of such Equity Shares, become a debt due to and recoverable by the Company from the allottee
thereof, and shall be paid by him accordingly.

(p) Except as required by Applicable Law, no Person shall be recognized by the Company as holding any
Shares upon any trust, and the Company shall not be bound by, or be compelled in any way to recognize
(even when having notice thereof), any equitable, contingent, future or partial interest in any Shares, or
any interest in any fractional part of a Share or (except only as by these Articles or by Applicable Law
otherwise provided) any other rights in respect of any Share except an absolute righ t to the entirety
thereof in the registered Shareholder.

(q) Except so far as otherwise provided by the conditions of the issue or by these presents, any capital raised
by the creation of new Equity Shares, shall be considered as part of the existing capital and shall be
subject to the provisions herein contained with reference to the payment of calls and instalments,
forfeiture, lien, surrender, transfer and transmission, voting and otherwise.

(r) All the provisions of these Articles shall apply to the Shareholders of the Company.

(s) Subject to the provisions of these Articles, the Company shall have the power, subject to and in
accordance with the provisions of Section 54 of the Companies Act, 2013 and other relevant regulations
in this regard from time to time, to issue sweat equity shares to its employees and/or Directors on such
terms and conditions and in such manner as may be prescribed by Applicable Law from time to time.

(t) Subject to the provisions of these Articles, the Share Capital shall be under the control of the Board who
may, subject to Applicable Law, issue, allot or otherwise dispose of the same to such Persons, on such
terms and conditions and at such time as the Board thinks fit with full power to give to any Person the

313
 option to call for any Shares or other Securities either at par or at a premium and for such consideration
as the Board thinks fit. Subject to these Articles and the Act, the Directors shall have th e power, from
time to time, to increase and to consolidate or divide the Share Capital in the original or any additional
Share Capital into different classes and attach thereto at its discretion any preferential, deferred or other
special rights, privileges, conditions or restrictions as to dividends, capital, voting or otherwise, as may
be determined by or in accordance with the provisions hereof and to vary, modify or abrogate any such
right, privilege, or condition, or restriction in such manner as may f or the time being be permitted in
accordance with the provisions hereto or the legislative provisions for the time being in force.

(u) Subject to the provisions of these Articles, and subject to the provisions of section 68 to 70 and other
applicable provisions of the Act or any other law for the time being in force, the Company may purchase
its own Equity Shares or other specified securities.

3. SECURITIES

The Company shall, subject to the applicable provisions of the Act and in compliance with Applicable Law
and the consent of the Board, have the power to issue Securities on such terms and in such manner as the
Board deems fit including their conversion, repayment, and redemption whether at a premium or otherwise.

4. DEMATERIALISATION OF SECURITIES

Definitions

For the purpose of this Article:

(a) “Beneficial Owner” means a person or persons whose name is recorded as such with a Depository;

(b) “SEBI” means the Securities and Exchange Board of India;

(c) “Depository” means a company formed and registered under the Companies Act, 2013, or any previous
law, and which has been granted a certificate of registration to act as a depository under the Securities
and Exchange Board of India Act, 1992 and the rules and regulations made thereunder; and

(d) “Security” means such security as may be specified by SEBI from time to time.

The Company shall be entitled to dematerialise the Share Capital and to offer Securities in a dematerialised
form in accordance with the Depositories Act, 1996, the Securities and Exchange Board of I ndia (Depositories
and Participants) Regulations, 2018 and other Applicable Law. The Company shall, on a request made by a
beneficial owner, rematerialize Securities which are in dematerialised form.

Notwithstanding anything in the Act or these Articles to the contrary, where Securities are held in a
depository, the records of the beneficial ownership may be served by such Depository on the Company by
means of electronic mode or by delivery of digital storage devices or any other mode as prescribed by
Applicable Law from time to time.

Nothing contained in Section 56 of the Act or these Articles shall apply to a Transfer of securities effected
by a transferor and transferee both of who are entered as beneficial owners in the records of a depository.

Notwithstanding anything in the Act or these Articles, where Securities are dealt with by a depository, the
Company shall intimate the details thereof to the depository immediately on allotment of such Securities.

Nothing contained in the Act or these Articles regarding the necessity to have distinctive numbers for
Securities issued by the Company shall apply to Securities held with a depository.

All Securities held by a Depository shall be dematerialised and shall be in a fungible form.

Notwithstanding anything to the contrary contained in the Act or these Articles, a depository shall be deemed
to be the registered owner for the purposes of effecting any Transfer of ownership of Shares on behalf of the
beneficial owners.

314
 Save as otherwise provided in above, the Depository as the registered owner of the Securities shall not have
any voting rights or any other rights in respect of Securities held by it.

Every Person holding Securities of the Company and whose name is entered as the beneficial owner in the
records of the depository shall be deemed to be the owner of such Securities and shall also be deemed to be
a Shareholder of the Company. The beneficial owner of the Securities shall be entitled to all the liabilities in
respect of his Securities which are held by a depository.

5. SHARES AND SHARE CERTIFICATES

(a) The Company shall issue, re-issue and issue duplicate share certificates in accordance with the provisions
of the Act and in the form and manner prescribed under the Companies (Share Capital and Debentures)
Rules, 2014.

(b) A duplicate certificate of Shares may be issued, if such certificate:

(i) is proved to have been lost or destroyed; or

(ii) has been defaced, mutilated or torn and is surrendered to the Company.

(c) A certificate, issued under the common seal of the Company, specifying the Shares held by any Person
shall be prima facie evidence of the title of the Person to such Shares. Where the Shares are held in
dematerialized form, the record of depository shall be the prima facie evidence of the interest of the
Beneficial Owner.

(d) If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof
for endorsement of transfer, then upon production and surrender thereof to the Company, a new
certificate may be issued in lieu thereof, and if any certificate is lost or destroyed then upon proof thereof
to the satisfaction of the Company and on execution of such indemnity as the Company deems adequate,
being given, a new certificate in lieu thereof shall be given to the party entitled to such lost or destroyed
certificate. Every certificate under the Articles shall be issued without payment of fees if the Directors
so decide, or on payment of such fees (not exceeding Rupees twenty (20) for each certificate) as the
Directors shall prescribe. Provided that, no fee shall be charged for issue of a new certificate in
replacement of those which are old, defaced or worn out or where there is no further space on the back
thereof for endorsement of transfer.

Provided that notwithstanding what is stated above, the Directors shall comply with the applicable
provisions of the Act and Law including rules made under the Securities Contracts (Regulation) Act,
1956, as amended or any other Act, or rules applicable in this behalf.

The provisions of this Article shall mutatis mutandis apply to the debentures of the Company.

(e) The provisions of this Article shall mutatis mutandis apply any other Securities of the Company.

(f) When a new share certificate has been issued in pursuance of sub-article (d) of this Article, it shall be in
the form and manner stated under the Companies (Share Capital and Debentures) Rules, 2014.

(g) Where a new share certificate has been issued in pursuance of sub-articles (d) or (f) of this Article,
particulars of every such share certificate shall be entered in a Register of Renewed and Duplicate
Certificates maintained in the form and manner specified under the Companies (Share Capital and
Debentures) Rules, 2014.

(h) All blank forms to be used for issue of share certificates shall be printed and the printing shall be done
only on the authority of a Resolution of the Board. The blank forms shall be consecutively machine–
numbered and the forms and the blocks, engravings, facsimiles and hues relating to the printing of such
forms shall be kept in the custody of the company secretary or of such other person as the Board may
authorize for the purpose and the company secretary or the other person aforesaid shall be responsible
for rendering an account of these forms to the Board.

315
 (i) The company secretary shall be responsible for the maintenance, preservation and safe custody of all
books and documents relating to the issue of share certificates including the blank forms of the share
certificate referred to in sub-article (h) of this Article.

(j) All books referred to in sub-article (i) of this Article, shall be preserved in the manner specified in the
Companies (Share Capital and Debentures) Rules, 2014.

(k) In respect of any Share or Shares held jointly by several persons, the Company shall not be bound to
issue more than one share certificate for all such holders. If any Share stands in the names of 2 (two) or
more Persons, the Person first named in the Register Of Members shall as regards receipt of dividends
or bonus, or service of notices and all or any other matter connected with the Company except voting at
meetings and the transfer of Shares, be deemed the sole holder thereof, but the joint holders of a Share
shall be severally as well as jointly liable for the payment of all instalments and calls due in respect of
such Shares, and for all incidents thereof according to these Articles.

(l) Except as ordered by a court of competent jurisdiction or as may be required by Law, the Company shall
be entitled to treat the Shareholder whose name appears on the Register of Members as the holder of any
Share or whose name appears as the beneficial owner of Shares in the records of the Depository, as the
absolute owner thereof and accordingly shall not be bound to recognise any benami, trust or equity or
equitable, contingent or other claim to or interest in such Share on the part of any other Person whether
or not he shall have express or implied notice thereof. The Board shall be entitled at their sole discretion
to register any Shares in the joint names of any 2 (two) or more Persons or the survivor or survivors of
them.

(m) Subject to applicable provisions of the Act, the Company shall issue certificates or receipts or advices,
as applicable, of subdivision, split, consolidation, renewal, exchanges, endorsements, issuance of
duplicates thereof or issuance of new certificates or receipts or advices, as applicable, in cases of loss or
old decrepit or worn out certificates or receipts or advices, as applicable within a period of 30 (thirty)
days from the date of such lodgement.

6. FURTHER ISSUE OF CAPITAL

(a) Where at any time, in terms of Section 62 of the Act, the Company proposes to increase its subscribed
capital by the issue of further Shares, such Shares shall be offered—

(i) to persons who, on the date specified under Law, are holders of the Equity Shares of the Company
in proportion, as nearly as circumstances admit, to the paid up Share Capital on those Shares by
sending a letter of offer subject to the following conditions, namely:

(a) the offer shall be made by notice specifying the number of Shares offered and limiting a time,
as prescribed under the Act, from the date of the offer within which the offer, if not accepted,
shall be deemed to have been declined;

(b) the offer aforesaid shall be deemed to include a right exercisable by the Person concerned to
renounce the Shares offered to him or any of them in favour of any other Person; and the notice
referred to in clause (i) above shall contain a statement of this right; and

(c) after the expiry of the time specified in the notice aforesaid, or on receipt of earlier intimation
from the Person to whom such notice is given that he declines to accept the Shares offered, the
Board may dispose of them in such manner which is not disadvantageous to the Members and
the Company.

(ii) to employees under a scheme of employees’ stock option, subject to Special Resolution passed by
the Company and subject to the Rules and such other conditions, as may be prescribed under Law;
or

(iii) to any persons, if it is authorised by a Special Resolution, whether or not those Persons include the
Persons referred to in clause (i) or clause (ii) above, either for cash or for a consideration other than
cash, if the price of such Shares is determined by the valuation report of a registered valuer subject
to compliance with applicable provisions of Chapter II of the Act and the Rules framed thereunder.

316
 (b) The notice referred to in sub-clause a. of clause (i) of sub-article (a) shall be dispatched through registered
post or speed post or through electronic mode or courier or any other mode having proof of delivery to
all the existing Shareholders at least 3 (three) days before the opening of the issue.

(c) Nothing in this Article shall apply to the increase of the subscribed capital of a Company caused by the
exercise of an option as a term attached to the Debentures issued or loan raised by the Company to
convert such Debentures or loans into Shares in the Company:

Provided that the terms of issue of such Debentures or loan include a term providing for such an option
have:

(i) In the case of debentures or loans or other than debentures issued to, or loans obtained from the
Government or any institution specified by the Central Government in this behalf, has also been
approved by a Special Resolution passed by the Company in a General Meeting.

(d) The provisions contained in this Article shall be subject to Section 42 and Section 62 of the Act, the
Rules and the applicable provisions of the Act.

(e) Provided that notwithstanding anything hereinbefore contained the further Shares aforesaid may be
offered to any persons, whether or not those persons include the persons referred in this Article 8, in any
manner whatsoever,

(i) if a Special Resolution to that effect is passed by the Company in General Meetings; or

(ii) where no such Special Resolution is passed, if the votes cast (whether on a show of hands or on a
poll as the case may be) in favour of the proposal contained in the resolution moved in that General
Meeting (including the casting vote, if any, of the Chairman) by the Members who, being entitled
to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast
against the proposal by Members, so entitled and voting.

7. REDUCTION OF SHARE CAPITAL

The Company may, subject to the applicable provisions of the Act, from time to time, reduce its Capital, any
capital redemption reserve account and the securities premium account in any manner for the time being
authorized by Law. This Article is not to derogate any power the Company would have under Law, if it were
omitted.

8. ALTERATION OF CAPITAL

Subject to these Articles and Section 61 of the Act, the Company may, by Ordinary Resolution in a General
Meeting from time to time, alter the conditions of its Memorandum as follows, that is to say:

(a) it may increase its Share Capital by such amount as it thinks expedient.

(b) reclassify unissued preference Share Capital into Equity Share Capital and vice versa.

(c) consolidate and divide all or any of its Share Capital into shares of a larger amount than its existing
Shares.

Provided that no consolidation and division which results in changes in the voting percentage of
Shareholders shall take effect unless it is approved by the Tribunal on an application made in the
prescribed manner.

(d) convert all or any of its fully paid-up Shares into stock and reconvert that stock into fully paid-up Shares
of any denomination.

(e) sub-divide its Shares or any of them into shares of smaller amount than is fixed by the Memorandum so
however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid
on each reduced share shall be the same as it was in the case of the Share from which the reduced share
is derived.

317
 (f) cancel Shares which, a t the date of the passing of the resolution in that behalf, have not been taken or
agreed to be taken by any person, and diminish the amount of its Share Capital by the amount of the
shares so cancelled. Such cancellation of Shares shall not be deemed to be a reduction of Share Capital.

(g) The Company shall have power, subject to and in accordance with all applicable provisions of the Act
and Articles, to purchase any of its own fully paid Shares whether or not they are redeemable and may
make payment out of Share Capital in respect of such purchase.

(h) Subject to Applicable Law, the Company may issue Shares; either equity or any other kind with non-
voting rights and the resolution authorizing such issue shall prescribe the terms and conditions of that
issue.

9. STATUTORY REGISTERS

The Company shall keep and maintain at its registered office all statutory registers namely, register of charges,
register of employee stock options, register of sweat equity shares, register of shares or securities bought
back, register of renewed and duplicate share certificate, register of deposits, register of director and KMPs,
register of members, register of debenture holders, register of any other security holders, the register and
index of beneficial owners and annual return, register of loans, guarantees, security and acquisitions, register
of investments not held in its own name and register of contracts and arrangements for such duration as the
Board may, unless otherwise prescribed, decide, and in such manner and containing such particulars as
prescribed by the Act and the Rules. The registers and copies of annual return shall be open for inspection
during 11.00 a.m. to 1.00 p.m. on all working days, other than Saturdays, at the registered office of the
Company by the persons entitled thereto on payment, where required, of such fees as may be fixed by the
Board but not exceeding the limits prescribed by the Rules.

10. COMMISSION AND BROKERAGE

(a) Subject to the applicable provisions of the Act, the Company may at any time pay a commission to any
person in consideration of his subscribing or agreeing to subscribe or procuring or agreeing to procure
subscription, (whether absolutely or conditionally), for any Securities in accordance with the provisions
of the Act.

(b) The commission may be satisfied by the payment of cash or the allotment of fully or partly paid Shares
or partly in one way and partly in the another.

11. SHARES AT THE DISPOSAL OF THE DIRECTORS

(a) Subject to the provisions of Section 62 and other applicable provisions of the Act, and these Articles, the
Shares in the Share Capital of the Company for the time being (including any Shares forming part of any
increased Share Capital of the Company) shall be under the control of the Board who may issue, allot or
otherwise dispose of the same or any of them to Persons in such proportion and on such terms and
conditions and either at a premium, at par or at a discount (subject to compliance with Section 53 and
Section 54 of the Act) at such time as they may, from time to time, think fit and with the sanction of the
Company in the General Meeting to give to any Person or Persons the option or right to call for any
Shares of the Company either at par or premium during such time and for such consideration as theBoard
thinks fit and may issue and allot Shares of the Company in the capital of the Company on payment in
full or part of any property sold and transferred or for any, services rendered to the Company in the
conduct of its business and any Shares of the Company which may be so allotted may be issued as fully
paid up Shares of the Company and if so issued, shall be deemed to be fully paid up Shares. Provided
that option or right to call of Shares of the Company shall not be given to any Person or Persons without
the sanction of the Company in the General Meeting.

(b) If, by the conditions of allotment of any Share, the whole or part of the amount thereof shall be payable
by installments, every such installment shall, when due, be paid to the Company by the person who, for
the time being, shall be the registered holder of the Shares or by his executor or administrator.

(c) Every Shareholder, or his heirs, executors, or administrators shall pay to the Company, th e portion of the
capital represented by his Share or Shares which may for the time being remain unpaid thereon in such

318
 amounts at such time or times and in such manner as the Board shall from time to time in accordance
with the Articles require or fix for the payment thereof.

(d) In accordance with the applicable provisions of the Act and the rules:

(i) Every Shareholder or allottee of Shares shall be entitled without payment, to receive one or more
certificates specifying the name of the Person in whose favour it is issued, the Shares to which it
relates and the amount paid up thereon. Such certificates shall be issued only in pursuance of a
resolution passed by the Board and on surrender to the Company of its letter of allotment or its
fractional coupon of requisite value, save in cases of issue of share certificates against letters of
acceptance or of renunciation, or in cases of issue of bonus shares. Such share certificates shall also
be issued in the event of consolidation or sub-division of Shares of the Company. Every such
certificate shall be signed by either 2 (two) Directors or by a Director and company secretary or any
other person authorised by the Board and such certificate shall be issued under the Seal of the
Company which shall be affixed in the presence of persons required to sign the same. Particulars of
every share certificate issued shall be entered in the Register of Members against the name of the
Person, to whom it has been issued, indicating the date of issue. For any further certificate, the Board
shall be entitled, but shall not be bound to prescribe a charge not exceeding Rupees Twenty (2 0).

(ii) Every Shareholder shall be entitled, without payment, to one or more certificates, in marketable lots,
for all the Shares of each class or denomination registered in his name, or if the Directors so approve
(upon paying such fee as the Directors may from time to time determine) to several certificates, each
for one or more of such Shares and the Company shall complete and have ready for delivery such
certificates within 2 (two) months from the date of allotment, or within 1 (one) month of the receipt
of instrument of transfer, transmission, sub-division, consolidation or renewal of its Shares as the
case may be. Every certificate of Shares shall be in the form and manner as specified in these Articles
and in respect of a Share or Shares held jointly by several Persons, the Company shall not be bound
to issue more than one certificate and delivery of a certificate of Shares to the first named joint holder
shall be sufficient delivery to all such holders.

(iii) Every certificate shall be under the seal and shall specify the number and distinctive numbers of
Shares in respect of which it is issued and the amount paid-up thereon and shall be in the prescribed
form under Applicable Law.

(iv) the Board may, at their absolute discretion, refuse any applications for the sub -division of share
certificates, into denominations less than marketable lots except where sub-division is required to be
made to comply with any statutory provision or an order of a competent court of law or at a request
from a Shareholder or to convert holding of odd lot into transferable/marketable lot.

(v) A Director may sign a share certificate by affixing his signature thereon by means of any machine,
equipment or other mechanical means, such as engraving in metal or lithography, but not by means
of a rubber stamp, provided that the Director shall be responsible for the safe custody of such
machine, equipment or other material used for the purpose.

12. CALLS ON SHARES

(a) Subject to the provisions of Section 49 and other applicable provisions of the Act, the Board may, from
time to time, subject to the terms on which any Shares may have been issued and subject to the conditions
of allotment, by a resolution passed at a meeting of the Board, make such call as it thinks fit upon the
Shareholders in respect of all money unpaid on the Shares held by them respectively and each
Shareholder shall pay the amount of every call so made to him to the Company and at the times and
places appointed by the Board and shall not give the option or right to call on Shares to any person except
with the sanction of the Company in the General Meeting.

(b) 30 (thirty) days’ notice in writing at the least of every call (otherwise than on allotment) shall be given
by the Company specifying the time and place of payment and if payable to any Person other than the
Company, the name of the person to whom the call shall be paid, provided that before the time for
payment of such call, the Board may by notice in writing to the Shareholders revoke the same.

319
(c) The Board of Directors may, when making a call by resolution, determine the date on which such call
shall be deemed to have been made, not being earlier than the date of resolution making such call and
thereupon the call shall be deemed to have been made on the date so determined and if no date is
determined, the call shall be deemed to have been made at the time when the resolution of the Board
authorising such call was passed and may be made payable by the Shareholders whose names appear on
the Register of Members on such date or at the discretion of the Board on such subsequent date as shall
be fixed by the Board. A call may be revoked or postponed at the discretion of the Board.

(d) The Board may, from time to time, make calls upon the Shareholders in respect of any moneys unpaid
on their Shares (whether on account of the nominal value of the Shares or by way of premium) or by the
conditions of allotment thereof made payable at fixed times.

(i) Each Shareholder shall, subject to receiving at least 14 (fourteen) days’ notice specifying the time
or times and place of payment, pay to the Company, at time or times and place so specified, the
amount called on his Shares.

(ii) A call may be revoked or postponed at the discretion of the Board.

(e) A call in accordance with the Act on partly-paid Shares, is deemed to have been made at time when the
resolution of the Board authorizing the call was passed and may be required to be paid by instalments.

(f) A call shall be deemed to have been made at the time when the resolution of the Board of Directors
authorizing such call was passed and may be made payable by those Members whose names appear on
the Register of Members on such date, or, at the discretion of the Directors on such subsequent date as
shall be fixed by the Directors.

(g) The Board may from time to time, at their discretion extend the time for the payment of any call and may
extend such time as to payment of call for any of the Members, the Directors may deem entitled to such
extension save as a matter of grace and favour.

(h) If the sum payable in respect of any call or instalments be not paid on or before the day appointed for
payment thereof, the holder for the time being or allottee of the Share(s) in respect of which a call shall
have been made or the instalments shall be due shall pay interest on the same at such rate as the Directors
shall fix from the day appointed for the payment thereof to the time of actual payment but the Directors
may waive payment of such interest wholly or in part.

(i) The joint Shareholders shall be jointly and severally liable to pay all calls in respect thereof.

(j) If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the
Person from whom the sum is due shall pay interest thereon from the day appointed for payment thereof
to the time of actual payment at rate as the Board may determine.

(k) The Board shall be at liberty to waive payment of any such interest wholly or in part.

(l) Any sum which by the terms of issue of a Share becomes payable on allotment or at any fixed date,
whether on account of nominal value of the Share or by way of premium, shall, for the purpose of these
Articles, be deemed to be a call duly made and payable on the date on which by the terms of issue such
sum become payable.

(m) In case of non-payment of such sum, all the relevant provisions of these Articles as to payment of interest
and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call
duly made and notified.

(n) The Board-

(i) may, if it thinks fit, receive from any Shareholder willing to advance the same, all or any part of the
moneys uncalled and unpaid upon any Shares held by him; and

320
 (ii) upon all or any moneys advanced, may (until the same would, but for such advance, become
presently payable) pay interest at such rate (per cent annum), as may be agreed upon between the
Board and the Shareholder paying the sum in advance.

(o) The Board may, if it thinks fit (subject to the provisions of the Act) agree to and receive from any Member
willing to advance the same whole or any part of the moneys due upon the Shares held by him beyond
the sums actually called for, and upon the amount so paid or satisfied in advance, or so much thereof as
from time to time exceeds the amount of the calls then made upon the Shares in respect of which such
advance has been made, the company may pay interest at such rate, as the Member paying such sum in
advance and the Directors agree upon provided that money paid in advance of calls shall not confer a
right to participate in profits or dividend. The Directors may at any time repay the amount so advanced.

However, no Member shall be entitled to voting rights in respect of the money(ies) so paid by him
until the same would but for such payment, become presently payable.

(p) The Members shall not be entitled to any voting rights in respect of the moneys so paid by him until the
same would but for such payment, become presently payable.

(q) Neither a judgment nor a decree in favour of the Company for calls or other moneys due in respect of
any Shares nor any part payment or satisfaction thereof nor the receipt by th e Company of a portion of
any money which shall from time to time be due from any Member in respect of any Shares either by
way of principal or interest nor any indulgence granted by the Company in respect of payment of any
such money shall preclude the forfeiture of such Shares as herein provided.

(r) The provisions of these Articles shall mutatis mutandis apply to the calls on debentures of the company.

On trial or hearing of any action for the recovery of money due for any call, it shall be sufficient to prove that
the name of the Member sued is entered in the register of the holder of the Shares in respect of which such
debts accrued, that the resolution making the calls was duly given to the Members sued, in pursuance of these
Articles and it shall not be necessary to prove the appointment of the Directors who made such calls, nor any
other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of debt.

13. BORROWINGS

Subject to the provisions of these Articles and subject to Applicable Laws:

(a) the Board may from time to time at their discretion raise or borrow from the Directors, Members, or other
Persons any sum or sums or money for the purpose of the Company at such interest and/or upon such
security or conditions as they may consider proper or expedient.

(b) the Board may raise or secure the payment of repayment of such sum or sums in such manner and upon
such terms and conditions in all respect as they think fit and in particular by the issue of debentures or
debenture stock of the Company charged upon all or any part of the property of the Company (both
present and future) including its uncalled capital for time being.

(c) debentures, debenture stock, bonds or other securities may be made assignable free from any equities,
between the Company and the Person to whom the same be issued.

(d) subject to the provisions of the Act, any debentures, debenture-stock, bonds or other securities may be
issued at a discount, premium or otherwise and may be issued on condition that they shall be convertible
into Shares of any denomination and with any special privileges to redemption, surrender, drawings,
allotment of Shares, attendance in General Meetings, appointment of Directors or otherwise.

Debentures with the right to conversion into or allotment of Shares shall be issued only with the consent of
the company in the General Meeting by a Special Resolution.

14. LIEN ON SHARES/DEBENTURES

Subject to the provisions of these Articles, the Company shall have first and paramount lien upon a ll
Shares/debentures (other than fully paid up Shares/ debentures) registered in the name of each Member

321
 (whether solely or jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently
payable or not) called or payable at a fixed time in respect of such Shares/ debentures, and no equitable
interest in any Share shall be created except upon the footing and condition that this Article will have full
effect and such lien shall extend to all dividends and bonuses from time to tim e declared in respect of such
Shares/debentures.

Unless otherwise agreed, the registration of a Transfer of such Shares/debentures shall operate as a waiver of
the Company’s lien if any, on such Shares/debentures. The Board may at any time declare any
Shares/debentures wholly or in part to be exempt from the provisions of this Article.

Subject to the provisions of these Articles, the Shares of any Member who is indebted to the Company may
be sold by a resolution of the Board to satisfy the Company's lien thereon and be transferred to the name of
the purchaser without the consent and notwithstanding any opposition on the part of the indebted Member
with complete title of the Shares of any such Member which shall be sold and transferred against such
indebted Member, and all Persons claiming under him whether he may be deemed to be the holder of such
Shares, which shall stand discharged from all dues and calls made prior to such application of the purchase
and the purchaser by virtue of such sale and Transfer shall not be bound to see the application of the purchase
money not his title to the Shares be affected by any irregularity or invalidity in the proceedings with reference
to the sale.

The Company lien, if any, on a Share shall extend to all dividends payable thereon and the Company may
sell, in such manner as the Board thinks fit, any Shares on which the Company has a lien:

Provided that no sale shall be made –

(i) Unless a sum in respect of which the lien exists is presently payable, or

(ii) Until the expiration of 14 (fourteen) days after a notice in writing stating and demanding payment of
such part of the amount in respect of which the lien exists as is presently payable, has been given to the
registered Shareholder for the time being of the Share or the Person entitled thereto by reason of his death
or insolvency.

To give effect to any such sale, the Board may authorize some Person to transfer the Shares sold to the
purchaser thereof.

(i) The purchaser shall be registered as the Shareholder of the Shares comprised in any such Transfer.

(ii) The purchaser shall not be bound to see to the application of the purchase money, nor shall his title to
the Shares be affected by irregularity or invalidity in the proceedings in the reference to the sale.

The proceeds of the sale shall be received by the Company and applied in payment of such part of the
amount in respect of which the lien exists as is presently payable.

The residue, if any, shall, subject to a like lien for sums not presently payable as existed upon the Shares
before the sale, be paid to the Person entitled to the Shares at the date of the sale.

In exercising its lien, the Company shall be entitled to treat the registered holder of any Share as the
absolute owner thereof and accordingly shall not (except as ordered by a court of competent jurisdiction
or unless required by any statute) be bound to recognise any equitable or other claim to, or interest in,
such Share on the part of any other person, whether a creditor of the registered holder or o therwise. The
Company’s lien shall prevail notwithstanding that it has received notice of any such claim.

15. TRANSFER OF SHARES

(a) A common form of transfer shall be used for the purpose of transfer of Shares. The instrument of transfer
of any Share in the Company shall be executed by or on behalf of both the transferor and transferee.
Subject to the provisions of Section 56 of the Act, the rules prescribed there under and these Articles, the
Shares in the Company shall be transferred by an instrument in writing in the prescribed form and duly
stamped and delivered to the Company within the period prescribed in the Act and provisions of Section
56 of the Act shall be duly complied with in respect of all transfers of Shares and registration thereof.

322
 (b) The transferor shall be deemed to remain a Shareholder until the name of the transferee is entered in the
Register of Members in respect thereof.

(c) The Board may, subject to the right of appeal conferred by section 58 of the Act, decline to register-

(i) the transfer of a Share, not being a fully paid up Share, to a Person of whom they do not approve; or

(ii) any transfer of Shares on which the Company has a lien.

(d) The Board may also decline to recognise any instrument of transfer unless-

(i) The instrument of transfer is in the form prescribed by the Act;

(ii) the instrument of transfer is accompanied by the certificate of the Shares to which it relates, and such
other evidence as the Board may reasonably require to show the right of the transferor to make the
transfer; and

(iii) the instrument of transfer is in respect of only one class of Shares.

(e) Subject to the provisions of section 91 of the Act, the registration of transfers may be suspended at such
times and for such periods as the Board may from time to time determine. Provided that such registration
shall not be suspended for more than 30 (thirty) days at any one time or for more than 45 (forty-five)
days in the aggregate in any year.

(f) No fee shall be payable to the Company, in respect of the registration of transfer or transmission of
Shares, or for registration of any power of attorney, probate, letters of administration and succession
certificate, certificate of death or marriage or other similar documents, sub division and/or consolidation
of Shares and debentures and sub-divisions of letters of allotment, renounceable letters of right and split,
consolidation, renewal and genuine transfer receipts into denomination corresponding to the market unit
of trading.

(g) Subject to the provisions of these Articles and any other Law for the time being in force, the Directors
may refuse (whether in pursuance of any power of the Company under these Articles or otherwise) to
register the transfer of or the transmission by operation of law of the right to, any securities or interest of
a Member in the Company and shall within one month from the date on which the instrument of transfer,
or the intimation of such transmission, as the case may be, was delivered to the Company, communicate
the same to the transferee and transferor or to the person giving notice of such transmission, as the
case may be, giving reasons for such refusal.

Provided that, registration of a transfer shall not be refused on the ground of the transferor being
either alone or jointly with any other Person or Persons indebted to the Company on any account
whatsoever except where the Company has a lien on Shares.

(h) A transfer of a Share in the Company of a deceased Member thereof made by his legal representative
shall, although the legal representative is not himself a Member be valid as if he had been a Member at
the time of the execution of the instrument of transfer.

16. TRANSMISSION OF SHARES

(a) On the death of a Shareholder, the survivor or survivors where the Shareholder was a joint Shareholder,
and his nominee or nominees or his legal representatives where he was a sole Shareholder, shall be the
only Persons recognized by the Company as having any title to his interest in the Shares.

(b) Nothing in (i) above shall release the estate of a deceased joint Shareholder from liability in respect of
any Share which had been jointly held by him with other Persons.

(c) Any Person becoming entitled to a Share in consequence of the death or insolvency of any Shareholder
may, upon such evidence being produced as may from time to time properly be required by the Board
and subject as hereinafter provided, elect, either –

323
 (i) To be registered himself as a Shareholder; or

(ii) To make such transfer of the Share as the deceased or insolvent Shareholder could have made.

(d) The Board shall, in either case, have the same right to decline or suspend registration as it would have
had, if the deceased or insolvent Shareholder had transferred the Share before his death or insolvency.

(e) If the Person so becoming entitled shall elect to be registered as a Shareholder himself, he shall deliver
or send to the Company a notice in writing signed by him stating that he so elects.

(f) If the Person aforesaid shall elect to transfer the Share, he shall testify his election by executing a transfer
of the Share.

(g) All the limitations, restriction and provisions of these Articles relating to the right of transfer and the
registration of transfers of Shares shall be applicable to any such notice or transfer as aforesaid as if the
death or insolvency of the Shareholder had not occurred and the notice or transfer were a transfer signed
by that Shareholder.

(h) A Person becoming entitled to a Share by reason of death or insolvency of the Shareholder shall be
entitled to the same dividends and other advantages to which he would be entitled if he were the registered
Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be
entitled in respect of it to exercise any right conferred by membership in relation to the meetings of the
Company.

Provided that the Board may, at any time, give notice requiring any such Person to elect either to be
registered himself or to transfer the Share, and if the notice is not complied with within 90 (ninety) days,
the Board may thereafter withhold payments of all dividends, bonuses or money payable in respect of
the Share, until the requirements of the notice have been complied with.

(i) The Company shall be fully indemnified by such person from all liabilities, if any, by actions taken by
the Board to give effect to registration or transfer.

The provisions of these Articles relating to transmission by operation of law shall mutatis mutandis apply
to any other securities including debentures of the Company.

17. BUY-BACK OF SHARES

Notwithstanding anything contained in these Articles, but subject to the provisions of the Act or any other
law for the time being in force, the company may purchase its own shares or other specified securities.

18. COMPANY NOT LIABLE TO NOTICE OF EQUITABLE RIGHTS

The Company shall incur no liability or responsibility whatever in consequence of its registering or giving
effect to any transfer of Shares made or purporting to be made by any apparent legal owner thereof (as shown
or appearing in the Register of Transfer) to the prejudice of persons having or claiming a ny equitable rights,
title or interest in the said Shares, notwithstanding that the Company may have had notice of such equitable
rights referred thereto in any books of the Company and the Company shall not be bound by or required to
regard or attend to or give effect to any notice which may be given to it of any equitable rights, title or interest
or be under any liability whatsoever for refusing or neglecting to do so, though it may have been entered or
referred to in some book of the Company but the Company shall nevertheless be at liberty to regard and attend
to any such notice and give effect thereto if the Board shall so think fit.

19. FORFEITURE OF SHARES

(a) If any Member fails to pay the whole or any part of any call or instalment or any money due in re spect
of any Shares either by way of principle or interest on or before the day appointed for the payment of the
same, the Directors may, at any time thereafter, during such time as the call or instalment or any part
thereof of other money as aforesaid remain unpaid or a judgment or decree in respect thereof remains
unsatisfied in whole or in part, serve a notice on such Member or on the person (if any) entitled to the
Shares by transmission, requiring him to pay such call or instalment or such part thereof or other moneys

324
 as remain unpaid together with any interest that may have accrued and all expenses (legal or otherwise)
that may have been incurred by the Company by reason of such non-payment.

(b) The notice aforesaid shall-

(i) name a further day (not being earlier than the expiry of 14 (fourteen) days from the date of service
of the notice) on or before which the payment required by the notice is to be made; and

(ii) state that, in the event of non-payment on or before the day so named, the Shares in respect of which
the call was made will be liable to be forfeited.

(c) If the requirements of any such notice as aforesaid are not be complied with, any Share in respect of
which such notice has been given, may at any time, thereafter before payment of all ca lls, instalments,
other money due in respect thereof, interest and expenses as required by the notice has been made, be
forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared
or any other money payable in respect of the forfeited Share and not actually paid before the forfeiture
subject to the applicable provisions of the Act. There shall be no forfeiture of unclaimed dividends before
the claim becomes barred by Applicable Law.

(d) When any Share shall have been so forfeited, an entry of the forfeiture, with the date thereof, shall be
made in the Register of Members and notice of the forfeiture shall be given to the Member in whose
name they stood immediately prior to the forfeiture but no forfeiture shall b e in any manner invalidated
by any omission or neglect to give such notice or to make any entry as aforesaid.

(e) Any Share so forfeited shall be deemed to be the property of the Company and may be sold, re-allotted
or otherwise disposed of either to the original holder thereof or to any other person upon such terms and
in such manner as the Board shall think fit.

(f) A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited
Shares, but shall, notwithstanding the forfeiture, remain liable be liable to pay and shall forthwith pay to
the Company all calls, instalments, interest, expenses and other moneys owing upon or in respect of such
Shares at the time of forfeiture together with interest thereon from the time of the forfeiture until payment
at such rates as the Directors may determine and the Directors may enforce the payment of the whole or
a portion thereof as if it were a new call made at the date of forfeiture but shall not be under any obligation
to do so.

(g) The lia bility of such Person shall cease if and when the Company shall have received payment in full of
all such moneys in respect of the Shares.

(h) A duly verified declaration in writing that the declarant is a Director, the manager or the company
secretary of the Company, and that a Share in the Company has been duly forfeited on a date stated in
the declaration, shall be conclusive evidence of the facts therein stated as against all Persons claiming to
be entitled to the Share.

(i) The forfeiture of a Share shall involve the extinction at the time of the forfeiture of all interest and claims
and demands against the Company in respect of the Shares forfeited and all other rights incidental to the
Share, except only such of those right as by these presents are expressly saved.

(j) The Directors may, subject to the provisions of the Act, accept a surrender of any Share from or by any
Member desirous of surrendering them on such terms and conditions as has been agreed to, between the
parties.

(k) Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers hereinbefore
given, the Board may appoint some Person to execute an instrument of transfer of the Shares sold and
cause the purchaser’s name to be entered in the Register of Members in respect of the Shares sold and
the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the
purchase money, and after his name has been entered in the Register of Members in respect of such
Shares, the validity of the sa le shall not be impeached by any person and the remedy of any person
aggrieved by the sale shall be in damages only and against the Company exclusively.

325
 (l) The Company may receive the consideration, if any, given for the Share on any sale or disposal thereof
and may execute a transfer of the Share in favour of the Person to whom the Share is sold or disposed of.

(m) The transferee shall thereupon be registered as the Shareholder and the transferee shall not be bound to
see to the application of the purchase money, if any, nor shall his title to the Share be affected by any
irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share.

(n) The Board may, at any time before any Share so forfeited shall have been sold, re-allotted or otherwise
disposed of, annul the forfeiture thereof, upon such conditions as it thinks fit.

(o) The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which,
by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the nominal
value of the Share or by way of premium, as if the same had been payable by virtue of a call duly made
and notified.

The provisions of these Articles relating to forfeiture of Shares shall mutatis mutandis apply to any other
securities including debentures of the Company.

20. CONVERSION OF SHARES INTO STOCK

(a) The Company may, by ordinary resolution in General Meeting may-

(i) Convert any paid up Shares into stock; and

(ii) Reconvert any stock into paid up Shares of any denomination.

(b) The holder of the stock may transfer the same or any part thereof in the same manner as, and subject to
the Articles under which, the Share from which the stock arose might before the conversion have been
transferred, or as near thereto as circumstances admit.

(c) Provided that the Board may, from time to time, fix the minimum amount of stock transferable, so,
however, that such minimum shall not exceed the nominal amount of the Shares from which the stock
arose.

(d) The holders of the stock shall, according to the amount of stock held by them, have the same rights,
privileges and advantages as regards dividends, voting at meetings of the Company, and other matters,
as if they held the Shares from which the stock arose; bu t no such privilege or advantage (except
participation in the dividends and profits of the Company and in the assets on winding-up) shall be
conferred by an amount of stock which would not, if existing in Shares, have conferred that privilege or
advantage.

(e) Such of the Articles of the Company (other than those relating to share warrants), as are applicable to
paid up Shares shall apply to stock and the words “Share” and “Shareholder” in those Articles shall
include “stock” and “stockholder” respectively

21. RIGHT TO ISSUE SHARE WARRANTS

The Company may issue share warrants subject to, and in accordance with the provisions of the Act.

(a) The Board may, in its discretion, with respect to any Share which is fully paid up on application in writing
signed by the person registered as holder of the share, and authenticated by such evidence (if any) as the
Board may from time to time require as to the identity of the person signing the application, and the
amount of the stamp duty on the warrant and such fee as the Board may from time to time require having
been paid, issue a warrant.

22. RIGHTS OF WARRANT HOLDERS

(a) The bearer of the share warrant may at any time deposit the warrant at the Office of the Company, and
so long as the warrant remains so deposited, the depositor shall have the same right to signing a
requisition, for calling a meeting of the Company, and of attending, and voting and exercising other

326
 privileges of a Member at any meeting held after the expiry of two (2) clear days from time of the deposit,
as if his name were inserted in the Register as the holder of the shares included in the deposited warrant.

(b) Not more than one person shall be recognized as the depositor of the share warrant.

(c) The Company shall, on two (2) days written notice, return the deposited share warrant to the depositor.

Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant, sign a
requisition for calling a meeting of the Company, or attend, or vote or exercise any other privileges of a
Member at a meeting of the Company, or be entitled to receive any notice from the Company.

(d) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages
as if he were named in the Register as the holder of the shares included in the warrant, and he shall be
Member of the Company.

23. BOARD TO MAKE RULES

The Board may, from time to time, make rules as to the terms on which it shall think fit, a new share warrant
or coupon may be issued by way of renewal in case of defacement, loss or destruction.

24. ISSUE OF BONUS SHARES

The Company in its General Meeting may resolve to issue bonus Shares to its Members subject to the
applicable provisions of the Act and other laws as may be applicable in this behalf from time to time.

25. PROCEEDINGS AT GENERAL MEETING

(a) The Company shall, in addition to any other meetings hold a General Meeting which shall be called as
its annual general meeting, at the intervals and in accordance with the provisions of the Act. All General
Meetings including annual general meetings shall be convened by giving at least 21 (twenty one) days’
clear notice to Shareholders or to the authorised representative of the Shareholders in respect of each
meeting of the Shareholders, in writing or through electronic mode in such manner as may be prescribed
under the Act. However, any General Meeting may be convened by giving a shorter notice than 21
(twenty one) days with the consent of the Shareholders representing not less than 95% (ninety five
percent) of the Members of the Company entitled to vote thereat, in case of annual general meeting and
with the consent of the majority in number of the Members entitled to vote, representing not less
than 95% (ninety five percent) of paid up capital of the Company in case of Extra ordinary General
Meeting. Where a Member is entitled to vote on some resolution or resolutions to be moved at a General
Meeting and not on the others, for the computation of the above, such Members shall only be taken into
account in respect of the former resolution or resolutions and not in respect of the latter.

(i) All General Meetings other than annual general meetings shall be called extraordinary general
meetings.

(ii) The quorum for the General Meeting shall be as prescribed in the Act.

(iii) The Board may, whenever it thinks fit, call an extraordinary General Meeting.

(iv) The Board shall, at the requisition made by such number of Members who hold, on the date of the
receipt of the requisition, not less than one-tenth of such of the paid-up Share Capital of the
company as on that date carries the right of voting, call an extraordinary General Meeting of the
Company within the period of 21 (twenty one) days from the date of receipt o f a valid requisition.

(v) No business shall be transacted at any General Meeting unless a quorum of Shareholders is present
at the time when the meeting proceeds to business.

(vi) The Chairman of the Board shall preside as chairman at every General Meeting.

327
 (vii) If there is no such Chairman, or if he is not present within fifteen minutes after the time appointed
for holding the meeting, or is unwilling to act as chairman of the meeting, the Directors present
shall elect one of the Directors to be the chairman of the meeting.

(viii) If at any meeting no Director is willing to act as chairman or if no Director is present within fifteen
minutes after the time appointed for holding the meeting, the Shareholders present shall choose one
of the Shareholders to be the chairman of the meeting.

(ix) The chairman may, with the consent of any meeting at which a quorum is present, and shall, if so
directed by the meeting, adjourn the meeting from time to time and from place to place.

(x) No business shall be transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place.

(xi) When a meeting is adjourned for 30 (thirty) days or more, notice of adjourned meeting shall be
given as in the case of an original meeting.

(xii) Save as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business
to be transacted at an adjourned meeting.

(a) On any business at any General Meeting, in case of an equality of votes, whether on a show
of hands or electronically or a poll, the chairman shall have a second or casting vote.

(b) The chairman shall have a second or casting vote in a General Meeting.

(c) Any business other than that upon which poll has been demanded may be proceeded with,
pending the taking of the poll.

(d) General Meetings shall be held in accordance with the provisions of the Act and these Articles
of Association. Each Shareholder shall declare to the other Shareholder(s) any interest it has
in a matter requiring its consent or on which it is intended to vote in the General Meeting.

(e) The notice of each General Meeting shall specify the date, time and include an agenda setting
out the business proposed to be transacted at the meeting, together with copies of all relevant
papers connected therewith and/or proposed to be placed before or tabled at the General
Meeting.

(f) The Company shall cause minutes of all proceedings of every General Meeting, of any class
of Shareholders or creditors, and every resolution passed by Postal Ballot, to be kept in
accordance with the provisions of Section 118 of the Act by preparing such minutes, within
30 (thirty) days of the conclusion of each such meeting, entries thereof in books kept for that
purpose with their pages consecutively numbered. Each page of every such book shall be
initialled or signed and the last page of the record of proceedings of each meeting in such
books shall be dated and signed by the Chairman of the same meeting within the aforesaid
period of 30 (thirty) days or in the event of the death or inability of the Chairman within that
period, by a Director duly authorized by the Board for that purpose, in no case the minutes of
the proceedings or a meeting shall be attached to any such book as aforesaid by pasting or
otherwise. Any such minutes kept as aforesaid shall be evidence of the proceedings recorded
therein.

(b) All General Meetings, resolutions put to the vote at the meeting shall be decided in accordance with the
Act. Each Shareholder shall have one vote for each Equity Share held by it, and all Shareholders’ matters
shall be decided in accordance with the Act and the provisions contained in these Articles of Association.
Shareholders or their proxies must submit the proxy form, duly completed at or prior to each General
Meeting and in accordance with the Act.

(c) The books containing the aforesaid minutes shall be kept at the registered office and be open for
inspection by any Members without any charge, during 11.00 AM to 01.00 PM, to the inspection of any
Member, on all working days, except Saturdays and Sundays, without charge subject to such reasonable
restrictions as the Company may by these Articles or in General Meeting impose in accordance with

328
 Section 119 of the Act. Any Member shall be entitled to be furnished, within 7 (seven) days after he had
made a request in that behalf to the Company with a copy of the minutes on payment of `10 per page or
part of any page. Provided that a Member who has made a request for provision of soft copy in respect
of minutes of any previous General Meetings held during a period immediately preceding three financial
years shall be entitled to be furnished, with the same free of cost.

26. VOTES OF MEMBERS

(a) Subject to the provisions of the Act:

(i) On a show of hands, every holder of Equity Shares entitled to vote and present in person shall have
one vote and upon a poll every holder of Equity Shares entitled to vote and present in person or by
proxy shall have voting rights in proportion to his Share in the paid -up equity Share Capital of the
Company.

(ii) Every holder of a preference share in the Share Capital of Company shall be entitled to vote at a
General Meeting of Company only in accordance with the limitations and provisions laid down in
Section 47(2) of the Act:

(b) Subject to the provisions of the Act and these Articles, votes may be given either personally or by proxy
(only on poll) or in the case of a body corporate also by a representative duly authorized under Section
113 of the Act. A Member may exercise his vote at a General Meeting by electronic means in accordance
with Section 108 of the Act and rules prescribed under the Act, the Listing Regulations and shall vote
only once.

(c) In case of joint Shareholders, the vote of the senior who tenders the vote, whether in a person or in a
proxy, shall be accepted to the exclusion of votes of the other joint Shareholders.

(d) For this purpose, seniority shall be determined by the order in which the names stand in the Register of
Members. Where there are several executors or administrators of a deceased Member in whose sole name
any Shares stand, any one of such executors or administrators may vote in respect of such Shares unless
any other of such executors is present at the meeting at which such vote is tendered and object to the
votes in which case no such vote shall be exercised except with the unanimous consent of all the executors
or administrators present.

(e) Subject to the provisions of the Act, no Member shall be entitled to be present or to vote at any General
Meeting either personally or by proxy or be reckoned in a quorum whilst any call or other sums shall be
due and payable to the Company in respect of any of the Shares of such Member, or in regard to which
the Company has exercised any right of lien.

(f) No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting
at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall
be valid for all purposes.

(g) Any such objection made in due time shall be referred to the Chairman of the meeting, whose decision
shall be final and conclusive.

(h) The instrument appointing proxy and the power of attorney or other authority, if any under which it is
signed or a notarised certified copy of that power or authority, shall be deposited at the registered office
of the Company not less than 48 hours before the time for holding the meeting or adjourned meeting at
which the Person named in the instrument proposes to vote, or in the case of the poll, not less than 24
hours before the time appointed for the taking of the poll; and in the default the instrument of proxy shall
not be treated as valid. One Member shall be entitled to appoint only one proxy for his entire
Shareholding.

(i) An instrument appointing proxy shall be in Form MGT-11 as provided in Rule 19 of the Companies
(Management and Administration) Rules, 2014, and in compliance with Section 105(6) of the Companies
Act, 2013.

329
 (j) A vote given in accordance with the terms of an instrument of proxy shall be valid, notwithstanding the
previous death or insanity of the principal or the revocation of the proxy or the authority under which the
proxy was executed, or the transfer of the Shares in respect of which the proxy is given:

Provided that no intimation in writing of such death, insanity, revocation or transfer shall have been
received by the Company at its office before the commencement of the meeting at which the proxy is
used.

27. BOARD OF DIRECTORS

(a ) Subject to the applicable provisions of the Act, the number of Directors of the Company shall not be less
than 3 (three) and not more than 15 (fifteen), provided that the Company may appoint more than 15
(fifteen) directors after passing a Special Resolution in a General Meeting. The Company shall also
comply with the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014
and the provisions of the Listing Regulations, as amended. The Board shall have an optimum
combination of executive, non-executive and independent directors, including at least 1 (one) woman
Director, and as may be prescribed by Law from time to time.

The first Directors of the Company are:

1. Mayurdhvaj Jadeja and
2. Mina M. Jadeja

The Board shall have the power to determine the Directors whose period of office is or is not liable to
determine by retirement of Directors by rotation.
(b ) The remuneration of the Directors shall, in so far as it consists of a monthly payment, be deemed to
accrue from day to day.

(c ) The remuneration payable to the Directors, including any managing or whole time Director or manager,
if any, shall be determined in accordance with and subject to the provisions of the Act by an ordinary
resolution passed by the Company in General Meeting.

(d ) Subject to provisions contained in Section 197 of the Act, if any Director be called upon to perform extra
services or special exertions or efforts (which expression shall include work done by a Director as a
Member of any committee formed by the Director(s) the Board may arrange with such Directors for such
special remuneration for such extra services or special exertions or efforts either by a fixed sum or
otherwise as may be determined by the Board and such remuneration may be either in addition to or in
substitution for his remuneration, subject to provisions of the Act and confirmation by the Company in
General Meeting.

(e ) If it is provided by any trust deed, security or otherwise, in connection with any issue of debentures of
the Company that any person or persons shall have power to nominate a Director or Directors of the
Company, then in the case of any and every such issue of debentures, the person or persons having such
power may exercise such power from time to time and appoint a Director or Directors accordingly. Any
Director so appointed is herein referred to as “Debenture Director”. A Debenture Director may be
removed from office at any time by the person or persons in whom for the time being is vested the power
under which he was appointed and another Director may be appointed in his place. A Debenture Director
shall not be bound to hold any qualification Shares. A Debenture Director shall not if so agreed by the
company be liable to retire by rotation; but shall automatically cease to hold office as a Director if and
when the debentures are fully discharged.

(f ) In addition to the remuneration payable to them in pursuance of the Act, the Directors may be paid all
travelling, hotel and other expenses properly incurred by them-

(i) in attending and returning from meetings of the Board of Directors or any committee thereof or
general meeting of the Company; or

(ii) in connection with the business of the Company.

330
(g) The Directors need not hold any qualification Share.

(h ) The Company may exercise the powers conferred by the Act with regard to having an official Seal for
use abroad, and such powers shall be vested in the Board.

(i) The Company may exercise the powers conferred on it by section of the Act with regard to a keeping of
a foreign register; and the Board may (subject to the provision of those sections) make and vary such
regulation as it may think fit respecting the keeping of such register.

(j) All cheques, promissory notes, drafts, hundis, bills of exchange and other negotiable instrument, and all
receipts for money paid to Company, shall be signed drawn, accepted, endorsed, or otherwise executed,
as the case may be, by such Person and such manner as the Board shall from time to time by resolution
determine.

(k ) Every Director present at the meeting of the Board shall sign his name in the book to be kept for that
purpose, and the company secretary or the Chairman shall record the presence of Director present through
video conferencing.

(l) Subject to the provisions of Section 161 and other applicable provisions (if any) of the Act, the Directors
shall have power at any time and from time to time to appoint a person or persons, other than a person
who fails to get appointed as a Director in a General Meeting, as additional Director or Directors. Such
Additional Director shall hold office only up to the date of the next annual general meeting of the
Company or the last date on which the annual general meeting should have been held, whichever is
earlier, but shall be eligible for re- election at that meeting as a Director, provided that the number of
Directors and the Additional Director together, shall not exceed the maximum strength fixed by theBoard
under these Articles. Further, in accordance with the provisions of the Act, Board may appoint the
alternate Directors and Nominee Directors.

(m ) Subject to provisions of the relevant laws and these Articles, not less than 2/3rd of the total number of
Directors for the time being shall be those whose period of office is liable for determination of retirement
by rotation, and their appointment shall, save as otherwise expressly provided in their presence, be in the
General Meeting.

(n ) Circular Resolution: Subject to as expressly provided in the Act, a resolution by circulation shall be as
valid and effectual provided it is compliant with the secretarial standard on meetings of the Board of
Directors as a resolution duly passed at a meeting of the Directors called and held, provided it has been
circulated in draft form, together with the relevant papers, if any, to all the Directors and has been
approved by a majority of the Directors entitled to vote thereon.

(o ) Participation through Video Conferencing or other audio visual means: In accordance with Rule 3 of the
Companies (Meetings of Board and its Powers), Rules, 2014 and other applicable provisions, the
Directors may participate in relevant meetings through video conferencing or other audio visual means,
provided that such Director, who desires to participate through video conferencing or other audio visual
means, shall give prior intimation to that effect sufficiently in advance so that the Company is able to
make suitable arrangements in that behalf. However, the Company shall not deal with the matters as
prescribed under Rule 4 of the Companies (Meeting of Board and its Powers) Rules, 2014 through video
conferencing or other audio visual means, provided that where there is quorum in a meeting through
physical presence of Directors, any other Director may participate through video conferencing or other
audio visual means.

(p ) The Directors may, from time to time, at their discretion raise or borrow for the purpose of theCompany’s
business such sum of money as they think fit. The Directors may secure the repayment of or raise any
such sum or sums as aforesaid by mortgage or charge upon the whole or any part of the property and
assets of the Company, present and future including the uncalled capital or by the issue, at such price as
they may think fit, of bonds or debentures of debentures-stock, either charged upon the whole or any part
of the property and assets of the Company or not so charged or in such other way as the Directors may
think expedient.

(q ) The management of the business of the Company shall be vested in the Board and the Board may exercise
all such powers of the Company, as the Company by its memorandum of association or otherwise and to

331
 do such acts and things as are allowed under the Act, or any other Applicable Law, required to be
exercised by the Company in General Meeting, subject nevertheless to these Articles and memorandum
of association the Company, the provisions of the act, or any other act and to such regulation being not
inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in General
Meeting, but no regulation made by the Company in General Meeting, shall invalidate any prior of the
Board which would have being valid if that regulation had not been made.

(r) The Directors may, from time to time, accept deposits from Shareholders (either in advance of calls or
otherwise) and from Persons and generally raise or borrow any sums of money for the purpose of the
Company from the Shareholders or other Persons, or the Directors may themselves advance money to
the Company on such interest as may be approved by the Board.

(s) The Directors may, from time to time, secure the payment of such money in such manner and upon such
terms and conditions in all respect as they deem fit and in particular by the issue of debentures, bonds of
the Company or any mortgage, charge hypothecation, pledge, lien or other security of all or any part or
portion of the property of the Company and the uncalled for the time being.

(t) The Directors, may grant retiring Persons, pension or annuities or other allowances, including allowance
on death to any Person or to the widow or dependents of any Person in respect of services rendered by
him to the Company a s Managing Directors, manager or as an officer, or employee of the Company, or
of any Subsidiary company(ies) or of its holding company (if any) notwithstanding that he may have
been a Director and may make any payments toward insurance or trusts for such purpose in respect of
such pensions, annuities and allowances in terms of engagement of such Persons.

(u ) Subject to the provisions of the Act and notwithstanding anything to the contrary contained in these
Articles, so long as any moneys remain owing by the Company to the financing company or body or
financing corporation or credit corporation or bank or any insurance corporation (each such financing
company or body of financing corporation of credit corporation or any insurance corporation is herein
after referred to as financial institution) out of any loans granted by the financial institution to the
Company or so long as the financial institution hold Shares in the Company as a result of underwriting
or direct subscription or so long as any liability of the Company arising out of any guarantee furnished
by the financial institution on behalf of the Company remains outstanding the financing institution shall
have a right to appoint from time to time, its nominee/s as a Director or Directors (which Director or
Directors is/are hereinafter referred to as nominee Director/s) on the Board of the Company and to
remove from such office the nominee Director/s so appointed, and the time of removal and also in the
case of death or resignation of the nominee Director/s appointed at any time appoint any other
Person/Persons in his/her place and also fill any vacancy which may occur as a result of such
Director/ceasing to hold office for any reasons whatsoever; such appointment or removal shall be made
in writing on behalf of the financial institution appointing such nominee Director/s and shall be delivered
to the Company at its registered office.

(v ) Subject to the provisions of the Act and of these Articles, the Board shall have the power to appoint from
time to time any one or more of its Directors as Managing Directors, whole time directors of theCompany
in accordance with the provisions of the Act and upon such terms and conditions as the Board think fit,
the Board may by resolution vest in such Managing Director/s or whole time director/s such of the powers
hereby vested in the Board generally as it thinks fit, as such power may be exercisable for such conditions
and subject to such restriction as it may determine. The remuneration of managing director/s, and whole
time director/s may be by way of monthly payment, fee for each meeting or participation in profits, or
by all or any these modes or any other mode not expressly prohibited by the Act.

(w) A Director may be paid a sitting fee for each meeting of the Board or committee of the Board attended
by him in accordance with the provisions of the Act. It is further provided that the Directors may be paid
different sitting fee for attending physical Board Meeting and meeting through video conferencing.

(x ) Subject to the provisions of Section 161(4), 169(7) and other applicable provisions (if any) of the Act,
any casual vacancy occurring in the office of a Director before the term of office of such Director expires,
may be filled up by the Directors at a meeting of the Board. Any person so appointed would have held
office, if the vacancy had not occurred and shall hold office only upto the date which the Director in
whose place he is so appointed would have held office if it had not been vacated. Provided that, where a

332
 vacancy is created by removal of a Director, the Director who was removed from office shall not be re-
appointed as the Director by the Board.

(y ) Vacation of Office of Director: The office of the Director shall ipso facto become vacant if at any time
he commits any of the acts set out in the Section 167 of the Act.

(z ) Subject to the applicable provisions of the Act, a Director may resign from his office at any time by
notice in writing addressed to the Board.

28. PROCEEDINGS OF BOARD MEETINGS/ COMMITTEE

(a) The Board of Directors shall meet at least four times in a year for the dispatch of business, adjourn and
otherwise regulate its meeting and proceeding as it thinks fit provided that not more than one hundred
and twenty days shall intervene between two consecutive meetings of the Board.

(b) Subject to requirements of notice as prescribed in these Articles, the Managing Director or the Chairman,
or the company secretary of the Company or any other officer as may be authorized in this regard, may
at any time summon a meeting of the Board. Notice in writing of every meeting of the Board shall be
given to every Director for the time being in India, and at his usual address in India to every other
Director, inter-alia through email.

(c) The continuing Directors may act notwithstanding any vacancy in the Board; but, if and so long as their
number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing
Directors or Director may act for the purpose of increasing the number of Directors to that fixed for the
quorum, or of summoning a General Meeting of the Company, but for no other purpose.

(d) At least seven days written notice shall be given to each of the Directors including the alternate Directors
in respect of each meeting of the Board, at the address notified from time to time by each Director of the
Company, or through e-mail at their registered e-mail id.

Provided that a meeting of the Board may be called at shorter notice, in accordance with the Act, to
transact urgent business subject to the condition that at least one Independent Director, if any, shall be
present at the meeting.

Provided further that in case of absence of Independent Directors from such a meeting of the Board,
decisions taken at such a meeting shall be circulated to all the Directors and shall be final only on
ratification thereof by at least one Independent Director, if any.

(e) The notice of each Board Meeting shall specify the date, time and include an agenda setting out the
business proposed to be transacted at the meeting, together with copies of all relevant papers connected
therewith and/or proposed to be placed before or tabled at the Board Meeting. Notice of the Board
Meeting shall be sent at least 7 (seven) days in advance to each of the Directors.

(f) Minutes of each meeting of the Board shall be recorded in English and kept by the Company in
accordance with Applicable Law.

(g) Save as otherwise expressly provided in the Act, questions arising at any meeting of the Board shall be
decided by a majority of the votes.

(h) The chairman of the Board (“Chairman”) shall be one of the Directors appointed by the Board for the
purpose of the Board Meeting. The Chairman shall have a second or casting vote.

(i) If no such Chairman is elected, or if at any meeting the Chairman is not present within 30 minutes after
the time appointed for holding the meeting, the Directors present may choose one of them to be chairman
of the meeting.

(j) Subject to the provisions of the Act and related regulations, the Board may from time to time, constitute
committees of the Board and may determine their functions, powers, authorities and responsibilities.
Such a committee may elect a chairman of its meetings and if no such Chairman is elected, or if at any

333
 meeting the Chairman is not present within 30 minutes after the appointed time for the meeting, the
Members present may choose one of their Members as the Chairman for that meeting.

(k) All acts done by any meeting of the Board or of a committee thereof or by any Person acting as a Director,
shall, notwithstanding that it may be afterwards discovered that there was some defect in the appointment
of any one or more such Directors or of any Person acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such Director or such Person had been duly appointed and was
qualified to be a Director.

(l) Subject to the provisions of the Act and other provisions of these Articles-

(i) A chief executive officer, manager,companysecretary or chief financial officer may be appointed by
the Board for such term, at such remuneration and upon such conditions as it may think fit; and any
chief executive officer, manager company secretary or chief financial officer so appointed may be
removed by the Board;

(ii) A Director may be appointed as chief executive officer, managercompanysecretary or chief financial
officer.

(m) A provision of the actor regulations, or these Articles requiring or authorizing a thing to be done by or to
a Director or a manager or company secretary or chief executive officer or chief financial officer shall
not be satisfied by its being done by or to some Person acting both as Director and as or in the place of,
the manager or company secretary or chief executive officer or chief financial officer.

29. POWER AND DUTIES OF MANAGING DIRECTORS AND WHOLE TIME DIRECTORS

The Managing Director/whole-time director shall subject to the supervision, control and direction of the
Board and subject to the provisions of the Act, exercise such powers as are exercisable under these Articles
by the Board of Directors, as they may think fit and confer such power for such time and to be exercised as
they may think expedient and they may confer such power either collaterally with or to the exclusion of any
such substitution for all or any of the powers of the Board of Directors in that behalf and may from time to
time revoke, withdraw, alter or vary all or any such powers. The Managing Directors/ whole time Directors
may exercise all the powers entrusted to them by the Board of Directors in accordance with the Board’s
direction.

30. REMOVAL OF DIRECTORS

(a) The Company may, subject to the provisions of Section 169 and other applicable provisions of the Act
and these Articles remove any Director before the expiry of his period of office, by passing an ordinary
resolution.

(b) Special notice as provided by Section 115 of the Act and Rule 23 of the Companies (Management and
Administration) Rules, 2014, shall be given, of any resolution to remove a Director under this Article or
to appoint some other person in place of a Director so removed at the meeting at which he is removed.

(c) On receipt of notice of any such resolution to remove a Director under this Article, the Company shall
forthwith send a copy thereof to the Director concerned and the Director (whether or not he is a Member
of the Company) shall be entitled to be heard on the resolution at the meeting.

(d) Where notice is given of a resolution to remove a Director under this Article and the Director concerned
makes with respect thereto, representation in writing to the Company and requests its notification to
Members of the Company, the Company shall unless the representation is received by it too late for it to
do (a) in the notice of the resolution given to the Members of the Company state the fact of the
representation having been made and (b) send a copy of the representation to every Member of the
Company to whom the notice of the meeting has been sent (whether before or after receipt of the
representation by the Company) and if a copy of the representation is not sent as aforesaid due to
insufficient time or because of the Company's default the Director may (without prejudice to his right to
be heard orally) require that the representation shall be read out at the meeting. Provided that copies of
the representation shall not be read out at the meeting if, on the application either of the Company or of

334
 any other person who claims to be aggrieved, the Tribunal is satisfied that the rights conferred by this
clause are being abused to secure needless publicity for defamatory matter.

(e) A vacancy created by the removal of a Director under this Article may, if he had been appointed by the
Company in General Meeting or by the Board, be filled by the appointment of another Director in his
place by the meeting at which he is removed provided Special Notice of the intended appointment has
been given under clause (b) hereof. A Director so appointed shall hold office until the date up to which
his predecessor would have held office if he had not been removed as aforesaid.

(f) If the vacancy is not filled under clause (e) it may be filled as casual vacancy in accordance with the
provisions (in so far they are applicable) of the Act.

(g) A Director who was removed from office under this Article shall not be re-appointed as Director by the
Board of Directors.

(h) Nothing contained in this Article shall be taken:

(i) as depriving a person removed thereunder of any compensation or damages payable to him in respect
of the termination of his appointment as Director or of any other appointment terminating with that
as Director, or

(ii) as derogating from any power to remove a Director which may exist apart from this Article.

31. SHAREHOLDER MEETINGS

(a) Frequency and Location

Subject to the provisions of the Act, the Company shall hold at least 1 (one) General Meeting to be called
as annual general meeting in any given calendar year within 6 (six) months following the end of the
previous Financial Year. All General Meetings shall be governed by Applicable Laws, the provisions of
these Articles and Memorandum of Association. All other General Meetings, other than the annual
general meeting shall be extraordinary general meetings. Annual general meeting and extraordinary
general meetings will be held at the registered office of the Company or elsewhere subject to Applicable
Laws.

(b) Venue, Day and Time for holding General Meeting

(i) Every annual general meeting / extraordinary general meeting shall be called during such hours, on
such day, at such place and in such manner as may be prescribed under the Act.

(ii) Every Member of the Company shall be entitled to attend the General Meeting either in person or
by proxy and the Auditor of the Company shall have the right to attend and to be heard at a General
Meeting in which any business is conducted which concerns him as Auditor. The Directors are also
entitled to attend the General Meeting.

(c) In case an extraordinary general meeting is called on requisition, upon the receipt of such valid
requisition, the Board shall forthwith call an Extraordinary General Meeting and if they do not proceed
within 21 (twenty one) days from the date of the requisition being deposited at the office to cause a
meeting to be called on a day not later than 45 (forty five) days from the date of deposit of the requisition,
the requisitionists or such of their number as represent either a majority in value of the Paid up Share
Capital held by all of them or not less than one-tenth of such of the Paid-up Share Capital of theCompany
as is referred to in Section 100 of the Act, whichever is less, may themselves call the meeting, but in
either case any meeting so called shall be held within three months from the date of the delivery of the
requisition as aforesaid.

(i) An extraordinary general meeting called by the requisitionists shall be called in the same manner, as
nearly as possible, as that in which a meeting is called by the Board.

(ii) The accidental omission to give any such notice as aforesaid to any of the Members, or the non-
receipt thereof, shall not invalidate any resolution passed at any such meeting.

335
 (iii) No General Meeting, Annual or Extraordinary, shall be competent to enter into, discuss or transact
any business which has not been mentioned in the notice or notices by which it was convened.

(iv ) The General Meeting called under this Article shall be subject to and will be held in accordance with
the provisions contained under the Act.

(d) Notice

Prior written notice of at least twenty one (21) clear days for a General Meeting shall be given to all
Shareholders of the Company, provided however, that any General Meeting may be held upon shorter
notice in accordance with the provisions of the Act. All notices for General Meetings shall be issued in
compliance with Applicable Laws and shall be accompanied by an agenda setting out the particulars of
the businesses proposed to be transacted at such meeting, in the business proposed to be transacted at
such meeting.

(e) Quorum

The quorum for a General Meeting shall be constituted by the presence, “in Person”, of such number of
Shareholders as required under the Act. If, within half-an-hour of the time appointed for the meeting, a
quorum is not present, the meeting shall be adjourned and reconvened for the date that falls 7 (seven)
days after such adjourned meeting at the same time and place, or to such other date and such other time
and place as determined by the Board, it being understood that the agenda for such adjourned meeting
shall remain unchanged and the quorum for such adjourned meeting shall be the same as required for the
original meeting. At the said adjourned General Meeting, if the quorum is not present within half-an-
hour from the time appointed for the said adjourned General Meeting, the Members present shall
constitute a valid quorum.

(f) Voting

(i) Subject to the provisions of the Act, a Shareholder shall be entitled to exercise its right to vote at
General Meetings by proxy and/or by an authorized representative, and such proxy or authorized
representative need not be a Shareholder.

(ii) Subject to Applicable Law, all decisions of the Shareholders shall be made by ordinary or special
resolutions, as required under the Act.

(g) Adoption of Financial Statements

The Board shall provide the audited Financial Statements of the Company’s previous Financial Year to
all Shareholders in accordance with the Act before the annual general meeting is held to approve and
adopt the audited Financial Statements, unless shorter notice consent has been granted by the Members.

32. DIVIDEND

(a) The Company in General Meeting may declare dividends, but no dividend shall exceed the amount
recommended by the Board.

(b) Subject to the provisions of the Act, the Board may from time to time pay to the Members such interim
dividends of such amount on such class of Shares and at such times as it may think fit.

(c) The Board may, before recommending any dividend, set aside out of the profits of the company such
sums as it think fit as a reserves which shall, at the discretion of the Board, be applied for any purpose to
which the profits of the company may be properly applied, including provision for meeting contingencies
or for equalising dividends; and pending such application, may, at the like discretion, either be employed
in the business of the Company or be invested in such investments (other than Shares of the Company)
as the Board may, from time to time, think fit.

(d) The Board may also carry forward any profits which it may consider necessary not to divide, without
setting them aside as a reserve.

336
 (e) Subject to the rights of persons, if any, entitled to Shares with special right as to dividends, all dividend
shall be declared and paid accordingly to the amounts paid or credited as paid on the Shares in respect
whereof the dividend is paid, but if and so long as nothing is paid upon any of the Shares in the company,
dividends may be declared and paid according to the amount of the Shares.

(f) No amount paid or credited as paid on a Share in advance of calls shall be treated for the purposes of this
regulation as paid on the Share.

(g) All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on
the Shares during any portion or portions of the period in respect of which the dividend is paid; but if
any Share is issued on terms providing that it shall rank for dividend as from a particular date such Share
shall rank for dividend accordingly.

(h) The Board may deduct from any dividend payable to any Member all sums of money, if any, presently
payable by him to the Company on account of calls or otherwise in relation to the Shares of theCompany.

(i) The Board may retain dividends payable upon Shares in respect of which any person is, under the
Transmission Clause hereinbefore contained, entitled to become a Member, until such person shall
become a Member in respect of such Shares.

(j) Any dividend, interest or other monies payable in cash in respect of Shares may be paid by electronic
mode or by cheque or warrant sent through the post directed to the registered address of the holder or, in
the case of joint holders, to the registered address of that one of the joint holder who is first named on
the register of Members, or to such person and to such address as the holder or joint holders may in
writing direct.

(k) Every such cheque or warrant shall be made payable to the order of the person to whom it is sent.

(l) Payment in any way whatsoever shall be made at the risk of the person entitled to the money paid or to
be paid. The Company will not be responsible for a payment which is lost or delayed. The Company will
be deemed to having made a payment and received a good discharge for it if a payment using any of the
foregoing permissible means is made.

(m) Any one of two or more joint holders of a Share may give effective receipts for any dividend, bonuses
or other monies payable in respect of such Shares.

(n) Notice of any dividend that may have been declared shall be given to the person entitled to share therein
in the manner mentioned in the Act.

(o) No dividend shall bear interest against the Company.

(p) The waiver in whole or in part of any dividend on any Share by any document (whether or not under
seal) shall be effective only if such document is signed by the Member (or the person entitled to Share
in consequence of the death or bankruptcy of the holder) and delivered to the Company and if or to the
extent that the same is accepted as such or acted upon by the Board.

33. UNPAID OR UNCLAIMED DIVIDEND

(a) Where the Company has declared a dividend but which has not been paid or claimed within 30 (thirty)
days from the date of declaration, transfer the total amount of dividend which remains unpaid or
unclaimed within the said period of 30 (thirty) days, to a special account to be opened by the company
in that behalf in any scheduled bank, to be called "Unpaid Dividend Account".

(b) Any money transferred to the unpaid dividend account of a company which remains unpaid or unclaimed
for a period of seven years from the date of such transfer, shall be transferred by the company to the Fund
known as Investor Education and Protection Fund established under Section 125 of the Act.

(c) No unclaimed or unpaid dividend shall be forfeited by the Board.

337
34. WINDING UP

Subject to the applicable provisions of the Act and rules made thereunder, if the company shall be wound up,
and the assets available for distribution among the Members as such shall be insufficient to repay the whole
of the paid up capital, such assets may be divided by the liquidator, with the sanction of a special resolution
of the Company, and any other sanction required by the Act, amongst the members in specie or kind, the
whole or any part of the assets of the Company, whether they shall consist of property of the same kind or
not.

For the purpose aforesaid, the liquidator may set such values as he deems fair upon any property to be divided
as aforesaid and may determine how such division shall be carried out as between the Members or different
classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets
trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall
think fit but so that no Member shall be compelled to accept any Shares or other securities whereon there is
any liability.

35. CAPITALISATION OF PROFITS

(a) The Company in General Meeting may, upon the recommendation of the Board, resolve:

(i) That it is desirable to capitalize any part of the amount for the time being standing to the credit of
any of the Company’s reserve account, or to the credit of the profit and loss account, or otherwise
available for distribution; and

(ii) That such sum be accordingly set free for distribution amongst the Shareholders who would have
been entitled thereto, if distributed in the way of dividend and in the same proportions.

(b) Whenever such a resolution as aforesaid shall have been passed, the Board shall-

(i) Make all appropriations and application of the undivided profits resolved to be capitalized thereby,
and all allotments and issues of fully paid Shares if any; and.

(ii) Generally do all acts and things required to give effect thereto.

36. APPOINTMENT OF AUDITOR

Subject to the provisions of Section 139 of the Act and Rule 3 of the Companies (Audit and Auditors) Rules,
2014,

(i) The Company shall at an annual general meeting appoint an auditor or auditors to hold office for a
maximum period of 5 (five) consecutive years or an auditor firm for a more than 2 (two) terms of five
consecutive years. The Company shall appoint and reappoint auditor or auditors or auditor firm in terms
of Applicable Law.

(ii) Rights and duties of the auditors shall be regulated in accordance with Section 143 of the Act.

(iii) Subject to Section 137 and other provisions of the Companies Act, at least once every year, the Financial
Statements of the Company shall be audited and the correctness of the Financial statements shall be
ascertained by one or more auditor or auditors.

Every audited Financial Statements of the Company shall be adopted at an annual general meeting of the
Company.

37. MISCELLANEOUS

INDEMNITY

Subject to provisions of the Act, the Chairman, Directors, Auditors, Managing Directors and other officers
for the time being of the Company and any trustees for the time being acting in relation to any of the affairs
of the Company and their heirs and executors, shall be indemnified out of the assets and funds of the Company

338
 from or against all bonafide suits, proceedings, costs, charges, losses, damages and expenses which they or
any of them shall or may incur or sustain by reason of any act done or about the execution of their duties in
their respective offices except those done through their wilful neglects or defaults of any other officer or
trustee.The Company may take and maintain any insurance as the Board may think fit on behalf of its present
and/or former directors and KMP’s for indemnifying all or any of them against any liability for any acts in
relation to the Company for which they may be liable but have acted honestly and reasonably.

(a) General Authority

Where the Act requires that a company cannot undertake any act or exercise any rights or powers unless
expressly authorized by its articles, these Articles shall in relation to the Company, be deemed to confer
such right, authority or power.

(b) Common Seal

(i) The Directors shall provide a common seal for the purpose of the company and shall have power
from time to time to destroy the same and substitute a new seal in lieu thereof and the Directors
shall provide for safe custody of the Seal. The Seal shall not be affixed to any instrument, if so
required except by authority of resolution of the Board or a committee of the Board authorised by
it in that behalf and except in the presence of at least 1 (one) Director and that 1 (one) Director shall
sign every instrument to which the seal of the Company is so affixed in his presence. Share
certificates will, however, be signed and sealed in accordance with Rule 5(3) of Companies (Share
Capital and Debentures) Rules, 2014.

(ii) Provided that the certificates of Shares or debentures shall be sealed in t he manner and in
conformity with the provisions of the Act or any statutory modification thereof for the time being
in force.

(iii) The Company shall also be at liberty to have an official seal in accordance with the Act for use in
any territory, district or place outside India and such power shall accordingly be vested in the
Directors or by or under the authority of the Directors granted, in favour of any person appointed
for the purpose in that territory, district or place outside India.

38. POWER TO ESTABLISH BRANCH OFFICES

The Company shall have the power to establish branch offices (as defined under the Act).

39. AUTHENTICATION OF DOCUMENTS AND PROCEEDINGS

Save as otherwise expressly provided in the Act or these Articles, a document or proceeding requiring
authentication by the Company or contracts made by or on behalf of the Company may be signed by the KMP
or an officer duly authorised by the Board.

40. NOT RESPONSIBLE FOR ACTS OF OTHERS

Subject to the provisions of the Act, no Director or other officer of the Company shall be liable for the acts,
receipt, neglects or defaults of any other Director or officer, or for joining in any receipt or other act for
conformity or for any loss or expenses happening to the Company through insufficiency or deficiency of title
to any property acquired by order of the Director for or on behalf of the Company, or for the insufficiency or
deficiency of any security in or upon which any of the moneys of the Company shall be invested, or for any
loss or damage arising from the bankruptcy, insolvency, or tortuous act of any person, company or
corporation, with whom any moneys, securities or effects shall be entrusted or deposited or for any loss
occasioned by any error of judgment or over sight in his part or for any other loss or damage or misfortune
whatever which shall happen in the execution of the duties of his office or in relation thereto, unless the same
happens through his own willful act or default.

41. FILING FEES

Without prejudice to the generality foregoing it is hereby expressly declared that any filing fee payable or
any document required to be filed with Registrar of Companies in respect of any act done or required to be

339
 done by any Director or other Officer by reason of his holding the said office, shall be paid and borne by the
Company

42. SECRECY

No Shareholder shall be entitled to visit or inspect any work of the Company without the permission of the
Directors or to require discovery of or any information respecting any detail of the Company’s secret process
or any other matter which is or may be in the nature of a trade, secret process or any other matter which may
relate to the conduct of the business of the Company and which in the opinion of the Directors, it would be
inexpedient in the interest of the Company to disclose.

43. ALTERATION IN ARTICLES OF ASSOCIATION

The Company, may from time to time alter, add to amend or delete any of the existing Articles or may add a
new Article thereto or adopt a new set in accordance with the provisions of the Act.

340
 SECTION XI - OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by our
Company or entered into more than two years before the date of this Red Herring Prospectus) which are, or may
be deemed material, have been entered or to be entered into by our Company. The documents for inspection
referred to hereunder may be inspected at our Registered Office, from 10.00 a.m. to 5.00 p.m. on Working Days
from the date of this Red Herring Prospectus until the Bid/Issue Closing Date (except for such agreements
executed after the Bid/Issue Closing Date). Due to the COVID-19 pandemic, SEBI, pursuant to its circular no.
SEBI/HO/CFD/DIL2/CIR/P/2020/78 dated May 6, 2020, granted the relaxation to provide procedure for
inspection of material documents electronically, and accordingly, copies of the documents for inspection referred
to hereunder, would also be available on the website of the Company at https://www. www.cscpl.com from the
date of this Red Herring Prospectus until the Bid/Issue Closing Date (except for such agreements executed after
the Bid/Issue Closing Date). Any of the contracts or documents mentioned in this Red Herring Prospectus may be
amended or modified at any time if so required in the interest of our Company or if required by the other parties,
without reference to the Shareholders, subject to compliance of the provisions contained in the Companies Act
and other applicable law.

A. Material Contracts for the Issue

1. Registrar Agreement dated July 31, 2019, entered into between our Company, the Selling Shareholders
and the Registrar to the Issue, as amended by the amendment agreement dated September 9, 2020.

2. Issue Agreement dated August 7, 2019 entered into between our Company, the Selling Shareholders and
the BRLMs, as amended by the amendment agreement dated September 9, 2020.

3. Escrow and Sponsor Bank Agreement dated August 29, 2020, entered into between our Company, the
Selling Shareholders, the Registrar to the Issue, the BRLMs and the Banker(s) to the Issue, as amended
by the amendment agreement dated September 9, 2020.

4. Share Escrow Agreement dated August 29, 2020, entered into between the Selling Shareholders, our
Company and the Share Escrow Agent, as amended by the amendment agreement dated September 9,
2020.

5. Syndicate Agreement dated August 29, 2020, entered into between our Company, the Selling
Shareholders, the BRLMs and the Syndicate Members, as amended by the amendment agreement dated
September 9, 2020.

6. Agreement dated August 29, 2020, entered into between our Company and the Monitoring Agency, as
amended by the amendment agreement dated September 9, 2020.
7. Underwriting Agreement to be entered into between our Company, the Selling Shareholders, and the
Underwriters.
B. Material Documents
1. Order dated December 24, 2018, by the Central Bureau of Investigation, Government of India, against
inter alia Naresh Vijaykumar Goyal, a member of the Promoter Group.

2. Letter dated January 28, 2020 from SEBI granting our Company an exemption under Regulation
300(1)(c) of the SEBI ICDR Regulations from classifying Sudesh Goyal and Suresh Goyal (brothers of
the spouse of Shubharangana Goyal) a nd body corporates in which Sudesh Goyal or Suresh Goyal hold
20% or more of the equity share capital, as members of the Promoter Group.

3. Certified copies of the Memorandum of Association and Articles of Association of our Company as
amended from time to time.

4. Certificate of incorporation dated December 15, 1988.

5. Fresh certificate of incorporation on change of name dated July 27, 2004.

6. Fresh certificate of incorporation consequent upon conversion to public limited company dated April 10,

341
 2019.

7. Resolutions of the Board of Directors dated June 14, 2019 and September 9, 2020, in relation to the Issue
and other related matters.

8. Resolution of the Shareholders of our Company dated June 14, 2019 approving the Fresh Issue.

9. Resolution of the Board of Directors of our Company dated August 7, 2019 approving the Draft Red
Herring Prospectus.

10. Resolution of the Board of Directors of our Company dated September 12, 2020 approving this Red
Herring Prospectus.

11. Consent letters dated July 18, 2019 and September 9, 2020, from Kamalkumar Rajendra Aggarwal, as a
Selling Shareholder in relation to the Offer for Sale.

12. Consent letters dated July 18, 2019 and September 9, 2020, from Naresh Vijaykumar Goyal, as a Selling
Shareholder in relation to the Offer for Sale.

13. Consent dated August 25, 2020 from Frost & Sullivan to rely on and reproduce part or whole of the Frost &
Sullivan Report and include their name in this Red Herring Prospectus.

14. Consent dated August 26, 2020, from the Statutory Auditors namely, K.C. Mehta & Co., Chartered
Accountants, to include their name as an “expert” as defined under section 2(38) of the Companies Act, 2013
to the extent and in their capacity as the Statutory Auditors and in respect of the: (i) Restated Financial
Statements and their examination report dated August 19, 2020, on the Restated Financial Statements; and (ii)
the statement of possible special tax benefits dated August 26, 2020, included in this Red Herring Prospectus
and such consent has not been withdrawn as on the date of this Red Herring Prospectus.

15. The statement of possible special tax benefits dated August 26, 2020, from the Statutory Auditors.

16. Industry report titled “Independent Market Report on Global Pharmaceuticals Intermediates and Oilfield
Chemicals Market” dated June 19, 2019, as updated by way of reports dated February 25, 2020 and
August 24, 2020, prepared by Frost & Sullivan.

17. The certificates issued by N.G. Vithalani, Chartered Engineer, both dated August 26, 2020, on the: (a)
capacity details of the existing plants at our Manufacturing Facility; and (b) the estimated cost and
capacity details of the additional plants to be constructed at our Manufacturing Facility, respectively.

18. Copies of annual reports of our Company for the preceding three Fiscals.

19. Consent of the Directors, BRLMs, Syndicate Members, our previous Statutory Auditor, M/s Shah Mehta
and Bakshi, Chartered Accountants, the Legal Counsel to the Issue, Registrar to the Issue, Banker(s) to
the Issue, monitoring agency, banker to our Company, Company Secretary and Compliance Officer, N.G
Vithalani, Chartered Engineer and our customers, as referred to in their specific capacities.

20. Personal guarantee issued by Kamalkumar Rajendra Aggarwal and Naresh Vijaykumar Goyal to HDFC Bank
Limited.

21. Tripartite agreement dated December 31, 2018, among our Company, NSDL and the Registrar to the Issue.

22. Tripartite agreement dated February 11, 2019, among our Company, CDSL and the Registrar to the Issue.

23. Due diligence certificate dated August 7, 2019 addressed to SEBI from the BRLMs.

24. In-principle listing approvals dated September 9, 2019 and September 13, 2019, issued by BSE and NSE,
respectively.

25. SEBI final observation letter bearing reference number CFD/WRO/SKD/DD/219/1/2020 dated January 28,
2020.

342
 DECLARATION

We hereby declare that all relevant provisions of the Companies Act, 2013 and the guidelines and regulations issued
by the Government of India and the guidelines or regulations issued by the SEBI, established under Section 3 of the
SEBI Act, as the case may be, have been complied with and no statement made in this Red Herring Prospectus is
contrary to the provisions of the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956 and the
SEBI Act or the rules made or guidelines or regulations issued thereunder, as the case may be. We further certify
that all statements made in this Red Herring Prospectus are true and correct.

SIGNED BY ALL THE DIRECTORS OF OUR COMPANY

____________________________ ____________________________
Kamalkumar Rajendra Aggarwal Navdeep Naresh Goyal
(Chairman and Managing Director) (Deputy Managing Director)

____________________________ ____________________________
Rajesh Chimanlal Gandhi Himanshu Purohit
(Whole-Time Director and Chief Financial Officer) (Whole-Time Director)

____________________________ ____________________________
Rajveer Aggarwal Lalit Chaudhary
(Whole-Time Director) (Independent Director)

____________________________ ____________________________
Bharat Shah Neelu Shah
(Independent Director) (Independent Director)

____________________________ ____________________________
Devendra Rajkumar Mangla Samir Chandrakant Patel
(Independent Director) (Independent Director)

Place: Vadodara

Date: September 12, 2020

343
 DECLARATION

I, the undersigned, Kamalkumar Rajendra Aggarwal, as a Selling Shareholder, hereby certify that all statements,
disclosures and undertakings made or confirmed by me in this Red Herring Prospectus in relation to myself and
the Equity Shares being offered by me in the Issue are true and correct. I assume no responsibility as a Selling
Shareholder, for any other statements, including, any of the statements made or confirmed by or relating to the
Company or any other person(s) in this Red Herring Prospectus.

Signed by the Selling Shareholder

_____________________________
Kamalkumar Rajendra Aggarwal

Place: Vadodara

Date: September 12, 2020

344
 DECLARATION

I, the undersigned, Naresh Vijaykumar Goyal, the undersigned, acting as a Selling Shareholder hereby certify that
all statements, disclosures and undertakings made or confirmed by me in this Red Herring Prospectus in relation
to myself and the Equity Shares being offered by me in the Offer for Sale are true and correct. I assume no
responsibility as a Selling Shareholder, for any other statements, including, any of the statements made or
confirmed by or relating to the Company or any other person(s) in this Red Herring Prospectus.

Signed by the Selling Shareholder

_____________________________
Naresh Vijaykumar Goyal

Place: Vadodara

Date: September 12, 2020

345