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Notes to Accounts of Bhagiradha Chemicals & Industries Ltd.

Mar 31, 2022

20.2 Term loans II & III sanctioned by Axis Bank Ltd are secured by exclusive first charge on fixed assets created out of the term loans extended by the term lender and paripassu first charge on the movable fixed assets (Except vehicles) and immovable fixed assets of the Company (including EM of the Company land and buildings but excluding agricultural lands lying in the name of the Company not charged to any bank) along with other lenders and personal guarantee of Sri S Chandra Sekhar, Managing Director of the Company & Smt. S Lalitha Sree, Director of the Company.

20.3 Term Loans sanctioned under GECL 2.0 of H 290 Lakhs & H 179 Lakhs by State Bank of India & Axis Bank Ltd, respectively are secured by extension of charge / security interest (both primary & collateral ) currently secured to the banks for their existing credit facilities on a second ranking basis.

20.4 Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/ FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of H 918.54 Lakhs and H 514.51 Lakhs respectively for a period of 14 years to the Company in respect of Chlorpyriphos plant. The sanction of H 918.54 Lakhs under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of H 514.51 Lakhs under letter No.30/1/2002/0300/0300/FD dated 10-04-2002 has expired its utilisation on 14th February, 2016. The Company has availed an aggregate deferment loan of H 563.17 Lakhs under the above sanctions. The repayment has commenced and an amount of H 266.70 Lakhs has been paid. However, the deferment amount payable for the years 19-20, 2020-21 & 2021-22 aggregating to H 62.20 Lakhs was placed in the form of fixed deposits with banks as per orders of the Honourable High Courts of AP & TG. Thus the liability under sales tax deferment reflected is inclusive of the above deposits.

20.5 Loans availed from Intercorporates have been taken with the repayment period of two years from the date of availing such loan. The Interest is paid at the rate of 8.5% per annum on the principal outstanding.

20.6 Loans availed from Directors have been taken with the repayment period of two years from the date of availing such loan. The Interest is paid at the rate of 8.5% per annum on the principal outstanding.

20.7 The company has not been declared a wilful defaulter (as defined by RBI Circular) by any bank or financial Institution or other lender.

20.8 The Company does not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period.

20.9. a. The Company has not obtained term loan from any Bank/ Financial Institution during the financial year 2021-22.

20.9. b. The Company has obtained term loan from following Bank/ Financial Institution during the financial year 2020-21.

24 FINANCIAL LIABILITIES - BORROWINGS (Contd..)

1. For Limits sanctioned by SBI, Axis & RBL Banks

i) Primary Security for working captial loans:

Pari Passu first charge on current assets of the Company.

ii) Collateral Security :

Paripassu firtst charge on movable fixed assets of the Company (both present and future) except vehicles and assets created out of term loans from Axis Bank Ltd and equitable mortagage of the company''s factory land and buildings in an extent of 71.68 acres situated at Cheruvukommupalem, Ongole.

Pari Passu Second charge is available to SBI, ICICI Bank Ltd & RBL Bank Ltd by way of hypothecation on the movable fixed assets of the Company financed by Axis Bank Ltd.

iii) Primary security for Term Loans sanctioned by Axis Bank Limited- Exclusive charge by way of hypothecation on the assets created out of term loans sanctioned by Axis Bank Limited.

iv) Personal Guarantee of Sri. S Chandra Sekhar, Managing Director and Smt. S Lalitha Sree Director of the Company.

2. For Limits sanctioned by ICICI Bank Ltd, the following securities are stipulated- Cash Credit and LC limits

i. Primary Security:

First Paripassu charge on current assets of the company, both present and future along with other working capital member banks.

ii. Collateral securities:

First paripassu charge on entire fixed assets (Movable and Immovable) (except vehicles and assets financed exclusively by other banks and assets financed by Axis bank by way of term loans)both present and future along with other working capital member banks on Factory land and building property in Cheruvukommupalem, Prakasam district, Andhra Pradesh

iii) Second Paripassu charge on movable fixed assets of the company created out of term loans from Axis bank.

3. For Limits sanctioned by ICICI Bank Ltd, the following securities are stipulated- Over Draft Limit

i) Primary Security:

First Paripassu charge on current assets of the company, both present and future along with other working capital member banks.

ii) Collateral securities:

First paripassu charge on entire fixed assets (Movable and Immovable) (except vehicles and assets financed exclusively by other banks and assets financed by Axis bank by way of term loans)both present and future along with other working capital member banks on Factory land and building property in Cheruvukommupalem, Prakasam district, Andhra Pradesh

iii) Second Paripassu charge on movable fixed assets of the company created out of term loans from Axis bank.

iv) Exclusive collateral in the name of Bheema Fine Chemicals Pvt Ltd, situated at village Kadechur,Hobli,585102, Yadgir dist, Karnataka of leasehold industrial land in 33.90 acres.

v) The facilities are secured by personal guarantees of Mr S Chandra Sekhar and Smt. S. Lalitha Sree, Directors.

25.2 The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of Micro and Small Enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2022 has been made in the financial statements based on information received and available with the Company.

38 Exceptional Item - Insurance Claim :

An amount of H 105 Lakhs was received during the financial year 2020-21 as full & final settlement under the reinstatement policy for damage to Civil structures, Plant and Electrical Equipment which was disclosed as Income from Insurance claim as exceptional Item.

39 Other Comprehensive Income (OCI)

The disaggregation of changes to OCI by each type of reserve in equity is shown below:

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Nature of CSR activities - For promotion of Healthcare, Environmental Sustainability & Education.

As Per section 135 of the Companies Act, 2013, amount required to be spent by the Company during the year ended March 31, 2022 was H 46.89 Lakhs Computed at 2% of its average net profits for the immediately preceding three financial years, on Corporate Social Responsibility (CSR). The Company spent an amount of H 46.89 Lakhs against this obligation for promotion of Healthcare, Environmental Sustainability & Education.

42 EARNINGS PER SHARE

42.1 Earnings per share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

Diluted earnings /(loss) per share amounts are calculated by dividing the profit/loss attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

44 COMMITMENTS & CONTINGENCIES

Particulars

Year ended March 31, 2022

Year ended March 31, 2021

a. Commitments:

Estimated amount of contracts remaining to be executed on capital account & not provided for (net of advances)

93.91

36.30

Total

93.91

36.30

b. Contingent Liabilities:

i) Outstanding bank guarantees

10.00

10.00

ii) Letters of Credit

749.89

248.83

iii) Indirect Taxes - GST

65.69

-

iv) Indirect Taxes - Entry Tax

9.10

-

v) Indirect Taxes - CVD & SAD ( Refer Note 45)

39.92

39.92

Total

874.60

298.75

45 During the year 2018-19, Company paid H 26.21 Lakhs and H 13.71 Lakhs on account of CVD and SAD towards shortfall quantity of their export obligation in respect of two advance authorization licences granted to it. The Company has filed for a refund of the CVD & SAD as per the provisions of Sec. 142(3) of CGST Act. Refund application of the Company has been rejected by the Asst. Commissioner of Central Taxes, CGST Division vide its order dated 14.05.2020. Later, the Company made an Appeal with the Commissioner of Appeals, which was also rejected, vide

order dated 30.10.2020. On 28.01.2021, the Company preferred further appeal with The Customs, Excise and Service Tax Appellate Tribunal Regional Bench, Hyderabad which is admitted by the Appellate Tribunal vide letter dated 2106-2021. Hence, no provision is made in the books of the Company.

46 SEGMENT REPORTING :

a. BASIS OF SEGMENTATION

The company operates only in one business segment viz. ‘manufacturing and sales of agro chemicals'' and hence no separate information for primary segment wise disclosure is required.

53 FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The fair value of other current financial assets, cash and cash equivalents, trade receivables investments trade payables, short-term borrowings and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.

The amortized cost using effective interest rate (EIR) of non-current financial assets consisting of security and term deposits are not significantly different from the carrying amount.

Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.

Non-current borrowing comprises term loan from the banks. The impact of fair value on such portion is not material and therefore not considered for above disclosure.

Non-current borrowings comprises of Inter corporate borrowing has been valued at amortised cost using Effective Interest Rate (EIR).

Financial Risk Management objectives & Policies

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity exposes it to market risk, commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, the Company evaluates various options and may enter into derivative financial instruments like foreign exchange forward contracts, foreign currency option contracts in order to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives, if entered into, are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company. Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rate, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.

54.1 Credit Risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

a) Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgment. Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.

b) Cash and Cash Equivalents

The Company held cash and cash equivalents of H 219.83 Lakhs at March 31, 2022 (March 31, 2021: H 31.87 Lakhs). This includes the cash and cash equivalents held with the bank and the cash on hand with the Company.

54.2 Liquidity Risk

Liquidity risk is the risk in terms of 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 has obtained fund and non-fund based working capital loan from bank. The borrowed funds are generally applied for Company''s own operational activities.

b) Interest Rate Risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. The company''s exposure to the risk of changes in the market interest rate relates primarily to the company''s long term debt obligations with floating interest rates. The company''s interest rate exposure is mainly related to variable interest rates debt obligations. The Company manages the liquidity and fund requirements for its day to day operations like working capital, suppliers/buyers credit.

Exposure to interest rate risk

Company''s interest rate risk arises from borrowings. Borrowings issued at fixed rates exposes to fair value interest rate risk. The interest rate profile of the Company''s interest-bearing financial instruments as reported to the management of the Company is as follows.

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.

Cash flow sensitivity analysis for variable-rate instruments

The risk estimates provided assume a change of 25 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarised above. This calculation assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date assuming that all other variables, in particular foreign currency exchange rates, remain constant. The period end balances are not necessarily representative of the average debt outstanding during the period.

54.3 a) Market Risk

Market risk is the possibility of losses that may be incurred by the company due to factors that affect the overall performance of the company - such as foreign exchange rates, interest rates, recessions etc. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily due to the fluctuations in the rate of interest for borrowings from banks, recession in the market, foreign exchange rate fluctuation etc.

b) Currency Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses natural hedge technique of adjusting foreign currency receivables against currency payables. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exposure to all other foreign currencies other than US Dollar is not material.

D) 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. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.

For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

56 The Code on Social Security 2020

The Code on Social Security 2020 (‘the Code'') relating to employee benefits, during the employment and postemployment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published."

57 Figures of the Previous year are regrouped / reclassified wherever considered necessary and rounded off to the nearest lakh.


Mar 31, 2018

NOTES :1.TAXES

(a) Income tax expense:

The major components of income tax expenses for the year ended March 31, 2018 and for the year ended March 31, 2017 are:

This information also complies with the terms of the recognition granted upto 31 March 2020 to the Company''s In- House Research and Development Activities by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India, vide their letter No. TU/IV-RD/2515/2017 dated 29th May 2017 NOTES : 37 Government Grant (Ind AS 20)

Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of Rs, 9,18,54,000/- and Rs, 5,14,50,510/- respectively for a period of 14 years to the company in respect of chlorpyriphos plant. Using prevailing market interest rate of 10% p.a. for an equivalent loan as on 01-04-2016 (date of transition to Ind AS) 2,32,95,304/-. The difference amount of Rs, 2,43,95,450/between the closing value as on 01-04-2016 of Rs, 4,76,90,754/- and 2,32,95,450/- ( fair value of loan as on 01-04-2016) is classified as Government Grant which will be recognized in the statement of profit and loss over the remaining period of loan. Accordingly, an amount of Rs, 15,24,716/- is recognized in the Statement of Profit and Loss.

NOTES : 38 Related party disclosures

Names of related parties and description of relationship

Name of the related party_Relationship_

Enterprises under the significant influence of persons having significant influence over this company

Nagarjuna Agrichem Limited Enterprises under the control of persons having significant influence over this company

Greenpath Energy Private Limited

Key Management Personnel

S Chandra Sekhar Managing Director

D Ranga Raju Chairman

K S Raju Director

Sudhakar Kudva Independent Director

D Sada Sivudu Independent Director

B Lalitha Sree Director

B Murali Chief Financial Officer

A Arvind Kumar Chief Operating Officer

B N Suvarchala Company Secretary Note: Related party relationships have been identified by the management and relied upon by the auditors.

NOTES : 2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial Risk Management Framework

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), 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 Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

The company''s interest rate exposure is mainly related to variable interest rates debt obligations. The company manages the liquidity and fund requirements for its day to day operations like working capital, suppliers/buyers credit.

Exposure to interest rate risk

Company''s interest rate risk arises from borrowings. Borrowings issued at fixed rates exposes to fair value interest rate risk. The interest rate profile of the Company''s interest-bearing financial instruments as reported to the management of the Company is as follows. ''

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.

Cash flow sensitivity analysis for variable-rate instruments

The risk estimates provided assume a change of 25 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarized above. This calculation assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date assuming that all other variables, in particular foreign currency exchange rates, remain constant.. The period end balances are not necessarily representative of the average debt outstanding during the period.

C 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. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes.

Currency risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company, as per its risk management policy, uses natural hedge technique of adjusting foreign currency receivables against currency payable. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exposure to all other foreign currencies other than US Dollar is not material.

Exposure to currency risk

The currency profile of financial assets and financial liabilities as at March 31, 2018, March 31, 2017 and April 1, 2016 are in Indian Rupees.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars and Pounds at March 31 would have affected the measurement of financial instruments denominated in US dollars and Pounds 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. ''

D. 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. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgment.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.

The impairment loss at March 31, 2018 related to customers that have defaulted on their payments to the Company and are not expected to be able to pay their outstanding balances, is mainly due to economic circumstances.

Cash and cash equivalents

The Company held cash and cash equivalents of INR 3,44,27,200 at March 31, 2018 (March 31, 2017: INR 68,55,611, April 1, 2016 : INR 72,48,371.). The cash and cash equivalents are held with bank.

NOTES : 3. CAPITAL MANAGEMENT

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

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company intends to keep the gearing ratio between 0.5 to 1.5. The Company includes within net debt, borrowings including interest accrued on borrowings less cash and short-term deposits. ^

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately recall loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the period ended March 31, 2018.

NOTES : 4 FIRST TIME ADOPTION OF IND AS

These are the Company''s first set of financial statements which have been prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2018, the Company had prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 01, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

(a) The Company has elected to regard carrying values for all of property, plant and equipment as deemed cost at the date of the transition.

(b) Estimates

The estimates as at April 01, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation. The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 01, 2016 (transition date), March 31, 2017 and March 31, 2018.

Notes to reconciliation of equity as at April 01, 2016 and March 31, 2017 and statement of profit or loss for the year ended March 31, 2018:

i) MAT Credit entitlement

MAT credit entitlement is to be presented under loans and advance in accordance with Guidance Note on "Accounting for Credit available in respect of MAT under the Income Tax Act, 1961" issued by ICAI. However, as per Ind AS, MAT credit entitlement is generally recognized as a deferred tax asset with a corresponding deferred tax benefit in the statement of profit and loss. Accordingly, the Company has reclassified the MAT credit entitlement from loans and advances to deferred tax assets as at March 31, 2017 Rs, 2,50,11,819 (April 01, 2016: Rs, 2,50,11,819).

ii) Deferred Tax Assets

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires accounting for deferred taxes using the Balance sheet approach, which focuses on temporary difference between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences and the Company has accounted for such differences. Deferred tax adjustment are recognized in correlation to the underlying transaction either in retained earnings or a separate component in equity. Accordingly, the Company has recognized deferred tax assets/(liabilities) as at March 31, 2017 for Rs, 4,05,52,200 (April 01, 2016: Rs, 5,53,12,638).

iii) Borrowings - Sales Deferement Loan

The company has measured deferred sales tax loan at fair value in accordance with Ind AS. Accordingly the company has recognized government grant. Notional interest on such deferred sales tax loan has been charged to statement of profit and loss and government grant is amortized to statement of profit and loss over the remaining period of the loan.

iv) Excise duty on sale of goods

As per Indian GAAP, excise duty should be included in the turnover and should be shown as reduction from the gross turnover on the face of the statement of profit and loss. However, Ind AS 18 does not specifically prescribe any guidance for inclusive presentation of excise duty. Accordingly the Company has presented revenue gross of excise duty.

v) Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

vi) Remeasure of actuarial gains/ (losses):

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

vii) Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

NOTES : 5

The previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s presentation.


Mar 31, 2016

1 The Term Loan is secured by Exclusive charge on fixed assets created out of term loan and second charge on the fixed assets of the Company (both present and future) by way of hypothecation of movable fixed assets and equitable mortgage of immovable fixed assets of the company and personal guarantee of Mr.S.Chandra Sekhar, Managing Director of the company, Smt.S.Lalitha Sree, Director and Smt.S.Ratna Kumari.

2. Deferred payment Liabilities :

Government of Andhra Pradesh vide letterNo.20/2/6/1369/ID dated 08-10-1996 and letterNo.30/1/2002/0300/0300/ FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of Rs, 9,18,54,000/- and Rs, 5,14,50,510/respectively for a period of 14 years to the company in respect of chlorpyriphos plant. The sanction of Rs, 9,18,54,000/- under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of Rs, 5,14,50,510/- under letter No.30/1/2002/0300/0300/FD dated 10-04-2002 has expired its utilization on 14th February, 2016. The company has commenced the repayment and has paid Rs, 86,25,980/utilized till 2000-01. Sales tax amounting to Rs, 31,85,266/- for the year ended 31-03-2016 (Previous Year Rs, 68,24,451/-) deferred during the year.

3. The working capital facilities are secured by hypothecation of the current assets of the company and further secured by a first charge on the fixed assets of the company (excluding fixed assets created out of term loan sanctioned by Bank of India), second charge on fixed assets created out of term loan sanctioned by Bank of India and are personally guaranteed by Mr.S.Chandra Sekhar, Managing Director, Smt.S.Lalitha, Director and Smt.S.Ratna Kumari.

4. Sundry creditors as at 31st March 2016 includes an amount of Rs, 52.12 lakhs (Previous year Rs, 47.83 lakhs) outstanding (but not over due) to micro and small enterprises. The above disclosure is based on the information available with the company regarding the status of suppliers as defined under the Micro, Small and Medium Enterprises Development Act 2006.

5. Balances in Sundry Creditors are subject to confirmation and reconciliation if any, however in the opinion of the management there would not be any material impact on the financial statements.

6. Balances are subject to confirmation and reconciliation if any, however in the opinion of the management there would not be any material impact on the financial statements.

7. Government of Andhra Pradesh vide letterNo.20/2/6/1369/ID dated 08-10-1996 and letterNo.30/1/2002/0300/0300/ FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of Rs, 9,18,54,000/- and Rs, 5,14,50,510/respectively for a period of 14 years to the company in respect of chlorpyriphos plant. The sanction of Rs, 9,18,54,000/under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010 and sanction of Rs, 5,14,50,510/- under letter No.30/1/2002/0300/0300/FD dated 10-04-2002 has expired its utilization on 14th February, 2016. The company has commenced the repayment and has to pay Rs, 82,96,558/- previous year Rs, 3,604,670/- during the year 2016-17.

8. Balance in Unpaid Dividends is not due to be credited to investor education & protection fund.

Disclosure of Accounting Policies and Notes on Accounts Forming part of Financial Statements

Notes annexed to and forming part of the Balance Sheet as at March 31, 2016 and the Statement of Profit & Loss for the year ended on that date:


Mar 31, 2014

1. CONTINGENT LIABILITIES Rs in lakhs As at As at Particulars 31.03.2014 31.03.2015

a. Estimated amount of Contracts remaining to be executed on Capital account and not provided for, net of advances 50.08 356.68

b. Contingent Liabilities not provided for:

- Letters of Credit 1,669.07 6.64

- Bank Guarantees 23.00 11.00

2. In the opinion of the Management and to the best of their knowledge and belief the value of the realization of Current Assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the Balance Sheet. The provision for depreciation and for all the known liabilities is adequate and not in excess of what is required.

3. Segment Reporting

There are no separate reportable segments as per Accounting Standard 17, as the entire operations of the company relate to one segment, viz. Agrochemicals.

4. Related Party Transactions

Disclosure in respect of related parties as defined in Accounting Standard 18 with whom transactions have taken place during the year are given below:

a) List of Related Parties:

(i) Key Management Personnel

Shri S. Chandra Sekhar, Managing Director

Shri D. Sadasivudu, Executive Director (upto 31.08.2012)

(ii) Related party:

Nagarjuna Agrichem Limited

5. Employee benefits

a. Defined benefit plans

The following table sets forth the status of the Gratuity Plan and Leave encashment of the Company and the amounts recognised in the Balance Sheet and Statement of Profit and Loss.

b. Defined contribution plans

In respect of defined contribution plans, an amount of Rs.30.28 lakhs (Rs. 27.08 lakhs) towards gratuity has been recognised as an expense in the Statement of Profit and Loss during the year.

6. Earnings Per Share

Earning per share is calculated by dividing the profit attributable to the equity share holders by the weighted average number of equity shares outstanding during the year. The basic and diluted EPS per equity share is given hereunder:

7. The company has provided deferred tax liability/ (income) of Rs. (4,781,410/-) for the current year (Previous year net deferred tax liability Rs. 7,574,916/-) as per the Accounting Standard 22. Break up of deferred tax liabilities and reconciliation of current year deferred tax charge / income are given below:

8. a) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purpose.


Mar 31, 2013

1. Contingent Liabilities Rs. in lakhs

Particulars As at As at 31.03.2013 31.03.2012

a. Estimated amount of Contracts remaining to be executed on Capital account and not provided for, net of advances 356.68 36.97

b. Contingent Liabilities not provided for:

- Letters of Credit 6.64 887.91

- Bank Guarantees 11.00 10.60

2. In the opinion of the Management and to the best of their knowledge and belief the value of the realization of Current Assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the Balance Sheet. The provision for depreciation and for all the known liabilities is adequate and not in excess of what is required.

3. Segment Reporting

There are no separate reportable segments as per Accounting Standard 17, as the entire operations of the company relate to one segment, viz. Agrochemicals.

4. Related Party Transactions

Disclosure in respect of related parties as defined in Accounting Standard 18 with whom transactions have taken place during the year are given below:

a) List of Related Parties:

(i) Key Management Personnel

Sri S. Chandra Sekhar, Managing Director (from 01.06.2012) Sri D. Sadasivudu, Executive Director (upto 31.08.2012)

(ii) Associates

Nagarjuna Agrichem Limited

5. Figures of the previous year have been regrouped/rearranged wherever considered necessary to confirm to the current year presentation or classification.


Mar 31, 2012

1. CONTINGENT LIABILITIES Rs. in lakhs

As at As at Particulars 31.03.2012 31.03.2011

a. Estimated amount of Contracts remaining to be executed on Capital account and not provided for, net of advances 36.97 114.70

b. Contingent Liabilities not provided for:

Letters of Credit 887.91 389.61

Bank Guarantees 10.60 54.30

2. In the opinion of the Management and to the best of their knowledge and belief the value of the realization of Current Assets, loans and advances in the ordinary course of business would not be less than the amount of which they are stated in the Balance Sheet. The provision for depreciation and for all the known liabilities is adequate and not in excess of what is required.

3. During the year entire manufacturing activities of the company were temporarily shut down due to major fire broke out in Block-III of the company for 50 Days from 10th August, 2011 and operation in Block – I & II has been restarted from 29.09.2011.

4. Due to major fire in Block – III, (which has manufacturing facility of Clodinafop, Cloquintocet Mexyl, Thiamathoxam) Factory Building, Plant & Equipment, Electricals & Stock in Process was damaged. The company is adequately insured under cost of Reinstatement policy of Assets. During the year company has received final claim of Rs. 540.01 Lakhs on account of damage. The company has made the provisions/adjustments in books of account under the head Extra Ordinary Items towards insurance claim (Net)

5. The Company was Manufacturing Triclopyr, Fluroxypr, Clodinafop and Cloquintocet Mexyl under the 100% EOU Scheme. The company has got approval to exit from the 100% EOU Scheme from the "office of the Assistant commissioner of Customs & Central Excise". Now total plant is operating under DTA.

6. Segment Reporting

There are no separate reportable segments as per Accounting Standard 17, as the entire operations of the company relate to one segment, viz., Agrochemicals.

7. Related Party Transactions

Disclosure in respect of related parties as defined in Accounting Standard 18 with whom transactions have taken place during the year are given below:

8. a) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purpose.

9. During the year ended 31st March, 2012 the revised Schedule VI notified under the Companies act, 1956 has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous years figures in accordance with the requirements applicable in the current year.


Mar 31, 2010

1. Contingent Liabilities not provided for: Rs. in lakhs

Particulars As at As at 31.03.2010 31.03.2009

i) Letters of Credit 271.18 136.68

ii) Export Bills Discounting - 110.19

iii) Bank Guarantees 28.86 23.86

2. SECURED LOANS

The working capital facilities are secured by hypothecation of the current assets of the company and further secured by a first charge on the fixed assets of the company and are personally guaranteed by the Managing Director and Executive Director of the company.

3. SALES TAX DEFERMENT

Government of Andhra Pradesh vide letter No.20/2/6/1369/ID dated 08-10-1996 and letter No.30/1/2002/0300/0300/FD dated 10-04-2002 had sanctioned sales tax deferment for an amount of Rs.91,854,000/- and Rs. 51,450,510/- respectively for a period of 14 years to the company in respect of chlorpyriphos plant. The sanction of Rs.91,854,000/- under letter No.20/2/6/1369/ID dated 08-10-1996 has expired its utilization on 28th February, 2010. The company has commenced the repayment as per the utilization and has paid Rs.140,800/- utilized in 1995-96.

Based on the sales tax returns the sales tax deferred till 31-03-2010 amounts to Rs. 38,919,538/-.

4. Micro small and medium enterprises

Sundry creditors as at 31st March 2010 includes an amount of Rs. 11.68 lakhs (Previous year Rs. 22.37 lakhs) outstanding for more than 45 days (but not overdue) to micro and small enterprises. The above disclosure is based on the information available with the company regarding the status of suppliers as defined under the Micro, Small and Medium Enterprises Development Act 2006.

5. Segment Reporting

There are no separate reportable segments as per Accounting Standard 17, as the entire operations of the company relate to one segment, viz. Agrochemicals.

6. EOU Unit

The company has commenced the manufacture of an additional product Cloquintocet Mexyl from June 30, 2009.

7. Related Party Transactions

Disclosure in respect of related parties as defined in Accounting Standard 18 with whom transactions have taken place during the year are given below:

a) List of Related Parties:

Key Management Personnel

- Sri S. Koteswara Rao, Managing Director

- Sri D. Sadasivudu, Executive Director

8. As per the directions of the Andhra Pradesh Pollution Control Board vide their order no. 204/PCB/TF-VJA/2000 dated 27-03-2010, the company is required to dispose off the Chlorpyriphos residue stored in drums to TDSF before 31-12-2010. The company has made provision for Rs. 250 lakhs in its Profit and Loss Account in respect of the same.

9. Figures of the previous year have been regrouped/rearranged wherever considered necessary to confirm to the current year presentation or classification.

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