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Notes to Accounts of Fineotex Chemical Ltd.

Mar 31, 2022

a. Office Premises includes fully paid unquoted shares in respect of ownership of Office Premises in 2 Co-operative Society (31 March 2021: 2 Co-operative Society); 15 shares (31 March 2021: 15 shares) of Rs.50/- each.

- Investment Property includes fully paid unquoted shares in respect of ownership of Office Premises in 1 Co-operative Housing Society (31 March 2021: 1 Co-operative Housing Society); 10 shares (31 March 2021: 10 shares) of Rs.50/- each.

b. Motor Vehicles of Original Cost Rs. 108.48 Lakhs as at 31st March 2022 (Previous Year as at 31st March 2021 Rs. 108.48 Lakhs) are in the name of the directors of the company.

c. The amount of Contractual Commitments for the acquisition/construction of Property, Plant & Equipments is disclosed in Note No.34.

d. The fair market value of investment property as determined in accordance with Level III input provided by Management is approximately Rs.225.24 Lakhs (Previous Year Rs.225.24 Lakhs).

(Also Refer Note No 47 (1))

e. The Company has no restrictions on the realisability of its investment property. There are no contractual obligations to purchase, construct or develop investment property as at the year end.

f. Investment property is leased out to tenant under operating leases. Disclosure on future rent receivable is included in note 41.

a. Office Premises includes fully paid unquoted shares in respect of ownership of Office Premises in 2 Co-operative Society (31 March 2020: 2 Co-operative Society); 15 shares (31 March 2020: 10 shares) of Rs.50/- each.

- Investment Property includes fully paid unquoted shares in respect of ownership of Office Premises in 1 Co-operative Housing Society (31 March 2020: 1 Co-operative Housing Society); 10 shares (31 March 2020: 10 shares) of Rs.50/- each.

b. Motor Vehicles of Original Cost Rs. 108.48 Lakhs as at 31st March 2021 (Previous Year as at 31st March 2020 Rs. 108.48 Lakhs) are in the name of the directors of the company.

c. The amount of Contractual Commitments for the acquisition/construction of Property, Plant & Equipments is disclosed in Note No.34.

d. The fair market value of investment property as determined in accordance with Level III input provided by Management is approximately Rs.225.24 Lakhs (Previous Year Rs.225.24 Lakhs).

(Also Refer Note No 47 (1))

e. The Company has no restrictions on the realisability of its investment property. There are no contractual obligations to purchase, construct or develop investment property as at the year end.

f. Investment property is leased out to tenant under operating leases. Disclosure on future rent receivable is included in note 41.

g. Amount recognised in Profit & Loss for Investment Properties:

The Mutual Fund Institution on April 23,2020 voluntarily decided to wind up its Six yield oriented fixed income funds including âFranklin India Short Term Income Plan.

Consequent to the winding up, the units can no longer be subscribed or reedemed by the Unitholders post cut off time ie April 23, 2020.

As per the communication received from the Mutual Fund Institution, the amount subscribed by the Unitholders would be paid as per the regulatory process in due course of time.

Based on the above assurances and regular communication on the development of the same by Mutual Fund Institution, the management estimates to recover the entire amount subscribed in due course of time. The Management is closely monitoring the developments in the said matter and is continously reviewing and assessing the impact if any, on its financial statements.and is continously reviewing and assessing the impact if any, on its financial statements.

i. Advance to Supplier includes Rs.68.86 Lakhs as at 31st March 2022 (Previous year Rs.33.33 Lakhs) due from Subsidiary Company (Also Refer Note No 42).

ii. Intercorporate Loan includes Rs. 244.99 Lakhs as at 31st March 2022 (Previous year Rs.46.32 Lakhs) due from Subsidiary Company repayable on demand (Also Refer Note No 42 & 44).

Intercorporate Loans are given in ordinary course of business for business activities.

i. The Management intends to sell the immovable property acquired during the year ended 31st March 2018. An active program to locate the buyer and to complete the sale has already been initiated, the sale is expected to be completed in the next 12 months. Accordingly, the above assets have been classified as assets held for sale.

The Company pursuant to its intention, have received Advance for Sale of Property classified as held for Sale. The Company is in the process of completing the transfer of title and is expected to be completed in the financial year 2022-2023.

ii. Further the fair value of these asset is higher than its carrying value as on 31st March 2022 and hence no impairment loss has been recognised.

b) Rights, Preferences and restrictions attached to shares

The company has one class of equity shares having a face value Rs. 2/- per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders will be entitled to receive any of the remaining asset of the company in proportion to the number of equity shares held by the shareholders, after distribution of all the preferential amounts. However no such preferential amount exist currently.

d) Other details of Equity Shares for a period of five years immediately preceding March 31, 2022

i. Pursuant to approval of the Board of Directors of Company vide resolution dated 27th July, 2020 the Company has bought back 5,51,580 equity shares of Rs.2/- each from the open market at an average price of Rs.33.04. The Company has paid a total amount of Rs. 182.25 Lakhs for the said buyback of shares.

ii. Pursuant to approval of the Board of Directors of Company vide resolution dated 14th November, 2016 the Company has bought back 9,98,110 equity shares of Rs.2/- each from the open market at an average price of Rs. 29.69. The Company has paid a total amount of Rs. 292.65 Lakhs for the said buyback of shares.

iii. Pursuant to shareholders approval dated 28th May,2015, the Equity Shares of Rs.10/- each of the Company were sub-divided into 5 Equity Shares of Rs.2/- per share w.e.f. 12th June,2015.

a. Description of Nature and Purpose of the Reserves Capital Reserve

Capital Reserve was created on acquisition of Proprietorship concern âFineotex Chemical Industriesâ in FY 2007-08 in Slump Sale.

Capital Redemption Reserve

The Company had purchased its own shares and as per the provisions of the applicable laws, a sum equal to the nominal value of the shares so purchased is required to be transferred to the capital redemption reserve.

Securities Premium

The amount received in excess of face value of the equity shares is recognised in Securities Premium. The reserve is utilised in accordance with the provisions of the Act.

Retained Earnings

Retained earnings are the accumulated profits earned by the Company till date, less transfer to general reserves, dividend (including dividend distribution tax) and other distributions made to the shareholders.

Equity-settled Share-based Payment Reserve

This reserve is created by debiting the statement of profit and loss account with the value of share options granted to the employees by the Company. Once shares are issued by the Company, the amount in this reserve will be transferred to share capital, securities premium or retained earnings.

(b) Fair Value Hierarchy

The Fair Value Hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

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

Level 2 - Inputs are other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly or indirectly. Level 3 - Inputs are not based on observable market data (unobservable inputs).

The Financial Instruments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market.

Measurement of Fair Values :

The fair value of the 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. The following methods and assumptions were used to estimate the fair values:

- The fair values of investment in shares is the share price quoted on recognised stock exchange as on the reporting date of balance sheet

- The fair values of investment in mutual fund is the N.A.V as on the reporting date of balance sheet

- The fair values of interest free security deposit given / accepted is estimated by discounting cash flows using rates currently available

for instruments with similar terms, credit risks and remaining maturities. Management regularly assesses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value

NOTE 39: FINANCIAL RISK MANAGEMENT

The Companyâs activities expose it to market risk. In order to minimize any adverse effects on the financial performance of the Company

The Company risk management is carried out by policies approved by the board of directors. The board provides written principles for overall risk management, as well as policies covering specific areas. There is no change in objectives, polices and process for managing the risk and methods used to measure the risk as compared to previous year.

(a) Market Risk:-

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 rates, 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. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs

(a) (i) Market Risk - Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The companyâs exposure to the risk of changes in market interest rates primarily to the Companyâs borrowings, both short term and long term obligations with fixed and floating interest rates. However the companies exposure to floating rate borrowings are very limited to its size of operation .

The company is also exposed to interest rate risk on its financial assets that include fixed deposits (which are part of cash and cash equivalents) since all these are generally for short durations, there is no significant interest rate risks pertaining to these deposits

Trade Receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Companyâs review includes external ratings, if they are available, financial statements, industry information, business intelligence and in some cases bank references.

Trade Receivables of the Company are typically unsecured,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customersâ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically distributed in India.

Expected credit loss for trade receivable:

The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables. On account of adoption of Ind AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the impairment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss rates are based on actual credit loss experience and past trends. The provision matrix takes into account external and internal credit risk factors and historical experience / current facts available in relation to defaults and delays in collection thereof. Accordingly based on the provision matrix there is no expected credit loss to the company and accordingly there is no provision for doubtful debts.

Other Financial Assets

The company maintains exposure in Cash and Cash equivalents and Bank deposits with banks, Equity Shares and Investments in Mutual Funds. The Company has diversified portfolio of investment with various number of counterparties which has goods credit ratings, goods reputation and hence the risk is reduced. Individual risk limits set for each counterparty based on financial position, credit rating and post experience. Credit limits and concentration of exposures are actively monitored by the Company.

Expected credit loss on financial assets other than trade receivable:

With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet

The Companyâs maximum exposure to credit risk as at 31st March, 2022,and 31st March, 2021 is the carrying value of each class of financial assets.

Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements is retained as Cash and Cash Equivalents (to the extent required).

Exposure to Liquidity Risk

The responsibility of liquidity risk management rest with board of directors which are appropriate risk management framework for short, medium and long term liquidity measures with adequate cash flows and banking facilities.

The following table shows the maturity analysis of the Companyâs Financial Liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance Sheet Date

(d) Collateral

The Company has pledged its Non-Current as well as Current Assets to a consortium of lenders as collateral towards borrowings by the Company. Refer Note No. 21 for the detailed terms and conditions of the collaterals pledged.

NOTE 40: EMPLOYEE BENEFITS (a) Retirement Benefits

As per Ind AS 19 the Company has recognized âEmployees Benefitsâ,in the financial statements in respect of Employee Benefits Schemes as per Actuarial Valuation as on 31st March 2022.

Note:

Related parties are identified by the Company and relied upon by the Auditors

* Provision for contribution to gratuity fund which are made based on actuarial valuation on overall company basis are not included in remuneration to Key Management Personnel.

43 SEGMENT REPORTING

As the company has only one primary business activity, Segment Reporting is not applicable as per Ind AS 108 - Operating Segments

44 a. Loans given, Investments made and Corporate Guarantees given u/s 186(4) of the Companies Act, 2013 are disclosed under the

respective notes.

b. Disclosure as per Regulation 53(1) of SEBI (Listing Obligation and Disclosure Requirements) Regulations:

45 Balances of Trade Receivables, Trade Payables, Advances and Deposits received / given, from / to customers are subject to confirmation and subsequent reconciliation.

46 Figures in brackets indicate previous yearâs figures. Previous yearâs figures have been regrouped, rearranged and reclassified wherever necessary to conform with this yearâs classification.

47 Additional information Pursuant to paragraph 6 (L) of Part I of Schedule III of the Companies Act,2013 (as certified by the Director) is given in Annexure âAâ hereto.

The Board of Directors at its meeting held on 28th April , 2022 have recommended a payment of final dividend of Rs.0.40 (Rupee Forty paise only) per equity share of face value of Rs.2/- each for the financial year ended 31st March, 2022.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

1) The company is following Cost Model for accounting of Investment Properties. The fair market value of Investment property (as measured for disclosure purpose in the financial statement) is in compliance with âIND AS 40 - Investment propertyâ and is not based on valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 (Also refer Note No 3).

2) The Company has granted following Advances in the nature of Loans to its wholly owned subsidiary that is without specifying the period of repayment

Mar 31, 2018

1 BACKGROUND

Fineotex Chemical Limited is a public limited by shares domiciled in India, incorporated under the provisions of Companies Act, 1956. Its shares are listed on National Stock Exchange of India Limited and BSE Limited. Its registered office is situated at 42,43 Manorama Chambers, S.V. Road Bandra (West) Mumbai - 400050 India.

The Company is engaged in the business of manufacturing of Textile chemicals, auxiliaries and specialty chemicals.

i. The management has technically reviewed the estimated useful life of Leasehold Improvement as 20 years which is different from those prescribed under Part C of Schedule II to the Companies Act 2013.

ii. Motor Vehicles amounting to Rs. 82,57,417/- as at 31st March 2018 (Previous Year as at 31st March 2017 Rs. 76,23,426/- and as at 1st April 2016 Rs. 35,24,573/-)are in the name of the directors of the company.

iii. Motor Vehicle amounting to Rs. 53,89,498/- (Previous Year as at 31st March 2017 Rs. Nil and as at 1st April 2016 Rs. Nil)has been provided as security against the term loan taken from Bank by the Company. Refer Note No. 19 & 24.

iv. The Company has elected to measure all its property, plant and equipment at the previous GAAP carrying amount i.e. 31st March, 2016 as its deemed cost (Gross Block Value) on the date of transition to Ind AS i.e. 1st April, 2016.

v. During the year ended 31st March 2018, Land amounting to Rs. 2,98,90,873/- has been regrouped from Factory Buildings to Land Leasehold and the corresponding depreciation claimed in earlier years has been reversed and an effect for the same has been reflected in the adjustment column above.

vi. The fair market value of Investment property as determined in accordance with Level III input provided by Management is approximately Rs. 5,50,00,000/-

Note :

Investment in Mutual Fund amounting to Rs. 10,33,72,024/- as at 31st March 2018 (Previous Year Rs. 5,92,28,915/- and as at 1st April, 2016 Rs. 5,92,28,915/-) are under lien against bank overdraft facility availed by the Company.

Note :

i. Security and Other deposits of Rs. 2,84,87,665/- (Previous Year as at 31st March 2017 Rs.2,95,00,000/- and as at 1st April 2016 Rs. 2,63,10,410/-) is due from subsidiary company and relative of key management personnel.

ii. Fixed Deposit of Rs. 12,51,900/- (Previous Year as at 31st March 2017 Rs.1,66,300/- and as at 1st April 2016 Rs. NIL) that are restricted for use pertains to lien against bank guarantee with Indian Bank.

Note :

i. The Current Account balance includes unpaid dividend of Rs. 1,16,442/- as at 31st March 2018 (Previous Year as at 31st March 2017 Rs. 1,27,686/- and as at 1st April 2016 Rs. 36,423/-) which have been kept in separate earmarked accounts and no transactions except for stated purpose are done through such accounts.

ii. Fixed Deposit of Rs. 69,17,097/- (Previous Year as at 31st March 2017 Rs.74,87,272/- and as at 1st April 2016 Rs. 91,21,923/-) that are restricted for use pertains to lien against bank borrowings and bank guarantee with Indian Bank.

Note :

ii. Further the fair value of these asset is higher than its carrying value as on 31st March 2018 and hence no impairment loss has been recognised.

b) Rights, Preferences and restrictions attached to shares

d) Other details of Equity Shares for a period of five years immediately preceding March 31, 2018

i. Pursuant to approval of the Board of Directors of Company vide resolution dated 14th November, 2016 the Company has bought back 9,98,110 equity shares of Rs. 2/- each from the open market at an average price of Rs. 29.69/- . The Company has paid a total amount of Rs. 2,92,64,848/- for the said buyback of shares.

ii. Pursuant to shareholdersâ approval dated 28th May,2015, the Equity Shares of Rs.10/- each of the Company were sub-divided into 5 Equity Shares of Rs.2/- per share w.e.f. 12th June,2015.

iii. The Company had allotted 1,12,29,811 fully paid up equity shares of face value Rs. 10/- each during the year ended 31st March, 2015 pursuant to the bonus issue approved by the shareholders through postal ballot by capitalisation of Securities Premium. Bonus equity shares were issued in proportion of 1:1 i.e. (one) equity share of Rs. 10/- each fully paid up for every one share held.

Notes :

Loan from Axis Bank is @8.40% p.a. and secured against hypothecation of Motor Vehicles. These loans are repayable in 37 equal monthly installment of Rs. 1,06,956/- commencing from 01st Feb, 2018

NOTE 2(i): FIRST TIME ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)

âThese are the Companyâs first financial statements prepared in accordance with Ind AS

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March 2018, the comparative information presented in these financial statements for the year ended 31 March, 2017 and in the preparation of an opening Ind AS Balance Sheet at 1 April, 2016 (the Companyâs date of transition).

In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and Cash Flows is set out in the following tables and notesâ

Exemptions applied

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

Optional Exemption

1 Deemed Cost for Property , Plant and equipments and intangible assets :

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date oftransition to IndAS, measured as per previous GAAP and use that as its deemed cost as at the date oftransition. Accordingly, the Company has elected to measure continue with the carrying values under previous GAAP for carrying value

2 Investment in foreign subsidiaries :

Under, Ind AS 101 an entity can determine the value of investment in a Subsidiary, Associate or Joint ventures as either of the below:

- Cost determined in accordance with Ind AS 27 (i.e. retrospective application of Ind AS 27)

- Fair value at the entityâs date of transition to Ind AS

- Previous GAAP carrying amount

Accordingly, the Company has elected to carry forward the previous GAAP amounts as the deemed cost for investment in equity shares of Subsidiaries in the Standalone Financial Statements.

Mandatory Exemption

1 Estimates

An entityâs estimates in accordance with Ind ASâs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were an error.

Ind AS estimates as at 1 April 2016 and 31 March 2017 are consistent with the estimates as at the same date made in conformity with the previous GAAP

2 Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

FOOT NOTE 3 (iv): NOTES TO RECONCILATION OF EQUITY AS AT APRIL 01, 2016 AND MARCH 31, 2017 AND PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2017

1 Fair valuation of investments

In the financial statements prepared under Previous GAAP, Non-current Investments of the Company were measured at cost less provision for diminution (other than temporary). Under Ind AS, the Company has recognised such investments as follows:

- Equity Shares of subsidiary companies - At Cost

- Equity and Debt oriented mutual funds - At fair value through profit and loss (FVTPL)

- Quoted Equity Shares - At FVTPL through an irrevocable election

Ind AS requires the above investments to be recognised at fair value (except investments in equity shares of subsidiary and associate companies).

On the date of transition to Ind AS, the difference between the fair value of Non-Current Investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under Previous GAAP, has resulted in an increase in the carrying amount of these investments by Rs. 1,53,70,180/- which has been recognised directly in retained earnings (Equity).

As at 31st March, 2017, the difference between the fair value of Non-Current Investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under Previous GAAP, has resulted in an increase in the carrying amount of these investments by Rs. 7,01,14,523/-. On such fair valuation, net gain amounting to Rs. 8,18,57,068/- has been recognised in other income in the Statement of Profit and Loss.

2 Security Deposits

Under previous GAAP, the company accounted for deposits at transaction value. Under Ind AS, the deposits with inherent significant financing element are initially recorded at fair value with difference between transaction value and fair value being treated as prepaid expenses. The deposits are subsequently measured at amortised cost and prepaid rent is amortised over contract period on a straight line basis. This has resulted to an decrease in equity on the transition date by Rs. 1,11,776/-. The profit before tax for the year ended March 31, 2017 has increased by Rs. 1,11,776/-.

3 Deferred Tax

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 entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences 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. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or through other comprehensive income.

4 Deferral of Sales

Under Ind AS, revenue is recognised on transfer of significant risk and rewards to the customer with the seller retaining no continuing managerial involvement in the goods. This requires careful consideration of the sales delivery terms. On account of this, the sales made on CIF basis, which were recorded on bill of lading date under IGAAP, have been deferred with the corresponding inventory and sales deferral account being recognised.

This has resulted in increase in inventory by Rs. 9,72,006/- and Rs. 65,90,893/- as on 1st April 2016 and 31st March 2017 respectively. The value of trade receivables decreased by Rs. 17,50,100/- and Rs. 1,18,66,930/- as on 1st April 2016 and 31st March 2017 respectively.

5 Actuarial gain and loss

Under previous GAAP company measured the defined benefit obligations internally. On adoption of Ind AS the company has obtained actuarial valuation for its defined benefit obligation. The difference between defined benefit obligation as per actuarial valuation under Ind AS 19 and as measured under previous GAAP is recognised under retained earnings on transition to Ind AS. Consequently, provisions for employee benefit has been increased by Rs. 1,83,120/- and Rs. 3,42,717/- with a corresponding reduction in retained earnings on the 1st April 2016 and 31st March 2017 respectively.

Further under previous GAAP the company actuarial gains and losses in the statement of profit and loss in the period in which they occur. Under Ind AS, the company recognised all measurement gains and losses arising from defined benefit plans in Other Comprehensive Income in the period in which they occur.

6 Excise Duty

Under Indian GAAP, Sale of Goods was presented as net of excise duty. However, under Ind AS, Sale of Goods includes excise duty. Excise duty on Sale of Goods is separately presented on the face of statement of Profit and Loss.

7 Other Comprehensive income

Under Indian GAAP, the Company has not presented Other Comprehensive Income (OCI) separately. Hence, it has reconciled Indian GAAP Profit or Loss to Ind AS Profit or Loss. Further, Indian GAAP Profit and Loss account is reconciled to total Comprehensive Income as per Ind AS.

8 Other adjustments

Assets and Liabilities as well as items of Income and Expenses have been regrouped / re-classified wherever necessary to align with the provisions of Ind AS.

Notes :-

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

(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities

(iii) The Companyâs pending litigations comprise of proceedings pending with Income Tax department. The Management has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Management does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

NOTE 4: CAPITAL MANAGEMENT

The Companyâs objective for Capital Management is to maximize shareholder value and support the growth of the Company and to optimize capital structure to reduce the cost of capital. The Company determines the capital requirement based on long term and strategic investment and capital expenditure plans. The funding requirements are met through a mix of equity and operating cash flows generated. The relevant quantitative information on the aforesaid parameters are disclosed in these financial statements.

NOTE 5: FINANCIAL INSTRUMENTS - CLASSIFICATION AND FAIR VALUE MEASUREMENT

(a) Financial Assets and Liabilities

The carrying value of financial instruments by categories as at March 31, 2018 is as follows:

Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.

(b) Fair Value Hierarchy

The Fair Value Hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of the following three levels:

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

The Financial Instruments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market.

For Assets and Liabilities which are measured at Fair Values as at the Balance Sheet date, the classification of fair value calculations by category is summarized below:

Measurement of Fair Values :

- The fair values of investment in shares is the share price quoted on recognised stock exchange as on the reporting date of balance sheet

- The fair values of investment in mutual fund is the N.A.V as on the reporting date of balance sheet

- The fair values of interest free security deposit given / accepted is estimated by discounting cash flows using rates currently available for instruments with similar terms, credit risks and remaining maturities. Management regularly assesses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value

NOTE 6: FINANCIAL RISK MANAGEMENT AND POLICIES

The Companyâs activities expose it to market risk. In order to minimize any adverse effects on the financial performance of the Company

This note explains the sources of risk which the Company is exposed to and how the Company manages the risk and the impact of hedge accounting in the financial statements.

(a) Market Risk:-

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 rates, 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. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs

(a)(i) Market Risk - Interest Rate Risk

Sensitivity analysis to interest rate risk

The company doesnât 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.

(a)(ii) Market Risk - Price Risk( Securities)

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price.

Exposure to Price Risk

Other price risk arises from financial assets such as investments in equity instruments and mutual funds disclosed below. The Company does make deposit with the banks as margin money against the borrowing facility provided by the banks. Deposit is made in fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the investments.

Sensitivity analysis to Market Risk - Price Risk (Securities)

The Company is mainly exposed to price risk arising mainly from investments in equity instruments and mutual funds recgonised at FVTPL. A sensitivity analysis demonstrating the impact of change in market prices of these instruments from the prices existing as at the reporting date is given below. A sensitivity of 10% represents managementâs assessment of reasonably possible change in equity prices

(a)(iii)Market Risk - Currency Risk

The Company is having import and exports as well. Accordingly the group is exposed to currency risk on account of its trade payables and trade receivables in foreign currency. The functional currency of the group is Indian Rupees. The group follows a natural hedge driven currency risk mitigation policy to the extent possible . The exposed Foreign currency is not substantial to the operation of group.

Exposure to Currency risk

The summary quantitative data about the Groupâs exposure to currency risk are reported to management of the company are as follows:

(b) 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 Companyâs receivables from customers.

The carrying amount of Financial Assets represents the maximum credit exposure.

Trade Receivables

Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customersâ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically distributed in India.

Expected credit loss for trade receivable:

Other Financial Assets

Expected credit loss on financial assets other than trade receivable:

The Companyâs maximum exposure to credit risk as at 31st March, 2018, 2017 and 1st April, 2016 is the carrying value of each class of financial assets.

Exposure to Liquidity Risk

The responsibility of liquidity risk management rest with board of directors which are appropriate risk management framework for short , medium and long term liquidity measures with adequate cash flows and banking facilities.

(d) Collateral

The Company has pledged its Non-Current as well as Current Assets to a consortium of lenders as collateral towards borrowings by the Company. Refer Note No. 19 and Refer Note No. 22 for the detailed terms and conditions of the collaterals pledged.

NOTE 7: EMPLOYEE BENEFITS

(a) Retirement Benefits

As per Ind AS 19 the Company has recognized âEmployees Benefitsâ ,in the financial statements in respect of Employee Benefits Schemes as per Actuarial Valuation as on 31st March 2018

(A) Defined benefit plans

i Retiring Gratuity

I Components of Employer Expenses

(B) Defined Contribution Plans

Amount recognised as expenses on account of âContribution / Provision to and for Provident and other Fundsâ of Statement of Profit and Loss - Rs. 13,41,253/- (Previous year 8,62,563/-).

NOTE 8: LEASES

The Company has entered into Operating Leases on Immovable Properties.

NOTE 9: RELATED PARTY

List of related parties and Relationship A Enterprises where control exists :-Subsidiaries (Extent of Holding)

B Enterprise in which Key Managerial Personnel and their relatives have signicant Influence :

1 Proton Biochem Private Limited

2 Sanjay Exports

C Key Managerial Personnel :

a. Executive Directors :

1 Surendra Tibrewala

2 Sanjay Tibrewala

b. Non - Executive Directors : Non Independent

1 Ritu Gupta

c. Non - Executive Directors : Independent

1 Navin Mittal

2 Manmohan Mehta

3 Alok Dhanuka

d. Relatives of Key Managerial Personnel :

1 Kanaklata Tibrewala

D Transaction with Related Parties

Note:

Related parties are identified by the Company and relied upon by the Auditors.

10 SEGMENT REPORTING

As the company has only one primary business activity, Segment Reporting is not applicable as per Ind AS 108 - Operating Segments

11 Loans given, Investments made and Corporate Guarantees given u/s 186(4) of the Companies Act, 2013 are disclosed under the respective notes. Interest and Commission are recovered where incurred.

12 Balances of Trade Receivables, Trade Payables, Advances and Deposits received / given, from / to customers are subject to confirmation and subsequent reconciliation

13 Figures in brackets indicate previous yearâs figures. Previous yearâs figures have been regrouped, rearranged and reclassified wherever necessary to conform with this yearâs classification.

Mar 31, 2016

iii. Pursuant to shareholdersâ approval dated 28th May, 2015, the Equity Shares of Rs. 10/- each of the Company were sub-divided into 5 Equity Shares of Rs. 2/- per share w.e.f. 12th June, 2015 (Record date). Accordingly, the current year notes have been stated to this effect.

iv. The Company had allotted 1,12,29,811 fully paid-up equity shares of face value Rs. 10/- each during the year ended 31st March, 2015 pursuant to the bonus issue approved by the shareholders through postal ballot by capitalization of Securities Premium. Bonus equity shares were issued in proportion of 1:1 i.e. 1 (one) equity share of Rs. 10/- each fully paid up for every one share held.

v. The Company has only one type of equity share. Each equity share is entitled to one voting right only.

vi. In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all the preferential amounts. The distribution would be in proportion of the number of Equity shares held by the Equity Shareholders.

Note:

i. The Company has exercised the option under paragraph 46A(1) of Accounting Standard - 11 (Revised 2003) ''The Effect of Changes in Foreign Exchange rates'' as notified by Ministry of Company Affairs vide notification dated 29th December, 2011. Consequently the foreign exchange loss arising on reporting/settlement of long term foreign currency monetary items (other than relating to acquisition of depreciable fixed assets) amounting to Rs. NIL ( Rs. 3,03,441/-) for the year ended 31st March 2016 has been accumulated in "Foreign Currency Monetary Translation Difference Account", whereby the cumulative balance stands at Rs. NIL (Rs. 7,39,856/-). During the year an amount of Rs. 7,39,856/- (Rs 70,16,117/-) has been amortized.

ii. Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly, the written down value of Fixed Assets whose lives have expired as at 1st April, 2014 have been adjusted net of tax, in the opening balance of Profit and Loss Account amounting to Rs. 1,55,586/-

v. All the investments have been valued at cost. (Refer Note 2 I of Significant Accounting Policies).

vi. The Company during the year under consideration has regrouped investments in Mutual Funds as non current investments and accordingly provision for diminution created in the previous year was on account of classification of the said investments as current investments.

vii. Investments in Mutual funds amounting to Rs. 5,58,59,445/- (Rs. 5,58,59,445/-) are under lien against bank overdraft facility availed by the company.

i. Defined Contribution Plan

Employerâs contribution to PF, ESIC and other funds

ii. Defined Benefit Plan

The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

1. Interim Dividend

The Company has paid an interim dividend of Rs. 0.20 per equity share (i.e. 10% of the face value) on 11,22,98,110 equity shares of face value of Rs. 2/- each on 29th March, 2016 vide Board Resolution dated 14th March, 2016.

2. Corporate Social Responsibility

The gross amount required to spent by the company during the year is Rs. 29,97,800/- (out of which Rs. 9,46,000/- pertains to previous year) as per the provisions of section 135 of the Companies Act, 2013. However, the Company has spent Rs. 22,00,000/- during the current year.

3. During the year under consideration, the Company has not given any loans to related parties u/s. 186 of the Companies Act, 2013. The Company has made investments in subsidiary which is reflected at Note no. 10

4. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act could not be furnished.

5. Balance of sundry debtors, creditors and loans and advances are subject to confirmation, reconciliation, if any.

6. In the opinion of board and to the best of their knowledge and belief, the value on realization of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance sheet.

7. In the opinion of the board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

8. Previous yearâs figures have been regrouped, rearranged and reclassified wherever necessary to conform with this year''s classification.

Mar 31, 2015

1 CORPORATE INFORMATION

Fineotex Chemical Limited (The Company) is a public limited Company domiciled in India and incorporated under the Companies Act, 1956. The Company was incorporated in 2004 and is listed on Bombay Stock Exchange and on the National Stock Exchange. The Company is engaged in the business of manufacturing and trading of Chemicals. The Company is one of the leading manufacturers of chemicals for textiles, construction, water-treatment, fertiliser, leather and paint industry.

2. The Company has exercised the option under paragraph 46A(1) of Accounting Standard - 11 (revised 2003) ''The effect of changes in Foreign Exchange rates'' as notified by Ministry of Company Affairs vide notification dated 29th December, 2011. Consequently the foreign exchange loss arising on reporting/settlement of long term foreign currency monetary items (other than relating to acquisition of depreciable fixed assets) amounting to Rs. 303,441/- (Rs.3,478,580) for the year ended 31st March 2015 has been accumulated in "Foreign Currency Monetary Translation Difference Account"whereby the cumulative balance stands at Rs. 7,755,973/- (Rs. 12,735,864/-). During the year an amount of Rs. 70,16,117/- (Rs 5,283,332/- ) has been amortized.

3. Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly, the written down value of Fixed Assets whose lives have expired as at 1st April, 2014 have been adjusted net of tax, in the opening balance of Profit and Loss Account amounting to Rs. 155,586/- .

4. Term loan from bank is secured by way of exclusive first charge created by hypothecation of the total current assets including receivables (both present and future) of the Company. Fixed Deposits of the Company of Rs. 85,00,000/- have been marked as lien in favour of the Bank as a collateral security. Interest is charged at six months LIBOR plus 4.50% p.a. and is payable quarterly on the outstanding loan amount. The said loan is repayable during the financial year 2015-16 and accordingly it is regrouped under Other Current Liabilities as "Current Maturities of Long Term Debt"

Bank Overdraft is secured against Bank Fixed Deposits and pledge/lien of securities held by the Company and personal guarantee of directors.

i. Interest Free deposit towards rented premises paid to relative of director Rs.19,500,000/- (Rs.19,500,000/-)

ii. Deposit paid to a Group Companies Rs.129,00,000/- (Rs.5,000,000/-)

(i) Disclosures as defined in Accounting Standard 15 "Employee Benefits" are given below:

Defined Contribution Plan

Employer''s contribution to PF, ESIC and other funds Defined Benefit Plan

The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

5. Contingent Liabilities and Commitments

Contingent liabilities not provided for in respect of: (in Rs.)

Particulars March 31, 2015 March 31, 2014

i. (a) Claims against the Company not acknowledged as debts

Income Tax 214,820 -

(b) Guarantees given by bank 1,632,199 1,632,199

Future cash outflows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/ authorities. The management does not expect these claims to succeed and accordingly, no provision for the contingent liability has been recognized in the financial statements.

ii. Premium amount to be paid to MIDC on account of transfer of leasehold land in the name of the Company, for which amount is not ascertainable.

iii. Commitments (in Rs.)

Particulars March 31, March 31, 2015 2014

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances). 25,590,000 15,840,000

* The outstanding number of shares and the earnings per share of the previous year has been adjusted for the bonus issue, in accordance with Accounting Standard (AS) 20 - Earnings Per Share

6. Proposed Dividend

The Board has recommended a total dividend outflow of Rs. 1,12,29,811/- in the current financial year. The Board has recommended a substantial increase in the dividend outflow from Rs. 56,14,906/- in the previous financial year to Rs. 1,12,29,811/- in the current financial year. The dividend recommended on the increased capital after bonus issue is Rs. 0.50 per equity share having face value of Rs. 10/- each.

7. The shareholders of the Company have approved sub-division of one Equity Share having face value of Rs.10/- into five equity share of face value Rs.2/- each through postal ballot declared on 28th May, 2015.

8. Segment Reporting

The Company is primarily engaged in the business of manufacturing of textile chemicals, auxilliaries and specialty chemicals. These in the context of Accounting Standard 17 on Segment Reporting, are considered to constitute one single primary segment. There is no other secondary reportable segment.

9. Related Party Transactions

As per Accounting Standard 18, the disclosures of transactions with the related parties are given by way of an Aannexure I

10. During the year under consideration, the Company has not given any loans to related parties u/s. 186 of the Companies Act, 2013. The Company has made investments in subsidiary which is reflected at Note no. 11

11. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act could not be furnished.

12. Balance of sundry debtors, creditors and loans and advances are subject to confirmation, reconciliation, if any.

13. In the opinion of board and to the best of their knowledge and belief, the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance sheet.

14. In the opinion of the board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

15. Previous year''s figures have been regrouped, rearranged and reclassified wherever necessary.

Mar 31, 2014

CORPORATE INFORMATION

Fineotex Chemical Ltd. (The Company) is a public limited Company domiciled in India and incorporated under the Companies Act, 1956. The Company was incorporated in 2004 and is listed on Bombay Stock Exchange. The Company is engaged in the business of manufacturing and trading of Chemicals. The Company is one of the leading manufacturers of chemicals for textiles, construction, water-treatment, fertiliser, leather and paint industry. Its Company Identification Number is L24100MH2004PLC144295.

Note:

The Company has exercised the option under paragraph 46A(1) of Accounting Standard - 11 (revised 2003) ''The effect of changes in Foreign Exchange rates'' as notified by Ministry of Company Affairs vide notification dated 29th December, 2011. Consequently the foreign exchange loss arising on reporting/settlement of long term foreign currency monetary items (other than relating to acquisition of depreciable fixed assets) amounting to Rs. 127.36 lakhs ( Rs. 106.82 lakhs) for the year ended 31st March 2014 has been accumulated in "Foreign Currency Monetary Translation Difference Account", out of which Rs. 52.83 lakhs (Rs. 14.24 lakhs) has been amortized for the year ended 31st March, 2014. The outstanding balance as on 31st March 2014 in the "Foreign Currency Monetary Translation Difference Account" is Rs. 74.52 lakhs (92.57 lakhs).

Disclosures as defined in Accounting Standard 15 "Employee Benefits" are given below:

Defined Contribution Plan

Employer''s contribution to PF, ESIC and other funds

Defined Benefit Plan

The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

1. Contingent Liabilities and Commitments

i. Contingent liabilities not provided for in respect of: (in Rs.)

Particulars March 31, 2014 March 31, 2013

(a) Guarantees given by bank 1,632,199 1,189,083

(b) Claims against the Company not acknowledged as debts - 3,898,285

ii. Premium amount to be paid to MIDC on account of transfer of leasehold land in the name of the Company, for which amount is not ascertainable.

iii. Commitments (in Rs.)

Particulars March 31, 2014 March 31, 2013

Estimated amount of contracts remaining to be executed on capital account and not provided 15,840,000 15,840,000 for (Net of Advances).

2. Proposed Dividend

The Board of Directors of the Company in the meeting held on 30th May, 2014 has proposed a dividend of 5% on the Equity shares of Rs. 10/- each. The payment of the above proposed dividends are subject to the approval from the shareholders of the Company in the Annual General Meeting.

3. Segment Reporting

The Company is primarily engaged in the business of manufacturing of textile chemicals, auxilliaries and specialty chemicals. These in the context of Accounting Standard 17 on Segment Reporting, are considered to constitute one single primary segment. There is no other secondary reportable segment.

4. Related Party Transactions

As per Accounting Standard 18, the disclosures of transactions with the related parties are given by way of an annexure 1

5. Intial Public Offering (IPO)

During the year 2010-11, pursuant to the approval of the shareholders of the Company in an extra ordinary general meeting held on 26th August 2010, the Company has issued and alloted through Initial Public Offering (IPO) 4,211,211 equity shares of Rs.10/- each at a premium of Rs.60/- per share aggregating to total of Rs. 29.48 crores to all categories of investors. The issue was made in accordance with the terms of the Company''s prospectus dated 26th February 2011 and the shares got listed on 11th March 2011 on Bombay Stock Exchange Limited.

6. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act could not be furnished.

7. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. Annexure 2

8. Balance of sundry debtors, creditors and loans and advances are subject to confirmation, reconciliation, if any.

9. In the opinion of board and to the best of their knowledge and belief, the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance sheet.

10. In the opinion of the board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

11. Previous year''s figures have been regrouped, rearranged and reclassified wherever necessary.

Mar 31, 2013

1 CORPORATE INFORMATION

Fineotex Chemical Ltd. (The Company) is a public limited Company domiciled in India and incorporated under the Companies Act, 1956. The Company was incorporated in 2004 and is listed on Bombay Stock Exchange. The Company is engaged in the business of manufacturing and trading of Chemicals. The Company is one of the leading manufacturers of chemicals for textiles, construction, water-treatment, fertiliser, leather and paint industry.

2 Proposed Dividend

The Board of Directors of the Company in the meeting held on 15th May, 2013 has proposed a dividend of 5% on the Equity shares of Rs. 10/- each. The payment of the above proposed dividends are subject to the approval from the shareholders of the Company in the Annual General Meeting.

3 Segment Reporting

The Company is primarily engaged in the business of manufacturing of textile chemicals, auxilliaries and specialty chemicals. These in the context of Accounting Standard 17 on Segment Reporting, are considered to constitute one single primary segment. There is no other secondary reportable segment.

4 Intial Public Offering (IPO)

During the year 2010-11, pursuant to the approval of the shareholders of the Company in an extra ordinary general meeting held on 26th August 2010, the Company has issued and alloted through initial public offering (IPO) 4,211,211 equity shares of Rs.10/- each at a premium of Rs.60/- per share aggregating to total of Rs. 29.48 crores to all categories of investors. The issue was made in accordance with the terms of the Company''s prospectus dated 26th February 2011 and the shares got listed on 11th March 2011 on Bombay Stock Exchange Ltd.

In accordance with the "objects of issue" as stated in the prospectus of the Company, the status of utilisation upto 31st March 2013 of the amount raised through the said intial public offer is as follows:

5 The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act could not be furnished.

6 The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

7 Balance of sundry debtors, creditors and loans and advances are subject to confirmation, reconciliation, if any.

8 In the opinion of board and to the best of their knowledge and belief, the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance sheet.

9 In the opinion of the board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

10 Previous year''s figures have been regrouped, rearranged and reclassified wherever necessary.

Mar 31, 2012

1 CORPORATE INFORMATION

Fineotex Chemical Ltd. (The Company) is a public limited Company domiciled in India and incorporated under the Companies Act, 1956. The Company was incorporated in 2004 and is listed on Bombay Stock Exchange. The Company is engaged in the business of manufacturing and trading of Chemicals. The Comapny is one of the leading manufacturers of chemicals for textiles, construction, water-treatment, fertiliser, leather and paint industry.

i) Aggregate number of shares alloted as fully paid up bonus shares during the the period of five years immediately preceding the reporting date

- 3,324,600 Equity shares of Rs.10/- each fully paid issued as bonus shares in the Financial Year 2007-2008 by capitalisation of Securities Premium Account.

ii) Aggregate number of shares issued as fully paid up for consideration other than cash during the the period of five years immediately preceding the reporting date

- 3,000,000 Equity shares of Rs. 10/- each fully paid issued for consideration other than cash to vendor in pursuant to the acquisition of business in Financial Year 2007-2008.

iii) The Company has only one type of equity share. Each equity share is entitled to one voting right only.

iv) In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all the preferential amounts. The distribution would be in proportion of the number of Equity shares held by the Equity Shareholders.

Note : The Company has opted to follow Notification dated 29th December, 2011 issued by MCA (Ministry of Corporate Affairs) to the long term foreign currency monetary items. Accordingly the foreign exchange loss amortised upto the current date works to Rs.27.85 lakhs. The unamortised portion carried forward in the "Foreign Currency Monetary Item Translation Reserve" as on 31st March, 2012 is Rs. 71.37 lakhs.

Note:

i. Term loan from bank is secured by way of exclusive first charge created by hypothecation of the total current assets including receivables (both present and future) of the Company. Fixed Deposits of the Company of Rs. 8 Crores have been marked as lien in favour of the Bank as a collateral security. Interest is charged at six months LIBOR plus 4.50 % p.a. is payable quarterly on the outstanding loan amount.

Defined Contribution Plan:

Employer''s contribution to PF, ESIC and other funds Defined Benefit Plan:

The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

1 Contingent Liabilities and Commitments

i. Contingent liabilities not provided for in respect of:

Particulars 2011-2012 2010-2011

(a) Guarantees given by bank 369,000 749,000

(b) Claims against the Company not acknowledged as debts 3,898,285 3,898,285

ii. Premium amount to be paid to MIDC on account of transfer of leasehold land in the name of the Company, for which amount is not ascertainable.

iii. Commitments

2 Proposed Dividend

The Board of Directors of the Company in the meeting held on 24th November, 2012 has proposed a dividend of 5% on the Equity shares of Rs. 10/- each. The payment of the above proposed dividends are subject to the approval from the shareholders of the Company in the Annual General Meeting.

3 Segment reporting

The Company is primarily engaged in the business of manufacturing of textile chemicals, auxilliaries and specialty chemicals. These in the context of Accounting Standard 17 on Segment Reporting, are considered to constitute one single primary segment. There is no other secondary reportable segment.

4 Intial Public Offering (IPO)

During the year 2010-11, pursuant to the approval of the shareholders of the Company in an extra ordinary general meeting held on 26th August 2010, the Company has issued and alloted through initial public offering (IPO) 4,211,211 equity shares of Rs.10/- each at a premium of Rs.60/- per share aggregating to total of Rs. 29.48 crores to all categories of investors. The issue was made in accordance with the terms of the Company''s prospectus dated 26th February 2011 and the shares got listed on 11th March 2011 on Bombay Stock Exchange Ltd.

In accordance with the "objects of issue" as stated in the prospectus of the Company, the status of utilisation upto 31st March 2012 of the amount raised through the said intial public offer is as follows:

5 The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act could not be furnished.

6 The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

7 Balance of sundry debtors, creditors and loans and advances are subject to confirmation, reconciliation, if any.

8 In the opinion of board and to the best of their knowledge and belief, the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance sheet.

9 In the opinion of the board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

10 Previous year''s figures have been regrouped, rearranged and reclassified wherever necessary.

Mar 31, 2011

A) Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 7,77,584/- (NIL).

B) Contingent liabilities:

Contingent liabilities not provided for in respect of:

Particulars 2010-2011 2009-2010

(a) Guarantees given by bank 2249000 474000

(b)Claims against the Company not acknowledged as debts 3898285 4004940

Premium amount to be paid to MIDC on account of transfer of leasehold land in the name of the Company, for which amount is not ascertainable.

C) Balance of sundry debtors, creditors and loans and advances are subject to confirmation, reconciliation, if.any.

D) In the opinion of board the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet.

E) In the opinion of the Board, provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

G. Segment reporting:

The Company is primarily engaged in the business of manufacturing of textile chemicals, auxiliaries and specialty chemicals. These in the context of Accounting Standard 17 on Segment Reporting, are considered to constitute one single primary segment. There is no other secondary reportable segment.

H. Related party transactions:

A Key Management Personnel:

1 SurendrakumarTibrewala

2 Sanjay Tibrewala

B Relatives of Key Management Personnel:

1 Mrs. Kanaklata Surendra Kumar Tibrewala

2 Ms. Ritu Surendra Kumar Tibrewala

C Enterprise under significant influence of Key Management Personnel or their relatives:

1 Sanjay Exports

2 Proton Biochem Private Limited

Disclosures in respect of transactions with the above related parties in accordance with Accounting Standard 18 as notified by the companies (Accounting Standard) Rules, 2006 is separately enclosed as an annexure to the notes to accounts.

I. Liability for employee benefit has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard-15 (Revised) the details of which are as hereunder:

Defined contribution plan:

Employer''s contribution to PF, ESIC and other funds

Defined benefit plan:

The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

3 Previous year''s figures have been regrouped, rearranged and reclassified wherever necessary.

4 Figures in brackets relate (o) the previous year

5 The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any. relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act could not be furnished.

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