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Notes to Accounts of Balaji Amines Ltd.

Mar 31, 2023

Nature and purpose of other reserves

(i) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilized in accordance with the provisions of the Companies Act, 2013.

(ii) Capital reserve

Capital reserve includes transfer of forfeited shares amount and state subsidy. The reserve is utilised in accordance with the provision of the Companies Act, 2013.

(iii) Retained earnings

This reserve represents the cumulative profits of the Company and effects of the remeasurement of defined benefit obligations. The reserve is utilised in accordance with the provisions of the Companies Act, 2013

(iv) General Reserve

This reserve is used to record the transfers made from the retained earnings and was made on account of the requirements of the Companies Act, 2013 for payment of dividends. General reserve is used for strengthening the financial position and meeting future contingencies and losses.

37. CONTINGENT LIABILITIES AND COMMITMENTS (a) Contingent liabilities

Particulars

As at

March 31, 2023

As at

March 31, 2022

Claims against the Company not acknowledged as debts

Income tax

558.75

297.09

Guarantees

Corporate guarantee provided to bank on behalf of subsidiary company

-

250.00

Total

558.75

547.09

(b) Capital and other commitments

Particulars

As at

March 31, 2023

As at

March 31, 2022

Estimated amount of contracts remaining to be executed on capital account and not provided for

6,749.04

1,136.85

Total

6,749.04

1,136.85

The above sensitivity analysis is based on a change in each assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

(e) Risk exposure

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

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

40. CAPITAL MANAGEMENT

(a) Capital management and gearing ratio

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company''s capital management is to maximise the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The company monitors capital using a gearing ratio, which is debt divided by total capital. The company includes within debt, interest bearing loans and borrowings.

The Company funds its operations through internal accruals and aims at maintaining a strong capital base to support the future growth of its business.

(b) Particulars relating to short term borrowings

The company has obtained cash credit facilities under consortium banking from HFDC Bank Limited, State Bank of India and Bank of Baroda, which are secured by

- first pari-passu charge by way of hypothecation over the entire current assets of the Company (except Hotel disvison) and

- first pari-passu charge by the consotium on Land and Building and other movable fixed assets inlcuding Plant and machinery, both present and future of Unit I (Freehold) at Gat No. 194, 195, 196, 197 & 201, Tamalwadi, Osmanabad, Maharashtra and Unit III (Leasehold) at Plot No E-7 & E-8, MIDC, Chincholi, Solapur, Maharashtra.

These loans carry interest rate ranging from 7.80% p.a to 8.25% p.a.

As on 31st March, 2023, there is no outstanding amount under these facilities

41. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Fair values

The carrying amounts of trade payables, other financial liabilities (current),trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximation of fair values:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

There are no transfers between levels 1 and 2 during the year. The company''s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

(A) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency risk, interest rate risk and price risk.

Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables involving foreign currency exposure. The sensitivity analyses in the following sections relate to the position as at March 31, 2023 and March 31, 2022. The analysis excludes the impact of movements in market variables on the carrying values of financial assets and liabilties. The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31,2023 and March 31,2022.

(i) Foreign currency exchange rate 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''s exposure to the risk of changes in foreign exchange rates relates primarily to the trade/ other payables and trade/other receivables. The risks primarily relate to fluctuations in US Dollar and Euros against the functional currencies of the Company. The Company''s exposure to foreign currency changes for all other currencies is not material. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

The following tables demonstrate the sensitivity to a reasonably possible change in US dollars and Euro exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

(iii) 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 change in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates. As the Company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.

As the Company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

(B) Credit Risk

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to financial assets of the Company include trade receivables, security deposits held with government authorities and bank deposits which represents Company''s maximum exposure to the credit risk.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. With respect to other financial assets viz., loans & advances, deposits with government and banks, the credit risk is insignificant since the loans & advances are given to employees only and deposits are held with government bodies and reputable banks. The credit quality of the financial assets is satisfactory, taking into account the allowance for credit losses.

(ii) Significant estimates and judgements Impairment of financial assets:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company''s treasury maintains flexibility in funding by maintaining availability under deposits in banks.

Management monitors cash and cash equivalents on the basis of expected cash flows.

42. SEGMENT INFORMATION

(a) Description of segments and principal activities

The Company''s Managing Director and Chief Financial Officer examine the Company''s performance from a product perspective and have identified two reportable segments:

1. Chemicals - Manufacturing of speciality chemicals, aliphatic amines and derivatives

2. Hotel - Providing hotel, restaurant and hospitality services"

Segment revenue and expenses:

The Company has an established basis of allocating Joint/Corporate expenses to the segments, which is reasonable, and followed consistently. All other segment revenue and expenses are attributable to the segments. Certain Expenses/Income are not specifically allocable to specific segments and accordingly these expenses are disclosed as unallocated corporate expenses or income and adjusted only against the total income of the company. Segment result includes the respective other income.

Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions that are reported as direct offsets in the balance sheet. While most assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated to the segments on a reasonable basis. In such cases, the entire revenue and expenses of these assets including depreciation are also allocated to the same segments. Assets which are not allocable to the segments have been disclosed as ''unallocated corporate assets''. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include deferred income taxes. The loans and other borrowings that are not specifically allocable to the various segments are disclosed as ''unallocated corporate liabilities.

Inter segment transfers:

The Company adopts a policy of pricing inter-segment transfers at cost to the transferor segment.

Summary of segment information

43. IND AS 115 - REVENUE FROM CONTRACTS WITH CUSTOMERS

(A) The Company is primarily in the Business of manufacture and sale of Speciality Chemicals and Hotel Industry. All product sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch or delivery. All service sales are made over a period of time and revenue is recognised based on percentage of completion method. 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.

c. Borrowings on the basis of security of current assets

The Company has borrowings from banks on the basis of security of current assets. The quarterly statements of current assets filed by the Company with banks are in agreement with the books of accounts.

45. IMPACT OF COVID 19 PANDEMIC

The Company has considered the possible effects that may result from the pandemic relating to Covid-19 in the preparation of the financial statements including the recoverability of carrying amounts of financial and non-financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of these financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of Covid-19 on the Company''s financial statements may differ from that estimated as at the date of approval of these financial statements.

46. NOTE ON “CODE ON SOCIAL SECURITY, 2020"

The Indian Parliament has approved the''Code on Social Security, 2020''(''the Code'') 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 evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

47. The figures of previous year have been regrouped/reclassified wherever necessary to conform to current year''s presentation.


Mar 31, 2022

a) Depreciation is provided on fixed assets over the remaining useful life in accordance with the provisions of Schedule II of the Act.

b) Property, Plant and Equipment given as security for borrowings (Refer note 18 & 21).

c) Certain machinery at SPFY unit are hypothecated to Director of Industries Himachal Pradesh towards capital subsidy received from them.

d) Capital Work in progress includes a sum of ''780.53 spent for ongoing expansion at Kala-amb unit.

6.2 In the Previous year, the Company has reassessed deferred tax recognition, accordingly deferred tax assets of ''271.65 lakhs on unabsorbed depreciations and carried forward tax losses had been accounted. The Company has concluded that the deferred tax assets on unabsorbed depreciations and carried forward tax losses will be recoverable using the estimated future taxable income based on the approved business plans and budgets. The Company is expected to generate taxable income in near future.

13.1 Advances to Arcot Textile Mills Limited (ATML) (then a BIFR Company) was given for purchase of movable and immovable assets situated at Kallakurichi, Tamilnadu for a total consideration of ''1,105.00 on lump sum sale basis pursuant to MOU dated 20th December, 2007. The transfer of assets in favour of the Company was subject to deregistration of ATML from BIFR. Due to inordinate delay in deregistration from BIFR, it had been agreed that ATML will return the above advance vide their confirmation letter dated 5th October, 2012. Accordingly, ''930.59 has been returned by ATML till March 31,2022.

Rights, preferences and restrictions attached to Equity Shares:

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

Nature and purpose of other reserves/ other equity Securities Premium

This Reserve represents premium received on issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.

Share Based Payment Reserve:

This reserve relates to stock options granted to employees under "Employee Stock Option Plan 2018 Scheme (ESOP)"and shall be transferred to securities premium account/retained earnings on exercise/cancellation of options.

Retained Earnings

Retained earnings are profits earned by the Company after transfer to general reserve and payment of dividend to shareholders.

18.1 Term Loan from bank of ''434.51 of Foreign Currency Term Loan is secured by first pari passu charge over fixed assets of the Company both present & future with other term lenders and are further secured by second charge over current assets of the Company, by personal guarantee of Chairman of the Company and pledge of company''s certain shares by promoter and promoter group firms. This loan is repayable in monthly instalments ending December 2022 and presently carries interest @6.16% p.a..

18.2 Term Loans from banks of ''585.28 are secured by first pari passu charge over current assets of the Company and further secured by second pari passu charge over fixed assets of the Company both present & future with other term lenders, by personal guarantee of the Chairman of the Company.

Out of these loan, i) ''293.75 is repayable in monthly instalments ending October 2024 and carries interest @9.25% p.a..; ii) ''225.53 is repayable in monthly instalments ending October 2024 and carries interest @7.5% p.a.. & iii) ''66.00 is repayable in monthly instalments ending March 2027 and carries interest @6.8% p.a

18.3 Term Loan from bank of ''135.11 is secured by exclusive charge on certain plant & machinery purchased under ATUFS. This loan is repayable in monthly instalments ending November 2024 and carries interest @5.60% p.a..

18.4 Term Loan from Banks of ''51.57 are secured by hypothecation of respective vehicles financed.

21.1 Cash Credit Loans are secured by first pari passu charge by hypothecation of stocks, book debts and second pari passu charge on all fixed assets, both present and future and further secured by corporate guarantee of Hakoba Lifestyle Limited, a subsidiary of the Company and Pioneer E-com Fashions LLP, a promoter group firm, and personal guarantee of the Chairman of the Company.

38 Employee benefits

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined Contribution Plans:

The Company makes contributions towards provident fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. During the year the Company has contributed to Government Provident Fund ''104.79 (''86.91).

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at March 31,2022. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company''s financial statements as at balance sheetE. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

Sensitivities due to mortality and withdrawals are insignificant, hence ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

F. Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks as follow -

A) Salary Increases- Higher than expected increase in salary will increase the defined benefit obligation.

B) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan''s liability.

C) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumption in the valuation can impact the liabilities."

40 Pioneer Embroideries Limited Employee Stock Option Plan 2018 Scheme (ESOP)

The Company has granted stock options under the Pioneer Embroideries Limited Employee Stock Option Plan 2018 Scheme (ESOP) to the eligible employees of the Company. Under ESOP, the company has granted 4,31,000 options on August 03, 2021. 100% of total options granted would vest in after one year from the date of grant subject to fulfilment of vesting conditions. The maximum period for exercise of options is three year from the date of vesting. Each option when exercised would be converted into one fully paid-up equity share of ''10 each of the Company. The options granted under ESOP carry no rights to dividends and voting rights till the date of exercise.

@ The exercise price shall be decided by NRC subject to maximum discount of 50% of the closing market price on the stock exchange, which records the highest trading volumn in the Company''s equity shares on the date immediately prior to the date on which the notice of excercise is given to the Company by the employee. In any event, the excercise price shall not be less than face value of the equity share.

B. Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table."

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed

equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded

bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is

included in level 3. This is the case for unlisted equity securities.

II. Financial risk management

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

- credit risk;

- liquidity risk; and

- market risk"

i. Risk management framework

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 processes to ensure that executive management controls risks through the mechanism of property defined framework.

The Company''s risk management policies 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 by the board annually to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s Audit Committee oversees 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. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely both in domestic and export market. The Management impact analysis shows credit risk and impact assessment as low.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes market check, industry feedback, past financials and external ratings, if they are available. Sale limits are established for each customer and reviewed periodically. Any sales exceeding those limits require approval from the President of the Company.

More than 60 % of the Company''s customers have been transacting with the Company for over four years, and no impairment loss has been recognized against these customers. In monitoring customer credit risk, customers are reviewed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

The carrying amount net of credit loss allowances of trade receivables is ''2,155.16 (March 31, 2021 - ''1,994.68).

iii. 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 fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities 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.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows. This is generally carried out at unit level and monitored through corporate office of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account requirement, future cash flow and the liquidity in which the entity operates. In addition, the Company''s liquidity management strategy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(a) Financing arrangements

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in indian rupee and have an average maturity within a year.

(b) Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and exclude contractual interest payments and the impact of netting agreements.

The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to financial liabilities held for liquidity / credit management purposes and which are not usually closed out before contractual maturity.

The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change.

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management

is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company uses derivatives like forward contracts to manage market risks on account of foreign exchange. All such transactions are carried out within the guidelines set by the Board of Directors.

v. Currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and small exposure in EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions by hedging the foreign exchange inflows on regular basis.

Currency risks related to the principal amounts of the Company''s foreign currency payables, have been partially hedged using forward contracts taken by the Company.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During March 31,2022 and March 31,2021, the Company''s borrowings at variable rate were denominated in Indian Rupees.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Fair value sensitivity analysis for fixed-rate instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

42 a. Balances of certain trade receivables, advances, trade payables and other liabilities are in the process of confirmation and/or reconciliation.

b. Realisable value of current assets, deposits, loans and advances in the ordinary course of business will be at least equal to the amount at which they have been stated in the financial statements.

c. Some of the fixed deposits and bank accounts are subject to confirmations though reconciled with available bank statements.

44 Events Occurring after Balance Sheet Date Proposed Dividend

The Board of Directors has recommended final dividend of ''0.30 (''0.25) per share on the face value of ''10 each, aggregating to ''79.77 (''66.48), subject to approval by the Members at the forthcoming Annual General Meeting of the Company.

45 Segment Reporting

According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one broad business segment viz. "Textile" and substantially sale of the product is within the country. The Gross income and profit from the other segment is below the norms prescribed in Ind AS 108. Hence, the disclosure requirement of Ind AS 108 of ''Segment Reporting'' is not considered applicable.

46 Capital Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The following table summarises the capital of the Company :

50 Previous year figure have been regrouped / reclassified to conform to current years classifications. The accompanying Notes are an integral part of the Standalone Financial Statements.


Mar 31, 2019

As part of the general terms & conditions in respect of borrowings from Banks, prior permission should be taken from the lending Banks before distribution of dividend. Similarly, the term lenders have imposed a condition that, no dividend shall be declared in the event of default in the scheduled repayment of instalment or interest.

f. During the five years immediately preceding the current financial year, the company has not issued any shares without payment being received in cash, nor issued any bonus shares. Neither did the company buy back any shares during the said period.

g. The company has only one class of shares i.e. Equity Shares._

h. Terms and rights attached to equity shares

Rupees

Notes forming part of Standalone Financial Statements

The company has only one class of equity shares having par value of INR 2 per share. The Company declares and pays dividends in Indian Rupees. In the event of liquidation of the company, the holders of 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.

d) General Reserve At the beginning of the year Add : Transfer from statement of Profit and Loss Add : Difference between the aggregate face value of investment in amalgamating companies and the total cost of the same. Less :

Adjustment of Accumulated Debit Balance of Profit and Loss of

e) Balance in Statement of Profit and Loss brought forward from previous year


Mar 31, 2017

B. Contingent Liabilities:

Disputed demands

A. Under the Income Tax Act, l96l: Rs.l7.60 Lakhs (relating to Assessment Year 20l3-l4) and Rs.23l.08 Lakhs (relating to Assessment Year 20l4-l5) in respect of additions made in assessment under section l43(3) of the Income Tax Act, l96l and disputed in appellate proceedings. The appeals are pending before the Commissioner of Income Tax (Appeals) 7 Pune. The company has deposited an amount of Rs.2.64 Lakhs and Rs.34.66 Lakhs respectively against the said demands and obtained stay of collection of the balance disputed demand till disposal of the appeal. The above referred tax payments are grouped under the head "Short term loans and advances"

B. Service Tax: Rs.l66.l6 Lakhs. The matter is pending in appeal before the First Appellate Authority, viz., Commissioner of Central Excise, Customs and Service Tax (Appeals). An amount of Rs.l2.47 Lakhs has been deposited against this disputed demand. This amount is grouped under the head "Short term loans and advances"

C. Amounts recoverable from employees

The company has an arrangement with the supplier of coal for supply of coal in specified consignments on a periodic basis. Few consignments aggregating to the value of Rs.3l.7l lacs have been misappropriated, while in transit, by 2 employees of the company during the year ended March 3l, 20l5. The services of the said employees have been terminated in that year itself and legal action against initiated on these employees including action for the recovery of the above mentioned amounts. Pending recovery the amounts are shown under short term advances.

D. Segment Reporting:

The company operates in two segments viz., (a) Amines & Specialty Chemicals and (b) Hotel segment.

E. Expenditure on Corporate Social Responsibility (CSR):

The company has incurred an expenditure of Rs.I34.96 Lakhs on Corporate Social Responsibility initiatives in accordance with the provisions of Section I35 of the Companies Act, 20I3. The details of the projects on which the amounts are expended by the company on account of Corporate Social Responsibility are given in Note.26.

F. Related Party transactions:

e. Restriction on disbursement of Dividend

As part of the general terms & conditions in respect of borrowings from Banks, prior permission should be taken from the lending Banks before distribution of dividend. Similarly, the term lenders have imposed a condition that, no dividend shall be declared in the event of default in the scheduled repayment of installment.

f. Particulars of each shareholder holding more than 5% of share capital


Mar 31, 2016

C. Contingent Liabilities:

Income Tax Act, 1961. For the assessment year 2013-14 vide Order under section 143(3) dated 30.03.2016, on account of certain additions to the returned income the assessment has resulted in a demand of Rs, 17.60 lacs. The company has since preferred an appeal before the First Appellate Authority, viz., the Commissioner of Income Tax (Appeals) Pune. The matter is pending hearing. The company has since deposited an amount of 15% of the tax demand pending disposal of appeal. The said tax payment is treated as an advance in the books of the company. [Previous Year: Penalty u/s 271(l)(c) of the Income Tax Act, 1961 for the Assessment Year 2009-10 Rs, 37.33 lacs. The appeal in this case has been decided in favor of the company by the Commissioner of Income Tax (Appeals) Pune.]

D. Amounts recoverable from employees

The company has an arrangement with the supplier of coal for supply of coal in specified consignments on a periodic basis. Few consignments aggregating to the value of Rs, 31.71 lacs have been misappropriated, while in transit, by 2 employees of the company during the year ended March 31, 2015. The services of the said employees have been terminated in that year itself and legal action against initiated on these employees including action for the recovery of the above mentioned amounts. Pending recovery the amounts are shown under short term advances.

E. The company has incurred an expenditure of Rs, 102.77 lacs on Corporate Social Responsibility initiatives in accordance with the provisions of Section 135 of the Companies Act, 2013. This includes an amount of Rs, 1.13 lacs being short fall from the amounts due to be spent in the year 2014-15. The details of the projects on which the amounts are expended by the company on account of Corporate Social Responsibility are given in Note. 26.

e. Restriction on disbursement of Dividend

As part of the general terms & conditions in respect of borrowings from Banks, prior permission should be taken from the lending Banks before distribution of dividend. Similarly, the term lenders have imposed a condition that, no dividend shall be declared in the event of default in the scheduled repayment of installment.

‘Aggregate of amounts included in long term liability and installments of term loan payable within one year (Other Current Liabilities-Note 9)

The borrowings towards working capital limits sanctioned by banks including Working Capital Demand Loans ‘are secured by pari-passu first charge by way of hypothecation of stocks and book debts and second charge on all fixed assets of the company, both present and future.

The Directors of the company viz., Mr. A. Prathap Reddy, Mr. N. Rajeshwar Reddy, Mr. D. Ram Reddy and Mr. G. Hemanth Reddy have provided personal guarantees towards the fund based and non-fund based working capital limits availed by the company from the above lenders. The aggregate amount of such guarantees provided are asunder;


Mar 31, 2015

1. Contingent Liabilities:

Penalty proceedings U/s.271(1)(c) of the Income Tax Act, 1961 were initiated on the company In respect of Assessment Years 2007-08, 2008-09 and 2009-10. The disallowances / additions in the assessments of these years have been deleted by the Hon'ble Income Tax Appellate Tribunal, Pune. The penalty levied in respect of these assessments would therefore stand nullified. The company preferred appeal against the penalty in all the three years and Appellate Orders for the Assessment Years 2007-08 and 2008-09 have been passed in favor of the company duly dropping the penalty. The appeal against the penalty for the Assessment Year 2009-10 is yet to be heard. Consequent to order of the Hon'ble Income Tax Appellate Tribunal in favour of the company deleting the addition the company has been advised that this penalty would stand cancel

2. Amounts recoverable from employees

The company has an arrangement with the supplier of coal for supply of coal in specified consignments on a periodic basis. Few consignments aggregating to the value of Rs.31.71 lacs have been misappropriated, while in transit, by 2 employees of the company. The services of the said employees have since terminated and the company has initiated legal action against these employees including action for the recovery of the above mentioned amounts from them. Pending recovery the amounts are shown under short term advances.

3. The company computed the expenditure to be incurred on Corporate Social Responsibility at Rs. 96.22 lacs in accordance with the provisions of Section 135 of the Companies Act, 2013. Out of the said total commitment, an amount of Rs. 1.13 lacs is spent in April, 2015. The details of the projects on which the amounts are expended by the company on account of Corporate Social Responsibility are given in Note.27.

4. Previous year's figures are regrouped and reclassified wherever considered necessary.

5. Restriction on disbursement of Dividend

As part of the general terms & conditions in respect of borrowings from Banks, prior permission should be taken from the lending Banks before distribution of dividend. Similarly, the term lenders have imposed a condition that, no dividend shall be declared in the event of default in the scheduled repayment of instalment.

6. During the five years immediately preceding the financial year 2014-15, the company has not issued any shares without payment being received in cash, nor issued any bonus shares and the company did not buy back any shares.


Mar 31, 2014

1. Contingent Liabilities :

Disputed Liability on account of income tax, interest thereon and penalty, Rs. 3.63 Crores, for Assessment Year 2007-08 to 2010-11(including penalty in dispute Rs.1.82 crores for the assessment years 2007-08, 2008-09 & 2009-10). The Company has preferred an appeal against the demand and the penalty. The amounts paid against the disputed demand Rs. 1.11 Crores are included in Short term Loans & Advances pending outcome of the appellate proceedings. The appeal against the assessment is presently before the Hon''ble Income Tax Appellate Tribunal, Pune and the matter relating to penalty is pending before the Hon''ble Commissioner of Income Tax (Appeals)-III, Pune.

2. Restriction on disbursement of Dividend

As part of the general terms & conditions in respect of borrowings from Banks, prior permission should be taken from the lending Banks before distribution of dividend. Similarly, the term lenders have imposed a condition that, no dividend shall be declared in the event of default in the scheduled repayment of installment.

3. During the five years immediately preceding the financial year 2013-14, the company has not issued any shares without payment being received in cash, nor issued any bonus shares and the company did not buy back any shares.

4. The company has only one class of shares i.e. Equity Shares.

The borrowings towards working capital limits are secured by way of hyphothecation of stocks and book debts and second charge on all fixed assets of the company, (except Hotel Division) both present and future.

The Directors of the company viz., Shri. A. Prathap Reddy, Shri. N. Rajeshwar Reddy, Shri. D. Ram Reddy and Shri. G. Hemanth Reddy have provided personal guarantees towards the fund based and non-fund based working capital limits availed by the company from the above lenders.


Mar 31, 2013

A. Contingent Liabilities:

Disputed Liability on account of income tax, interest thereon and penalty, Rs. 3.63 Crores, for Assessment Year 2007-08 to 2010-11(including penalty in dispute Rs.1.47 crores for assessment year 2007-08 and 2008-09 only). The Company has preferred an appeal against the demand. The amounts paid against the disputed demand Rs. 1.11 Crore are included in Short term Loans & Advances.


Mar 31, 2012

Disputed Income Tax Liability Rs. 2.00 Crores. for Assessment Year 2007-08 to 2009-10. The Company has preferred an appeal against the demand. The amounts paid against the disputed demand Rs. 1.00 Crore are included in Shortterm Loans & Advances.

a. The company has declared bonus shares 0 1:1 in financial 2006-07. i.e. one bonus share for every one share held. The capital prior to bonus issue was Rs. 3,24,01,000/- divided into 32,40,100 shares of Rs. 10/- each.

Post bonus issue the capital of the company became Rs.6,48,02,000/- divided into 64,80,200 shares of Rs. 10/- each. Subsequently vide resolution of the members passed under section 94 of the Companies Act 1956, at the Annual General Meeting held on 08.09.2010, the share of par value of Rs. 10/- each has been split-up into 5 shares of par value of Rs. 2/- each resulting in the present paid up capital of 3,24,01,000 equity shares of Rs. 2/- each agreegating to Rs. 6,48,02,000/-. During the five years immediately preceding the financial year 2011-12 the company has not alloted any shares without payment being received in cash nor bought back any shares.

The company has only one class of shares i.e. Equity Shares.


Mar 31, 2011

1. Contingent Liabilities: Disputed Income Tax Liability Rs.1.52 Crs. for AY 2007-08. The Company has preferred an appeal against the demand. The amounts paid against the disputed demand are included in Loans & Advances.


Mar 31, 2010

1. Contingent Liabilities: Disputed Income

Tax Liability Rs.1.52 Crs. for year ended 31.03.2007 related to A.Y.2007- 08. The Company has preferred an appeal against the demand. The amounts paid against the disputed demand are included in Loans & Advances.

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