Notes to Accounts of Heranba Industries Ltd.

Mar 31, 2025

c. Provisions

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the
obligation. The expense relating to a provision is presented
in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When
discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.

Provisions are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.

n) Revenue Recognition

The Company recognizes revenue when control over the
promised goods or services is transferred to the customer
at an amount that reflects the consideration to which the
Company expects to be entitled in exchange for those
goods or services.

The specific recognition criteria described below must also
be met before revenue is recognised.

The Company recognises revenue generally at the point in
time when the products are delivered to customer or when
it is delivered to a carrier for export sale, which is when
the control over product is transferred to the customer. In
contracts where freight is arranged by the Company and
recovered from the customers, the same is treated as a
separate performance obligation and revenue is recognized
when such freight services are rendered.

Revenue is adjusted for variable consideration such as
discounts, rebates, refunds, credits, price concessions,
incentives, or other similar items in a contract when they
are highly probable to be provided. The amount of revenue
excludes any amount collected on behalf of third parties.

Interest and dividend:

Interest income including income arising on other
instruments are recognised on time proportion basis using
the effective interest rate method.

Dividend income is recognized when the right to receive
dividend is established.

Export Benefits

The benefit accrued under the Duty Drawback, Merchandise
Export Incentive Scheme and other schemes as per the
Import and Export Policy in respect of exports made under
the said schemes is included as ''Export Incentives'' under the
head ''Other operating revenue''.

o) Employee benefits

a) Defined Contribution Plan

The Company pays provident fund contributions to publicly
administered provident funds as per local regulations.
The Company has no further payment obligations once
the contributions have been paid. The contributions
are accounted for as define contribution plan and the
contributions are recognised as employee benefit expense
when they are due.

b) Defined Benefit Plan

The liability or asset recognised in the Balance Sheet in
respect of defined benefit gratuity plans is the present value
of the defined benefit obligation at the end of the reporting
period less the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using the
projected unit credit method.

The present value of the defined benefit obligation
denominated in '' is determined by discounting the estimated
future cash outflows by reference to market yields at the
end of the reporting period on government bonds that have
terms approximating to the terms of related obligation.

The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in employee
benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognised in the year in which they occur, directly in other
comprehensive income.

Changes in present value of the defined benefit obligation
resulting from plan amendments or curtailments are
recognised immediately in the statement of profit and loss
as past service cost.

c) Leave Entitlement

Leave entitlement are provided based on an actuarial
valuation, similar to that of gratuity benefit. Re-measurement,
comprising of actuarial gains and losses, in respect of leave
entitlement are recognised in the Statement of Profit and
Loss in the period in which they occur.

d) Short-term Benefits

Short-term employee benefits such as salaries, performance
incentives etc. are recognised as expenses at the
undiscounted amounts in the Statement of Profit and Loss
of the period in which the related service is rendered.

p) Borrowings and Borrowing costs.

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use
or sale are capitalised as part of the cost of the asset. All
other borrowing costs are expensed in the period in which
they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing
of funds.

q) Taxation

i. Current Tax

The tax currently payable is based on taxable profit for the
year. Taxable profit differs from ''profit before tax'' as reported
in the statement of profit and loss because of items of
income or expense that are taxable or deductible in other
years and items that are never taxable or deductible. The
Company''s current tax is calculated using rates that have
been enacted or substantively enacted by the end of the
reporting period.

ii. Deferred Tax

Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred tax
liabilities are generally recognized for all taxable temporary
differences. Deferred tax assets are generally recognized for
all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which
those deductible temporary differences can be utilized.

The carrying amount of deferred tax asset is reviewed at the
end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates

(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount of
its assets and liabilities.

r) Earnings per Share

Basic earnings per share are calculated by dividing the net
profit or loss for the year attributable to equity shareholders
by the weighted average number of equity shares
outstanding during the year. The weighted average number
of equity shares outstanding during the year is adjusted for
events of bonus issue, if any.

For the purpose of calculating diluted earnings per share,
the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares
outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.

The number of equity shares are adjusted retrospectively for
all periods presented for any bonus shares issues.

s) Cash Flow Statement

Cash flows are reported using the indirect method, whereby
profit for the period is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of
income or expenses associated with investing or financing
cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated.

t) Trade Payables & Trade Receivables.

A payable is classified as a ''trade payable'' if it is in respect
of the amount due on account of goods purchased or
services received in the normal course of business. These
amounts represent liabilities for goods and services
provided to the Company prior to the end of the financial
year which are unpaid. These amounts are unsecured
and are usually settled as per the payment terms stated
in the contract. Trade and other payables are presented
as current liabilities unless payment is not due within 12
months after the reporting period. They are recognised
initially at their fair value and subsequently measured at
amortised cost using the EIR method.

u) A receivable is classified as a ''trade receivable'' if it is in
respect of the amount due on account of goods sold or
services rendered in the normal course of business. Trade
receivables are recognised initially at transaction values and
subsequently measured at amortised cost using the EIR
method (if there is a financing element), less provision for
expected or lifetime credit loss.

v) Leases

Measurement of Lease Liability

At the time of initial recognition, the Company measures lease
liability as present value of all lease payments discounted
using the Company''s incremental cost of borrowing and
directly attributable costs. Subsequently, the lease liability is

1) increased by interest on lease liability.

2) reduced by lease payments made; and

3) remeasured to reflect any reassessment or lease
modifications specified in Ind AS 116 ''Leases'', or to
reflect revised fixed lease payments.

Measurement of Right-of-use assets

At the time of initial recognition, the Company measures
''Right-of-use assets'' as present value of all lease payments
discounted using the Company''s incremental cost of
borrowing w.r.t said lease contract. Subsequently, ''Right-of-
use assets'' is measured using cost model i.e., at cost less any
accumulated depreciation and any accumulated impairment
losses adjusted for any remeasurement of the lease liability
specified in Ind AS 116 ''Leases''.

Depreciation on ''Right-of-use assets'' is provided on straight
line basis over the lease period.

The exception permitted in Ind AS 116 for low value assets
and short-term leases has been adopted by Company.

w) Segment Reporting

Based on ” Management Approach ”as defined in Ind AS 108
-Operating Segments the chief operating decision maker
regularly monitors and reviews the operating results of the
whole Company as one segment of "Agro -Chemicals". Thus,
as defined in Ind AS 108, the Company''s entire business
falls under this one operational segment and hence the
necessary information has already been disclosed in the
Balance Sheet and the Statement of Profit and Loss. The
analysis of geographical segments is based on the areas in
which customers of the Company are located.

A. Expected Credit Loss

Allowance for Expected Credit Loss

In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL") model for measurement and recognition
of impairment loss on its trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the
expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk
factors and historical data of credit losses from various customers. The Company estimates impairment under the simplified
approach. Accordingly, it does not track the changes in credit risk of trade receivables. The impairment amount represents
lifetime expected credit loss.

a) Terms/rights attached to equity shares

The Company has a single class of equity shares having a par value of '' 10 per share. Each shareholder of equity share is
entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of
the Company in proportion to the number of equity shares held by each shareholder, after settlement of all preferential
obligations.

As per the records of the Company, including its register of shareholders/members and other declarations received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of the
shares.

Securities premium

Security Premium in accordance with the provisions of
Section 52 of the Companies Act represents the premium
received on issue of shares. It can be utilised to pay-off
equity related expenses or for issuance of bonus shares and
its related issue expenses.

General reserve

Under the erstwhile Companies Act 1956, general reserve
was created through an annual transfer of net income
at a specified percentage in accordance with applicable
regulations. The purpose of these transfers was to ensure
that if a dividend distribution in a given year is more than
10% of the paid up share capital of the Company for
that year, then the total dividend distribution is less than
total distributable reserve for that year. Consequent to
introduction of the Companies Act 2013, the requirement
to mandatorily transfer a specified percentage of net profit
to general reserve has been withdrawn. However the amount
previously transferred to the general reserve can be utilised

only in accordance with the specific requirements of the
Companies Act, 2013.

Capital Redemption Reserve

Capital redemption reserve represents the amount of
profits transferred from general reserve for the purpose
of redemption of preference shares or for the buyback of
shares.

Dividend

The Board of Directors of the Company at their meeting
held on May 23, 2025 have recommended dividend of '' 1
per share (10% of FV- '' 10) for the Financial Year 2024¬
25 e, subject to shareholder approval at the ensuing Annual
General Meeting.

The dividend proposed for the previous year has been paid
during the year and charged to Retained earning '' 5.00 crore.

I. Terms and Security of Borrowings:

a Cash Credit: Bank Of Baroda -Sanctioned Limit '' 74.75
crore, CC Interest rate 0.25% over 1 year MCLR without
Strategic Premium

b Foreign Currency Loan: Bank of Baroda -It is a sublimit
of '' 60 crore at Interest rate of around 7.62% p.a.
sanctioned under overall Cash Credit limit of '' 74.75
crore. Based on MCLR, payable as and when charged

c Working Capital Loan: Bank of Baroda -It is a sublimit
of '' 50 crore sanctioned under overall Cash Credit limit
of '' 74.75 crore. Interest rate 0.25% over 1 year MCLR
without Strategic Premium

d Packing Credit: Bank of Baroda -Sanctioned limit
'' 75.00 crore at average Interest rate of around 6.43%
p.a. (P.Y. Sanctioned limit '' 75.00 crore at average
Interest rate of around 6.50% p.a.)

e Working Capital Demand Loan: CTBC Bank Co. Ltd.
- Sanctioned limit '' 35 crore at interest rate to be
decided at disbursement, Company has not taken
disbursement during year

f Packing Credit: CTBC Bank Co. Ltd. - Sanctioned limit
'' 35 crore at average interest rate 6.43% p.a.

Above cash credit and packing credit limits are secured
by way of exclusive first charge on hypothecation of
entire inventories, Book debts and other current assets
present & future.

The above facilities are secured as follows,

i Pari pasu First charge on the current assets of the
Company both present and future.

ii Pari pasu Equitable Mortgage of all land and buildings
and hypothecation of plant and machinery situated at
factories or at godowns.

iii Personal Guarantee of Mr. R.K.Shetty, Mr. S.K.Shetty,
Mr. Raunak Shetty and Mr Shriraj Shetty.

II. Terms of Unsecured Borrowings:

a Working Capital Loan - Arka Fincap - sanctioned limit
of '' 55 crore. The Loans are secured by Pledge of Plant
and Machinery of wholly owned subsidary Heranba
Organic Pvt. Ltd., Corporate Guarantee of Heranba
Organics Pvt. Ltd. and Personal Guarantee of Promoters
- Mr. Sadashiv Kanyana Shetty and Mr. Raghuram
Kanyana Shetty.

b Working Capital Loan - Bajaj Finserv - sanctioned limit
of '' 17.50 crore. Unsecured facility with personal
guarantee of promoters- Mr. Sadashiv Kanyana Shetty,
Mr. Raghuram Kanyana Shetty, Mr. Sriraj Sadashiv
Shetty and Mr. Raunak Raghuram Shetty.

c Loan from R K Shetty: Loan of '' 14 crore at interest of
9.5% per anum. Repayable after 365 days from the date
of disbursement,along with interest.

40. FINANCIAL RISK MANAGEMENT

Risk management framework:

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s
senior management oversees management of these risks. The Company''s focus is to foresee the unpredictability of financial
markets and seek to minimize potential adverse effects on its financial performance.

i) Market Risk

a. Foreign currency risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices
etc. The Company operations involve foreign exchange transactions including mainly import, export, packing credit
facilities and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect
to US$. Foreign currency risk arises from future commercial transactions and recognised in assets and liabilities
denominated in foreign currency that is not Company''s functional currency (i.e INR). The risk is measured through
forecast of highly probable foreign currency cash flow.

b. Interest rate risk

Interest rate risk arises from movements in interest rates which could have effects on the Company''s net income or financial
position. Changes in interest rates may cause variations in interest income and expenses resulting from interest-bearing
assets and liabilities. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s
debt obligations with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings
and loans given affected. With all other variables held constant, the Company''s profit before tax is affected through the
impact on floating rate borrowings, as follows:

c. Other Market Price Risk

The Company is exposed to Equity price risk, which arises
from FVTPL of Equity securities. The Company has a very
insignificant portion of amount invested in quoted equity
securities. The management monitors the proportion of
quoted equity instruments in its investment portfolio based
on market indices.

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.

Trade and Other Receivables:

In accordance with Ind AS 109, the Company uses the
expected credit loss ("ECL") model for measurement and
recognition of impairment loss on its trade receivables or any
contractual right to receive cash or another financial asset
that result from transactions that are within the scope of

Ind AS 115. For this purpose, the Company uses a provision
matrix to compute the expected credit loss amount for trade
receivables. The provision matrix takes into account external
and internal credit risk factors and historical data of credit
losses from various customers. The Company estimates
impairment under the simplified approach. Accordingly, it
does not track the changes in credit risk of trade receivables.
The impairment amount represents lifetime expected credit
loss.

e. Liquidity risk

Liquidity risk is the risk that the Company will encounter
difficulty in raising funds to meet commitments associated
with financial instruments. Liquidity risk management implies
maintaining sufficient cash and marketable securities and
the availability of funding through committed credit facilities
to meet the obligations when due.

Management monitors rolling forecasts of the Company''s
liquidity position (comprising the undrawn borrowing
facilities below) and cash and cash equivalents on the basis
of expected cash flows. The Company manages its liquidity
risk by preparing month on month cash flow projections to
monitor liquidity requirements.

41. FAIR VALUE HIERARCHY

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a)
recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial
statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified
its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows
underneath the table.

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

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

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

(*) The Company has made an investment in Alternate Investment Fund (AIF) of '' 2.25 crore ('' 1.50 crore in previous year).
This investment is marked at fair value through profit and Loss (FVTPL),

In absence of financials statements of The Shamrao Vithal Co-op. Bank Ltd. And Matrubhumi Co-op. Credit Society Limited
the fair value effect is not given, the same is carried at its carrying value in books, although the same is accounted at FVTPL.
The management does not expect the fair value changes to be material to the financial statements.

42. CAPITAL MANAGEMENT

Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy
capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure
and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust
the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue
new shares.

43. RELATIONSHIP WITH STRUCK OFF
COMPANIES

The information about transaction with struck off Companies
(defined under Section 248 of the Companies Act, 2013 or
Section 560 of Companies Act, 1956) has been determined
to the extent such parties have been identified on the basis
of the information available with the Company and the same
is relied upon by the auditors.

44. ANALYTICAL RATIOS

Analytical Ratios as per requirements of Schedule III are
given in Statement 3

45. AUDIT TRAIL NOTE

The Ministry of Corporate Affairs (MCA) by the Companies
(Accounts) Amendment Rules 2021 and vide notification
dated 24 March 2021 has issued the "Companies (Audit and
Auditors) Amendment Rules, 2021 has prescribed a new
requirement for companies under the proviso to Rule 3(1)
of the Companies (Accounts) Rules, 2014 inserted requiring
companies, which uses accounting software for maintaining
its books of account, shall use only such accounting
software which has a feature of recording audit trail of each
and every transaction, creating an edit log of each change
made in the books of account along with the date when
such changes were made and ensuring that the audit trail
cannot be disabled.

As required under the above rules, the Company uses
Navision and HRMS software for its financial accounting
and HR which works along with Database for maintaining
its books of account which has a feature of recording audit
trail (edit log) facility and the same has been operated
throughout the year for all transactions recorded and the
audit trail feature has not been tampered with except:

i) the audit trail feature was not enabled at the database
level for accounting software "Navision”” to log any
direct data changes, used for maintenance of all
accounting records by the Company.

ii) At present the audit trail is preserved only for a period of
six months and all audit trails beyond six months are not
preserved due to space constraints. Further, back up of
the audit trail has not been preserved as per statutory
requirements for record retention due to cloud space
constraints.

46 . The Board of Directors at their meeting held on May 23,
2025 has recommended dividend of '' 1 per share (10% of
FV- '' 10) on the outstanding equity shares of nominal value
of '' 10/- each as on record date, subject to shareholder
approval at the ensuing Annual General Meeting.

47. The balance sheet, statement of profit and loss, cash
flow statement, statement of changes in equity, statement
of material accounting policy information and the other
explanatory notes forms an integral part of the financial
statements of the Company for the year ended March 31,
2025.

48. Figures of the previous period have been regrouped/
reclassified wherever necessary including to conform to
current period''s classification.

As per our report of even date attached

For Natvarlal Vepari and Co LLP For & on behalf of the Board of Directors

(Formerly known as Natvarlal Vepari & Co.) Heranba Industries Limited

Chartered Accountants
Firm Registration No. 106971W/W101085

N Jayendran S. K. Shetty R. K. Shetty

Partner Chairman Managing Director

Membership No. 040441 DIN: 00038681 DIN: 00038703

Place: Mumbai Abdul Latif Raj K Bafna

Date: May 23,2025 Company Secretary Chief Financial Officer

---

Mar 31, 2024

h) Provisions, contingent liabilities and contingent assets

A provision is recognized when the Company has a present obligation (legal or constructive) as a result of past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle a reliably assessable obligation. Provisions are determined.

based on best estimate required to settle each obligation at each balance sheet date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent liabilities are also present obligations where it is not probable that an outflow of resources will be required, or the amount of the obligation cannot be measured with sufficient reliability. Contingent Liabilities are not recognized in the financial statements but are disclosed separately.

Contingent assets are not recognised unless it becomes virtually certain that an inflow of economic benefits will arise.

i) Financial Assets

Recognition and initial measurement

Trade Receivables are initially recognised when they are originated. All other financial assets are initially recognised when the Company becomes party to the contractual provisions of the instrument. All financial assets other than those measured subsequently at fair value through profit and loss, are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset.

Classification and Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

i. Financial Assets at Amortised Cost

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual

terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the Effective Interest rate method (EIR). Amortized cost is calculated by taking into account any discount or premium and fees or cost that are an integral part of the EIR.

The EIR amortization is included in finance income in the statement of profit & loss. The losses arising from impairment are recognized in the statement of profit and loss.

ii. Financial Assets Measured at Fair Value through Other Comprehensive Income (FVOCI)

Financial assets are measured at fair value through Other Comprehensive Income (OCI) if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, these assets are subsequently measured at Fair Value. Interest Income under Effective Interest method, foreign exchange gains and losses and impairment losses are recognized in the statement of profit and Loss. Other net gains and losses are recognized in OCI.

iii. Financial asset not measured at amortised cost or at fair value through OCI is carried at Fair Value through Profit and Loss.

iv. Equity Investments

All Equity investments within the scope of Ind AS 109 are measured at Fair Value. Such equity instruments which are held for trading are classified as FVTPL. For all other such equity instruments, the Company decides to classify the same either as FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

For Equity instruments classified as FVOCI, all fair value changes in the instrument excluding dividends are recognized in OCI. Dividends on such equity instruments are recognized in the statement of Profit or loss.

De-recognition of Financial Assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:

- The rights to receive cash flows from the asset have expired, or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all

the risks and rewards of the asset, but has transferred control of the asset.

On de-recognition, any gains or losses on all debt instruments (other than debt instruments measured at FVOCI) and equity instruments (measured at FVTPL) are recognised in the statement of Profit and Loss. Gains and losses in respect of debt instrument measured at FVOCI and that are accumulated in OCI are reclassified to Profit and Loss on de-recognition. Gains or losses on equity instruments measured at FVOCI that are recognised and accumulated in OCI are not reclassified to Profit or Loss on derecognition.

j) Financial Liabilities

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

i) Recognition and Initial Measurement

Financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial Liability is initially measured at fair value plus, for an item not at fair value through profit and loss, net of transaction costs that are directly attributable to its acquisition or issue.

ii) Classification and Subsequent Measurement

The measurement of financial liabilities depends on their classification, as described below:

- Financial liabilities at fair value through Profit or Loss (FVTPL)

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial Liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognised in Statement of Profit and Loss.

- Financial liabilities at amortised cost

After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently measured at amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

iii) De-recognition of Financial Liabilities

Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

k) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

l) Offsetting Financial Instruments

Financial assets and liabilities are offset, and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

m) Derivative financial instruments and Hedge Accounting

Derivative financial instruments such as forward contracts to hedge its foreign currency risks are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value with changes in fair value recognised in the Statement of Profit and Loss in the period when they arise. Derivatives are carried as Financial Assets when the fair value is positive and as Financial Liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedge which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or is treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a Non-Financial Assets or Non-Financial liability.

n) Cash Flow Hedge

The Company designates derivative contracts or non-derivative Financial Assets/Liabilities as hedging instruments to mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly probable future cash flows attributable to a recognised asset or liability or forecast cash transactions.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in the cash flow hedging reserve being part of Other Comprehensive Income. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold or terminated or exercised, the cumulative gain or loss on the hedging instrument recognised in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously recognised in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.

o) Impairment

a. financial assets

In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the financial asset measured at amortized cost.

Loss allowances on trade receivables are measured following the ''Simplified Approach'' at an amount equal to the Lifetime ECL at each reporting date. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

In respect of other financial asset, the loss allowance is measured at 12-month ECL only, if there is no significant deterioration in the credit risk since initial recognition of an asset or asset is determined to have a low credit risk at the reporting date.

b. Impairment of Non-financial assets

The Company assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

c. Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

p) Revenue Recognition

The Company recognizes revenue when control over the promised goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

The specific recognition criteria described below must also be met before revenue is recognised.

Sale of goods

The Company recognises revenue generally at the point in time when the products are delivered to customer or when it is delivered to a carrier for export sale, which is when the control over product is transferred to the customer. In contracts where freight is arranged by the Company and recovered from the customers, the same is treated as a separate performance obligation and revenue is recognized when such freight services are rendered.

Revenue is adjusted for variable consideration such as discounts, rebates, refunds, credits, price concessions, incentives, or other similar items in a contract when they are highly probable to be provided. The amount of revenue excludes any amount collected on behalf of third parties.

Interest and dividend

Interest income including income arising on other instruments are recognised on time proportion basis using the effective interest rate method.

Dividend income is recognized when the right to receive dividend is established.

Export Benefits

The benefit accrued under the Duty Drawback, Merchandise Export Incentive Scheme and other schemes as per the Import and Export Policy in respect of exports made under the said schemes is included as ''Export Incentives'' under the head ''Other operating revenue''.

q) Employee benefits

a) Defined Contribution Plan

The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as define contribution plan and the contributions are recognised as employee benefit expense when they are due.

b) Defined Benefit Plan

The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation denominated in Rs. is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the year in which they occur, directly in other comprehensive income.

Changes in present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the statement of profit and loss as past service cost.

c) Leave Entitlement

Leave entitlement are provided based on an actuarial valuation, similar to that of gratuity benefit. Re-measurement, comprising of actuarial gains and losses, in respect of leave entitlement are recognised in the Statement of Profit and Loss in the period in which they occur.

d) Short-term Benefits

Short-term employee benefits such as salaries, performance incentives etc. are recognised as expenses at the undiscounted amounts in the Statement of Profit and Loss of the period in which the related service is rendered.

r) Borrowings and Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

s) Taxation

i. Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using rates that have been enacted or substantively enacted by the end of the reporting period.

ii. Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

t) Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, if any.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

The number of equity shares are adjusted retrospectively for all periods presented for any bonus shares issues.

u) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

v) Trade Payables & Trade Receivables

A payable is classified as a ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method.

w) A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. Trade receivables are recognised initially at transaction values and subsequently measured at amortised cost using the EIR method (if there is a financing element), less provision for expected or lifetime credit loss.

x) Leases

Measurement of Lease Liability

At the time of initial recognition, the Company measures lease liability as present value of all lease payments discounted using

the Company''s incremental cost of borrowing and directly attributable costs. Subsequently, the lease liability is:

1) increased by interest on lease liability;

2) reduced by lease payments made; and

3) remeasured to reflect any reassessment or lease modifications specified in Ind AS 116 ''Leases'', or to reflect revised fixed lease payments.

Measurement of Right-of-use assets

At the time of initial recognition, the Company measures ''Right-of-use assets'' as present value of all lease payments discounted using the Company''s incremental cost of borrowing w.r.t said lease contract. Subsequently, ''Right-of-use assets'' is measured using cost model i.e., at cost less any accumulated depreciation and any accumulated impairment

losses adjusted for any remeasurement of the lease liability specified in Ind AS 116 ''Leases''.

Depreciation on ''Right-of-use assets'' is provided on straight line basis over the lease period.

The exception permitted in Ind AS 116 for low value assets and short-term leases has been adopted by Company

y) Segment Reporting

Based on "Management Approach” as defined in Ind AS 108 -Operating Segments the chief operating decision maker regularly monitors and reviews the operating results of the whole Company as one segment of "Agro-Chemicals”. Thus, as defined in Ind AS 108, the Company''s entire business falls under this one operational segment and hence the necessary information has already been disclosed in the Balance Sheet and the Statement of Profit and Loss. The analysis of geographical segments is based on the areas in which customers of the Company are located.

A. Expected Credit Loss

Allowance for Expected Credit Loss

In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL”) model for measurement and recognition of impairment loss on its trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk factors and historical data of credit losses from various customers. The Company estimates impairment under the simplified approach. Accordingly, it does not track the changes in credit risk of trade receivables. The impairment amount represents lifetime expected credit loss.

c) Aggregate number of equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date

During the year ended March 31,2019, the bonus issue in the proportion of 4:1 i.e.4 (Four) bonus equity share of Rs. 10 each for every 1 (One) fully paid-up equity shares held was approved by the shareholders of the Company on .09^th July, 2018 through voting at the Meeting by show of hands. Subsequently, on 09^th July,2018, the Company allotted 3,12,45,224 (Three Crore Twelve Lakh Forty Five Thousand Two Hundred Twenty Four) equity shares to shareholders who held equity shares as on the record date of 09^th July,2018 and Rs. 31.25 Crore (representing par value of Rs. 10 per share) was transferred from securities premium and retained earnings to the share capital.

Security Premium

Security Premium in accordance with the provisions of Section 52 of the Companies Act represents the premium received on issue of shares. It can be utilised to pay-off equity related expenses or for issuance of bonus shares and its related issue expenses.

General reserve

Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10 % of the paid up share capital of the Company for that year, then the total dividend distribution is less than total distributable reserve for that year. Consequent to introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn. However the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

Capital Redemption Reserve

Capital redemption reserve represents the amount of profits transferred from general reserve for the purpose of redemption of preference shares or for the buyback of shares.

Gratuity is a defined benefit plan and Company is exposed to the

Following Risks:

1. Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

2. Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

3. Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

4. Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

5. Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

6. Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

Notes:

I. Terms and Security of Borrowings

a. Cash Credit - Bank Of Baroda: Sanctioned Limit Rs. 74.75 crores, CC Interest rate 9.35% p.a.

b. Foreign Currency Loan - Bank of Baroda: It is a sublimit of Rs. 60 crores at Interest rate of around 7.62% p.a. sanctioned under overall Cash Credit limit of Rs. 74.75 crores.

c. Working Capital Loan - Bank of Baroda: It is a sublimit of Rs. 50 crores sanctioned under overall Cash Credit limit of Rs. 74.75 crores.

d. Packing Credit - Bank of Baroda: Sanctioned limit Rs. 75.00 crores at average Interest rate of around 6.43% p.a. (P.Y.

Sanctioned limit Rs. 75.00 crores at average Interest rate of around 6.50% p.a.).

e. Letter of Credit- Bank of Baroda: Sanctioned limit Rs. 45 crores, commission @ 0.25%.

f. Packing Credit - HDFC Bank: Sanctioned limit Rs. 25 crores with sublimit of Cash credit facility of Rs. 25 crores or Working capital demand loan of Rs. 25 crores., However there is no drawdown against the sanction.

g. Letter of Credit- HDFC Bank: Sanctioned limit Rs. 10 crores., However there is no drawdown against the sanction.

h. Working Capital Demand Loan- CTBC Bank Co. Ltd.:

Sanctioned limit Rs. 35 crores at interest rate to be decided

Notes:

1) In Current year out of the above Rs. 2.91 Crores is paid against demand.

2) Out of the above Rs. 0.39 Crores is paid against demand.

3) Out of the above Rs. 0.75 Crores is paid against demand.

4) In certain Assessment Years, the Outstanding Demands on the Income Tax Site are on a higher side including interest accrued against which the demand orders are for lesser amount of demands. These are pending to be rectified on the Income site by the Department. The Company has shown Contingent Liability basis the

demand orders received taking into account the appeal file against the same.

5) The Demands are majorly against Inoperative PAN status due to non linking of PAN and Aadhar by the Counter parties. The Company is in the process of getting the same rectified from the parties post which the demand would change.

NOTE 35.

In the opinion of the Board of Directors, all assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

NOTE 36. DISCLOSURE IN ACCORDANCE WITH IND AS - 108 “OPERATING SEGMENTS”, OF THE COMPANIES (INDIAN ACCOUNTING STANDARDS) RULES, 2015

Ind AS 108 establishes standards for the way that business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. As the Company is engaged in providing similar nature of products, production process, customer types etc., the Company has a single operating segment of "Agro chemicals”, there are no differing risks and returns attributable to the Company''s services to its customers. Further, The Company primarily operates in India and therefore the analysis of geographical segment is demarcated into its Indian and Overseas revenue as under:

NOTE 39. FINANCIAL RISK MANAGEMENT Risk management framework

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s senior management oversees management of these risks. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

i) Market Risk a. Foreign currency risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices etc. The Company operations involve foreign exchange transactions including mainly import, export, packing credit facilities and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US$. Foreign currency risk arises from future commercial transactions and recognised in assets and liabilities denominated in foreign currency that is not Company''s functional currency. (i.e INR) The risk is measured through forecast of highly probable foreign currency cash flow.

c. Other Market Price Risk

The Company is exposed to Equity price risk, which arises from FVTPL of Equity securities. The Company has a very insignificant portion of amount invested in quoted equity securities. The management monitors the proportion of quoted equity instruments in its investment portfolio based on market indices.

d. Hedge Accounting

The Company''s business objective includes safe-guarding its earnings against adverse price movements of foreign exchange. The Company has adopted a policy to hedge all risks within an acceptable risk limit and an approved hedge accounting framework which allows for Cash Flow hedges.

There is an economic relationship between the hedged items and the hedging instruments. The Company has established a hedge ratio of 1:1 for the hedging relationships.

ii) Credit risk

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

Trade and Other Receivables

In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL") model for measurement and recognition of impairment loss on its trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk factors and historical data of credit losses from various customers. The

Company estimates impairment under the simplified approach. Accordingly, it does not track the changes in credit risk of trade receivables. The impairment amount represents lifetime expected credit loss.

iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through committed credit facilities to meet the obligations when due.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The Company manages its liquidity risk by preparing month on month cash flow projections to monitor liquidity requirements.

NOTE 40. FAIR VALUE HIERARCHY

This Section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

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

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

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

NOTE 41. CAPITAL MANAGEMENT

Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

NOTE 42. RELATIONSHIP WITH STRUCK OFF COMPANIES

The information about transaction with struck off Companies (defined under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956) has been determined to the extent such parties have been identified on the basis of the information available with the Company and the same is relied upon by the auditors.

NOTE 43. ANALYTICAL RATIOS

Analytical Ratios as per requirements of Schedule III are given in Statement 3.

NOTE 44. AUDIT TRAIL NOTE

The Ministry of Corporate Affairs (MCA) by the Companies (Accounts) Amendment Rules 2021 and vide notification dated 24 March 2021 has issued the "Companies (Audit and Auditors) Amendment Rules, 2021 has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies

(Accounts) Rules, 2014 inserted requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

As required under above rules, the Company uses Navision and HRMS software for its financial accounting and HR which works along with Database for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded and the audit trail feature has not been tampered with except:

i) the audit trail feature was not enabled at the database level for accounting software "Navision” to log any direct data changes, used for maintenance of all accounting records by the Company.

ii) At present the audit trail is preserved only for a period of six months and all audit trails beyond six months are not preserved due to space constraints. Further, Back up of the audit trail has not been preserved as per statutory requirements for record retention due to cloud space constraints.

NOTE 45.

The Board of Directors at their meeting held on May 27, 2024 has recommended dividend of Rs. 1.25 per share (12.5 % of FV-Rs. 10) on the outstanding equity shares of nominal value of Rs. 10/- each as on record date, subject to shareholder approval at the ensuing Annual General Meeting.

NOTE 46.

The balance sheet, statement of profit and loss, cash flow statement, statement of changes in equity, statement of material accounting policy information and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended March 31,2024.

NOTE 47.

Figures of the previous period have been regrouped/ reclassified wherever necessary including to conform to current period''s classification.

As per our report of even date attached

For Natvarlal Vepari & Co. For & on behalf of the Board of Directors

Chartered Accountants Heranba Industries Limited

Firm Registration No.: 106971W

N. Jayendran S. K. Shetty R. K. Shetty

Partner Chairman Managing Director

M. No.: 040441 DIN: 00038681 DIN: 00038703

Place: Mumbai Abdul Latif Raj K Bafna

Dated: May 27, 2024 Company Secretary Chief Financial Officer

---

Mar 31, 2023

o) Provisions, contingent liabilities and contingent assets

A provision is recognized when the Company has a present obligation (legal or constructive) as a result of past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle a reliably assessable obligation. Provisions are determined based on best estimate required to settle each obligation at each balance sheet date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent liabilities are also present obligations where it is not probable that an outflow of resources will be required, or the amount of the obligation cannot be measured with sufficient reliability. Contingent Liabilities are not recognized in the financial statements but are disclosed separately.

Contingent assets are not recognised unless it becomes virtually certain that an inflow of economic benefits will arise.

p) Leases

Measurement of Lease Liability

At the time of initial recognition, the Company measures lease liability as present value of all lease payments discounted using the Company''s incremental cost of borrowing and directly attributable costs. Subsequently, the lease liability is:

1) increased by interest on lease liability;

2) reduced by lease payments made; and

3) remeasured to reflect any reassessment or lease modifications specified in Ind AS 116 ''Leases'', or to reflect revised fixed lease payments.

Measurement of Right-of-use assets

At the time of initial recognition, the Company measures ''Right-of-use assets'' as present value of all lease payments discounted using the Company''s incremental cost of borrowing w.r.t said lease contract. Subsequently, ''Right-of-use assets'' is measured using cost model i.e., at cost less any accumulated depreciation and any accumulated impairment losses adjusted for any remeasurement of the lease liability specified in Ind AS 116 ''Leases''.

Depreciation on ''Right-of-use assets'' is provided on straight line basis over the lease period.

The exception permitted in Ind AS 116 for low value assets and short-term leases has been adopted by Company.

(ii) Contractual Obligation

Refer note 32 on disclosure of contractual commitments for the acquisition of Property, Plant & Equipment.

(iii) Property, Plant & Equipment taken on finance lease

The Property, Plant & Equipment includes leasehold land where the Company is a lessee under finance lease. The lease term in respect of leasehold land is long term lease with ability to opt for renewal of the lease term.

(iv) Assets Held for Sale:

Assets held for sale represents the leasehold land which are earmarked for transfer to our wholly owned subsidiary which are pending for transfer. The necessary actions for the clearance from GIDC are initiated from our side and the transfer will conclude as and when the clearances are obtained. Pending them the same are leased to the Subsidiary for their use.

a) Terms/rights attached to equity shares:

The Company has a single class of equity shares having a par value of ? 10 per share. Each shareholder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held by each shareholder, after settlement of all preferential obligations.

As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of the shares.

The Company has issued and alloted during the year ended March 31, 2019, 3,12,45,224 equity shares of ? 10 each as a bonus shares in the ratio of four equity shares for every one equity shares held by the members.

Security Premium:

Security Premium represents the premium received on issue of shares. It can be utilised to pay-off equity related expenses or for issuance of bonus shares and its related issue expenses.

General Reserve:

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The

purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid up share capital of the Company for that year, then the total dividend distribution is less than total distributable reserve for that year. Consequent to introduction of the Companies Act 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. However the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

Capital Redemption Reserve:

Capital redemption reserve represents the amount of profits transferred from general reserve for the purpose of redemption of preference shares or for the buyback of shares.

Gratuity is a defined benefit plan and Company is exposed to the following Risks:

1. Salary Risk:

The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

2. Interest Rate Risk:

A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

3. Investment Risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period

on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

4. Asset Liability Matching Risk:

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

5. Mortality Risk:

Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

6. Concentration Risk:

Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

Notes:

I. Terms and Security of Borrowings:

a. Cash Credit - Bank Of Baroda: Sanctioned Limit ? 74.75 crore, Interest rate 9.35% p.a. (PY: ? 74.75 crore, Interest rate 9.35% p.a.)

b. Foreign Currency Loan - Bank of Baroda: It is a

sublimit of ? 60 crore at Interest rate of around 6.44% p.a. sanctioned under overall Cash Credit limit of ? 74.75 crore. (PY: ? 60 crore at Interest rate ranging from 2.75% to 3.10% p.a.)

c. Packing Credit - Bank of Baroda: Sanctioned limit ? 75.00 crore at Interest rateof around 4.60% p.a. (PY: ? 50.00 crore Interest rate ranging from 1.25% to 1.85% p.a.)

d. Packing Credit - HDFC Bank: Sanctioned limit ? 25 crore with sublimit of Cash credit facility of ? 25 crore or Working capital demand loan of ? 25 crore.

e. Letter of Credit - HDFC Bank: Sanctioned limit ? 10 crore.

f. Bill discounted through MSME Bank are repayable within a period of 90 days bearing interest range of 7% to 7.75%

Above cash credit and packing credit limits are secured by way of exclusive first charge on hypothecation of entire inventories, Book debts and other current assets present & future.

The above facilities are secured as follows:

a. Pari pasu First charge on the current assets of the Company both present and future.

b. Pari pasu Equitable Mortgage of all land and buildings and hypothecation of plant and machinery situated at factories or at godowns.

c. Personal Guarantee of Mr. R.K. Shetty, Mr. S.K. Shetty, Mr. Raunak Shetty and Mr. Shriraj Shetty.

NOTE 34:

In the opinion of the Board of Directors, all assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

NOTE 35:

Disclosure in accordance with Ind AS 108 “Operating Segments”, of the Companies (Indian Accounting Standards) Rules, 2015.

Ind AS 108 establishes standards for the way that business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. As the Company is engaged in providing similar nature of products, production process, customer types etc., the Company has a single operating segment of “Agro chemicals”, there are no differing risks and returns attributable to the Company''s services to its customers. Further, The Company primarily operates in India and therefore the analysis of geographical segment is demarcated into its Indian and Overseas revenue as under:

NOTE 38: FINANCIAL RISK MANAGEMENT

Risk management framework:

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s senior management oversees management of these risks. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

i) Market Risk a. Foreign currency risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices etc. The Company operations involve foreign exchange transactions including mainly import, export, packing credit facilities and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US$. Foreign currency risk arises from future commercial transactions and recognised in assets and liabilities denominated in foreign currency that is not Company''s functional currency. (i.e INR) The risk is measured through forecast of highly probable foreign currency cash flow.

c. Other Market Price Risk

The Company is exposed to Equity price risk , which arises from FVTPL of Equity securities. The Company has a very insignificant portion of amount invested in quoted equity securities. The management monitors the proportion of quoted equity instruments in its investment portfolio based on market indices.

Hedge Accounting:

The Company''s business objective includes safe-guarding its earnings against adverse price movements of foreign exchange. The Company has adopted a policy to hedge all risks within an acceptable risk limit and an approved hedge accounting framework which allows for Cash Flow hedges.

There is an economic relationship between the hedged items and the hedging instruments. The Company has established a hedge ratio of 1:1 for the hedging relationships.

The hedge ineffectiveness can arise from:

- Differences in the timing of the cash flows

- Different indexes

- The counterparties'' credit risk differently impacting the fair value movements.

ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter party 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.

Trade and Other Receivables:

In accordance with Ind AS 109, the Company uses the expected credit loss (“ECL”) model for measurement and recognition of impairment loss on its trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit

risk factors and historical data of credit losses from various customers. The Company estimates impairment under the simplified approach. Accordingly, it does not track the changes in credit risk of trade receivables. The impairment amount represents lifetime expected credit loss.

iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through committed credit facilities to meet the obligations when due.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The Company manages its liquidity risk by preparing month on month cash flow projections to monitor liquidity requirements.

NOTE 39: FAIR VALUE HIERARCHY

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

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

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

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

NOTE 42: ANALYTICAL RATIOS

Analytical Ratios as per requirements of Schedule III are given in Statement 3.

NOTE 43:

This has reference to Companies letter dated May 22, 2023 as submitted to the Stock Exchange relating to Gujarat Pollution Control Board (“GPCB”) having uploaded an Order on its website instructing the Company to prohibit and close the operation at its Vapi''s Pant Unit-I situated at 1504, 1505, 1506, Phase -III, GIDC, Vapi & Unit - Ilsituated at A-2, 2214/2215, Phase No-III, Phase -III, GIDC, Vapi.

GPCB has laid down certain conditions and has asked the Company to fulfil the same. The Company has already fulfilled several of the conditions laid down by GPCB. It is already in the process of taking necessary steps to comply with other instructions of GPCB and to resume operations at the site as soon as possible. The management does not expect significant impact in its operations in the ensuing year which requires any adjustments to the assets and liabilities in its balance sheet.

NOTE 44:

The Board of Directors at their meeting held on May 30, 2023 has recommended dividend of ^ 1.25 per share (12.5% of FV-^ 10) on the outstanding equity shares of nominal value of ^ 10/- each as on record date, subject to shareholder approval at the ensuing Annual General Meeting.

NOTE 45:

The balance sheet, statement of profit and loss, cash flow statement, statement of changes in equity, statement of significant accounting policies and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended March 31,2023.

NOTE 46:

Figures of the previous period have been regrouped/ reclassified wherever necessary including to conform to current period''s classification.

As per our report of even date attached For & on behalf of the Board of Directors

^For Natvarlal Vepari & ^Co. Heranba Industries Limited

Chartered Accountants

Firm Registration No.: 106971W

N Jayendran S. K. Shetty R. K. Shetty

Partner Chairman Managing Director

Membership No.: 040441 DIN: 00038681 DIN: 00038703

Date: May 30, 2023 Abdul Latif Raj K Bafna

Pl_ace: M_umb_ai Company Secretary Chief Financial Officer

---

Mar 31, 2022

B) INITIAL PUBLIC OFFER

During the previous year the company completed the Initial Public offer ("the offer/IPO") of 99,71,937 Equity Shares of Face Value of ? 10/- each at a price of ? 627/- per equity share (including a premium of ? 617/- per share)

The offer comprised of a fresh issue of 9,56,937 equity shares aggregating to ? 600 Million and an offer for sale of 90,15,000 equity shares aggregating to ? 5,652.40 Million.

Of the Proceeds received from the Fresh issue of shares amounting to ? 600 Million after adjusting ? 17.20 Million towards Company''s share of IPO expenses, has been used by the company for the working capital requirement of the company.

Amount unutilised as on 31.03.2022 - NIL. Amount unutilised as on 31.03.2021 amounting to ? 500.51 Million is kept as fixed deposit in bank."

C) AGGREGATE NUMBER OF EQUITY SHARES ISSUED AS BONUS, SHARES ISSUED FOR CONSIDERATION OTHER THAN CASH AND SHARES BOUGHT BACK DURING THE PERIOD OF FIVE YEARS IMMEDIATELY PRECEDING THE REPORTING DATE:

During the year ended March 31, 2019, the bonus issue in the proportion of 4:1 i.e.4 (Four) bonus equity share of ? 10 each for every 1 (One) fully paid-up equity shares held was approved by the shareholders of the Company on .09^th July, 2018 through voting at the Meeting by show of hands. Subsequently, on 09^th July 2018, the Company allotted 3,12,45,224 (Three Crore Twelve Lakh Forty Five Thousand Two Hundred Twenty Four ) equity shares to shareholders who held equity shares as on the record date of 09^th July,2018 and ? 312.45 Million (representing par value of ? 10 per share) was transferred from securities premium and retained earnings to the share capital.

D) TERMS / RIGHTS ATTACHED TO EQUITY SHARES

The company has a single class of equity shares having a par value of ?10 per share. Each shareholder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian rupees.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company in proportion to the number of equity shares held by each shareholder, after settlement of all preferential obligations.

Footnote:

During the previous year, the company has incurred ? 179.19 Million (net of GST) as IPO related expenses and allocated such expenses between the Company ? 17.20 Million and selling Shareholders ? 161.99 Million. Such amounts were allocated based on agreement between the various parties and in proportion to the total proceeds in the IPO. The Company''s share of expenses ? 12.87 Million (net of taxes) has been adjusted to security premium

The Company has issued and allotted during the year ended 31/03/2019, 3,12,45,224 equity shares of ? 10 each as a bonus shares in the ratio of four equity shares for every one equity share held by the members.

SECURITY PREMIUM :

Security Premium represents the premium received o issue of shares. It can be utilised to pay-off equity related expenses or for issuance of bonus shares and its related issue expenses.

GENERAL RESERVE

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid up share capital of the Company for that year, then the total dividend distribution is less than total distributable reserve for that year Consequent to introduction of the Companies Act 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn. However the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

CAPITAL REDEMPTION RESERVE

Capital redemption reserve represents the amount of profits transferred from general reserve for the purpose of redemption of preference shares or for the buyback of shares.

Notes

A Cash Credit - Bank Of Baroda

Sanctioned Limit ? 747.5 Million, Interest rate 9.35% p.a. (Previous year 747.50 Million, Interest rate 9.90% p.a.)

B. Foreign Currency Loan - Bank of Baroda :- is a sublimit of ?600 Million sanctioned under overall Cash Credit limit of? 747.50 Million (Previous year 747.50 Million) Interest rate ranging from 2.75% to 3.10% p.a.

C. Packing Credit - Bank of Baroda

Sanctioned limit ? 500.00 Million Interest rate ranging from 1.25% to 1.85% p.a.

(Previous year sanction limit ? 200.00 Million , Interest rate 1.52% p.a. )

Above cash credit and packing credit limits are secured by way of exclusive first charge on hypothecation of entire inventories, Book debts and other current assets present & future.

The above facilities are secured as follows,

a. Pari pasu First charge on the current financial assets of the company.

b. Parri pasu Equitable Mortgage of all land and buildings and hypothecation of plant and machinery situated at factories.

c. Joint and several guarantee by all directors of the Company in individual capacity.

During the previous year Bank of Baroda has sanctioned to the company credit facilities totaling to ? 1600 Million by taking over credit facilities granted to the company by consortium of bankers namely Corporation Bank and Syndicate Bank amounting to ? 1207.10 Million with enhancement of ? 392.90 Million.

D. During the FY 2019-20, related parties of the company namely Insunt Trading Pvt Ltd (Borrower) and Shakti Bio Science Limited (Co Borrower) along with the company as a co borrower had entered into an borrowing arrangement for a term loan of ? 350 Million with Aditya Birla Finance Limited (ABFL) ["The Lender"] to discharge the liabilities of Shakti Bioscience Limited to its Banker in its capacity as a Coborrower (Balance outstanding as on 31/03/2022 for ?Nil (P.Y. ? 288.70 Million).

As a co borrower, Company has provided following security to the lender,

i) Put option on the company if default happens

ii) Lien on units invested in Aditya Birla Sunlife Mutual Fund amounting to ? 75.01 Million.

iii) First charge on Land situated at Sarigam

iv) Personal Guarantee of Chairman and his family members

Tenure of the loan is 60 months from date of first disbursement and Interest rate is 11.75% PA.

During the previous year ABFL has released its charge on land at Sarigam and hypothecation on current assets and lien on Investment in Aditya Birla Sunlife Mutual Fund referred in Note 15(D)(ii) above. The Loan to ABFL is since repaid fully and the company has received No Due Certificate for the same on 28^th April, 2021.

1 The quarterly statements of inventories filed by the company with the bank are in agreement with the books of acounts.

2 The quarterly statements of inventories and trade recievables for the quarted ended 31^st March 2022 are yet to be filed with bank as on date.

3 The securities of the company got listed on the stock exchange on 05^th March, 2021. The company was not required to compile and report quarterly accounts in the previous year ended March 2021, hence comparative figures have not been disclosed.

4 Quarterly book debt statement submitted to the bank are subject to adjustment towards credit balances of parties (towards purchase of Materials) and exchange flactuation .

The credit period on sales of goods ranges from 30 to 120 days with or without security.

As at 31^st March, 2022, ? 224.52 Million (As at 31^st March, 2021 ? 171.10 Million) was recognised as provision for allowance for doubtful debts on trade receivables.

Amount of revenue recognized from amounts included in the contract liabilities at As at 01^st April, 2021 ? 77.11 Million (As at 31^st March, 2021 ? 98.52 Million)

Out of the total contract liabilities outstanding as on 31^st March, 2022, ? 117.53 Million will be recognized by 31^st March, 2023.

Sensitivity Analysis:

As of 31^st March, 2022, every percentage point increase in discount rate will reduce our gratuity benefit obligation ? 7.44 Million

As of 31^st March, 2022, every percentage point decrease in discount rate will increase our gratuity benefit obligation ? 8.59 Million

As of 31^st March, 2022, every percentage point increase in salary escalation rate will increase our gratuity benefit obligation ? 8.26 Million

As of 31^st March, 2022, every percentage point decrease in salary escalation rate will decrease our gratuity benefit obligation ? 7.43 Million

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined

benefit obligation by one percentage, keeping all other actuarial assumptions constant.

Expected Contribution as on 31^st March, 2023 is ? 6.00 Million

Gratuity is a defined benefit plan and company is exposed to the Following Risks:

1 Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

2 Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

3 Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

4 Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

5 Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

6 Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

NOTE 32: CONTINGENT LIABILITIES AND COMMITMENTS (NOT PROVIDED FOR) :			(f in Million)
Particulars		As at 31st March, 2022 As at 31st March, 2021
A	Claims against the company not acknowledged as debts
1	Guarantees issued by bank	115.35	84.90
2	In respect of security provided to Aditya Birla Finance Limited for Loan	Nil	288.75
	availed by related party (Refer Note 14)
3	Disputed Excise Duty/ Custom Duty Demands	134.90	162.38
4	Disputed VAT Liability - UP state	4.50	4.50
(deposited against appeal f 2.25 Million)
5	Bills discounted with Bank	372.35	89.11

6 Disputed Income Tax Liability (2018-19)	46.85	46.85
B Commitments
Estimated amount of contracts remaining to be executed in Capital Account and not provided for (Net of Advance) i.e. the amount payable for the undelivered capital expenditure items.	162.53	76.39

NOTE 33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The company''s senior management oversees management of these risks. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

1) MARKET RISK

a) Foreign currency risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices etc. The company operations involve foreign exchange transactions including mainly import, export, packing credit facilities and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US$. Foreign currency risk arises from future commercial transactions and recognised in assets and liabilities denominated in foreign currency that is not company''s functional currency. ( i.e INR ) The risk is measured through forecast of highly probable foreign currency cash flow.

b) Interest rate risk

Short-term borrowings of the Company bear fixed interest rate, thus interest rate risk is limited for the Company.

c) Other Market Price Risk

The company is exposed to Equity price risk , which arises from FVTPL of Equity securities. The company has a very insignificant portion of amount invested in quoted equity securities. The management monitors the proportion of quoted equity instruments in its investment portfolio based on market indices.

Hedge Accounting:

The Company''s business objective includes safe-guarding its earnings against adverse price movements of foreign exchange. The Company has adopted a policy to hedge all risks within an acceptable risk limit and an approved hedge accounting framework which allows for Cash Flow hedges.

There is an economic relationship between the hedged items and the hedging instruments. The Company has established a hedge ratio of 1:1 for the hedging relationships.

2) 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.

Trade and Other Receivables:

The Company maintains an allowance for impairment of doubtful accounts based on financial condition of the customer, classification of customer, ageing of the customer receivable and overdues, available collaterals and historical experience of collections from customers. Accordingly, the Company creates provision for past due receivables beyond 90 days ranging between 10-11 % after reckoning the underlying collaterals. Besides, based on the expected credit loss model the Company also provides 2% allowances for receivables not due and past due up to 90 days except export receivables, if any. Further 100% impairment allownance has been created on credit impaired assets based on specific identification.

3) LIQUIDITY RISK

Liquidity risk is the risk that the company will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through committed credit facilities to meet the obligations when due.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The Company manages its liquidity risk by preparing month on month cash flow projections to monitor liquidity requirements.

II) FAIR VALUE HIERARCHY:

The company uses the following hierarchy for determing and disclosing the fair value of financial instrument by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical Assets or Liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

III) The company has fair valued its Equity investment through profit and loss and Investment in Debt Funds through OCI based on quoted prices of such investments in active market. Hence it falls under level 1 valuations technique.

NOTE 36. IND AS 116 LEASES

The Company''s lease asset primarily consist of leases for buildings (premises) for Depot and warehouses having various lease terms.

NOTE 37. CAPITAL MANAGEMENT

Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total equity. Net debt is calculated as total borrowings less cash and cash equivalents.

NOTE 39.

a) During the Financial Year 2019-20 the Company incorporated a company to be a wholly owned Subsidiary company namely CHANG ZHOU Heranba crop science and technology Co. Ltd in China having address at No.2 Building 53, Hengsheng Science Park, Tianning District, Changzhou City. As on reporting date i.e. 31/03/2022, the company has not contributed any amount towards capital of the subsidiary. Further, no shares have been allotted by the subsidiary to the company till reporting date.

b) Subsequent to the reporting date i.e on 09^th April 2022, the company has incorporated a Wholly-Owned Subsidiary Company namely "Mikusu lndia Private Limited. The Company has subscribed to 50,000/- (Fifty Thousand) Equity shares at the Face Value of ? 10 each aggregating to ? 5,00,000/- (Rupees Five Lakhs only). The wholly owned subsidiary shall carry out the business in the field of Agro Chemical.

Previous period figures have been regrouped/reclassified wherever necessary, to make them comparable with current period figures.