Notes to Accounts of Anjani Foods Ltd.

Mar 31, 2024

j) Provisions, Contingent liabilities

and Contingent assets

Provisions for legal claims and returns are recognised when the company has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provisions due to the passage of time is recognized as interest expense.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent Liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which willl be confirmed only by the occurrence or nonoccurence of one or more uncertain future events not wholly within the control of the Company.

Contingent assets are not recognized in financial statements since this may result in the recognition of income thay may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent assets and is recognised.

k) Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet."

(ii) Other long-term employee benefit obligations

The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by employees up to the end

of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligations. Remeasurements as a result of the experience adjustments and changes in actuarial assumptions are recognized in profit or loss.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur."

(iii) Post-employment obligations

The Company operates the following postemployment schemes:

(a) Defined benefit plans such as gratuity; and

(b) Defined contribution plan such as provident fund"

Gratuity obligations

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

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

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value

of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss."

Defined contribution plans

The Company pays provident fund contributions to publicly administered funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are ac counted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due. "

(iv) Bonus plans

The Company recognizes a liability and an expense for bonuses. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation."

L) Contributed equity

Equity shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

m) Earning per share

The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, profit/(loss) for the year attributable to the equity shareholders and the weighted average number of the equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares."

n) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

o) Standards issued but not yet effective

There is no such notification applicable from April 1,2024.

3. Critical estimates and Judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company''s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

(c) Terms/Rights attached to equity shares

The Company has only one class of equity shares having face value of Rs 2/- each. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the equity shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be proportion to the number of equity shares held by the shareholders.

Nature and purpose of other reserves

(i) Securities premium

Securities Premium Reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Act.

(ii) General Reserve

General reserve is used for strengthening the financial position and meeting future contingencies and losses.

(iii) Retained Earnings

This reserve represents the cumulative profits of the company and effects of remeasurement of defined benefit obligations. This reserve can be utilized in accordance with provisions of the Act.

13.1.1 Secured Loans

The Company has availed term loans from M/s. Indian Bank, Vishakapatnam branch amounting to Rs 250 Lakhs, Rs 250 Lakhs and 310 Lakhs respectively which are secured by pari-passu basis by the primary hypothecation of Stocks & Book Debts, Plant & Machinery & Furniture Fixtures and secondary charge by way of hypothecation of factory land and buildings situated land at Modavalasa and Siripuram and Personal Guarantee of Directors. The loan carries floating rate of interest and the same as on March 31,2024 is 9.65% p.a.(P.Y 9.65% p.a.)

The Company has availed Covid loans from M/s. Indian Bank, Vishakapatnam branch amounting to Rs 84 lakhs which are secured by pari-passu basis by assets created out of the loan. The loan carries floating interest rate and the same as on March 31,2024 is 9.25% p.a.(P.Y 9.25% p.a.)

13.1.2 Unsecured Loans

Unsecured loans represents interest free loans taken from the directors. Further, there is no expected repayment in the next 12 months period.

The above sensitivity analysis is based on a change in each assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

v) Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

28 . Financial instruments and risk management

Fair values

The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Set out below, is a comparision by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximation of fair values: *Fair value of instruments is classified in various fair value hierarchies based on the following three levels:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instruments are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3.

Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date. In respect of investments as at the transaction date, the Company has assessed the fair value to be the Realisable Value.

29. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

(A) 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 of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables.

i) Foreign currency exchange rate risk

Foreign currency risk is the risk that the fair value or future cash flows of an 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(when revenue or expense is denominated in a foreign currency). The exposure of entity to foreign currency risk is Nil as on Balance Sheet date.

ii) Interest rate risk

"Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates. As the Company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.

As the Company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

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

B) Credit Risk

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to maturity financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash and other collaterals are obtained from customers when considered necessary under the circumstances.

The carrying amount of trade receivables, loans, advances, deposits, cash and bank balances and bank deposits represents company''s maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks and deposits are with reputable government, public bodies and others.

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer

base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major receivables. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

i. Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invest in deposits with banks with high credit ratings assigned by external agencies.

ii. Credit risk on trade receivables and other financial assets is evaluated as follows:

(i) Expected credit loss for trade receivable under simplified approach:

iii. Significant estimates & judgements

Impairment of financial assets:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company''s treasury maintains flexibility in funding by maintaining availability under deposits in banks.

Management monitors cash and cash equivalents on the basis of expected cash flows.

i. Financing arrangements:

The company had access to the following undrawn borrowing facilities at the end of the reporting period:

30. Capital management

A. Capital management and Gearing Ratio

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

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

35. No funds have been advanced / loaned / invested (from borrowed funds or from share premium or from any other sources / kind of funds) by the Company to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding (whether recorded in writing or otherwise) that the Company shall (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

36. Code on Social Security

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

The amounts receivable from customers become due after expiry of credit period which on an average is 21 to 30 days. There is no significant financing component in any transaction with the customers.

The Company does not have any material performance obligations which are outstanding as at the year end as the contracts entered for sale of goods are for short term in nature.

39. The company has paid/provided for Rs.12.00 lakhs as remuneration to the Managing Director and Whole time director during the year 2023-24. However, in view of the in-adequacy of profits of the company for the FY 2023-24 for payment of the said remuneration, the company is placing a resolution for approval of its members in the ensuing Annual General Meeting of the members of the Company.

40. The company has enabled the feature of recording audit trail (edit log) facility in its accounting software w.e.f April 1, 2023 and the same has operated throughout the year since then for all relevant transactions recorded in the software. Further, the audit trail is not disabled and the same is not tampered with. The feature of recording audit trail (edit log) facility at database level is not enabled.

The accompanying notes are an integral part of the standalone financial statements.

As per our report of even date

On behalf of Board of Directors

For M.Anandam & Co.,

Chartered Accountants

(Firm Registration Number: 000125S)

K. Aditya Vissam R. Ravichandran

Y Lakshmi Nagaratnam ^{Managing Dir}ecto^{r Whole tim}e Sector''

DIN:06791393 DIN:00110930

Membership Number: 212926

D Venugopal Md. Ibrahim Pasha

Place_: Hyderabad Chief Financial Officer Company Secretary

PAN: AZGPD0487P Membership No: A39535

---

Mar 31, 2023

n) Provisions, Contingent liabilities and Contingent assets

"Provisions for legal claims and returns are recognised when the company has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provisions due to the passage of time is recognized as interest expense.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent Liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which willl be confirmed only by the occurrence or non-occurence of

one or more uncertain future events not wholly within the control of the Company.

Contingenet assets are not recognized in financial statements since this may result in the recognition of income thay may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent assets and is recognised.

0) Employee benefits

1) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet."

ii) Other long-term employee benefit obligations

The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligations. Remeasurements as a result of the experience adjustments and changes in actuarial assumptions are recognized in profit or loss.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur."

(iii) Post-employment obligations

The Company operates the following postemployment schemes:

(a) Defined benefit plans such as gratuity; and

(b) Defined contribution plan such as provident fund"

Gratuity obligations

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

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

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

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly

in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss."

Defined contribution plans

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

(iv) Bonus plans

The Company recognizes a liability and an expense for bonuses. The Company r e c o g n i z e s a p r o v i s i o n wh e r e contractually obliged or where there is a past practice that has created a constructive obligation."

p) Contributed equity

Equity shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds."

q) Earning per share

The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted

earnings per share, profit/(loss) for the yea r at tribut abl e to the equi ty shareholders and the weighted average number of the equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares."

r) Dividend distribution:

Dividends paid (including income tax thereon) is recognised in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.

s) Segment Reporting - Identification of Segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company’s chief operating decision maker to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the chief operating decision maker evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.

t) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

u) Standards issued but not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies

(Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (I n di a n Accou nt i n g S t a nd a rd s) Amendment Rules, 2023, as below:

Ind AS 1 - Presentation of Financial Statements -This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors -This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its financial statements.

Ind AS 12 - Income Taxes-This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its financial statements."

3. Critical estimates and Judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company''s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially a d j u st e d du e t o e st i m a t e s a n d assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

c) Terms/Rights attached to equity shares

The Company has only one class of equity shares having face value of Rs 2/- each. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the equity shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be proportion to the number of equity shares held by the shareholders.

Nature and purpose of other reserves

(i) Securities premium

Securities Premium Reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Act.

(ii) General Reserve

General reserve is used for strengthening the financial position and meeting future contingencies and losses.

(iii) Retained Earnings

This reserve represents the cumulative profits of the company and effects of remeasurement of defined benefit obligations. This reserve can be utilized in accordance with provisions of the Act.

13.1.1 Secured Loans

The Company has availed term loans from M/s. Indian Bank, Vishakapatnam branch of Rs 120 Lakhs, Rs 250 Lakhs, Rs 250 Lakhs and 310 Lakhs respectively which are secured by pari-passu basis by the primary hypothecation of Stocks & Book Debts, Plant & Machinery & Furniture Fixtures and secondary charge by way of hypothecation on factory land and buildings and Personal Guarantee of Directors. The loan carries floating rate of interest and the same as on 31.03.2023 is 9.65% p.a.

The Company has availed Covid loans from M/s. Indian Bank, Vishakapatnam branch of Rs 84 lakhs and Rs 60 lakhs which are secured by pari-passu basis by assets created out of the loan. The loan carries floating interest rate and the same as on 31.03.2023 is 9.2% p.a..

13.1.1.2 Unsecured Loans

Unsecured loans represents interest free loans taken from the directors.

ii. Defined contribution plans

The Company has defined contribution plans namely Provident fund. Contributions are made to provident fund at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contributions plan is as follows:

iii. Post- employment obligations

Gratuity : The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The Company operates post retirement gratuity plan with LIC of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation of leave encashment is recognised in the same manner as gratuity.

The above sensitivity analysis is based on a change in each assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

v) Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation. Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

28 . Financial instruments and risk management

Fair values

The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Set out below, is a comparision by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximation of fair values: *Fair value of instruments is classified in various fair value hierarchies based on the following three levels:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instruments are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3.

Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date. In respect of investments as at the transaction date, the Company has assessed the fair value to be the Realisable Value.

29. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

(A) 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 of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables.

i) Foreign currency exchange rate risk

Foreign currency risk is the risk that the fair value or future cash flows of an 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(when revenue or expense is denominated in a foreign currency). The exposure of entity to foreign currency risk is Nil as on Balance Sheet date.

ii) Interest rate risk

"Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates. As the Company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.

As the Company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

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

B) Credit Risk

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to maturity financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash and other collaterals are obtained from customers when considered necessary under the circumstances.

The carrying amount of trade receivables, loans, advances, deposits, cash and bank balances and bank deposits represents company’s maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks and deposits are with reputable government, public bodies and others.

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its

customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major receivables. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

i. Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invest in deposits with banks with high credit ratings assigned by external agencies.

ii. Credit risk on trade receivables and other financial assets is evaluated as follows:

iii. Significant estimates & judgements

Impairment of financial assets:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company’s treasury maintains flexibility in funding by maintaining availability under deposits in banks.

Management monitors cash and cash equivalents on the basis of expected cash flows.

i. Financing arrangements:

The company had access to the following undrawn borrowing facilities at the end of the reporting period:

30. Capital management

a. Capital management and Gearing Ratio

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

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

34. Segment Information

a) The company''s Director and Chief Financial Officer examine the Company''s performance from a product prospective and have identified one operating segment viz Production and sale of bakery products. Hence, segment reporting is not given.

b) Information about products:

35. Revenue from external customers

- Sale of Bakery Products Rs.4380.63 Lakhs.

36. Code on Social Security

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

39. Previous year figures have been recasted/restated/regrouped wherever necessary.

The accompanying notes are an integral part of the financial statements.

As per our report of even date On behalf of Board of Directors

For M.Anandam & Co.,

Chartered Accountants

(Firm Registration Number: 000125S) K. Aditya Vissam R. Ravichandran

Managing Director Whole time Director

Y Lakshmi Nagaratnam Partner DIN: 06791393 DIN: 00110930

Membership Number: 212926

D Venugopal Ibrahim Pasha

Place: Hyderabad Chief Financial Officer Company Secretary

Date: 30.05.2023 PAN: AZGPD0487P PAN: AQKPM7428G

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Mar 31, 2014

1. Note:

Note: Section 205 of the Companies Act, 1956 mandates that companies transfer dividend/depoists that has been unclaimed for a period of seven years from unpaid dividend/deposit account to the Investor Education and Protection Fund (IEPF). Accordingly, if dividend/deposit is unclaimed for a period of seven years, it will be transferred to IEPF.

2. Estimated amount of contracts, remaining to be executed on Capital account and notprovided for (net of advances) Rs. Nil (Previous year Rs. Nil).

3. CONTINGENT LIABILITIES NOT PROVIDED FOR:

I. Disputed Income Tax demands year 1998-99 Rs. 6.80 lakhs towards in respect of which company has filed an appeal with Commissioner Income Tax (Appeals).

II. Disputed Income Tax Liability for A.Y.2004-05 Rs. 9.78 lakhs towards lease income from buildings in respect of which the company has filed an appeal with Commissioner Income Tax (Appeals).

4. During the year the Company has sold some of the fixed assets for Rs. 5.50 Crores where book value is Rs. 5.92 Crores resulting in a loss of Rs. 0.43 Crores which is shown as exceptional item in the profit and loss account. The Company''s Subsidiary has made a turnover of Rs. 22.34 crores during the financial year 2013-14. The Company has initiated the merger process to merge the subsidiary company. In order to meet the growing demands of food industry, the Company has acquired 5.5 acres of additional land beside the existing facilities of the subsidiary company. Further the Company has plans to start a huge food park which includes manufacturing of bakery products, milk products and short eats etc.,

5. Balances with Scheduled Banks, Loans & Advances, and unsecured loans aresubject to confirmation and reconciliation.

6. The Company has made relevant disclosures which are applicable as per revised schedule VI and the figures for the previous years are reclassified/regroupedand rearranged wherever necessary.

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Mar 31, 2013

1. Estimated amount of contracts, remaining to be executed on Capital account and not provided for (net of advances) Rs.Nil (Previous year Rs.Nil).

2. CONTINGENT LIABILITIES NOT PROVIDED FOR:

I. Disputed Income Tax demands year 1998-99 Rs.6.80 lakhs towards in respect of which company has filed an appeal with Commissioner Income Tax (Appeals).

II. Disputed Income Tax Liability for A.Y.2004-05 Rs.9.78 lakhs towards lease income from buildings in respect of which the company has filed an appeal with Commissioner Income Tax (Appeals).

3. Aggregated Related Party Disclosures Related Parties

Enterprises owned or significantly influenced by Key Management personnel or relatives

- Anjani Portland Cement Limited

- Sri Vishnu Educational Society

- Dr.B.V.Raju Foundation Subsidiary Company

- Sai Aditya Foods and Retail Private Limited Key Management Personnel

Shri K.V.Vishnu Raju - Chairman

Shri R.Ravichandran - Whole Time Director

Shri S.Ram Kumar - Director

Shri P.V.R.L.Narasimha Raju - Director

Shri K.Hari Babu - Director

4. Balances with Scheduled Banks, Loans & Advances, and unsecured loans are subject to confirmation and reconciliation.

5. The Company has made relevant disclosures which are applicable as per revised schedule VI and the figures for the previous years are reclassified / regrouped and rearranged wherever necessary.

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Mar 31, 2012

Notes :

a) The term loan from Indian Overseas Bank, Bhimavaram Branch, is secured against the Lease Rentals receivable on the buildings let out to Sri Vishnu Educational Society, Bhimavaram. Further they are secured by equitable mortgage on land and building situated at Bhimavaram. Sri K.V. Vishnu Raju, Chairman of the Company in his personal capacity and Sri Vishnu Educational Society stood as guarantors for the said loan.

b) Terms of Repayment

Loans taken from Indian Overseas Bank is repayable in 81 Equated Monthly Installment of Rs.7,49,696/- each commencing from April 2011; Interest @13.25%.

Note:

Section 205 of the Companies Act, 1956 mandates that companies transfer dividend/depoists that has been unclaimed for a period of seven years from unpaid dividend/deposit account to the Investor Education and Protection Fund (IEPF). Accordingly, if dividend/deposit is unclaimed for a period of seven years, it will be transferred to IEPF.

1. Estimated amount of contracts, remaining to be executed on Capital account and not provided for (net of advances) Rs.Nil (Previousyear Rs.Nil).

2. CONTINGENT LIABILITIES NOT PROVIDED FOR:

I. Disputed Income Tax demands year 1998-99 Rs.6.80 Lakhs towards in respect of which company has filed an appeal with Commissioner Income Tax (Appeals).

II. Disputed Income Tax Liability for A.'Y.2004-05 Rs.9.78 takhs towards lease income from buildings in respect of which the company has filed an appeal with Commissioner Income Tax (Appeals).

3. Aggregated Related Party Disclosures Related Parties

Enterprises owned or significantly influenced by Key Management personnel orrelatives

- Anjani Portland Cement Limited

- Sri Vishnu Educational Society

- Dr.B.V.Raju Foundation Subsidiary Company

- Sai Aditya Foods and Retail Private Limited Key Management Personnel

Shri K.V.Vishnu Raju - Chairman

Shri R.Ravichandran - Whole Time Director

Shri S.Ram Kumar - Director

Shri P.V.R.L.Narasimha Raju - Director

Shri K.Hari Babu - Director

4. Balances with Scheduled Banks, Loans & Advances, and unsecured loans are subject to confirmation and reconciliation.

5. The Company has made relevant disclosures which are applicable as per revised schedule VI and the figures for the previous years are reclassified / regrouped and rearranged wherever necessary.

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Mar 31, 2011

1. Estimated amount of contracts, remaining to be executed on Capital account and not provided for (net of advances) Rs. Nil (Previous year Rs. Nil).

2. CONTINGENT LIABILITIES NOT PROVIDED FOR:

i) Disputed Income Tax demands year 1 998-99 Rs. 6.80 lakhs towards in respect of which company has filed an appeal with Commissioner Income Tax (Appeals).

ii) Disputed Income Tax Liability for A.Y.2004-05 Rs. 9.78 lakhs towards lease income from buildings in respect of which the company has filed an appeal with Commissioner Income Tax (Appeals).

3. Buildings situated at Bhimavaram, W.G.District are constructed on a land belonging to Sri Vishnu Educa- tional Society, a society registered under the Public Registration Societies Act, 1 860.

4. Aggregated Related Party Disclosures Related Parties

5. The term loan from Indian Overseas Bank, Bhimavaram Branch, is secured against the Lease Rentals receiv- able on the buildings let out to Sri Vishnu Educational Society, Bhimavaram. Further they are secured by equitable mortgage on land and building situated at Bhimavaram. Sri K.V.Vishnu Raju, Chairman of the Company in his personal capacity and Sri Vishnu Educational Society stood as guarantors for the said loan.

6. Deferred Tax Asset / Liability:

In accordance with Accounting Standard 22 "Accounting for taxes on Income" issued by the companies (Accounting Standards) Rules 2006.

7. Balances with Scheduled Banks, Loans & Advances, and unsecured loans are subject to confirmation and reconciliation.

8. Previous year's figures have been re-grouped / reclassified wherever necessary to conform to the current year's classification.

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Mar 31, 2010

1. CONTINGENT LIABILITIES NOT PROVIDED FOR:

i) Disputed Income Tax demands year 1998-99 Rs. 6.80 lakhs (previous year Rs.6.80 lakhs). ii) Disputed Income Tax Liability for A.Y.2004-05 Rs.9,77,706/- towards lease income from buildings in respect of which the company has filed an appeal with Commissioner Income Tax (Appeals).

2. The company has been advised that its present practice of recognizing income on rentals though presently disputed by Income Tax Department will ultimately be decided in favour of the Company.

3. Buildings situated at Bhimavaram, W.G.District are constructed on a land belonging to Sri Vishnu Educational Society, a society registered under the Public Registration Societies Act, 1 860.

4. Aggregated Related Party Disclosures Related Parties

Enterprises owned or significantly influenced by Key Management personnel or relatives

- Anjani Portland Cement Limited

- Sri Vishnu Educational Society

- Dr.B.V.Raju Foundation

- Hitech Print Systems Limited

Subsidiary Company

- Sai Aditya Foods and Retail Private Limited

Key Management Personnel

Shri K.V.Vishnu Raju - Chairman

Shri R.Ravichandran - Whole Time Director

Shri B.V.N.Satyanarayana Raju - Director

Shri S.Ram Kumar - Director

Shri P.V.R.LNarasimha Raju - Director



5. Balances with Scheduled Banks, Loans & Advances, Unsecured loans and Creditors are subject to confirmation and reconciliation.

6. The term loan from Indian Overseas Bank, Bhimavaram Branch, is secured against the Lease Rentals receivable on the buildings let out to Sri Vishnu Educational Society, Bhimavaram. Further they are secured by equitable mortgage on land and building situated at Bhimavaram. Sri K.V.Vishnu Raju, Chairman of the Company in his personal capacity and Sri Vishnu Educational Society stood as guarantors for the said loan.

7. Deferred Tax Asset / Liability:

In accordance with Accounting Standard 22 "Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India, the company has a Net Deferred Tax Liability aggregating to Rs.55,80,362/ - (Previous Year Net Deferred Tax Liability Rs.41,68,998/-).

8. Previous years figures have been re-grouped / reclassified wherever necessary to conform to the current years classification.