Effective 1st April 2019 the Company has adopted Ind AS 116 "Leases" and applied to lease contracts existing on 1st April 2019 by electing "modified retrospective approach". Accordingly, comparatives for the year ended 31st March 2019 have not been retrospectively adjusted and the Company has taken the cumulative adjustment to retained earnings on the date of initial application. On transition, the adoption of the new standard resulted in recognition of Right-of-use assets (ROU) of Rs 4.30 crore and a lease liability of Rs 4.00 crore. The cumulative effective of applying the standard resulted in adjusting the retained earnings as at 1st April 2019 with Rs 0.30 crore. Further Leasehold Lands having WDV of Rs 3.36 crore has been reclassified from Property, plant and equipment to Right-to-use Assets (ROU). In the Statement of Profit and Loss tor the current quarter, the nature of expenses in respect of operating leases has changed from lease rent to depreciation on right of use assets and finance cost for interest accrued on lease liability using the effective interest method. The adoption of the standard has no material impact on the standalone financial results for the quarter ended 30th June 2019

• Strong 48% growth in sales was driven by growth in all verticals especially sharp 62% growth in sales of engineering segment to Rs 173.70 crore (or 55% of sales). The segment revenue of chemicals was up by 37% to Rs 116.15 crore (or 37% of sales) and the segment revenue of consumer products was up by 19% to Rs 27.33 crore.

• EBIT was up by 44% to Rs 24.47 crore and strong upside in EBIT was largely due to chemical business. The segment profit of engineering was higher by just 13% to Rs 10.10 crore despite sharp jump in sales and this is largely due to erosion in segment margin by 250 bps to 5.8%. But higher sales together with 320 bps to 14% saw segment profit of chemicals up by 78% to Rs 16.23 crore. The segment loss of consumer products increased to Rs 1.86 crore from 1.08 crore of loss in corresponding previous period.

• Expansion in OPM to the tune of 250 bps was largely due to fall in all cost heads other than material cost. Material cost as % of sales net of stocks was up by 350 bps to 64.6%. However the cost of traded goods was down by 160 bps to 3%, the staff cost was down by 190 bps to 12.9%, the OE was down by 270 bps to 12.3%.

• Other income was down by 35% to Rs 10.35 crore. However the interest cost was down by 24% to Rs 3.23 crore and that of depreciation was up by 19% to Rs 5.21 crore. Thus the PBT was down by 40% to Rs 23.77 crore.

• Taxation in absolute term was up by 38% to Rs 8.37 crore and the effective tax rate for the quarter was lower at 35.2% compared to 35.7% in the corresponding previous period. Thus the PAT was eventually higher by 41% to Rs 15.40 crore.

Consolidated sales were higher by 41% to Rs 321.11 crore. Spurred further by 200 bps expansion in OPM to 7.2%, the operating profit was up by 95% to Rs 23.20 crore. After accounting for lower other income, lower interest and higher depreciation the PBT was up by 27% to Rs 21.48 crore. With profit from associate stand at Rs 0.53 crore, up 253%, the PBT after profit from associate was up by 29% to Rs 22.01 crore. The taxation was up by 35% to Rs 8.69 crore, the PAT was up by 25% to Rs 13.32 crore. Eventually net profit after minority interest was up by 33% to Rs 13.70 crore.