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Notes to Accounts of Privi Speciality Chemicals Ltd.

Mar 31, 2022

a) The net carrying amount of property, plant and equipment, amounting to Rs. 62,659.88 Lakhs (March 31,2021 Rs 53,949.86 Lakhs) are pledged as first charge security to banks providing term loans and second charge to banks providing working capital loans.

b) The Plant and machinery, Building and electrical installation includes an amount of Rs.381.30 Lakhs, Rs. 87.84 Lakhs and Rs. 20.81 Lakhs respectively (March 31,2021 : Rs.53.21 Lakhs, Rs. 21.58 Lakhs and Rs. 2.54 Lakhs) that represent borrowing cost capitalized @ 6.75% during the year. (March 31, 2021 : 6.75%).

c) The Company has not recognised any impairment loss during the current year (March 31, 2021 - Nil).

d) The title deeds of property plant and equiments are held in name of the Company.

a) The net carrying amount of plant and equipment, amounting to Rs 53,949.86 Lakhs (March 31,2020 Rs 53,660.70 Lakhs) are pledged as first charge security to banks providing term loans and second charge to banks providing working capital loans.

b) The Plant and machinery, Building and electrical installation includes an amount of Rs. 53.21 Lakhs, Rs. 21.58 Lakhs and Rs. 2.54 Lakhs respectively (March 31, 2020 : Rs. 343.25 Lakhs, Rs. 130.65 Lakhs and Rs. 9.98 Lakhs respectively) that represent borrowing cost capitalized @ 6.75% during the year. (March 31, 2020 : 8.6%)

c) The Company has not recognised any impairment loss during the current year (March 31, 2020 - Nil).

d) The title deeds of property plant equiments are held in name of the Company.

The aggregate depreciation expense on right-of-use asset is included under depreciation and amortisation expense in the Statement of Profit and Loss.

The Company has not recognised any impairment loss during the current year (31 March, 2021 - Nil).

i) The Company has taken land on lease for a non-cancellable period ranging 3 to 99 years, Building on lease for a tenure ranging from 3-5 years and plant and machinery for 10 years.

The Company leases with contract term of less than 1 year. These leases are short term and/or leases of low value items. The company has elected not to recognise right of use assets and lease liabilities of these assets.

iv) The weighted average incremental borrowing rate of 6.25% (March 31, 2021 9.40% p.a.) has been applied for measuring the lease liability at the date of initial application.

v) The total cash outflow for leases for year ended March 31, 2022 is Rs. 323.15 Lakhs (March 31,2021 Rs. 302.08 Lakhs.)

vi) Income from sub leasing of Right to use assets is Rs. NIL. (March 31, 2021 Rs. NIL)

i) During the year ended March 31,2022 Rs. 33.19 Lakhs (March 31,2021: Rs. 73.36 Lakhs) was recognised as an expense for inventories carried at net realisable value.

ii) The mode of valuation of inventories has been stated in note 2 xv of significant accouting policies.

iii) Bank overdrafts, cash credit and short-term loan from bank facility are secured by first paripassu charge on inventories (including raw material, finished goods and work-in-progress) and book debts (refer note 9 and 14).

Note : Margin money deposit amounting to Rs.85.82 Lakhs (March 31, 2021: Rs 149.97 Lakhs) are pledged with banks for non cash limits and term deposit Rs.204.95 Lakhs (March 31,2021: Rs.194.29 Lakhs) are pledged as cash security with banks for the loans taken by the company and Rs. 161.52 Lakhs (March 31, 2021 Rs. 51.48 Lakhs) other deposits with no lien.

Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regards to dividends and share in the company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid. Failure to pay any amount called up on shares may lead to forfeiture of the shares. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

The Company was informed by promoters about the inter-se transaction between the Promoter/ Promoter Group on April 29, 2021, April 30, 2021, May 04, 2021, whereby entire holding of FIH Mauritius Investments Ltd, Mr. Utkarsh Shah, M/s. Jariwala Trade Link LLP and M/s.Nahoosh Trade Link LLP (collectively called as “Sellers”) were acquired by Mr. Mahesh Babani, Mr.D.B. Rao and Promoter group (collectively called as “Acquirers”). FIH Private Investments Ltd Promoter Group Company sold its entire holding of 3,250 equity shares in the market on February 16, 2022. The necessary compliances as required under SEBI (Prohibition of insider Trading) Regulations, 2015 and SEBI (Substantial Acqusition of Shares and Takeovers) Regulations,2011 has been complied with by the Acquirers, Sellers and Company.

12a SHARE CAPITAL (Contd.)

D Aggregate number of shares allotted as fully paid up by way of bonus shares (during 5 years immediately preceding March 31, 2022) :

Equity shares allotted as fully paid up Bonus shares - Nil (March 31,2021 - Nil)

E Shares allotted as fully paid up pursuant to a scheme of arrangement without payment being received in cash (during 5 years immediately preceding March 31,2022):

During financial year ended March 31, 2017 -Equity shares of Rs. 10/- each - 12,634,353 shares.

A General reserve

As per the approved scheme of arrangement (Demerger) between the Privi Organics India Limited, Privi Specialities Chemicals Limited (Formally known as Fairchem Specialty Limited) and Privi Organics Limited during the period ended 31 March 2017, the excess of book value of assets over liabilities is treated as general reserve.

B Retained earnings

Retained earnings represent the amount of accumulated earnings/ (losses) at each Balance Sheet date of the Company, prepared in accordance with the basis of preparation section.

C Capital reserve

As per the approved Scheme ofArrangement and Amalgamation amongst Fairchem Speciality Limited (Demerged / Transferee Company) and Privi Organics India Limited (Transferor Company). vide NCLT Mumbai order dated June 30, 2020, all the assets, liabilities and reserve pursuant to the scheme, have been transferred at carrying amount and the difference if any being the excess is treated as capital reserve.

D The Capital management objective of the Company is to (a) maximize shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company''s capital management, capital includes issued equity share capital, share premium and all other equity.

The Company monitors capital using debt-equity ratio, which is total debt less liquid investments and bank deposits divided by total equity.

i) Term loan are secured by a first mortgage on the company''s immovable properties both present and future ranking paripassu interest and a first charge by way of hypothecation of all the company''s assets (save and except book debts and inventories) including movable machinery (save and except spares tools and accessories) both present and future subject to charges created in favour of the Company''s bankers for inventories, book debts and other specified movable assets for securing the borrowings of working capital.

ii) Currency swap on IDFC Rupee loan of Rs.4,000 Lakhs and ICICI bank Rupee loan of Rs.4,000 Lakhs are taken @ 64.42 per USD and @ 68.13 per USD respectively and other currency swap on HDFC Bank Rupee loan of Rs 5,600 Lakhs and Rs 7,400 Lakhs are taken @ 76.78 per USD and @ 75.83 per USD respectively, the currency swap represents derivative instruments which has been restated at the closing rate of exchange.

14 CURRENT BORROWINGS (SECURED) (Contd.)

a) All the above loans are secured by first pari passu charge on all current assets of the Company both present and future.

b) Working capital loans from banks are secured by way of hypothecation of inventories both on hand and in transit and book debts and other receivables both present and future and also secured by way of second charge on fixed assets.Working capital loans carry interest rate @ 4.90% to 5.50%.

c) Quarterly statements of current assets filed by the company with the banks and financial institution are in agreement with the books of accounts.

i) The banks include Kotak Mahindra Bank, HDFC Bank Ltd, CITI bank., RBL Ltd., IDFC bank, ICICI Bank Ltd., Standard Chartered Bank

ii) The returns are based on unaudited financial information in the interim period and are extracted from the books and records of the Company, as adjusted for certain quarterly closing entries, like adjustments in relation to unrealised gain/ (loss) on trade receivables and further adjusted by advances received from customers, exclusion of stores and spares and goods in transit from inventory. the related amounts are mentioned below :

Jun-21 unrealised gain of Rs. (238.35) Lakhs, advance from customers of Rs. (338.00) Lakhs, stores and spares inventory of Rs. 612.00 Lakhs and Goods in transit of Rs. 1819.70 Lakhs not included in quarterly statement submitted to bank.

Sep-21 unrealised gain Rs. (146.03) Lakhs, advance from customers Rs.(1,016.18) Lakhs, stores and spares inventory Rs. 681.70 Lakhs and GIT Rs. 1,638.63 Lakhs not included in quarterly statement submitted to bank.

Dec-21 unrealised gain Rs. (108.98) Lakhs, advance from customers Rs. (320.45) Lakhs stores and spares inventory Rs. 783.40 Lakhs and GIT Rs. 498.72 Lakhs not included in quarterly statement submitted to bank.

Mar-22 unrealised gain Rs. (373.23) Lakhs, advance from customers Rs. (264.56) Lakhs, stores and spares inventory Rs. 597.15 Lakhs and GIT Rs. 902.57 Lakhs not included in quarterly statement submitted to bank.

i) The banks include Kotak Mahindra Bank, HDFC Bank Ltd, CITI bank., RBL Ltd., IDFC bank, ICICI Bank Ltd., Standard Chartered Bank

ii) The returns are based on unaudited financial information in the interim period and are extracted from the books and records of the Company, as adjusted for certain quarterly closing entries, like adjustments in relation to unrealised gain/ (loss) on trade receivables and further adjusted by advances received from customers, exclusion of stores and spares and goods in transit from inventory. the related amounts are mentioned below :

Jun-20 unrealised loss of Rs. 99.24 Lakhs, advance from customers of Rs. (1035.18) Lakhs, stores and spares inventory of Rs. 156.24 Lakhs and Goods in transit of Rs. 95.28 Lakhs not included in quarterly statement submitted to bank.

Sep-20 unrealised loss Rs. 7.86 Lakhs, advance from customers Rs. (170.23) Lakhs, stores and spares inventory Rs. 465.10 Lakhs and GIT Rs. 1,201.75 Lakhs not included in quarterly statement submitted to bank.

Dec-20 unrealised loss Rs. (193.84) Lakhs, advance from customers Rs. (1175.99) Lakhs stores and spares inventory Rs. 180.99 Lakhs and GIT Rs. 39.01 Lakhs not included in quarterly statement submitted to bank.

Mar-21 unrealised gain Rs. 212.53 Lakhs, advance from customers Rs. (199.73) Lakhs, stores and spares inventory Rs. 540.64 Lakhs and GIT Rs. 286.26 Lakhs not included in quarterly statement submitted to bank.

d) Post shipment and packing credit from bank carry interest rate @ 0.70% to 1.50% for USD and packing credit in rupees carry intrest rate @ 5% to 5.50% p.a.

e) Cash credit loan from bank carry interest rate @ 7.00 % to 9.00 %.

f) Buyers credit carry interest rate @ Libor 0.60% to Libor 4% and due for payment within 180 days.

28 SEGMENT INFORMATION

A. Factors used to identify the entity''s reportable segments, including the basis of organisation

For management purpose, the Company has determined its reportable segment as “Aromatic chemicals” since the chief operating decision maker (CODM) evaluates the Company''s performance as a single segment.

C. Geographic information

The geographic information analyses the Company''s revenue and non-current assets by the Company''s country of domicile and other countries. In presenting the geographical information, segment revenue has been based on the geographic location of customers and segments assets were based on the geographic location of the respective non-current assets. The product offerings which are part of the speciality chemicals portfolio of the Company are managed on a worldwide basis from India. (refer note 36).

30 EMPLOYEE BENEFITS - POST-EMPLOYMENT BENEFIT PLANS

a) Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund and ESI which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to statement of profit and loss as they accrue.

Compensatory absences

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation. Amount of Rs 145.46 Lakhs (31 March, 2021 Rs 88.78 Lakhs) has been recognised in the Standalone Statement of profit and loss of provision for long-term employment benefit.

The fair value of financial instruments as referred to in note (a) above have been classified into a three categories depending on the inputs used in the valuation technique.

The categories used are as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

31 FINANCIAL INSTRUMENTS (Contd.)

c. Calculation of fair values

The fair values of the financial assets and liabilities are defined as 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. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended March 31, 2021.

(i) The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward rates. In case the forwards are taken from banks and financial institutions, the fair value is determined using quoted forward exchange rates at the reporting date and present value calculations based on high credit quality yield curves in the respective currencies by the bankers.

(ii) The fair values of investments in mutual fund units is based on the net asset value (''NAV'') as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.

(iii) Loans, lease liabilities and borrowings have fair values that approximate to their carrying amounts as it is based on the net present value of the anticipated future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

(iv) Cash and cash equivalents, trade receivables, investments in term deposits, other financial assets (except derivative financial instruments), trade payables, and other financial liabilities (except derivative financial instruments) have fair values that approximate to their carrying amounts due to their short-term nature.

32 FINANCIAL RISK MANAGEMENT

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.The Board of Directors has established the risk management committee, which is responsible for developing and monitoring the company''s risk management policies. The committee reports regularly to the board of Directors on its activities.

The Company''s risk management are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits.Risk management policies and systems are reviewed regularly to reflect changes in market conditions and activities.

The Audit committee oversees how management monitors compliance with the company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit committee is assisted in its oversight role by internal audit by external party.”

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

a. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations and arises principally from the Company''s receivables from customers.The carrying amount of financial assets represent the maximum credit exposure.

The Company''s exposure to credit risk is influenced mainly by the individual characterisitc of each customer.However, management also consider the factors that may influence the credit risk of its customer base. including the default risk associated with the industry and country in which company operates.

The Company analyses credit worthiness of each new customer individually before standard payment and delivery terms are offered.The Company is monitoring economic environment in countires where it operates and is taking actions to limit its exposure to customers in those countries experiencing particular economic volatility.

The Company uses an allowance matrix to measure the expected credit loss of trade receivables.Based on the industry practices and the business environment in which the entity operates, Management considers that the trade receivables are in default (credit impaired) if the payments are more than 365 days past due.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk and the current provision for the bad debts represents the impacted credit loss it foresees in its receivables.

Financial assets other than trade receivables are not impaired and further, there are no amounts that are past due. Management believes that the amounts are collectible in full, based on historical payment behavior.

b. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company maintains the level of its cash and cash equivalents at an amount in excess of expected cash outflow on financial liabilities.The Company also monitors the level of expected cash inflows on trade and other receivables together with expected cash inflows on trade and other payables

The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that have simultaneous gross cash settlement.

Currency Risk

The Company is exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date.

Currency exposure for borrowings is exclusive of Currency swap on IDFC Rupee loan of Rs.4,000 Lakhs and ICICI bank Rupee loan of Rs.4,000 Lakhs are taken @64.42 per USD and @68.13 per USD respectively and other currency swap on HDFC Bank Rupee loan of Rs 5,600 Lakhs and Rs 7,400 Lakhs are taken @ 76.78 per USD and @ 75.83 per USD respectively which are classified as Indian currency loan.

The Company''s corporate treasury function provides services to the business, co-ordinates access to domestic financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk,

The Corporate treasury function reports quarterly to the Company''s risk management committee, an independent body that monitors risks and policies implemented to mitigate risk exposures.

d. Sensitivity analysis

A reasonably possible strengthening (weakening) of the foreign currencies against INR at March 31, 2022 would have affected the measurement of financial instruments denominated in US dollars and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

* Demand of Rs. 15.52 Lakhs (out of which Rs. 6.00 Lakhs paid) raised by Customs, Excise and Service Tax Appellate Tribunal West Zonal Bench, Mumbai for clearance of imported goods under DEPB scheme. (Contravention of the provisions of Section 111 (o) of the Customs Act, 1962). Further the demand of Rs. 101.53 Lakhs was raised by Customs authority out of which Rs. 10.98 Lakhs is paid under protest, balance Rs. 90.54 Lakhs are unpaid as on March 31, 2022.

The claims against the Company comprise of pending litigations / proceedings pertaining to demands raised by Excise, Custom, Sales / VAT tax and other authorities / bodies. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements.

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

The Company does not expect any reimbursements in respect of the above contingent liabilities.

36 REVENUE FROM CONTRACTS WITH CUSTOMERS

(A) The Company is primarily in the business of manufacture and sale of Aroma chemicals. All sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/ delivery. The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established, the Company does not give significant credit period resulting in no significant financing component.

(E) Unsatisfied Performance Obligations

The Company applies the practical expedient in Paragraph 121 of Ind AS 115 and does not disclose information about remaining performance obligations.

38 TRANSFER PRICING

Transactions with related parties are governed by transfer pricing regulations of the Indian Income-tax Act, 1961. The Company''s international and domestic transactions with related parties are at arm''s length as per the independent accountants report for the year ended March 31,2021. Management believes that the Company''s international and domestic transactions with related parties post March 2021 continue to be at arm''s length and that the transfer pricing legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

39 EXCEPTIONAL ITEMS

a) Flood claim settlement (Net)

Unprecedented rainfall on July 22 and 23, 2021 in Raigad district of Maharashtra including Mahad and consequent overflow of Savitri river caused flooding and major power outage in and around Mahad. The factory operations at the units were temporarily suspended. The necessary steps were taken to resume the operations in phased manner from August 12, 2021 after taking into consideration the safety norms. There has been loss to assets comprising of Inventories, Plant & Machineries and Other fixed assets, etc. The profitability has also been impacted due to loss of sales. All the said losses are adequately insured including coverage towards loss of profit and replacement cost of fixed assets.

As per Management''s best estimate, the book value of the assets lost due to flood including other expenses for the year ended March 31, 2022 is Rs. 1,791.28 Lakhs which is debited to the statement of profit and loss and is disclosed as an exceptional item and netted off with final insurance claim settlement aggregating to Rs. 2,320.51 Lakhs for which a settlement letter is also issued by insurance company resulting in an exceptional gain(net) of Rs. 529.24 Lakhs for the year ended March 31,2022. The Company has received partial insurance claim of Rs. 1,000 Lakhs from the insurance company which is recognised in the quarter ended September 30, 2021. The balance amount of Rs.1,320.51 Lakhs (of which Rs. 300 Lakhs is received subsequent to the balance sheet date) is shown as receivable from insurance company in balance sheet as at March 31,2022. The entire insurance claim settlement amount is being recognised in the statement of profit and loss as per the requirement of Accounting Standards.

b) Fire Claim settlement (net)

On April 26, 2018 a major fire broke out at the Company''s Unit 2 Plant located at MIDC Mahad, Maharashtra. There was loss of the assets comprising of Inventories, Buildings, Plant and Machinery and other Fixed Assets, etc. which were adequately insured including coverage towards loss of profit and replacement cost of fixed assets. The Company received Rs.2,309.26 Lakhs and Rs.4,000 Lakhs during the year ended March 31,2021 and March 31,2020 respectively on account of Insurance claim which has been disclosed as an exceptional item. The entire Insurance Claim is now settled with the Insurance company, however, an amount of Rs. 809.26 Lakhs (Out of Rs. 2,309.26 Lakhs) accounted for in the year ended March 31, 2021 is

39 EXCEPTIONAL ITEMS (Contd.)

received on April 07,2021 subsequent to the year ended March 31, 2021. Since the final insurance claim is settled and a settlement letter is also issued by Insurance company on or before March 31, 2021 therefore this balance amount of Rs. 809.26 Lakhs as above mentioned was recognised as an exceptional Income in statement of standalone profit and loss for the year ended March 31,2021 and shown as receivable from insurance Company in Balance sheet as on March 31,2021 as per requirement of the Accounting Standards.

40 ESTIMATION OF UNCERTAINTIES RELATED TO GLOBAL HEALTH PANDEMIC FROM COVID-19

Government of India announced a Nationwide Lockdown due to COVID-19 Global Pandemic due to which the Compnay shutdown few of its plants at Mahad & Jhagadia factories (except those involved in manufacture of chemicals used in essential goods) from March 24,2020 which continued till April 7, 2020. Although sales were partially affected during the period of shutdown, however, impact is not significant. The Company had not seen any significant impact on net realisable value of its current assets.

The Global pandemic COVID-19 continued in the year 2021-22 as well. The business of the Compnay was not affected during the year. However, the completion of major capex project were delayed by 4 to 5 months due to second wave of COVID-19 during the period March 2021 to July 2021, on account of non-availability of labour, transport facilities, industrial oxygen, etc. Further, given the uncertainty due to COVID-19, the Company would continue to monitor any material changes to future economic conditions and the consequential impact on the standalone financial statements.

41 OTHER STATUTORY INFORMATION

a) Specified Bank Note: The disclosures regarding details of specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since the requirement does not pertain to the financial year ended 31 March 2022.

b) Other informations

(i) As on March 31, 2022 there is no Unutilised amounts in respect of any issue of securities and long term borrowings from banks and financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.

(ii) The Company do not have any transactions with struck off companies.

(iii) The Company do not have any charges or satisfaction, which is yet to be registered with Registrar of Companies beyond the statutory period.

(iv) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(v) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(vi) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(vii) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

41 OTHER STATUTORY INFORMATION (Contd.)

(viii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(ix) The Company have not entered in any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

c) Regroupings: Appropriate regroupings have been made in the standalone Balance sheet and standalone Statement of Profit and Loss (including Other Comprehensive Income), wherever required, by reclassification of the corresponding items if income, expenses, assets and liabilities, in order to bring them in line with the accounting policies and classification as per the standalone Ind AS financial information of the Company for the year ended March 31, 2022, prepared in accordance with Revised Schedule III of the Companies Act, 2013, requirements of Ind AS 1- ''Presentation of financial statements'' and other applicable Ind AS principles. The Company has adopted the Revised Schedule III as issued by MCA and accordingly numbers of comparative period has been reclassed as required. As a result of amendment to Schedule III, deposits have been reclassified to other financial assets which was earlier forming part of loans and current maturities of long-term borrowing are now presented as current borrowings which was earlier forming part of other financial liabilities.

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its valuation once the subject rules are notified and will give appropriate impact in its standalone financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.


Mar 31, 2018

1. Financial risk management

The Company’s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company’s management has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company has constituted a Risk Management framework, through which management develops and monitors the Company’s risk management policies. The key risks and mitigating actions are also placed before the Board of directors of the Company. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and to control and monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Risk Management framework of the Company is supported by the Finance team and experts of respective business divisions that provides assurance that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The activities are designed to:

- protect the Company’s financial results and position from financial risks

- maintain market risks within acceptable parameters, while optimizing returns; and

- protect the Company’s financial investments, while maximizing returns.

The Treasury department provides funding and foreign exchange management services for the Company’s operations. In addition to guidelines and exposure limits, a system of authorities and extensive independent reporting covers all major areas of treasury’s activity.

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

(A) Management of Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations.

Cash and cash equivalents & bank balances

The Company is also exposed to credit risk on cash and cash equivalents and bank balances other than cash and cash equivalents. These balances (other than cash on hand) are with high credit rating banks which are governed by Reserve Bank of India. The company believes its credit risk in such bank balances is immaterial.

Security deposits and other receivables

With respect to other financial assets namely security and other deposits and other receivables, the maximum exposure to credit risk is the carrying amount of these classes of financial assets presented in the balance sheet. These are actively monitored and confirmed by the treasury department of the Company.

Trade receivables

The Company measures the expected credit loss of trade receivables from customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends which is very negligible.

Based on the historical data, loss on collection of receivable as at March 31, 2017 and as at April 01, 2016 is not material hence no additional provision considered.

(B) Management of Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

The Company’s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions. Material and sustained shortfall in cash flow could undermine the company’s credit rating and impair investor confidence.

(C) Management of Market Risk

Market risk comprises of foreign currency risk and interest rate risk. Foreign currency risk arises from transactions that are undertaken in a currency other than the functional currency of the company. Further, the financial performance and financial position of the company is exposed to foreign currency risk that arises on outstanding receivable and payable balances at a reporting year end date. Interest rate risk arises from variable rate borrowings that expose the company’s financial performance, financial position and cash flows to the movement in market rates of interest.

Foreign currency risk

The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US$ and EURO.

The Company imports capital goods and raw materials and exports finished goods. The company also pays interest, legal and professional fees and travelling and conveyance in foreign currency.

Interest rate risk

The Company is mainly exposed to interest rate risk due to its variable interest rate borrowings. The interest rate risk arises due to uncertainties about the future market interest rate of these borrowings. The Company mitigates the interest rate risk for borrowing in functional currency, which is linked with MCLR, by negotiating and fixing the rate at the time of renewal of bank facility which remains effective for one year from the date of renewal. In case of borrowing in foreign currency, which is linked with LIBOR rate, the company mitigates the risk by fixing the margin at the time of renewal of bank facility which remains effective for one year from the date of renewal.

The Company has various non current and current borrowings whose facilities are on a variable interest rate basis. Refer below table for interest rate exposure.

The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The management monitors the return on capital as well as the level of dividends to shareholders. The Company’s goal is to continue to be able to provide return to shareholders by continuing to distribute dividends in future periods. Refer the below note for the final dividend declared and paid.

2. Related party disclosures

(a) Relationships Promoter Group

FIH Mauritius Investments Limited, Republic of Mauritius FIH Private Investments Limited, Republic of Mauritius

(Above two entities are subsidiaries of Fairfax India Holdings Corporation, Canada)

Subsidiaries

Privi Organics India Limited (Formerly known as Adi Aromatic Limited), India (w.e.f July 08, 2016)

Privi Biotechnologies Private Limited, India (w.e.f. August 1, 2016)3

Privi Organics USA Inc, USA (w.e.f. August 1, 2016)*

Associates

Minar Organics Private Limited, India (w.e.f. August 1, 2016 and up to March 21, 2018)

Key Management Personnel:

Mr. Nahoosh Jariwala Managing Director

Mr. Mahesh Babani Managing Director

investment held through subsidiary company pursuant to the scheme of arrangement (Refer Note 49)

3. Segment reporting

In accordance with Ind AS -108 ‘Operating Segment’, segment information has been given in the Consolidated Financial Statements of Fairchem Specialty Limited, and therefore, no separate disclosure on segment information is given in the Standalone Financial Statements.

4. Leases Company as lessee

The Company has entered into cancellable lease agreement for Corporate office premises for a period of nine years which commenced from September 7, 2013.

The lease rentals aggregating Rs. 34.50 Lakhs (Previous Year Rs. 49.26 Lakhs) have been included under the head “Other Expenses” Note 34 “Rent, rates and taxes” of Statement of Profit and Loss.

5. During the previous year and pursuant to the Ordinary Resolution passed by Postal Ballot on January 22, 2017, the Company has reclassified its Authorized Share Capital from 50,000 Preference Shares of Rs. 100 each to 500,000 Preference Shares of Rs.10 each filed with Registrar of Companies on March 14, 2017.

During the previous year and pursuant to the Ordinary Resolution passed by Postal Ballot on January 22, 2017 read with board resolution dated March 14, 2017, the Company has increased its Authorized Share Capital from 145,00,000 Equity Shares of Rs. 10 each to 40,000,000 Equity Shares of Rs.10 each and 500,000 Preference Shares of Rs. 10 each to 5,000,000 Preference Shares of Rs. 10 each filed with Registrar of Companies on March 17, 2017.

6. During the previous year, pursuant to the order dated February 22, 2017, by Hon’ble National Company Law Tribunal, Mumbai Bench, filed with Registrar of Companies on March 14, 2017, from appointed date August

1, 2016, approving the Scheme of Arrangement between M/s. Privi Organics Limited (“POL”) and Fairchem Specialty Limited (Formerly known as ADI Finechem Limited) (the Company) and Privi Organics India Limited (Formerly known as ADI Aromatic Limited) (‘Scheme of Arrangement’) the Company has to pay the consideration in the following proportion to the shareholders of POL:

- 27 (twenty seven) equity shares of the Company of Rs. 10 each fully paid up for every 40 (forty) equity shares of POL of Rs. 10/- each fully paid up, and

- 27 (twenty seven) compulsorily convertible preference shares of the Company of Rs. 10 each fully paid up for every 40 (forty) equity shares of POL of Rs. 10/- each fully paid up.

In accordance with above the Company has allotted 12,634,353 equity shares of Rs. 10 each and 12,634,353 compulsorily convertible preference shares of Rs.10 each to the shareholders of Privi Organics Limited as on March 8, 2017, the record date, by corresponding debit to general reserves and balance in the profit and loss account as per the treatment prescribed in aforesaid scheme.

7. First time adoption of Ind AS Transition to Ind AS

These are the company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these Financial Statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (the company’s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in Financial Statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP or IGAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions A.1.1. 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 as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities.

Accordingly, the company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value.

A.2 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:

A.2.1 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP

The Company made estimates for impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as this was not required under previous GAAP.

A.2.2 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. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

The Company has determined the classification of Financial Assets in terms of whether they meet the amortized cost criteria, FVPL criteria or FVOCI criteria based on the facts and circumstances that existed as of transition date.

B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS. The presentation requirements under previous GAAP differs from the presentation requirements under Ind AS and hence the previous GAAP information has been restated for ease of reconciliation with Ind AS. The restated previous GAAP information is derived based on the audited financial statements of the Company for the year ended March 31, 2016 and March 31, 2017.

Impact of Ind AS adoption on cash flow statement

There were no material differences in the net cash flow from operating, investing or financing activities due to Ind AS adoption.

Notes to first-time adoption:

Note 1: Proposed Dividend

Under the previous GAAP until April 1, 2016, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting.

Note 2: Excise Duty

Under the previous GAAP, 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. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses.

Note 3: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. 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 the previous GAAP, these remeasurements were forming part of the profit or loss for the year.

Note 4: Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Note 5: Rent equalisation

Under Ind AS, lease payments under an operating lease shall be recognized as an expense on a straight-line basis over the lease term unless the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. The escalation clause in the lease agreement is to compensate inflationary cost increase and hence, the lease payments are recognized on actual basis.

Note 6: Deferred Tax

Deferred tax have been recognized on the adjustments made on transition to Ind AS.

Note 7: Cash Discount

Under IGAAP, revenue from sale of products was measured at transaction price. Under Ind AS, revenue from sale of goods is measured at fair value of consideration received or receivable. Hence, cash discount is reduced from revenue to present the same at its fair value. This change has resulted in a decrease in total revenue and total expenses for the year ended March 31, 2017 by Rs. 13.71 lakhs. There is no impact on the total equity and profit.

Note 8: Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations, effective portion of gains and losses on cash flow hedging instruments and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under IGAA


Mar 31, 2017

1. During the year and pursuant to the Ordinary Resolution passed by Postal Ballot on January 22, 2017, the Company has reclassified its Authorised Share Capital from 50,000 Preference Shares of Rs. 100 each to 500,000 Preference Shares of Rs. 10 each filed with Registrar of Companies on March 14, 2017.

During the year and pursuant to the Ordinary Resolution passed by Postal Ballot on January 22, 2017, the Company has increased its Authorized Share Capital from 145,00,000 Equity Shares of Rs. 10 each to 40,000,000 Equity Shares of Rs. 10 each and 500,000 Preference Shares of Rs. 10 each to 5,000,000 Preference Shares of Rs. 10 each filed with Registrar of Companies on March 17, 2017.

2. During current year, pursuant to the order dated February 22, 2017, by Hon’ble National Company Law Tribunal, Mumbai Bench, filed with Registrar of Companies on March 14, 2017, from appointed date August 1, 2016, approving the Scheme of Arrangement between M/s. Privi Organics Limited (“POL”) and Fairchem Speciality Limited (Formerly known as ADI Finechem Limited) (the Company) and Privi Organics India Limited (Formerly known as ADI Aromatic Limited) (''Scheme of Arrangement’) the Company has to pay the consideration in the following proportion to the shareholders of POL:

- 27 (twenty seven) equity shares of the Company of Rs. 10 each fully paid up for every 40 (forty) equity shares of POL of Rs. 10/- each fully paid up, and

- 27 (twenty seven) compulsorily convertible preference shares of the Company of Rs. 10 each fully paid up for every 40 (forty) equity shares of POL of Rs. 10/- each fully paid up

In accordance with above the Company has allotted 12,634,353 equity shares of Rs. 10 each and 12,634,353 compulsorily convertible preference shares of Rs. 10 each to the shareholders of Privi Organics Limited as on March 8, 2017, the record date, by corresponding debit to general reserves and balance in the profit and loss account as per the treatment prescribed in aforesaid scheme.

3. Segment Reporting

a) Information about primary business segments

In accordance with the requirements of Accounting Standard 17 - “Segment Reporting” the Company has determined its business segment as Specialty Chemicals (which includes Oleo Chemicals and Intermediate Neutraceuticals). Since 100% of the Company’s business is in this segment, there are no other primary reportable segments. Thus the Segment Revenue, Segment Results, Total carrying amount of Segment Assets, Total carrying amount of Segment Liabilities, Total cost incurred to acquire segment assets, the total amount charge for depreciation and amortization during the year are all as reflected in the financial statements for the year ended March 31, 2017 and as on that date.

4. Leases

Operating Lease : As a Lessee

The Company has entered into cancellable lease agreement for Corporate office premises for a period of nine years commenced from September 7, 2013. The lease rentals aggregating Rs. 49.26 Lakhs (Previous Year Rs. 30.00 Lakhs) have been included under the head “Other Expenses” Note 27 “Rent” of Statement of Profit and Loss.

Although there is foreign holding in the company and dividend was declared and paid in the current and previous year, dividend has been paid to non-resident shareholders in Indian Rupees or has been deposited in a Rupee account with their respective bankers in India.

5. Previous year figures have been reclassified to conform to this year''s classification.


Mar 31, 2016

Nature of Security and terms of repayment for Long term secured borrowings :

1 Term loans / Working Capital Term loans aggregating to Rs. 11,43,16,003/- (Previous Year Rs.9,18,45,291/-) are secured primarily by Hypothecation by way of first charge on all present and future stocks, book debts and collaterals security by way of Equitable mortgage of industrial property bearing Survey No. 253/P and 312 situated at village Chekhala, Sanand-Kadi Road and Hypothecation of plant and machinery installed at the factory premises. Current rate of Interest is 10.80% per annum repayable in 36 / 48 / 60 monthly installments commencing from 7th day of succeeding months of respective disbursements.

2 The Vehicle loans from HDFC Bank Limited of Rs.147,091/- (Previous Year Rs.451,951/-) are secured by hypothecation of vehicles and are further secured by personal guarantee given by a Director of the Company. The vehicle loan from ICICI Bank Ltd. of Rs.764,289/- (Previous Year 1,279,781/-) is secured by hypothecation of vehicle.

3 The balances under the head of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation.

4 Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No.22 “Other Expenses under the head of Sales Expenses “ represents excise duty paid on sample etc. is not recoverable from sales.

5 Leases : Finance Lease :

In accordance with accounting standards 19 “Leases” issued by the Institute of Chartered Accountants of India, the assets acquired on finance lease on or after April 01, 2001 are capitalized and a loan liability recognized. Consequently depreciation is provided on such assets, installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles. The agreements provide for reimbursement of taxes, levy etc imposed by any authorities in future. There are no exceptional / restrictive covenants in the lease agreements.

The minimum installments and present value as at March 31, 2016 in respect of asset acquired under the lease agreement are as under :


Mar 31, 2015

1. Corporate Information :

Adi Finechem Limited ("The Company") was incorporated in May, 1985 as "H. K. Agro Oil Ltd." under the provisions of The Companies Act, 1956. The Company is engaged in manufacturing of Specialty Oleo Chemicals. The manufacturing facility for the same is set up at Village Chekhala, Ta. Sanand, Dist. Ahmedabad, Gujarat. The finished products of the Company can broadly be divided in to (a) Nutraceutical Products and (b) Oleo Chemicals. The equity shares of the Company are listed on Bombay Stock Exchange Ltd. and Ahmedabad Stock Exchange Ltd. There was a partial change in management of the Company w.e.f. April, 2010.

2.1 Term loans / Working Capital Term loans aggregating to Rs. 9,18,45,291/- (Previous Year Rs. 2,22,58,471/-) are secured primarily by hypothecation by way of first charge on all present and future stocks, book debts, vehicles and collaterals security by way of Equitable mortgage of industrial property bearing Survey No. 253/P and 312 situated at village Chekhala, Sanand-Kadi road and Hypothecation of plant and machinery installed at the factory premises. Current rate of Interest is 11.75% per annum repayable in 60 / 48 monthly installments commencing from 7th day of succeeding months of respective disbursements.

2.2 The Vehicle loans from HDFC Bank Limited are secured by hypothecation of vehicles and are further secured by personal guarantee given by a Director of the Company. The vehicle loan from ICICI Bank Ltd is secured by hypothecation of vehicle.

* The opening balance of Depreciation under the heads "Office Equipment" and "Furniture & Fixtures" include Rs. 1,17,345/- and Rs. 23,745/- respectively, being the adjustment made as per Schedule II of the Companies Act, 2013. The corresponding adjustment for aggregate amount of Rs. 1,41,090/- is given in Note No. 2 titled as "Reserves & Surplus"

* The basic and diluted EPS for the year 2013-14 have been restated pursuant to the issue of bonus equity shares in the ratio of 1:10 ( one bonus equity share of Rs. 10/- each for every 10 equity shares of Rs. 10/-each held).

* The estimates of future salary increase considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market.

Defined Contribution Plans :

Rs.54,38,888/- (Previous Year Rs.23,05,243/-) recognised as an expense and included in the note 21 of Profit and Loss Account under the head " Contribution to Provident Fund,Gratuity and Superannuation"

3 Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transactions have taken place and relationships

(i) Enterprise over which Key management personnel and their relatives are able to exercise significant influence Adicorp Enterprise Private Limited

PCD Investment Private Limited

UKM Investment Private Limited

Harihar Manufacturing & Trading Private Limited

Dashrath Jagmohandas Investment Private Limited

Super Handlers Private Limited

Ashmak Investment Private Limited

Adi Corporation

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala Shri Bimal D. Parikh

4 Contingent Liabilities

As at As at Particulars 31st March 31st March 2015 2014

(a) In respect of Bank Guarantee given by bank to UGVCL 6,410,021 -

(b) In respect of disputed Income Tax matters 1,456,215 870,115

(c) In respect of Civil Suit 1,500,000 1,500,000

(d) In respect of Custom Duty 520,360 520,360

(e) In respect of Excise Duty 2,279,219 2,279,219

12,165,815 5,169,694

(f) Commitments:

Estimated amount of contracts remaining to be executed on capital account 47,303,966 51,205,113 and not provided for (Net of advances)

5 Dividends proposed to be distributed :

The Board of Directors, in its meeting held on May 04, 2015 recommended the dividend of Rs. 2.50 per equity share of Rs. 10/- each.

6 The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confirmation and reconciliation.

7 Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No.22 "Other Expenses " represents excise duty paid on sample etc. is not recoverable from sales.

8 Leases :

Finance Lease :

In accordance with accounting standards 19 "Leases"issued by the Institute of Chartered Accountants of India, the assets acquired on finance lease on or after April 01,2001 are capitalised and a loan liability recognised. Consequently depreciation is provided on such assets,installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles. The agreements provide for reimbursement of taxes,levy etc imposed by any authorities in future. There are no exceptional/restrictive covenants in the lease agreements.

and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 30th Annual General Meeting of the Company, to be held on Monday, July 27, 2015 at 5.00 p.m. at Memories Hall, 2nd Floor, TGB Banquets & Hotel Ltd., (The Grand Bhagwati), S. G. Road, Bodakdev, Ahmedabad - 380 054 and at any adjournment thereof in respect of such resolutions as are indicated below:

Notes:

(1) This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting.

(2) A Proxy need not be a member of the Company.

(3) A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

(4) This is only optional. Please put a 'V' in the appropriate column against the resolutions indicated in the Box. If you leave the 'For' or 'Against' column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.

(5) Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes.

(6) in the case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.


Mar 31, 2014

1. Segment Reporting:

The Company has only one reportable business segment "Speciality Chemicals" as primary segment. The Company has identified the Secondary Segment as geographical segment based on the location of customers.

2. Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transactions have taken place and relationships

(i) Enterprise over which Key management personnel and their relatives are able to exercise significant influence Adicorp Enterprise Private Limited PCD Investment Private Limited UKM Investment Private Limited Harihar Manufacturing & Trading Private Limited Adi Enterprise

Dasrath Jagmohandas Investment Pvt. Limited Super Handlers Private Limited Ashmak Investment Private Limited Adi Logistics

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala Shri Bimal D.Parikh

3. Contingent Liabilities

As at As at Particulars 31st March 31st March 2014 2013

(a) Outstanding Bank Guarantees given to various Statutory bodies

(a) In respect of disputed Income Tax matters 870,115 870,115

(b) In respect of Civil Suit 1,500,000 1,500,000

(c) In respect of Custom Duty 520,360 520,360

(d) In respect of Excise Duty 2,279,219 -

5,169,694 2,890,475

(d) Commitments:

Estimated amount of contracts remaining to be executed on capital account 51,205,113 36,210,700 and not provided for (Net of advances)

4. Disclosure of Derivatives

The Company uses derivative instruments i.e forward contracts to hedge I its risks of net exposure associated with foreign currency fluctuations. The I Company does not enter into any forward contract which is intended for trading I or speculative purposes. However there are no outstanding foreign exchange I forward contracts for hedging foreign currency in relation to Exports as at I March 31, 2014.

5. The Board of Directors, in its meeting held on May 19, 2014, recommended the dividend of Rs. 1.50 per equity share of Rs. 10/-each.

6. Insurance claim lodged by the Company in respect of fire that took place in previous financial year ended 31-03-2013 is settled during the year.

7. The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confirmation and reconciliation.

8. Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No. 22 "Other Expenses " represents excise duty paid on sample etc. is not recoverable from sales.

9. Leases :

Finance Lease :

In accordance with accounting standards 19 "Leases" issued by the institute of Chartered Accountants of India, the assets acquired on finance lease on or after April 01, 2001 are capitalised and a loan liability recognised. Consequently depreciation is provided on such assets, installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles. The agreements provide for reimbursement of taxes, levy etc imposed by any authorities in future. There are no exceptional/restrictive covenants in the lease agreements.


Mar 31, 2013

1 Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transactions have taken place and relationships

(i) Enterprise over which Key management personnel and their relatives are able to exercise signifcant infuence

Adicorp Enterprise Private Limited

PCD Investment Private Limited

UKM Investment Private Limited

Harihar Manufacturing & Trading Private Limited

Adi Enterprise

Dasrath Jagmohandas Investment Pvt Limited

Super Handlers Private Limited

Ashmak Investment Private Limited

Adi Logistics

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala Shri Bimal D. Parikh

(iii) Relatives of Key Management Personnel

Miss Vaishnavi N. Jariwala Miss Priyanshi N. Jariwala

2 Contingent Liabilities

As at As at Particulars 31st March 31st March 2013 2012

(a) Outstanding Bank Guarantees given to various Statutory bodies 397,000

(b) In respect of disputed Income Tax matters 870,115 7,325,188

(c) In respect of Civil Suit 1,500,000 1,500,000

(d) In respect of Custom Duty 520,360 520,360

2,890,475 9,742,548

(d) Commitments:

Estimated amount of contracts remaining to be executed on capital account 36,210,700 4,929,373 and not provided for (Net of advances)

3 Dividends proposed to be distributed :

The Board of Directors, in its meeting held on May 18, 2013, recommended the dividend of Rs. 1 /- per equity share of Rs. 10/-each.

4 During the year, on 27-11-12, fre took place at the factory of the Company. The Company has lodged a claim with insurance company under fre policies which is under process. Based on the current status of the claim, the insurance claim Receivable and corrssponding loss on fre is accounted for. The difference, if any, on settlement will be effected in the statement of proft and loss.

5 The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confrmation and reconciliation.

6 Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No.22 "Other Expenses" represents excise duty paid on sample etc. is not recoverable from sales.

7 Leases :

Finance Lease :

In accordance with accounting standards 19 "Leases"issued by the institute of Chartered Accountants of India,the assets acquired on fnance lease on or after April 01, 2001 are capitalised and a loan liability recognised. Consequently depreciation is provided on such assets, installments paid are allocated to the liability and the interest is charged to Proft and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles. The agreements provide for reimbursement of taxes,levy etc imposed by any authorities in future. There are no exceptional / restictive convenants in the lease agreement.


Mar 31, 2012

(1) The Cash Flow statement has been prepared under the Indirect Method as set out in Accounting Standard - 3 on Cash Flow Statement issued by The Institute of Chartered Accountants of India.

(2) Purchase of Fixed Assets include items in Capital Work in progress including capital advances

(3) The previous year's figures have been re-grouped wherever necessary to make them comparable with this year's figures.

4.1 The equity share holders of the Company are entitled to receive interim and/ or final dividend as declared and approved by the Board of Directors and/or the share holders of the Company. The dividend so declared will be in proportion to the number of equity shares held by the shareholders

4.2 In the event of the liquidation of the Company, equity share holders will be entitled to receive remaining assets of the company. The distribution will in proportion to the number of equity shares held by the share holders.

Nature of Security and terms of repayment for Long term secured borrowings :

5.1 Term loans Rs.15,118,555 (Previous Year :248,331)are secured primarly by Hypothecation by way of first and exclusive charge on all present and future stocks and book debts and colleteral security by way of Equitable mortgage of industrial property bearing survey no. 253 & 312 suitated at village chekhala, sanand kadi road and Hypothecation of plant and machinery installed at the factory premises. Further secured by personal gurarantee given by Promoter Directors.Rate of Interest is 13.50% Repayable in 36 monthly installments commencing from December 2011.

5.2 The Vehicle loans from Bank are secured by hypothecation of vehicles and are further secured by personal guarantee given by the Directors of the company.

Working Capital Loan Rs. 140,469,524 (Previous Year :96,169,280)are secured primarly by Hypothecation by way of first and exclusive charge on all present and future stocks and book debts and colleteral security by way of Equitable mortgage of industrial property bearing survey no. 253 & 312 suitated at village chekhala, sanand kadi road and Hypothecation of plant and machinery installed at the factory premises. Further secured by personal gurarantee given by Promoter Directors.Rate of Interest is 13.50%

6 Related Party Disclosures :

List of related parties where contracts exists and related parties with whom transaction have taken place and relationship.

(i) Enterprise over which Key management personnel and their relatives are able to exercise significant influence

Adicorp Enterprise Private Limited

PCD Investment Private Limited

UKM Investment Private Limited

Harihar Manufacturing & Trading Private Limited

Adi Enterprise

Dasrath Jagmohandas Investment Pvt Limited

Super Handlers Private Limited

Munindra Investment Private Limited

Adi Logistic

Navin Syntex Private Limited

Newzen omputers Private Limited

Tulsishyam Investment Private Limited

Ashmak Investment Private Limited

(ii) Key Management Personnel

Shri Nahoosh J. Jariwala

Shri Bimal D.Parikh

(iii) Relatives of Key Management Personnel

Miss Vaishnavi N.Jariwala

Miss Priyanshi N.Jariwala

7 Disclosure of Derivatives

The Company uses derivative instruments i.e forward contracts to hedge its risks of net exposure associated with foreign currency fluctuations. The Company does not enter into any forward contract which is intended for trading or speculative purposes.However there are no outstanding Foreign exchange forward contract for hedging Foreign currency in relation to Exports as at March 31,2012

Foreign Currency exposure not hedged by derivative instrument as at March 31,2012 amount to Rs 69,447,054 (Previous Year Rs.3,06,98,143 /-)

On the basis of the information and records available with the Company, there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the MSMED Act and above mentioned disclosures are made under the Note No. 7 " Trade Payables". This has been relied upon by the auditors.

8. The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured / Unsecured Loans are subject to confirmation and reconciliation.

9. Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Note No.22 "Other Expenses" represents excise duty paid on sample etc. is not recoverable from sales.

10. Leases:

Finance Lease:

In accordance with accounting standards 19 "Leases"issued by the institute of Chartered Accountants of India,the assets acquired on finance lease on or after April 01,2001 are capitalised and a loan liability recognised.Consequently depreciation is provided on such assets,installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on lease agreements mainly comprise of vehicles.The agreements provide for reimbursement of taxes,levy etc imposed by any authorities in future.There are no exceptional/restictive convenants in the lease agreements.

The minimum installments and present value as at March 31,2012 in respect of asset acquired under the lease agreement are as under:


Mar 31, 2011

Current Year Previous Year Rs. Rs.

1. Contingent Liabilities :

(a) Claims against the Company for civil suit of damages 15,00,000 NIL

(b) Disputed demand of Income Tax Department 73,25,188 73,25,190

(b) Defined Contribution Plans :

Rs. 13,41,357/- (Previous year Rs. 13,02,097/-) recognised as an expense and included in the Schedule 13 of Profit and Loss Account under the head "Contribution to Provident Fund, Gratuity and Superannuation".

2. Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Schedule 13 "Manufacturing Expenses & Other Expenses" represents excise duty paid on sample etc. is not recoverable from Sales.

(b) Foreing Currency exposure not hedged by derivative instruments as at 31st March, 2011 amount to Rs. 3,06,98,143/- (Previous Year Rs. 1,55,00,603/-)

3. The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured/Unsecured Loans are subject to confirmation and reconciliation.

4. Leases :

Finance Lease :

In accordance with Accounting Standard 19 "Leases” issued by the Institute of Chartered Accountants of India, the assets acquired on finance lease on or after April 01, 2001 are capitalized and a loan liability recognized. Conse- quently, depreciation is provided on such assets, installments paid are allocated to the liability and the interest is charged to Profit and Loss Account.

Assets acquired on Lease agreements mainly comprise of Vehicles. The Agreements provide for reimbursement of taxes, levy etc. imposed by any authorities in future. There are no exceptional / restrictive covenants in the Lease Agreements.

5. In the opinion of the Management of the Company, the Current Assets, Loans & Advances are approximately of the value stated if realized in the ordinary course of business. The provision for the depreciation and for all known liabilities are adequate and not in excess of amount reasonably necessary. There are no Contigent Liabilities other than stated.

6. Figures of previous year have been re-grouped / reclassified, wherever necessary to make them comparable with the figures of this year.


Mar 31, 2010

Current Year Previous Year Rs. Rs.

1. Contingent Liabilities :

(a) Disputed demand of Central Excise Department NIL NIL

(b) Disputed demand of Income Tax Department 73,25,190 73,25,190

(b) Defined Contribution Plans :

Rs. 13,02,097/- (Previous year Rs. 11,69,843/-) recognised as an expense and included in the Schedule 13 of Profit and Loss Account under the head "Contribution to Provident Fund, Gratuity and Superannuation".

2. Excise duty shown as deduction from domestic sales represents the amount of excise duty on sales. Excise duty expense under Schedule 13 "Manufacturing Expenses & Other Expenses" represents excise duty paid on sample etc. is not recoverable from Sales.

3. The following disclosures are made for the amounts due to the Micro, Small and Medium Enterprises as at 31st March, 2010.

(Amount in Rs.)

Principal amount remaining unpaid to any supplier as at the year end 2,99,819 (Unpaid as at 31st March, 2009) (1,59,035)

Interest due on the above mentioned principal amount remaining unpaid to any - supplier as at the year end (-)

Amount of the interest paid by the Company in terms of Section 16 of Micro, Small - and Medium Enterprises Development Act, 2006 ("MSMED Act") along with the amount of the payment made to the supplier beyond the appointed day during the (-) accounting year.

Amount of the interest due and payable for the period of delay in making payment - but without adding the interest specified under the MSMED Act. (-)

Amount of Interest accrued and remaining unpaid at the end of the accounting - year. (-)

On the basis of the information and records available with the Company, there are no delays in payments to Micro, Small and Medium Enterprises as required to be desclosed under the MSMED Act and above mentioned disclosures are made under the Schedule -10 "Current Liabilities and Provisions". This has been relied upon by the auditors.

4. Related Party Disclosures :

(a) List of Related Parties with whom transactions have taken place and Relationship :

Name of Related Party Relationship

Aja Impex Pvt. Ltd. formerly known as

(Shri Aja Electro Chem Pvt. Ltd.)

Shri Abhyudaya Chemicals Pvt. Ltd.

Shri Arya Investment Pvt. Ltd.

Essenar Investments Pvt. Ltd. " Enterprises over which key management personnel and their

PCD Investment Pvt. Ltd. relatives are able to exercise significant influence.

UKM Investment Pvt. Ltd. (Associate Companies / Enterprise)

Harihar Manufacturing & Trading Pvt. Ltd.



Adicorp Enterprises Pvt. Ltd.

Shri Rajan R. Harivallabhdas > Key Management Personnel

Shri Nahoosh J. Jariwala



Shri A. R. Harivallabhdas

Smt. K. A. Harivallabhdas Relatives of key Management Personnel Smt. S. D. Harivallabhdas

Miss Vaishnavi N. Jariwala

Miss Priyanshi N. Jariwala

(C) List of other Companies under common control:

1. Shri Ajita Investment Pvt. Ltd.

2. Shri Amala Investment Pvt. Ltd.

3. Rekhank Investment Pvt. Ltd.

4. Archisa Investment Pvt. Ltd.

5. Agam Investment Pvt. Ltd.

6. Anugat Investment Pvt. Ltd.

Note : Transactions with related parties which are not material in nature and carried out in normal course of business such as payment of electricity bills, telephone bills, office maintenance charges etc. are not shown.

(b) The total installed capacity of the company is 10,000 M.Tons per annum measured in terms of throughput of raw material. (As certified by the management and accepted by the Auditors as such.)

- The Quantitative details under following para (C) to (h) is as submitted by the management and accepted by the Auditors as such.

5. Capital work in progress includes advances given to suppliers Rs. 23,63,747/- (Previous Year Rs. NIL)

6. The balances under the head of Sundry Debtors, Sundry Creditors, Loans & Advances, Secured/Unsecured Loans are subject to confirmation and reconciliation.

7. In the opinion of the Management of the Company, the Current Assets, Loans & Advances are approximately of the value stated if realized in the ordinary course of business. The provision for the depreciation and for all known liabili- ties are adequate and not in excess of amount reasonably necessary. There are no Contigent Liabilities other than stated.

8. As there is a Business loss as per the provisions of the Income Tax Act,1961 therefore no provision for Tax has been made.

9. The details of Previous years expenses is as under:

10. Figures of previous year have been re-grouped / reclassified, wherever necessary to make them comparable with the figures of this year.

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