Notes to Accounts of Kanoria Chemicals & Industries Ltd.

Mar 31, 2018

1 CORPORATE AND GENERAL INFORMATION

Ludlow Jute & Specialities Limited , which has remained in the forefront of product innovation and technological breakthroughs was built by Ludlow Corp. of the U.S.A on the bank of the river Hooghly at Chengail in Howrah district of West Bengal. The management has been making adequate investment in modernization and installation of specialized equipment, but it also has heralded the introduction of a number of value added products as the blending of jute with other natural/manmade fibres. Ludlow has developed products like Jute Mesh/Scrim for Roofing Felt, Agriculture, Horticulture and Webbing for Furniture Industry, Rubber Bonded jute cloth for Landscaping, special fabrics for Furnishing and Apparel, Soil Saver known as Geo-textile and Carpet-backing Cloth.

2 BASIS OF ACCOUNTING

2.1 Statement of Compliance

The financial statement are prepared in accordance with Indian Accounting Standards (“Ind- AS”) as prescribed under Section 133 of the Companies Act, 2013 (“the Act”), as notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standard ) Amendment Rules, 2016 and other accounting principles generally accepted in India.

The financial Statements for all periods up to and including the year ended 31st March 2017, were prepared in accordance with the accounting standards notified under Section 133 of the Companies Act 2013, read with Rule 7 of The Companies (Accounts) Rules, 2014,the Companies Act, 2013 and in accordance with the Generally Accounting Principal in India.

These financial statements for the year ended 31st March 2018 are the first the Company has prepared in accordance with Indian Accounting Standards (“Ind-AS”). Further, in accordance with the Rules, the Company has restated its Balance Sheet as at 1st April 2016 also as per Ind-AS. For preparation of opening balance sheet under Ind-AS as at 1st April 2016, the Company has availed exemptions and first time adoption policies in accordance with Ind-AS 101 “First-time Adoption of Indian Accounting Standards”, the details of which have been explained thereof in the “Notes to Reconciliation of Balance Sheet & Equity as at 1st April 2016 and 31st March, 2017 and Profit or Loss for the year ended 31st March, 2017.” (Refer note 52(iv)).

2.2 Basis of Measurement

The financial statements have been prepared on historical cost convention on accrual basis except for following assets and liabilities which have been measured at fair value or revalued amount:

(i) Financial assets and liabilities (including derivative instruments) that is measured at Fair value/ Amortised cost;

(ii) Plan assets under defined benefit plans - Measured at fair value.

(iii) Property Plant and Equipment being Land-Measured at Fair Value.

2.3 Functional and Presentation Currency

The Financial Statements have been presented in Indian Rupees (INR), which is also the Company’s functional currency. All financial information presented in INR has been rounded off to the nearest lakhs as per the requirements of Schedule III, unless otherwise stated.

2.4 Use of Estimates and Judgements

The preparation of financial statements require judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period prospectively in which the results are known/ materialized.

2.5 Operating Cycle

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 “Presentation of Financial Statements”. The Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.

b) Terms /Rights attached to Shareholders

The Company has only one class of issued shares i.e. Equity Shares having par value of Rs.10 per share. Each holder of Equity Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

c) R.V. Investment & Dealers Limited is the Holding Company of this Company.

d) Details of shareholders holding more than 5% shares in the Company :

e) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

f) The company has neither alloted any equity shares for consideration other than cash nor has issued any bonus shares nor has bought back any shares during the period of five years preceeding the date at which Balance Sheet is prepared.

g) No securities which are convertible into Equity/Preference shares have been issued by the Company during the year.

h) No calls are unpaid by any directors or officers of the company during the year.

Nature & Purpose of Reserves

Securities Premium Reserve : The Reserve represents the premium on issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.

General Reserve : The Reserve is created by an appropriation from one component of equity (generally retained earnings) to another, not being an item of Other Comprehensive Income. The same can be utilised by the company in accordance with the provisions of the Companies Act, 2013.

Retained Earnings : This reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This reserve can be utilised in accordance with the provisions of the Companies Act 2013.

Item of other Comprehensive Income (Re-Measurement of defined benefit plans) : Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge or credit recognised in Other Comprehensive Income (OCI) in the period in which they occur. Re-measurement recognised in OCI is reflected immediately in retained earnings and will not be reclassified to Statement of Profit and Loss.

a) Rupee Term Loan from Bank @ 11.70% interest p.a. is repayable in 10 semi-annual instalment for Rs.146.00 between March 2012 to September 2016, 10 semi - annual instalments for Rs.150.00 between September 2013 to March 2018, in 9 semi-annual instalments for Rs. 405.41 from April 2015 to April 2019,and 9 semi - annual instalment for Rs.148.21 between January 2013 to January 2017. The primary security against such loan is hypothecation of machineries purchased under the Term Loan.

b) Term loan of Rs.84.64 @ 11.70% interest p.a., is secured by hypothecation of machineries and 1st. pari passu charges on entire assets both present and future and repayable in 9 half yearly instalment of Rs.9.40 each starting after 6 months of disbursement i.e 25.11.2015.

c) Term loan of Rs. 155.00 @ 8.90% interest p.a., is secured as exclusive charge over all the assets of the Company funded by the specified bank and subservient charge over all the current Assets and Movable Fixed Assets of the Company (both present & future) and repayable in 20 quarterly instalments of Rs.7.75 each starting after 1 year from date of disbursement i.e 16.05.2018.

d) Term loan of Rs. 850.12 @ 8.95% interest p.a., is secured as exclusive charge over all the assets of the Company funded by the specified bank and subservient charge over all the current Assets and Movable Fixed Assets of the Company (both present & future) and repayable in 20 quarterly instalments of Rs. 42.51 each starting after 2 years from the date of disbursement i.e 03.10.2019.

Working Capital Borrowings of Rs.3,083 (P.Y. - Rs.2,226) are unsecured while the balance Working Capital Borrowings are secured. Working Capital Borrowings in Rupee is secured against hypothecation of entire stocks and trade receivable together with bank’s pari passu 1st charge on entire assets both present and future of the Company.

3. EMPLOYEE BENEFITS

In accordance with the revised Ind AS 19 on Employee Benefits, the requisite disclosure are as follows :

a) Defined Contribution Plans : The amount recognized as expense for the Defined Contribution Plans are as under:-

b) Defined Benefit Plans : Benefits are of the following types :

i) Gratuity Plan

Every employee who has completed continuous five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972.

ii) Provident Fund

Provident Fund (other than government administered) as per the provisions of Employees Provident Funds and Miscellaneous Provisions Act, 1952.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for Gratuity Plan:

4. A quantitative sensitivity analysis for significant assumption as at 31 March 2018 are as shown below :

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant, The results of sensitivity analysis is given below :

Please note that the sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Funding arrangements and Funding Policy :

The Company has purchased an insurance policy to provide for payment of gratuity to the employees every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

5. In respect of provident funds for eligible employees maintained by a trust, in the nature of defined benefits plan, shortfall towards ‘interest rate guarantee liability’ amounting to Rs.35.58 lacs upto 31.03.18, as per actuarial valuation in respect of contribution towards such funds has been provided and included as expenses in ‘Contribution to PF & Other Fund’ under the heading “Employees Benefit Expenses”.

6. Segment Reporting

For management’s purpose, the Company’s business activities fall within two business segment viz. Jute Goods & Power. The disclosure requirements as per Ind AS 108 “Operating Segments” is given below :

(iii) Other Disclosures

a) The Company’s operations predominantly relate to Jute and other product is Power. Accordingly, these business segments comprise the primary basis of segmental information set out in these financial statements.

b) Inter-segment transfers are based on prevailing market prices.

c) The accounting policies adopted for segment reporting are in line with the accounting policy of the Company.

d) The Operating Segments have been reported in a manner consistent with the internal reporting and evaluation by Chief Operating Decision Maker (CODM).

7. Related Party Transactions

As defined in Indian Accounting Standard 24, ‘Related Party Disclosures’ are given below :-

8. Corporate Social Reporting

1) In accordance with the Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities, the requisite disclosure are as follows :

Expenditure incurred on CSR activities :

9. There being uncertainties in realization from Insurance claims, the same are accounted for on settlement/realization.

10. Certain Trade Receivable, Loans and Advances and Trade Payable are subject to confirmation In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

11. The Company has not received any memorandum as required to be filed by the suppliers with the notified authority under Micro, Small and Medium enterprises development Act, 2006 for claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to such parties during the year is Rs.Nil. (Previous Year Rs.Nil).

12. Capital Management

The Company objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic Investments. Sourcing of capital is done through judicious combination of equity / internal accruals and borrowings, both short term and long term. Net debt to Equity ratio is used to monitor capital.

The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other current financial liabilities approximates their carrying amounts largely due to the shortterm maturities of these instruments. The management has assessed that the fair value of floating rate instruments approximates their carrying value.

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

(a) The investments being listed, the fair value has been taken at the market rates of the same on the reporting dates. They are classified as Level 1 fair values in the fair value hierarchy.

(b) The values of non current borrowings are based on the discounted cash flows using a current borrowing rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including own credit risks, which was assessed as on the balance sheet date to be insignificant.

iii) Fair Value Hierarchy

The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortised cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ins AS 113 “Fair Value Management”. An explanation of each level follows underneath the tables :

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels

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

Level 2 : Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3 : Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.

During the year ended 31st March 2018 and 31st March 2017, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements.

13. Financial risk management objectives and policies

The Company’s activities expose it to the following risks :

a) Credit risk

b) Liquidity risk

c) Market risk

a) Credit Risk

Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions, investments, foreign exchange transactions and other financial instruments.

Trade receivables : Customer credit risk is managed by the Company subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major customers are generally secured by obtaining security deposits/bank guarantee or other forms of credit insurance. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivable disclosed in note 12.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Typically the Company ensures that it has sufficient cash on demand to meet expected short term operational expenses. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans/internal accruals. The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.

c) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises four type of risks: Commodity Price Risk, Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.

1) Commodity Price Risk : The Company primarily imports raw jute , stores and spare items etc. It is exposed to commodity price risk arising out of movement in prices of such commodities. Such risks are monitored by tracking of the prices and are managed by entering into fixed price contracts, where considered necessary.

2) Foreign Currency Risk : The Company has Foreign Currency Exchange Risk on imports of input materials, Capital Equipment(s) in foreign currency for its business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management using derivative, wherever required, to mitigate or eliminate the risk.

The following table demonstrates the sensitivity in the US Dollars (USD); Euro (EUR) and Sterling Pound (GBP) to the Indian Rupee with all other variables held constant.

i) Exposure to currency risk

The Company’s exposure to foreign currency risk at the end of the reporting period are as follows :

3) Interest rate risk : The fair value or future cash flows of a financial instrument fluctuates due to changes in market interest rates. The Company’s exposure to the interest rate risk relates primarily to the Company’s long-term debt obligations with floating interest rates.

The Company is exposed to risk due to interest rate fluctuation on long term borrowings. Such borrowings are based on fixed as well as floating interest rate. Interest rate risk is determined by current market interest rates, projected debt servicing capability and view on future interest rate. Such interest rate risk is actively evaluated and is managed through portfolio diversification and exercise of prepayment/refinancing options where considered necessary.

4) Other Price Risk : The Company’s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance Sheet at Fair Value through Profit and Loss. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable and do not warrant any management.

14. The Board of Directors of the Company has recommended to pay a final dividend @ 20% (Rs.2.00 per share on Face Value of Rs.10/) amounting to Rs.215.46 lakhs (which will attract liability towards Dividend Distribution Tax amounting to Rs.44.29 lakhs) subject to the approval of shareholders in the Annual General Meeting.

15. Transition to Ind AS

These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with generally accepted accounting principles in India (Previous GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31 March 2018, together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening statement of financial position was prepared as at 1st April 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.

Exceptions and Exemptions Applied

Ind AS 101 “First-time adoption of Indian Accounting Standards” (hereinafter referred to as Ind AS 101) allows first time adopters certain mandatory exceptions and optional exemptions from the retrospective application of certain Ind AS, effective for 1st April, 2016 opening balance sheet. In preparing these Standalone financial statements, the Company has applied the below mentioned mandatory exceptions and optional exemptions.

I. Applicable Mandatory Exceptions

(i) Estimates

As per para 14 of Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to IND AS at the end of the comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies. As per para 16 of the standard, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition or at the end of the comparative period. The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statement that were not required under the previous GAAP are listed below:

- Fair Valuation of financial instruments carried at FVTPL

- Determination of the discounted value for financial instruments carried at amortized cost.

(ii) Classification and measurement of financial assets

Para B8 - B8C of Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively.

II. Optional Exemptions Availed

(i) Property Plant and Equipment and Intangible Assets

The company has elected to measure items of Property Plant & Equipment and Intangible Assets at its carrying value at the Transition Date except for land which is measured at fair value as deemed cost.

(ii) Determining whether an arrangement contains a Lease

Para D9-D9AA of Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 “Leases” for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement). The Company has applied the above transitional provision and has assessed all the arrangements at the date of transition.

(iii) Investments in Subsidiaries

As permitted by para D14 & D15 of Ind AS 101, the Company has elected to measure the investments in equity shares of subsidiaries at Deemed Cost calculated at the previous GAAP carrying amount as on the date of transition, as the company has elected to measure such investments at Cost under Ind AS 27 “Separate Financial Statements”.

15. (iv) Notes to the reconciliation of Balance Sheet & Equity as at April 1, 2016 and March 31, 2017 and Profit or Loss for the year ended March 31, 2017.

Explanations to the material adjustments made in the process of Ind AS transition from previous GAAP

I) Fair Valuation as deemed Cost for Property Plant & Equipment

The Company have considered fair value for one item property i.e. Land measuring 149.48 acres situated in Chengail, Howrah, West Bengal in India with favourable impact of Rs.11095.66 lakhs in accordance with stipulations of Ind AS 101 with the resultant impact of accumulation in reserves.

II) Long term borrowings

Under Indian GAAP, the Company accounted for long term borrowings measured at transaction value. Under IND AS, the Company has recognised the long term borrowings at amortised cost using effective interest rate (EIR).

III) Fair Valuation of Financial Instruments

Under the Indian GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments(other than equity instruments designated at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31st March 2017.

IV) Proposed Dividend & Dividend Distribution Tax

Under Indian GAAP till F.Y. 2015-16 proposed dividends including Dividend Distribution Taxes (DDT) were recognized as a liability in the period to which they relate, irrespective of when they were declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid. Since declaration of dividend occurs after period end in the Company, the Provision for proposed dividend has been derecognized against retained earnings on 1st April 2016 and Liabilities recognized in the year ended 31st March 2017.

V) Re-classifications

a) Assets / liabilities which do not meet the definition of financial asset / financial liability have been reclassified to other asset / liability.

b) Remeasurement gain/loss on long term employee defined benefit plans are re-classified from statement of profit and loss to OCI.

c) Jute Manufacturing Cess on sales was earlier netted off with Sales, now have been presented separately.

VI) Leases

a) Under Ind AS, where the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases, straight lining of lease is not required. The same was required under AS-19. The Company has initially recognised security deposit paid to the lessor at fair value and subsequently at amortised cost as per Ind AS 109.

VII) Deferred Revenue

Under Indian GAAP, grants received from government agencies against specific fixed assets (Property, Plant and Equipment) are adjusted to the cost of the assets. Under Ind AS the same has been presented as deferred revenue being amortised in the statement of profit & loss on a systematic basis.

VIII) Stores and Spares

The Company accounted for certain spares which are capable of being used for more than one accounting period or which can be used specifically only in combination with another fixed assets as part of inventories under IGAAP. Under Ind AS, any asset which satisfies the criteria of Ind AS 16 mentioned above needs to be accounted for as a part of Property, plant and equipment. Accordingly, the Company has done an assessment of the relevant inventory and reclassified such items from inventory to Property, plant and equipment.

IX) Forward Contract

Under Ind AS mark to market gain/loss on restatement of forward contract as at the reporting date has been recognized in the statement of profit & loss.

X) Bill Discounting

Under IGAAP, trade receivables derecognised by way of bills of exchange were shown as contingent liability since there was a recourse clause. Under Ind AS, the trade receivable have been restated with corresponding recognition of short term borrowings of Rs.246.40 as on 31st March, 2017 and Rs.595.68 as on 1st April, 2016.

XI) Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

16. Previous GAAP figures have been reclassified/regrouped to conform the presentation requirements under Ind AS and the requirements laid down in division - II of the Schedule - III of the Companies Act, 2013.

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Mar 31, 2018

1: Consequent to the introduction of Goods and Service Tax (GST) with effect from 1^st July 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, unlike Excise duties, levies like GST, VAT etc. are not part of Revenue. Accordingly, the figures of Revenue from Operation and Segment Revenue of Alco Chemicals for the Year ended 31^st March, 2018 are not comparable with the previous year.

2 : Disclosures as required under Indian Accounting Standard 19 on "Employee Benefits" A. Defined Benefit Plan

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the Post - retirement benefit plans .

3. Sensitivity Analysis

The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.

4. In respect of Provident Fund in the nature of defined benefit plans contribution amounting to Rs. 2.92 million (Previous year Rs. 2.55 million) and the accrued past service liability of Rs. Nil (Previous year Rs. Nil) as valued by the actuary using Projected Unit Credit Method is recognized as expenses and included in "Employee Benefits Expense".

5. Description of Risk Exposures

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.

B. Defined Contribution Plan

The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trust or by the Central Government and debit the same to statement of Profit and Loss. The provident fund set up by the employers, require interest shortfall to be met by the employers. The fund set up by the Company does not have existing deficit of interest shortfall. The amount debited to Statement of Profit and Loss towards Provident Fund contribution during the year was Rs. 10.19 million (previous year Rs. 8.98 million).

6 : Financial Risk Management - Objectives and Policies

The company’s principal financial liabilities comprise borrowings, trade payables, other financial liabilities and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s financial assets include investments, trade receivables, cash and cash equivalents, other bank balances and loans.

The Company is exposed to market risk and credit risk. The Company has a Risk management policy and its management is supported by a Risk management committee that advises on risks and the appropriate risk governance framework for the Company. The Risk management committee provides assurance to the Company’s management that the Company’s risk activities are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTOCI investments, FVTPL investments, trade payables, trade receivables, etc.

(a) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. The Company monitors the foreign exchange fluctuations on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigation measures. The Company enters into forward exchange contracts against its foreign currency exposure relating to underlying liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in USD, Euro and SGD exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

(b) Commodity price risks

The company is affected by the price volatility of methanol, one of its major raw material. Its operating activities require a continuous supply of methanol. The Company monitors price and demand/supply situation on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigation measures.

(c) Equity price risks

The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments/mutual funds. Reports on the investment portfolio are submitted to the Company’s management on a regular basis.

Equity price sensitivity

The following table shows the effect of price changes in quoted and unquoted equity shares (other than that in subsidiaries), quoted preference shares, quoted and unquoted equity mutual funds, unquoted alternative investment funds and unquoted equity funds.

(ii) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivables

An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on credit losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed as the Company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.

(iii) Liquidity risk

Liquidity risk is the risk that Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial asset and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

The table below analysis financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amount disclosed in the table are the contractual undiscounted cash flow.

7 : Capital Management

The Company''s objective when managing capital (defined as net debt and equity) are to safeguard the Company''s ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company. The Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

8 : Related Party Disclosures:

(i) List of related parties and relatives with whom transaction taken place:

1. Vardhan Limited ^Ho|ding ^C°mp^any

2. Pipri Limited

3. Kanoria Africa Textiles Plc, Ethiopia

4. APAG Holding AG, Switzerland

5. APAG Elektronik AG, Switzerland

6. APAG Elektronik s.r.o., Czech Republic

7. CoSyst Control Systems GmbH, Germany ^{Subsidiary Companies}

8. APAG Elektronik LLC, USA

9. APAG Elektronik S. De R.L. De C.V., Mexico (up to 4^th March, 2018)

10. APAG Services S. De R.L. De C.V., Mexico (up to 4^th March, 2018)

11. APAG Elektronik Corp., Canada (w.e.f. 13^th February, 2018)

12. Mr. R. V. Kanoria - Chairman & Managing Director

13. Mr. S. V. Kanoria - Whole Time Director

14. Mr. Amitav Kothari - Director

15. Mr. H.K. Khaitan - Director

16. Mr. Ravindra Nath - Director

Key Management Personnel (KMP)

17. Mr. G. Parthasarathy - Director

18. Mr. S. L. Rao - Director

19. Mr. A. Vellayan - Director

20. Mrs. M. Kanoria - Director

21. Mr. A. V. Kanoria

Relative of KMP

22. Mrs. V. Kanoria

23. KPL International Limited Enterprise over which KMP exercises significant influence

24. Kanoria Employees'' Provident Fund Trust Post Employment Benefit Plan entity

---

Mar 31, 2016

1. For the year ended 31st March, 2016, the Board of Directors of the Company have recommended dividend of Rs.1.50 per share (Previous year Rs. 1.50 per share) to equity shareholders aggregating to Rs. 65.54 million (Previous year Rs. 65.54 million). Together with the Corporate Dividend Distribution Tax of Rs. 13.34 million (Previous year Rs. 13.10 million), the total payout will be Rs. 78.88 million (Previous year Rs. 78.64 million).

2. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

3. Income from Investments represent the income earned on the temporary investments for deployment in businesses in due course.

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/Intra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business includes Power generation from Solar energy.

4. Figures for the previous year have been regrouped/rearranged, wherever found necessary.

---

Mar 31, 2016

1 Rupee Term Loan from Bank is repayable in 10 semi-annual installment for Rs. 14,600/- between March 2012 to September 2016, for Rs. 15,000/- between September 2013 to March 2018 and in 9 semi-annual installments for Rs. 40,541/- from April 2015 to April 2019, for Rs. 14,821/- between January 2013 to January 2017. The primary security against such asset is hypothecation of machineries purchased under the Term Loan.

b) Term loan of Rs. 90 lacs, is secured by hypothecation of machineries and 1st. pari passu charges on entire assets both present and future and repayable in 9 half yearly installment of Rs. 10 lacs each starting after 6 months of disbursement i.e 25.11.2015.

2 Raw materials, Stores & Spares Parts consumed include profit and/or loss on sale and excess/short found on physical verification.

3 The amount of borrowing cost capitalized during the year is Rs. Nil (Previous Year Rs. Nil).

4 a) Outstanding forward exchange contracts booked for the purpose of hedging receivables/firm commitment are USD 535, EURO 9 & Sterling Pound 155 (Previous year USD 276, EURO 30 and Sterling Pound Nil) and payable / firm commitments are USD NIL ( Previous Year USD NIL ).

b) Unhedged foreign currency receivables USD NIL, EURO NIL and Sterling Pound NIL (Previous Year USD 100, EURO 26 and Sterling Pound NIL) and payables are USD NIL (Previous Year USD NIL).

c) The marked to market loss amounting to Rs. NIL (Previous Year Rs. 9) has been accounted for. However, marked to market gain amounting to Rs. 420 (Previous Year Rs. 156) on Forward Exchange Contracts for firm commitments and highly probable forecast transaction has not been accounted for

4 The Company has not received any memorandum as required to be filed by the suppliers with the notified authority under Micro, Small and Medium Enterprises Development Act, 2006 for claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to such parties during the year is Rs. Nil. (Previous Year Rs. Nil).

5 As Company''s business activities fall within a single primary business segment viz. Jute Goods, the disclosure requirements of Accounting Standard - AS-17Rs. Segment Reporting issued by The Institute of Chartered Accountants of India are not applicable in respect of business segment. However, the geographical segments considered for disclosures on the basis of sales are as under :-

6 There being uncertainties in realization from Insurance claims, the same are accounted for on settlement/realization.

7 Certain Trade Receivables, Loans and Advances and creditors are subject to confirmation. In the opinion of the management the value of Trade Receivables and Loans & Advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

Notes 8. RELATED PARTY DISCLOSURES

Related Party disclosures as required by AS-18 are given below :

A. Relationships

1) Holding Company of the Company a) R. V. Investments & Dealers Ltd.

2) Subsidiary Company of the Company

a) Ludlow Exports Ltd.

b) Sijberia Industries Ltd.

3) Enterprise (within Group)

a) Kirtivardhan Finvest Services Ltd.

b) Belvedere Gardens Limited.

4) Key Managerial Personnel (KMP)

a) Mr. S. S. Kanoria (Executive Chairman till 29th July, 2014)

b) Mr. J. P. Sonthalia ( Managing Director till 9th May, 2014)

c) Mr. B. M. Thakkar ( Managing Director from 9th May, 2014 till 23rd June, 2014)

d) Mr. Ajay Todi (Managing Director from 1st July, 2014)

e) Mr. R. K. Gupta (Chief Financial Officer)

f) Ms. Minu Rohila (Company Secretary and Compliance Officer from 2nd November, 2015)

g) Mrs. Puja Guin (Company Secretary till 15th May, 2015)

Notes 9. Figures of less than Rupee 1 have been shown at actual in brackets in Notes to Account No 2.10 and 2.11. ___Other than these all other figures in bracket are in negatives._

Notes 10. Figures of the Previous Year have been regrouped/rearranged wherever considered necessary.

---

Mar 31, 2015

(A) The Company has only one class of issued shares i.e. Equity Share having par value of Rs.5 pershare. Each holder of Equity Share is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to theirshareholding.

(B) Vardhan Limited, the holding company, holds 26,133,872 Equity Shares of 5 each in the company.

(C) Details of shareholders holding more than 5 percent equity shares.

(D) No Shares have been reserved for issue under options and contracts/commitmentsforthe sale of shares/disinvestmentas at the Balance Sheetdate.

(E) The Company, during the year 2012-13, had bought back 12,603,167 Equity Shares of Rs. 5 each.

(F) None of the securities are convertible into shares at the end of the reporting period.

(G) No calls are unpaid by any Director or Officer of the Company during the year.

2. Managing Director''s appointmentand remuneration of Rs. 2.91 million for the period from 10th January, 2015 to 31st March, 2015 is subject to the approval of Shareholders.

3. For the year ended 31 st March, 2015, the Board of Directors of the Company have recommended dividend of Rs. 1.50 per share (Previous year Rs. 1.50 per share) to equity shareholders aggregating to Rs. 65.54 million (Previous yearRs. 65.54 million). Together with the Corporate Dividend Distribution Tax of Rs. 13.10 million (Previous yearRs. 11.14 million), the total payout will be Rs. 78.64 million (Previous yearRs. 76.68 million).

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. This information is required to be disclosed under the Micro, Small & Medium enterprises DevelopmentAct, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

5. Income from Investments represent the income earned on the temporary investments made out of sale proceeds of a business undertaking for deployment in businesses in due course.

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/lntra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business includes Power generation from Solar energy.

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/lntra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business includes Power generation from Solar energy.

6. Details of Loans given, Investment made, Guarantees given and Security provided under Section 186 (4) of the Companies Act, 2013.

Investments made are disclosed in Note No. 12 to the Financial Statements.

Corporate Guarantees given are disclosed in Note No. 29 to the Financial Statements

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified numberof days of lastdrawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation oron exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 7.48 million (previous yearRs. 6.92 million).

---

Mar 31, 2014

1. Share Capital

a) There has been no change/movements in number of shares outstanding at the beginning and at the end of the reporting period.

b) The Company has only one class of issued shares i.e. Equity Shares having par value of Rs.10 per share. Each holder of Equity Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

c) R.V. Investment & Dealers Limited is the Holding Company of this Company.

d) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment as at the Balance Sheet date.

e) No shares have been allotted or has been bought back by the Company during the period of 5 years preceding the date as at which the Balance Sheet is prepared.

f) No securities which are convertible into Equity/Preference shares have been issued by the Company during the year.

g) No calls are unpaid by any directors or officers of the company during the year.

2. Long-Term Borrowings

a) Rupee Term Loan from Bank is repayable in 10 semi-annual installment for Rs.14600/- between March, 2012 to March, 2016, for Rs. 14821/- between January 2013 to March 2018 and for Rs. 15000/- between September 2013 to March 2018. The primary security against such asset is hypothecation of machineries purchased under the Term Loan. For the Term Loan of Rs. 28779/-received during the year, terms of repayments have not been finalised till date.

3. Short-Term Borrowings

a) Working Capital Borrowings in Rupee is secured against hypothecation of entire stocks together with bank''s pari passu 1st charge on entire assets both present and future of the company.

b) Export Packing Credit is secured against hypothecation of Stock of materials, semi-finished and finished goods.

4. Fixed Assets

Note :

Fixed Assets of the Company excluding minor items,were revalued by an external Independent Valuer on 31st March,1992 which resulted in increase of Fixed Assets Value by Rs. 300,476 on Net Current Replacement Basis. This increase had been transfered to Revaluation Reserve Account. After adjustment in respect of Fixed Assets sold/discarded and Depreciation Provided,the Revaluation Reserve now stands at Rs. 6,971 as on 31.03.2014.(PY Rs. 15,190)

5. Investments

* BIFR Companies

@ Shares in Reliance Jute Mills (Int.) Ltd. has been aquired as per scheme of Arrangement of Reliance Jute Ltd. with Reliance International Ltd.

# In absence of availability of unquoted rates,market value of such shares have been considered at Rs. (1)/-.

6. OTHER ASSETS

* The above Insurance Claim is outstanding for the last three years. On 06-12-2013 the company has filed a legal suit at National Consumer Dispute Redressal Commission (NCRDC ), New Delhi. The Management is hopeful of gettng a favourable verdict in this regard. Hence creating provision against it has not been considered necessary by the management.

7. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

As at March 31, As at March 31, 2014 2013

a) Bills Discounted with Banks 53,892 46,168

a) Other Disputed Claims (ESI)(Gross) (Adv. paid Rs. 1,873, PY Rs. 1,873)

c) Excise Duty Demand disputed 5,691 5,691

(i) Excise Authority raised the 43 43 demand on transit loss of Jute Batching Oil from 1964 to 1969. Writ Petition pending before High Court at Kolkata

(ii)Excise Authority raised the 1,780 1,780 demand on Jute Webbing as differential duty between specific rate as per classification list and advalorem rate. Matter is pending before Appeallate Authority for the year 1986-87 to 1991-92. (Advance paid Rs. 300 PY Rs. 300)

d) i) Disputed demand against Sales 4,498 4,708 Tax for the year 1999-00 and 2004 -05 for which the Company has preferred appeal and it is pending before W.B.C.T. (A & R) Board (Adv. paid Rs. 1,120, PY. Rs.1,120)(Gross)

ii) Disputed demand against Sales 1,35,960 1,03,282 Tax for the year 2005-06 to 2010- 2011 for which Appeal is pending before SR. and AD. Joint commissioner (CD) and WBCT (A&R) Board.

e) Land Revenue (Rent) raised by the 11,546 10,392 office of the B.L. & L.R. Officer Uluberia- II, Howrah due to retrospective changes in W.B.Land Reform Act. Matter is pending before W.B.Land Reform Tribunal since 2002-03.

f) a) Outstanding Bank Guarantees 37,021 36,889

b) Outstanding Letter of Credit 59,064 75,481

8. In respect of Defined Benefits Plans, necessary disclosures are as under :

i) Benefits are of the following types :

- Every employee who has completed continuous five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972.

- Provident Fund (other than government administered) as per the provisions of Employees Provident Funds and Miscellaneous Provisions Act, 1952.

ii) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

iii) In respect of provident funds for eligible employees maintained by a trust, in the nature of defined benefits plan, upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However, contribution to those provident fund amounting to Rs. 8,844 (previous year Rs. 8,803)is recognized as expense and included in "Employees Benefit Expenses".

9. Raw materials, Stores & Spares Parts consumed include profit and/or loss on sale and excess/short found on physical verification.

10. The amount of borrowing cost capitalized during the year is Rs. Nil (previous year Nil).

11. a) Outstanding forward exchange contracts booked for the purpose of hedging Receivables/firm commitment are USD 115, EURO 41 & Sterling Pound Nil(Previous year USD 383,EURO 58 and Sterling Pound 23)

b) Unhedged foreign currency receivables USD 127, EURO 22 and Sterling Pound 21 (Previous Year USD 77, EURO Nil and Sterling Pound Nil) and payables are USD 249 (Previous Year USD 282).

c) The marked to market loss amounting to Rs. NIL(Previous Year - 4) has been accounted for. However, marked to market gain amounting to Rs. 329(Previous Year - Rs. 608) on Forward Exchange Contracts for firm commitments and highly probable forecast transaction has not been accounted for.

11. The Company has not received any memorandum as required to be filed by the suppliers with the notified authority under Micro, Small and Medium enterprises development Act,2006 for claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to such parties during the year is Rs. Nil. (Previous Year Rs. Nil).

12. As Company''s business activities fall within a single primary business segment viz. Jute Goods, the disclosure requirements of Accounting Standard - AS-17'' Segment Reporting issued by The Institute of Chartered Accountants of India are not applicable in respect of business segment. However, the geographical segments considered for disclosures on the basis of sales.

---

Mar 31, 2013

1. For the year ended 31st March, 2013, the Board of Directors of the Company have recommended dividend of Rs. 1.50 per share (Previous year Rs. 1.50 per share) to equity shareholders aggregating to Rs. 65.54 million (Previous year Rs. 84.44 million). Together with the Corporate Dividend Distribution Tax of Rs. 11.14 million (Previous year Rs. 13.70 million), the total payout will be Rs. 76.68 million (Previous year Rs. 98.14 million).

2. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2013. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

3. Due to inadequacy of profits as per Section 349 of the Companies Act, 1956 (the Act), the remuneration of Rs. 13.53 million (including Rs. 2.53 million paid in previous year) to Managing Director for the period from 10th January, 2012 to 31st March, 2013, which includes an amount of Rs. 6.94 million in excess of limit specified under section 309 (3) read with schedule XIII of the Act., is subject to the approval of the Central Government which is awaited.

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/Intra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic

Acid & Ethyl Acetate etc. and Solar Power business includes Power generation from Solar energy. 36. As per Business Transfer Agreement dated 16th April, 2011 the Company has divested its Chloro Chemicals Division at the close of business hours on 23rd May, 2011 for a Cash consideration of Rs. 8.3 billion. In line with the requirement of Accounting Standard 24 on Discontinued Operations, the following statement shows the revenue and expenses of this division which are included in the Statement of Profit & Loss :

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Company''s actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 6.44 million (previous year Rs. 8.58 million).

4. Figures for the previous year have been regrouped/rearranged, wherever found necessary.

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Mar 31, 2012

(a) The Company has only one class of issued shares i.e. Equity Share having par value of Rs.5 per share. Each holder of Equity Share is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

(b) The company does not have a holding company.

(c) No Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

(d) 18,765,500 Equity Shares of Rs. 5 each as fully paid up Bonus Shares were allotted on 11th January, 2008 by Capitalisation of Capital Redemption Reserve.

(e) None of the securities are convertible into shares at the end of the reporting period.

(f) No calls are unpaid by any Director or Officer of the Company during the year.

1. EXCEPTIONAL ITEMS CONSIST OF

i) The gain/(loss) arising from the effect of change in the foreign exchange rates on revaluation of the outstanding Foreign Currency Convertible Bonds (FCCB) & premium thereon, together with gain/(loss) on remittance/reinstatement of FCCB bank balances which existed during previous year, as calculated pursuant to the requirement of Accounting Standard (AS) 11 Rs. (9.25) million (Previous Year Rs. (1.56) million).

ii) Profit on Sale of Chloro Chemicals Division of the Company Rs. 3,579.62 million (Previous Year Rs. Nil).

2. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for)

(i) Contingent Liabilities

(a) Claims/Disputed liabilities not acknowledged as debt

Nature of Contingent Liability Status Indicating Uncertainties

Demand notice issued by Central The matter is pending with Asstt.

Excise Department Commissioner of Central Excise - 1.20

Demand notices issued by Central The matter is pending with Allahabad

Excise Department High Court - 0.95

Demand notices issued by Central The matter is pending with Commissioner

Excise Department (Appeal) 4.52 8.67

Demand notices issued by Central The matter is pending with CESTAT - 9.99

Excise Department

Demand notice issued by Custom The matter is pending with Asstt.

Department Commissioner of Custom - 0.43

Entry tax demand issued by The matter is pending with Allahabad

assessing authority High Court - 9.06

Sales tax/VAT demands issued by The matter is pending with Allahabad

assessing authority High Court - 4.51

Sales tax/VAT demands issued by The matter is pending with Trade Tax

assessing authority Tribunal (paid Rs. 0.43 million) 0.43 0.43

Income tax demands issued by The matter is pending with CIT (Appeal) 128.13 175.99

DCIT

(b) Outstanding Bank Guarantees 16.86 73.59

(c) Corporate Guarantee given to Gujarat Industrial Development Corporation for securing loan by Bharuch Eco -Aqua Infrastructure Limited. 11.63 11.63

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 102.10 27.07

Advances paid 4.57 4.67

3. For the year ended 31st March, 2012, the Board of Directors of the Company have recommended dividend of Rs.1.50 per share (Previous year Rs. 5 per share) to equity shareholders aggregating to Rs. 84.44 million (Previous year Rs. 281.48 million). Together with the Corporate Dividend Distribution Tax of Rs.13.70 million (Previous year Rs. 45.21 million), the total payout will be Rs.98.14 million (Previous year Rs. 326.69 million).

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the company.

5. Due to inadequacy of profits as per Section 349 of the Companies Act, 1956 (the Act), the remuneration paid to Managing Director during the period from 1st April, 2011 to 9th January, 2012, exceeds the limit prescribed under Section 309 read with the Schedule XIII of the Act, by Rs. 3.52 million. The Company has initiated steps to obtain the approvals for the same from the shareholders in the ensuing Annual General Meeting and the Central Government, as required.

The remuneration of Rs. 2.53 million paid to Managing Director for the period from 10th January, 2012 to 31st March, 2012 (on his re- appointment), is subject to the approval of the shareholders in the ensuing Annual General Meeting, and further the same is subject to the approval of the Central Government.

(C) Other Disclosures

Basis of pricing inter/Intra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Chloro Chemicals business includes Caustic Soda, Liquid Chlorine, Hydrochloric Acid, Stable Bleaching Powder, Chlorinated Paraffins, Poly Aluminium Chloride, Captive Power, Aluminium Chloride, Salt etc. and Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic Acid & Ethyl Acetate etc.

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 8.58 million (previous year Rs. 20.81 million).

6. The financial statements for the year ended 31st March, 2011 had been prepared as per the applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March,2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements except for accounting for dividend on investments in subsidiaries.

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Mar 31, 2011

(Rs. in million)

2010-2011 2009-2010

1. Contingent Liabilities not provided for in respect of:

(a) Outstanding Bank Guarantees 73.59 78.16

(b) Claims/Disputed liabilities not acknowledged as debt

Nature of Contingent Liability Status Indicating Uncertainties

Demand notice issued by Central The matter is pending with Asstt. Excise Department Commissioner of Central Excise 1.20 1.20

Demand notices issued by Central The matter is pending with Allahabad Excise Department High Court (Paid Rs. 0.43 million) 0.95 1.05

Demand notices issued by Central The matter is pending with Commissioner Excise Department (Appeal) (Paid Rs. 2.50 million) 8.67 0.77

Demand notices issued by Central The matter is pending with CESTAT Excise Department (Paid Rs. 0.20 million) 69.99 42.27

Demand notice issued by Custom The matter is pending with Asstt. Department Commissioner of Custom (Paid Rs. 0.31 million) 0.43 0.43

Entry tax demand issued by The matter is pending with Allahabad assessing authority High Court (Paid Rs. 2.53 million) 9.06 16.02

Sales tax demands issued by The matter is pending with Joint - 8.39 assessing authority Commissioner (Appeal)

Sales tax demands issued by The matter is pending with Allahabad 4.51 - assessing authority High Court (Paid Rs. 0.16 million)

VAT demands issued by The matter is pending with Value Added Tax assessing authority Tribunal (paid Rs. 0.43 million) 0.43 1.56

Income tax demands issued by The matter is pending with CIT (Appeal) DCIT (Disallowance u/s 80IA Rs.163.36 million) 175.99 29.38

2. The Company had issued 200 0% Foreign Currency Convertible Bonds (FCCB) of USD 100,000 each aggregating to USD 20 million, at par, on May 31, 2006. These Bonds are convertible into Equity Shares of Rs.5/- each fully paid, till May 27, 2011 at the option of the bondholder. Unless converted, these Bonds are redeemable on June 07, 2011 at 144.715 percent of their principal amount. The premium up to 31st March, 2011 amounting to Rs. 382.40 million has been accounted for under Provisions.

The Company has utilised the FCCBs issue proceeds towards funding of capital expenditure and related issue expenses.

3. The gain/loss arising from the effect of change in the foreign exchange rates on revaluation of the outstanding Foreign Currency Convertible Bonds (FCCB) & premium thereon, together with gain/loss on remittance/reinstatement of FCCB bank balances which existed during previous year, as calculated pursuant to the requirement of Accounting Standard (AS) 11 are shown as exceptional items.

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

5. The Company has exited from Joint Venture with Soluciones Extractivas Alimentarias S.L.A, Spain (Solutex) by an agreement dated 1st March, 2011. As per the terms of agreement the entire investment in Minerva Flavours & Fragrance Private Limited, the Joint Venture Company, will be transferred at face value (at cost) to a wholly owned subsidiary of Solutex by 24th September, 2011. During the year under review Equity Shares of the face value of Rs. 5.30 million has already been transferred leaving a balance investment of Rs. 10.99 million.

6. As per Business Transfer Agreement dated 16th April, 2011 the Company has divested its Chloro Chemicals Division to Aditya Birla Chemicals (India) Ltd. on a slump sale basis at the close of business hours on 23th May, 2011 for a Cash consideration of Rs. 8.30 billion.

7. Disclosure as required by Accounting Standard 15 (Revised) on Employee Benefits: -

In respect of Leave Encashment & Gratuity, a defined benefit scheme (based on Actuarial Valuation)-

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The company has made provision for interest shortfall of Rs.0.42 million for the year. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 20.81 million (previous year Rs. 19.06 million).

8. Related Party Disclosures:

(i) List of related parties over which control exists and relationship:

Name of the Related Parties Relationship

1. Pipri Limited Wholly Owned Subsidiary

2. Minerva Flavours and Fragrance Private Limited* Joint Venture

3. Mr. R. V. Kanoria - Chairman & Managing Director Key Management Personnel

4. Mr. J. R Sonthalia - Managing Director (Designate)- Chloro Chemicals

5. Mr. T. D. Bahety - Whole Time Director

6. Mr. S. V. Kanoria Relative of Key Management Personnel

7. Mrs. V. Kanoria

8. KPL International Limited Enterprises over which Key Management Personnel

9. KCI Alco Chem Limited exercises significant influence

* Exited from Joint Venture vide an agreement dated 1st March, 2011

9. Segment Reporting:

(C) Other Disclosures

Basis of pricing inter/lntra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Chloro Chemicals business includes Caustic Soda, Liquid Chlorine, Hydrochloric Acid, Stable Bleaching Powder, Chlorinated Paraffins, Poly Aluminium Chloride, Captive Power, Aluminium Chloride, Salt etc. and Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic Acid & Ethyl Acetate etc.

10. Figures for the previous year have been regrouped/rearranged, wherever found necessary.

---

Mar 31, 2010

(Rs. in million) 2009-2010 2008-2009

1. Contingent Liabilities not provided for in respect of:

(a) Outstanding Bank Guarantees 78.16 69.34

(b) Claims/Disputed liabilities not acknowledged as debt

Nature of Contingent Liability Status Indicating Uncertainties

Demand notice issued by Central The matter is pending with Asstt.

Excise Department Commissioner of Central Excise 1.20 1.90

Demand notices issued by Central The matter is pending with Allahabad

Excise Department High Court (Paid Rs. 0.43 million) 1.05 1.05

Demand notices issued by Central The matter is pending with Commissioner

Excise Department (Appeal) 0.77 1.78

Demand notices issued by Central The matter is pending with CESTAT

Excise Department (Paid Rs. 0.52 million) 42.27 20.00

Demand notice issued by Custom The matter is pending with Asstt.

Department Commissioner of Custom

(Paid Rs. 0.31 million) 0.43 0.43

Entry tax demand issued by The matter is pending with Allahabad

assessing authority High Court (Paid Rs. 2.53 million) 16.02 13.49

Sales tax demands issued by The matter is pending with Joint assessing authority Commissioner (Appeal) 8.39 -

Sales tax/VAT demands issued by The matter is pending with Trade Tax

assessing authority Tribunal (paid Rs. 0.60 million) 1.56 1.68

Income tax demands issued by The matter is pending with CIT (Appeal)

DCIT (Paid Rs. 3.00 million) 29.38 1.42



2. The Company had issued 200 0% Foreign Currency Convertible Bonds (FCCB) of USD 100,000 each aggregating to USD 20 million, at par, on May 31,2006. These Bonds are convertible into Equity Shares of Rs.5 each fully paid, at the conversion price of Rs. 44.67 per share, subject to the terms of issue and price adjustment on the happening of certain events and price reset at the end of 3rd year of issue with a fixed rate of exchange of Rs. 46.19 equal to USD 1. The conversion is at the option of bond-holders at any time on or after June 05,2006 and prior to the close of business on May 27,2011. As at the end of the year the entire FCCBs issued were outstanding.

Based on the current applicable conversion price, the Share Capital of the Company will increase by 20,682,090 Equity Shares of Rs.5 each on conversion of these Bonds.

Unless previously converted, the Bonds are redeemable on June 07, 2011 at 144.715 percent of their principal amount. The premium up to 31st March, 2010 amounting to Rs.295.07 million has been accounted for under Provisions.

The Company has utilised the FCCBs issue proceeds towards funding of capital expenditure and related issue expenses.

3. The gain/loss arising from the effect of change in the foreign exchange rates on revaluation of the outstanding Foreign Currency Convertible Bonds (FCCB) & premium thereon, together with gain/loss on remittance/reinstatement of FCCB bank balances which existed during previous year, as calculated pursuant to the requirment of Accounting Standard (AS) 11 are shown as exceptional items.

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

5. The Company has entered into a Joint Venture Agreement with Soluciones Extractivas Alimentarias S.L.A., Spain (Solutex) for manufacturing and marketing, world wide, products such as ingredients and extracts obtained by using the SFE technology with carbon di-oxide including for the flavour and fragrances market or any other market as may be determined by Minerva Flavours and Fragrance Private Limited, the JV Company. The Company together with its wholly owned subsidiary holds 26% stake in joint venture and 74% is held by Solutex. The Company has invested a total amount of Rs.16.29 million (including Rs.3.95 million for share application money pending allotment) till 31st March, 2010

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Companys actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 19.06 million (previous year Rs. 17.97 million).

6. Related Party Disclosures:

(i) List of related parties over which control exists and relationship:

Name of the Related Parties Relationship

1. Pipri Limited Wholly Owned Subsidiary

2. Minerva Flavours and Fragrance Private Limited Joint Venture

3. Mr. R. V. Kanoria - Chairman & Managing Director Key Management Personnel

4. Mr. J. R Sonthalia - Managing Director (Designate)-Chloro Chemicals

5. Mr. T. D. Bahety - Wholetime Director

6. Mr. S. V. Kanoria Relative of Key Management Personnel

7. KPL International Limited Enterprises over which Key Management Personnel

8. Prajapati Chemicals & Alfreds Limited exercises significant influence

9. KCI Alco Chem Limited

7. Figures for the previous year have been regrouped/rearranged, wherever found necessary.