Notes to Accounts of Transchem Ltd.

Mar 31, 2018

Note:

Ind-AS 16, Property, Plant & Equipment

As per the information and explanations given to us and as certified by the management, as on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the Company.

c) Rights, preferences and restrictions attached to shares:

The Company has only one class of equity shares having face value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. Equity shares holders are also entitled to dividend as and when proposed by the Board of Directors and approved by Shareholders in Annual General Meeting. In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the Company, after distribution of all Preferential amounts which shall be in proportion to the number of shares held by the Shareholders.

18 (b) - During the financial year 2016-17, advance payment of '' 1,792,804, towards acquisition of land at Maval, Talegaon, no more being recoverable, had been written off.

1. Fair value measurements

Financial instruments by category:

All financial assets and financial liabilities of the Company are under the amortized cost measurement category at each of the reporting dates except quoted non-current investments and current investments, which are recognized and measured at fair value through profit or loss .

Fair value hierarchy

The following table provides the fair value measurement hierarchy of Company''s financial assets and financial liabilities

2. Financial risk management objectives and policies

The risk management policies of the Company are established to identify and analyses the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Management has overall responsibility for the establishment and oversight of the Company''s risk management framework. In performing its operating, investing and financing activities, the Company is exposed to the Credit risk, Liquidity risk and Market risk.

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 three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk.

Credit risk on financial assets

Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to discharge their obligations in full or in a timely manner consist principally of cash balances with banks, cash equivalents and receivables, and other financial assets. The maximum exposure to credit risk is: the total of the fair value of the financial instruments and the full amount of any loan payable commitment at the end of the reporting year.

The Company''s non-listed equity shares and mutual funds’ investments are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages this price risk through diversification and by placing limits on individual and total equity instruments. The Company''s Board of Directors reviews and approves all equity investment decisions.

Credit risk on cash balances with banks is limited because the counterparties are entities with acceptable credit ratings. Credit risk on other financial assets is limited because the other parties are entities with acceptable credit ratings.

As disclosed in Note 7, cash and cash equivalents balances generally cash on hand and balances held with the bank in current account.

Exposure to credit risk Financial asset for which loss allowance is measured using expected credit loss model have been listed in the table 20.1 above.

In the opinion of management, Financial assets, Cash and cash equivalent, Balance with Bank, Loans and other financial assets 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.

The Company has not recognized any loss allowance as the Company expects that there is no credit loss on trade receivable.

During the year, the Company has incurred an insignificant amount towards Finance cost. Further, the Company does not carry any financial liabilities as at the Balance Sheet date, hence disclosures related to Ind-AS 107, paragraph 33, on exposures to risk, objectives, policies and procedures with regard to financial liabilities are not applicable.

3. Capital management

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

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

4. First time adoption of Ind AS First Ind AS Financial statements

These are the Company''s first financial statements prepared in accordance with Ind AS.

The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs with effect from 01 April 2017, with a transition date of 01 April 2016. Ind AS 101-First-time Adoption of Indian Accounting Standards requires that all Ind AS and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended 31 March 2018 for the Company, be applied retrospectively and consistently for all financial years presented. Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognized directly in equity (retained earnings or another appropriate category of equity).

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

i Optional exemptions availed Deemed cost

Since, there is no change in the functional currency of the Company, it has opted to continue with the carrying values measured under the previous GAAP and use that carrying value as the deemed cost for property, plant and equipment on the date of transition.

Designation of previously recognized financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVTPL on the basis of the facts and circumstances at the date of transition to Ind AS.

Company has elected to apply this exemption for its investment in equity instruments.

ii Mandatory exceptions applied Estimates

The estimates as at 1 April 2016 and 31 March 2017 are consistent with those made for the same dates in accordance with previous GAAP (after adjustment to reflect differences if any, in accounting policies) apart from the following items where the application of previous GAAP did not require estimation:

(i) Impairment of financial assets based on the expected credit loss model; and

(ii) Investments in equity instruments carried as FVPL or FVOCI.

The estimates used by the Company to present the amounts in accordance with Ind AS reflect conditions that existed at the date on transition to Ind AS.

De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has applied the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

iii Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:

a) Reconciliation of Total Comprehensive Income for the year ended 31 March 2017;

b) Reconciliation of Equity as at 01 April 2016 and as at 31 March 2017;

c) Adjustments to Statement of Cash Flows.

5. iii (c) Adjustments to Statement of Cash Flows for the year ended 31 March 2017

All the adjustments on account of Ind AS are non - cash in nature and hence, there is no material impact on the cash flows in the cash flow statement.

A.1 Fair Valuation of Inventories

Under the previous GAAP, inventory of securities were valued at cost, as certified by the management. Under Ind-AS, these inventories are required to be measured at fair value less costs to sell. The resulting fair value changes of inventories have been recognized in retained earnings '' 908,711 as at 01 April 2016 and subsequently in the Statement of Profit and Loss for the year ended 31 March 2016.

A.2 During the year, management has determined the Gratuity and Compensated Absences liability based on Actuarial Valuation as per Ind-AS 19, Employee Benefits''. The restated liability has been recorded and the impact of restatement has been recorded in the Statement of Profit and Loss for the respective years.

A.3 During the financial year 2016-17, the Company paid '' 1,754,430 towards settlement of Maharashtra State Electricity Distribution Company Limited (MSEDCL) dues pertaining to period prior to 30 December 2000, under the ''Amnesty Scheme for PD consumer 2016-17''. This expenditure has been corrected by restating the Retained Earnings and Liabilities as at 01 April 2015.

A.4 Under Ind AS, all items of income and expense recognized in period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Item of income and expense that are not recognized in profit or loss but are shown in Statement of Profit and Loss as “Other comprehensive income” includes measurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

Impact of recognizing actuarial gains / losses on defined benefit obligations in other comprehensive income (OCI):-

Indian GAAP - Actuarial gains / losses on defined benefit obligations is recognized in Statement of Profit and Loss

Ind AS - Actuarial gains / losses on defined benefit obligations is recognized in other comprehensive income.

Consequently, actuarial loss of '' 92,984 has been recognized in OCI.

Note 6.Contingent Liabilities

Note 7. During the financial year 2017-18 and 2016-17, the Company does not have revenue from operations and hence for the purpose of disclosure of segment information as per Ind-AS 108, ''Operating Segments'', the Company does not have a business segment. Further, the Company operates in India and accordingly no disclosures are required under secondary segment reporting.

Note 8. The Company has suspended its operation. In view thereof and in consideration of prudence, the Company has not recognized Deferred Tax Asset in respect of set off of available losses and timing differences.

Note 9.

Related Party Disclosures:

As per Ind-AS 24 “Related party Disclosures”, disclosure of transactions with the related parties as defined in the Accounting Standard are given below:

i) Names of related parties and description of relationship:

Name of the Related Party__Designation__Relationship_

Bina Sanjeev Shah__Director_ Key Management Personnel (KMP)

Rajen Kapil Desai__Director_

Neerav Bharat Merchant__Director_

Dilip Shripati Shinde__Director_

Vinayak Vengulekar__Director (upto 31 January 2017)

Mukesh Jagat Jethwani__Director (since 25 September 2017)

Mirza Saeed Nazir Kazi__Director (since 25 September 2017)

Neeraja Deepak Karandikar__Company Secretary_

Mukesh Chandrakant Garach Chief Financial Officer__

Note 10. Earnings per share (EPS)

The amount considered in ascertaining the Company''s earnings per share constitutes the net profit after tax and includes post tax effect of any exceptional items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutive potential shares.

Note 11.

Employee Benefits Obligations

As per Ind-AS 19, “Employee Benefits”, the disclosures as defined in the Accounting Standard are given below : Defined Contribution Plans:

The Company offers its employees defined contribution plan in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund cover substantially for all regular employees. Contributions are paid during the year into separate funds. While both the employees and the company pay predetermined contributions into the provident fund and pension fund, no fund has been created by the Company for gratuity. The company''s contribution to the provident fund and family pension fund has been charged to Statement of Profit and Loss.

Defined Benefit Plans:

The Company offers its employees defined benefit plans in the form of gratuity (a lump sum amount). Benefits under the defined benefit plans are based on years of service and the employees last drawn salary immediately before exit. The gratuity scheme covers substantially all regular employees. However the Company has not created any fund in accordance with the scheme. Commitments are actuarially determined at year end. On adoption of the revised Accounting Standard (AS15) on “Employee Benefits”, Actuarial valuation is done based on “Projected Unit Credit Method”. Gains and loss of changed actuarial assumptions are charged to Statement of Profit & Loss. The obligation for leave Encashment benefits is recognized in the manner similar to Gratuity.

Note 12. Internal Audit:

During the financial year 2017-18, the Company appointed M/s. L. T. Jadhav & Company, (Chartered Accountants), as Internal Auditor (Membership No. 037240; FRN No.118218W) having Registered Office address at 601, 6th Floor, Madhuban CHS, 51, T.P.S. Road, Boriwali (West), Mumbai, 400092. They are eligible for re-appointment during the year also.

Note 13.

The figures of the previous year have been reworked, regrouped, rearranged and reclassified, wherever necessary to conform to the current year presentation.

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Mar 31, 2014

1. According to the information and explanation given by the management there is no disputed amount of Income Tax, Excise, Customs and any other laws & no dues under any other laws.

2. Accounting Standard - 18 - Related party disclosure:There are no related parties as identified by the management.

3. Accounting Standard - 22 - Accounting for taxed on income issued by the Institute of Chartered Accountants is applicable to the Company. However due to substantial losses, on principle of prudence, the Company has not recognised deferred tax asset.

4. Accounting Standard - 28 - Impairment of Assets.

As per the information and explanations given to us and as certified by the management, as on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the Company.

5. In opinion of the Directors:

a) The Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business and will not be less than the amount at which they are stated in the Balance Sheet.

b) The provision of depreciation and for all known liabilities are adequate and not in excess / short of the amount reasonably necessary.

6. CONTINGENT LIABILITIES

(Rupees)

Contingent Liabilities not provided 2013-14 2012-13

(i) Excise Duty 400,000.00 400,000.00

(ii) MSEB Dues Net of Deposits 7,480,000.00 7,480,000.00

7. Previous years figure have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2013

1. According to the information and explanation given by the management there is no disputed amount of Income Tax, Excise, Customs and any other laws & no dues under any other laws.

2. Accounting Standard - 18 - Related party disclosure

There are no related parties as identified by the management.

3. Accounting Standard - 22 - Accounting for taxed on income issued by the Institute of Chartered Accounts is applicable to the Company. However due to substantial losses, on principle of prudence, the Company has not recognized deferred tax assets.

4. Accounting Standard - 28 - Impairment of Assets.

As per the information and explanations given to us and as certified by the management, as on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the Company.

5. In opinion of the Directors :

a) The Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business and will not be less than the amount at which they are stated in the Balance Sheet.

6. Contingent Liabilities : (Rupees)

Contingent Liabilities not provided 2012-13 2011-12

(i) Excise Duty 400,000 400,000

(ii) MSEB Dues Net of Deposits 7,480,000 -

7. Previous year''s figure have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2012

1.1 According to the information and explanation given by the management there is no disputed amount of Income Tax, Excise, Customs and any other laws & no dues under any other laws.

1.2 AS - 28 - IMPAIRMENT OF ASSETS

As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the Company.

1.3 In opinion of the Directors :

a) The Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business and will not be less than the amount at which they are stated in the Balance Sheet.

b) The provision of depreciation and for all known liabilities are adequate and not in excess/short of the amount reasonably necessary.

1.4 CONTINGENT LIABILITIES : (Rs. in Lacs)

2011-12 2010-11 Contingent Liabilities not provided

Excise Duty : 4.00 4.00

1.5 The Revised Schedule VI has been effective from April 01 2011 for the preparation of financial statement. This has significantly impacted the disclosure and presentation made in the financial statements. Previous years figures have been regrouped, rearranged and reclassified wherever necessary to correspond with the current year's clarification/disclosure.

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Mar 31, 2010

1. According to the information and explanation given by the management there is no disputed amount of Income Tax, Excise, Customs and any other laws

2. AS - 28 - IMPAIRMENT OF ASSETS :

As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the Company.

3. In opinion of the Directors :

a) The Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business and will not be less than the amount at which they are stated in the Balance Sheet.

b) The provision of depreciation and for all known liabilities are adequate and not in excess / short of the amount reasonably necessary.

4. CONTINGENT LIABILITIES : (Rs. in Lacs)

Contingent Liabilities not provided 2009-10 2008-09

Excise Duty 4.00 4.00

5. There is no commission payable or paid to the Director of the Company. Hence, the Computation of Net Profit in accordance with Section 198 of the Companies Act is not given.

6. As per the information with the Company, there is no amount payable to Small Scale Industrial Undertaking in excess of Rs 1.00 Lacs and outstanding for a period of more, than 30 days

7. SEGMENT INFORMATION :

Segment information has not been given as the management is of the view that the above information would be prejudicial to the interest of the company.

8. ACCOUNTING FOR DEFERRED TAXATION :

In compliance with the Accounting Standard 22 issued by the institute of Chartered Accountants of India, an amount of Rs. 51.74 Lacs (2009 - 50.67 Lacs) representing deferred tax assets, as at 31st March, 2010, has been recognised in the Profit and Loss Appropriations Account. Deferred tax liability of Rs. 83.05 Lacs as at 31-03-2009, is deducted by Rs. 51.74 Lacs resulting in a net deferred tax liability amounting to Rs. 31.34 Lacs. (2009 - 83.08 Lacs).

9. Previous years figures have been regrouped wherever necessary.