Notes to Accounts of Ambica Agarbathies & Aroma Industries Ltd.

Mar 31, 2024

1.12 Provisions and Contingent Liabilities

A Provision is recognized if, as a result of past event, the Company has a present legal obligation that is reasonbly estimable, and it is probable that an outflow of economic benefits will be required to settle the present obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.13 Financial Instruments

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

Initial Recognition

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.

Subsequent Measurement

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved both by collection contractual cash flows on specified dates to cash flows that are solely payments of principal and interest on the amount outstanding and selling financial assets.

Financial assets at fair value through Profit and Loss

Financial assets are measured at fair value through profit and loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs that are directly attributable to the acquisition of financial assets and liabilities at fair value through profit and loss are immediately recognised in statement of profit and loss.

Financial liabilities

Financial liabilities are classified as measured at amortised cost or Fair Value Through Profit and Loss Account (FVTPL). A financial liability is classified as at FVTPL if it is classified as held for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in statement of profit and loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in statement of profit and loss. Any gain or loss on derecognition is also recognised in statement of profit and loss.

De-recognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition as per Ind AS 109. A financial liability (or a part of a financial liability) is derecognised from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

1.14 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above are considered an integral part of the Company’s cash management.

1.15 Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated.

25.1 During the year the company has not proposed dividends during the year.

25.2 During the year the company has not issued securities for Specified purpose.

25.3 Borrowings taken by the Company from banks and financial institutions are fully utilised for the specific purpose it was taken.

25.4 The Company did not have any assets other than Property, Plant and Equipment, Intangible assets.

25.5 The Title deeds of immovable property(land and building) included in Property, Plant and Equipment held are in the name of the company.

25.6 During the company has not revalued its Property, Plant and Equipment during the year

25.7 During the year the Company has not made any Loans and Advances in the nature of Loans granted

to Promoters, Director''s, KMP''s and related parties except the parties which are disclosed in related parties transactions.

25.8 No proceedings have been initiated during the year or are pending against the company at March 31, 2023 and March 31,2022 for holding any binami property under Binami transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made there under

25.9 During the year the Company has not declared as wilful defaulter by any bank, financial Institution or other lender.

25.10 There are no charges or satisfaction is yet to be registered with Registrar of Companies beyond the statutory period.

25.11 The Company do not have any Layer of companies

25.12 During the year the company do not have any approved scheme of arrangements

25.13 During the year the Company has not taken any borrowings to directly or indirectly lend or invest in third parties or entities or Ultimate beneficiaries

25.14 During the year the Company has not provided any security or guarantee or the like on behalf of the Ultimate beneficiaries

25.15 During the year the Company is not covered u/s 135 of the Companies Act, 2013.

25.16 During the year the company does not have any Undisclosed Income during the Year.

25.17 During the year the company has not invested in Crypto currency or Virtual currency.

25.18 The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

25.19 The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note No. 28. Contingent liabilities (a) Contingent liabilities

"Claims against the Company not acknowledged as debts:

I) On account of Direct Tax matter - Rs. 1746.50 lakhs

The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process with respect to Direct Tax and Indirect tax matters. No tax expense has been accrued in the financial statements for the tax demand raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

As per our report of even date. For and on behalf of the board

AMBICA AGARBATHIES AROMA & INDUSTRIES LIMITED

For Ramasamy Koteswara Rao and Co LLP

Chartered Accountants

Firm Regn No.010396S/S200084 Sd/- Sd/-

Veeravenkata Pothu Krishna Rao Perla Alapati Ramachandra Rao Sd/_- Chairman and Managing Director Director

(Peri Reddy Talla)

^Part^ner

Membership No-236759 ^{Sd/- Sd/-}

Satyavathi Perla Ambica Hanuma

Executive Director Chief Financial Officer

Sd/-

Uma Gayathri

Place: Hyderabad Company Secretary

Date: 28-05-2024

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Mar 31, 2013

1. Sundry debtors and creditors are subject to confrmations.

2. a) Construction Work at Vizag:

The Company has entered into a License agreement with APSRTC for construction of Commercial Complex at Dwarakanagar Bus Station, Vizag on BOT basis for 30 years. The company has entered into an agreement with M/s. Trinethra Infra Ventures Ltd., (TIVL), Hyderabad for construction of the said Commercial Complex and the value of works completed as on 31-03-2013 was Rs. 567.26 Lakhs.

(b) Construction Work at Vijayawada:

The Company has entered into a License agreement with APSRTC for construction of Commercial Complex at Old Bus stand, Vijayawada on BOT basis for 30 years. However, the Municipal Corporation of Vijayawada did not accord its permission for the construction of commercial complex at the allotted premises on the ground that the premises comes under Transport Zone but not of Commercial Zone. The company has already requested the said local authority to convert the premises into Commercial Zone from Transport Zone. Aggrieved by the decision of the Municipal Corporation Vijayawada, the company fled a Writ Petition vide W.P No. 14449/09 before the Honourable High Court of Andhra Pradesh which is pending for disposal. Keeping the dispute in view the company is not paying the License fees to be payable as per the BOT agreement with the APSRTC. However, the company is regular in making the required provisions in the books of account.

3. Investment in Vaibhav Skyscapes Ltd.,

During the Financial year 2008-09, the company has transferred all its interest and investments in M/s. Vaibhav Skyscapes Pvt. Ltd., to Vaibhav Empire Pvt. Ltd., and the formalities for the registration of the same are still pending.

4. Hotel and Other Division:

The requirement regarding furnishing of quantitative details is not required to Hotel Division and Other Divisions, since they belong to service industry.

5. Previous years''s fgures have been regrouped/reclassifed wherever necessary to confrm to the current year''s classifcation.

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Mar 31, 2012

A) Rights, Preferences and restrictions attached to shares

The Company has only one class of shares referred to as equity shares having a par value of Rs.10 each. The holder of equity shares are entitled to one vote per share. The Company declares and pays dividends in Indian Rupees.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Working Capital Loan of Rs.2015.37 Lakhs (2003.99 Lakhs) from Corporation Bank, Eluru, is against the hypothecation of raw materials, stocks-in-process, finished goods, consumables, stores, spares etc., and book debts of the Company, equitable mortgage on fixed assets of Hotel Division and collateral security of personal properties and personal guarantee of directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

1) Loans & Advances, Sundry debtors and creditors balances are subject to confirmation.

2) Secured Loans:

Agarbathies Division:

(a) Working Capital Loan of Rs.2015.37 Lakhs (2003.99 Lakhs) from Corporation Bank, Eluru, is against the hypothecation of raw materials, stocks-in-process, finished goods, consumables, stores, spares etc., and book debts of the Company, equitable mortgage on fixed assets of Hotel Division and collateral security of personal properties and personal guarantee of directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

(b) Term Loan of Rs. 389.02 Lakhs (Rs. 481.61) Lakhs from Corporation Bank, Eluru is against the first charge of the Agarbathi Rolling Machinery and of Rs.47.32 Lakhs (Rs.86.37 Lakhs) is against the first charge of the Windmill at Surandai, Tamil Nadu, equitable mortgage on fixed assets of Hotel Division and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

(c) Term Loan of Rs.1009.61 Lakhs ( Rs. 1001.10 Lakhs) from Indian Overseas Bank, Pondicherry is against the first charge of future rent receivables and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

(d) Vehicle finance and Top-up loans of Rs. 101.14 Lakhs (Rs.93.34 Lakhs) from Barclay Bank, HDFC Bank, ICICI Bank, Ing Vysya Bank, Reliance Capital Ltd., SBI, Shriram City Union Finance Ltd, Standard Chartered Bank and Tata Ltd. are against the security of vehicles respectively financed by them.

Hotel Division:

(a) Term Loan of Rs. 728.42 Lakhs (Rs. 390.59 Lakhs) from Corporation Bank, Eluru is against the first charge on fixed assets financed by them and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudarsan, Ambica Ramachandra Rao and their relatives.

(b) Term Loan of Rs.181 Lakhs (Rs.173.50 Lakhs) from Industrial Development Bank of India Ltd., Chennai is against the first charge on future credit card receivables of the company and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

(c) Term Loan of Rs. 39.04 (Rs. 41.73 Lakhs) from L & T Finance, Chennai is against the first charge on fixed assets [ Air-Conditioning Plant, Transformer, Laundry ] financed by them.

(d) Vehicle finance loans of Rs. 17.82 Lakhs (Rs.14.59 Lakhs) from AXIS Bank and Reliance Capital Limited, are against the security of charge of vehicles respectively financed by them.

Construction Division:

Term Loan of Rs. 779.18 Lakhs from Corporation Bank, Eluru is against the first charge on all movable assets of the company and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudarsan, Ambica Ramachandra Rao and their relatives.

3) Employee Benefits:

The Company has provided for Gratuity Liability as per the Actuary Valuation and as required by the AS-15: Employee Benefits.

4) Earning per Share (EPS):

The following particulars are furnished as required by Accounting Standard- 20 on "Earning per Share" issued by ICAI.

5) Deferred Tax:

In accordance with Accounting Standard- 22 on "Accounting for Taxes on Income" issued by ICAI, the Company has accounted for Deferred Tax.

Note: For the above Bank Guarantees availed from Andhra bank, State Bank of India, has issued Counter Guarantee. Further, Corporation Bank has issued counter Guarantee to State Bank of India.

The corporate guarantee given to Indian Overseas Bank on behalf of Ambica Infraventures Pvt. Ltd., which was a subsidiary of the company at the time when the Corporate Guarantee was issued by the company, the process of substitution of the said Corporate Guarantee by the new management of Ambica Infraventures Pvt Ltd., is in progress

6) a) Construction Work at Vizag:

The Company has entered into a License agreement with APSRTC for construction of Commercial Complex at Dwarakanagar Bus Station, Vizag on BOT basis for 30 years. The company has entered into an agreement with M/s. Trinethra Infra Ventures Ltd., (TIVL), Hyderabad for construction of the said Commercial Complex and the value of works completed as on 31-03-2012 was Rs. 567.26 Lakhs.

Further, as per the above said agreement, the company has to pay Annual Ground License Fee as well as Annual Commercial License Fee. However, the company is regular in making the respective provisions but did not make the payments for the respective provisions as per the agreement entered with them as there is a dispute between APSRTC and the company, on account of construction of a Fly-Over by the local Government, in front of the Commercial Complex and consequent inability of the company to exploit the commercial potential of the property resulting in non-payment of the lease rentals.

b) Construction Work at Vijayawada:

The Company has entered into a License agreement with APSRTC for construction of Com- mercial Complex at Old Bus stand, Vijayawada on BOT basis for 30 years. However, the Municipal Corporation of Vijayawada did not accord its permission for the construction of commercial complex at the allotted premises on the ground that the premises comes under Transport Zone but not of Commercial Zone. The company has already requested the said local authority to convert the premises into Commercial Zone from Transport Zone. Aggrieved by the decision of the Municipal Corporation Vijayawada, the company filed a Writ Petition vide W.P. No. 14449/09 before the Honourable High Court of Andhra Pradesh which is pend- ing for disposal. Keeping the dispute in view the company is not paying the License fees to be payable as per the BOT agreement with the APSRTC. However, the company is regular in making the required provisions in the books of account.

7) Investment in Vaibhav Skyscapes Ltd.,

During the Financial year 2008-09, the company has transferred all its interest and investments in M/s. Vaibhav Skyscapes Pvt. Ltd., to Vaibhav Empire Pvt. Ltd., and the formalities for the registration of the same are still pending.

8) Hotel and Other Division:

The requirement regarding furnishing of quantitative details is not required to Hotel Division and Other Divisions, since they belong to service industry.

9) Figures in the bracket denote last year figures. Previous year figures have been regrouped in appropriate cases.

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Mar 31, 2010

1) Loans & Advances, Sundry debtors and creditors balances are subject to confrmation.

2) Secured loans: Agarbathies Division:

a) Working Capital Loan of Rs.1611.42 Lakhs from State Bank of India, Chennai, with a sub-limit of Rs.45.00 Lakhs at Eluru, is against the hypothecation of raw materials, stocks-in-process, fnished goods, consumables, stores, spares etc., and book debts of the Company, equitable mortgage on fxed assets of Hotel Division and collateral security of personal properties and personal guarantee of directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

Purchase Factoring Facility of Rs.279.03 Lakhs from SBI GLOBAL FACTORS LIMITED [ Formarly known as SBI Factors and Commercial Services (P) Ltd.,] Chennai is against equitable mortgage on personal properties of directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives and personal guarantee of directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao.

FCNR(B) loan of USD 16,95,202.58 availed equivalent to Rs.750.00 Lakhs as a part of overall fund-based working capital limit, on closure of term, incurred Gain of Rs.92.73 Lakhs on account of foreign exchange fuctuation.

b) Working Capital Loan of Rs.304.72 Lakhs from ICICI Bank, Chennai, is against the hypothecation of raw materials, stocks- in-process, fnished goods, consumables, stores, spares etc., and book debts of the

Company and collateral security of personal properties and personal guarantee of directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao.

c) Term Loan of Rs. 256.58 Lakhs from State Bank of India, Chennai is against the frst charge of the Agarbathi Rolling Machinery and of Rs.132.01 Lakhs is against the frst charge of the Windmill at Surandai, Tamil Nadu, equitable mortgage on fxed assets of Hotel Division and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

d) Vehicle fnance and Top-up loans of Rs.75.91 Lakhs from Barclay Bank, HDFC Bank, ICICI Bank, Reliance Capital Ltd., SBH Bank and Standard Chartered Bank etc., are against the security of vehicles respectively fnanced by them.

Hotel Division:

a) Term Loan of Rs.565.97 Lakhs from State Bank of India, Chennai is against the frst charge on fixed assets financed by them and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

b) Term Loan of Rs.274.90 Lakhs from Industrial Development Bank of India Ltd., Chennai is against the frst charge on future credit card receivables of the company and collateral security of personal properties and personal guarantee of the directors i.e., Ambica Krishna, Ambica Sudrsan, Ambica Ramachandra Rao and their relatives.

c) Vehicle fnance and Topup loans of Rs.15.73 Lakhs from Kotak Mahindra, ICICI Bank, HDFC and Tata Motor Finance Ltd., are against the security of charge of vehicles respectively fnanced by them.

3) Employee Benefts:

The Company has provided for Gratuity Liability as per the Actuary Valuation and as required by theAS-15: Employee Benefts.

4) Borrowing Cost:

Interest capitalized Rs. NIL/- (Rs. 80,77,617/-)

5) Segment Reporting:

The following is Segment Report of the Company in accordance with Accounting Standard- 17 on "Segment Reporting" issued by ICAI.

6) Deferred Tax:

In accordance with Accounting Standard- 22 on "Account- ing for Taxes on Income" issued by ICAI, the Company has accounted for Deferred Tax.

The Deferred Tax has been evaluated as on 31 -3-2010 and the difference pertaining to the earlieryears including the frst year in which the Deferred Tax provisions came into force amount- ing to Rs. 2,31,28,812/- has been provided by way of adjust- ment from the balance in Proft & Loss A/c as on 1-4-2009.

7) Contingent liabilities:

I. Claims against the Company not acknowledged as debts: NIL (NIL)

II. Bank Guarantee by

a) Andhra Bank: - to Dty Comm. of Customs, Chennai : Rs.24,17,163 ( Rs.24,17,163) - to Comm. of Customs of Customs House,

Chennai : Rs. 2,80,000 (Rs.2,80,000) - to Joint Comm. of Sale Tax, Howrah : Rs. 20,000 (Rs. 20,000)

b) State Bank of India: - to Comm. of Customs of Customs House, Chennai : Rs.16,20,000 (Rs.16,20,000) - to Canteen Stores Department, Mumbai : Rs.64,10,000 (Rs.64,10,000) - to Comm., Warangal Municipal Corporation, Warangal : Rs.10,00,000 (Rs.10,00,000)

Note: For the above Bank Guarantees availed from Andhra Bank, State Bank of India issued Counter Guarantee. c) Dhanalakshmi Bank:

- to APSRTC, Vijayawada : Rs.54,20,000 (Rs.54,20,000)

- to Visakhapatnam Urban Development

Authority on behalf of SPV,

Ambica Infra Ventures

(P) Ltd., : Rs.21,57,500 (Rs.21,57,500)

8) a) Construction Work at vizag:

The Company has entered into a License agreement with APSRTC for construction of Commercial Complex at Dwarakanagar Bus Station, Vizag on BOT basis for 30 years. The company has entered into an agreement with M/s. Trinethra Infra Ventures Ltd., (TIVL), Hyderabad for construction of the said Commercial Complex and the value of works completed as on 31-03-2010 was Rs. 567.26 Lakhs.

Further, as per the above said agreement, the company has to pay Annual Ground License Fee as well as Annual Commercial License Fee. However, the company is regular in making the respective provisions but did not make the payments for the respective provisions as per the agreement with them as there is a dispute between APSRTC and the company, on account of construction of a Fly-Over by the local government, in front of the Commercial Complex and the consequent inability of the company to exploit the commercial potential of the property resulting in non - payment of the lease rentals.

b) Construction Work at vijayawada:

The Company has entered into a License agreement with APSRTC for construction of Commercial Complex at Old Bus stand, Vijayawada on BOT basis for 30 years. However, the Municipal Corporation of Vijayawada did not accord its permission for the construction of commercial complex at the allotted premises on the ground that the premises comes under Transport Zone but not of Commercial Zone. The company has already requested the said local authority to convert the premises into Commercial Zone from Transport Zone. However, Aggrieved by the decision of the Municipal Corporation Vijayawada, the company fled a Writ Petition vide W.P No. 14449/09 before the Honourable High Court of Andhra Pradesh which is pending for disposal. Keeping the dispute in view the company is not paying License fees to be payable as per the BOT agreement with the APSRTC. However, the company is regular in making the required provisions in the books of account.

All the formalities regarding the above preferential allotment has been duly complied with by the company and the said 28,00,000 Equity shares of Rs. 10/- each allotted on conversion of warrants issued on preferential basis made by the company are listed and admitted to dealings on stockexchanges vide letter dated 28.05.2010 by NSE and letter dated 20.05.2010 by BSE.

9) Investment in vaibhav Skyscapes ltd.,

During the Financial year 2008-09, the company has transferred all its interest and investments in M/s. Vaibhav Skyscapes Pvt. Ltd., to Vaibhav Empire Pvt. Ltd., and the formalities for the registration of the same are still pending.

10) ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3, 4C AND 4D OF PART II OF THE SCHEDULE VI OF THE COMAPANIES ACT, 1956:

a) Class of goods, Capacity and production:

Class of goods - Manufacturing of Agarbathies

Capacity as at 31st March, 2010 - Not Applicable

I. Licensed capacity: - Not Applicable

II. Installed capacity: - Not Applicable [As certifed by the Management]

11) Hotel and Other Division:

The requirement regarding furnishing of quantitative details is not required to Hotel Division and Other Divisions, since they belong to service industry.

12) Figures in the bracket denote last year fgures. Previous year fgures have been regrouped in appropriate cases.