Notes to Accounts of Archit Organosys Ltd.

Mar 31, 2024

g. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre tax rates that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A provision for onerous contract is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with the contract.

Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

h. Revenue Recognition

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.

The Company has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.

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

Sale of Goods

Revenue is recognised when control of goods is transferred to a customer in accordance with the terms of the contract. The control of the goods is transferred upon delivery to the customers either at factory gate of the Company or specific location of the customer or when the goods are handed over to the freight carrier, as per the terms of the contract. A receivable is recognised by the Company when the goods are delivered to the customer as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due.

The Company accounts for pro forma credits, refunds of duty of customs or excise, or refunds of sales tax/ GST in the year of admission of such claims by the concerned authorities. Export benefits are classified as other operating income and recognized on accrual basis in the year of export based on eligibility and when there is no uncertainty on receiving the same.

Interest Income

Interest income is recognised using the effective interest method as set out in Ind AS 109 - Financial Instruments: Recognition and Measurement, when it is probable that the economic benefits associated with the transaction will flow to the Company and the amount of the revenue can be measured reliably. The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period.

I. Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company as a lessee

The Company applies a single recognition and measurement approach for all leases, except for shortterm leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets

i. Right of use

The Company recognises right-of-use assets ("ROU Assets) at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note f “Impairment of non-financial assets”.

ii. Lease Liability

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. Lease liabilities has been presented under the head “Financial Liabilities”.

iii. Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

j. Foreign Currency Translation

In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency are recognised at the rate of exchange prevailing at the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit and loss in the period in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.

k. Borrowing Costs

Borrowing costs include

i. Interest expense calculated using the effective interest rate method,

ii. Finance charges in respect of finance leases, and

iii. Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.

l. Employee benefits

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 recognised 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.

Post-employment obligations

The Company operates the following post-employment schemes:

(i) defined contribution plans - provident fund and employee state insurance.

(ii) defined benefit plans - gratuity

i. Defined Contribution Plan

The Company has defined contribution plan for the post-employment benefits namely Provident Fund and Employees Death Linked Insurance, the contributions towards such funds and schemes are recognised as employee benefits expense and charged to the Statement of Profit and Loss when they are due. The Company does not carry any further obligations with respect to this, apart from contributions made on a monthly basis.

ii. Defined Benefit Plan

The Company has defined benefit plan, namely gratuity for eligible employees in accordance with the Payment of Gratuity Act, 1972 the liability for which is determined on the basis of an actuarial valuation (using the Projected Unit Credit method) at the end of each year.

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 tenor of the related obligation. The liability or asset recognized in the balance sheet in respect of gratuity is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets

The service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements) is recognised in the Statement of profit and loss in the line item ''Employee benefits expense''.

Remeasurements of the net defined liability, comprising of actuarial gains and losses, return on plan assets (excluding amounts included in net interest on the net defined benefit liability) and any change in the effect of asset ceiling (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI) in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

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

m. Income Taxes

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income

Current Tax

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

Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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

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

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

Current & Deferred Tax for the year

Current and deferred tax are recognised in the Statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Minimum Alternate Tax

MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented as Deferred Tax Asset.

n. Earnings per Share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to the ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the period. Where ordinary shares are issued but not fully paid, they are treated in the calculation of basic earnings per share as a fraction of an ordinary share to the extent that they were entitled to participate in dividends during the period relative to a fully paid ordinary share. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

o. Fair value Measurement

A number of Company''s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair value is the price that would be received on sell of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Company.

The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

p. Current / non- current classification

An asset is classified as current if:

i. it is expected to be realized or sold or consumed in the Company''s normal operating cycle;

ii. it is held primarily for the purpose of trading;

iii. it is expected to be realized within twelve months after the reporting period; or

iv. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current if:

i. it is expected to be settled in normal operating cycle;

ii. it is held primarily for the purpose of trading;

iii. it is expected to be settled within twelve months after the reporting period;

iv. it has no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between acquisition of assets for processing / trading / assembling and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

Note 3: Significant accounting judgments, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,

liabilities, the disclosures of contingent assets and contingent liabilities at the date of financial statements, income and expense during the period. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the periods in which the estimates are revised and in future periods which are affected.

Critical Accounting Estimates and Judgments

In the process of applying the Company''s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements.

(i) Contingences and Commitments

In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, such liabilities are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings, the management do not expect them to have a materially adverse impact on our financial position or profitability.

(ii) Taxes

Deferred tax assets are recognised for unused tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

(iii) Employee Benefits

Discount rate used to determine the carrying amount of the Company''s defined benefit obligation.

The cost of defined benefit plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

(iv) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Estimated irrecoverable amounts are based on the ageing of the receivable balance and historical experience. Individual trade receivables are written off when management deems it not to be collectible.

(v) Allowance for uncollectible trade receivables

Provision matrix takes into accounts historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the day of the receivables are due and the rates as given in the provision matrix.

(vi) Impairment of Property, Plant & Equipment

The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, an impairment loss which is material in nature is accounted for.

(vii) Litigations

The provision is recognized based on the best estimate of the amount desirable to settle the present obligation arising at the reporting period and of the income is recognized in the cases involving high degree of certainty as to realization.

(viii) Useful Life of Property, Plant and Equipment

The Company reviews the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. During the current financial year, the management determined that there were no changes to the useful lives and residual values of the property, plant and equipment.

Note 21.1 : Nature and purpose of reserves Securities Premium

Securities premium reserve is the premium received on issue of shares. These reserve is utilized in accordance with the provisions of the Companies Act, 2013. Capital Reserve

Capital Reserve is created out of forfeiture of equity shares.

General Reserve

General reserve was created by transfer of profits as per Companies (Transfer of Profits to Reserve) Rules, 1975. It is a transfer from one component of equity that is retained earnings for appropriation purpose.

Retained Earnings

The retained earnings reflect the profit of the Company earned till date net of appropriations. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve, after considering the requirements of the Companies Act, 2013.

Equity Instruments through Other Comprehensive Income

This represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, under an irrevocable option.

Note 22.1 : Details of Security

Term loans from Union Bank of India having outstanding balance as at March 31,2024 amounting to ? 1173.18 Lacs (P.Y. ? 1893.80 Laccs) are secured by -

(a) mortgage of industrial NA land at Survey No. RS 228/1A paiki 7 / paiki 2, Mouje Narmad at Bhavnagar in the name of the Company along with factory building and structures thereon.

(b) hypothecation of plant and machinery of the Company

(c) personal guarantee of 3 directors

As on March 31,2023, above loans were further secured by mortgage of factory land and building on plot No. 25/9/B & A, Phase III, GIDC Naroda, Naroda, Survey No. 221/p, 222/P, 229/p Ahmedabad in the name of Company (which have been sold and charge has been released during the F.Y. 2023-24).

Term loan from Union Bank of India having outstanding balance at at March 31,2024 amounting to ? 4.11 Lacs (P.Y. ? 12.55 Lacs) and from Toyota Financial Services India Limited amounting to ? 32.59 Lacs (P.Y. ? 42.98 Lacs) are sercured against vehicles.

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board has established the Audit Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Committee holds regular meetings and report to board on its activities.

The Company''s risk management policies 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 Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

Note 51.1 : Credit Risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to the credit risk from its trade receivables, investments, cash and cash equivalents, other bank balances, loans and other financial assets. The maximum exposure to credit risk is equal to the carrying value of the financial assets.

Trade Receivables

Trade receivables comprise a widespread customer base. Trade receivables are non-interest bearing and are normally 30 to 60 days credit term. Management evaluates credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. The Company does not hold collateral as security. No single customer accounted for 10% or more of the trade receivables in any of the year presented.

Expected credit loss assessment

Based on historic default rates and overall credit worthiness of customers, the company adopted a policy for assessing credit risk as per expected credit loss model for outstanding balances as on balance sheet date as per their ageing bucket :

Cash and Cash Equivalents

Credit risk on cash and cash equivalents and other deposits with banks is limited as the Company generally invests in deposits with banks with high credit ratings assigned by external credit rating agencies; accordingly the Company considers that the related credit risk is low. Impairment on these items is measured on the 12-month expected credit loss basis.

Note 51.2 : Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company''s treasury maintains flexibility in funding by maintaining liquidity through investments in liquid funds and other committed credit lines. Management monitors rolling forecasts of the group''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.

Maturity profile of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

Market risk is the risk arising from changes in market prices - such as foreign exchange rates and interest rates - will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of the investments. Thus, the exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency.

(a) Foreign currency risk

The Company is exposed to currency risk on account of foreign currency transactions including recognized assets and liabilities denominated in a currency that is not the Company’s functional currency (?), primarily in respect of US$ and Euro. The Company ensures that the net exposure is kept to an acceptable level and is remain a net foreign exchange earner.

Reasons for material discrepancies

The differences between books of accounts and statements submitted to bank are reconciled. These differences are mainly due to adjustment entries for exchange rate effects and change in grouping of trade receivables/trade payables during the course of limited review/audit.

Note 55 : Other Statutory Information

(a) The Company does not held any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. No proceeding has not been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(b) The Company does not have any transactions with companies struck off.

(c) The Company has not been declared wilful defaulter by any bank or financial institution or any other lender.

(d) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(e) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

(f) The Company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period.

(g) 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:

- 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

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(h) 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:

- 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

- provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) The Company is in compliance with number of layers of companies in accordance with clause 87 of Section 2 of the Act read with the Companies (Restriction of number of Layers) Rules, 2017.

(j) The Company has not entered in to any scheme of arrangement approved by the Competent Authority in terms of Section 230 to 237 of the Companies Act, 2013.

Note 56 : Statement of Management

(a) The non current financial assets, current financial assets and other current assets are good and recoverable and are approximately of the values, if realized in the ordinary courses of business unless and to the extent stated otherwise in the Accounts. Provision for all known liabilities is adequate and not in excess of amount reasonably necessary. There are no contingent liabilities except those stated in the notes.

(b) Balance Sheet, Statement of Profit and Loss, cash flow statement and change in equity read together with Notes to the accounts thereon, are drawn up so as to disclose the information required under the Companies Act, 2013 as well as give a true and fair view of the statement of affairs of the Company as at the end of the year and financial performance of the Company for the year under review.

Note 57

Previous year''s figures have been regrouped/re-arranged/recasted, wherever necessary, so as to make them comparable with current year''s figures.

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

ARCHIT ORGANOSYS LIMITED

FOR G. K. CHOKSI & CO. Kandarp K Amin Archana K Amin

^{[Firm R}e^{gistration N}°. ^101895W] Whole Time Director Whole Time Director

^Ch^art^emd ^Account^ant^s DIN: 00038972 DIN: 00038985

SANDIP A. PARIKH Ajay P. Patel

P^artn^er Chief Financial Officer

Mem. No. 40727

Place : Ahmedabad

Place : Ahmedabad

^{Date : 30th May}, ²⁰²⁴ Date : 30th May, 2024

---

Mar 31, 2016

1. Rights, Preferences and Restrictions

The rights and privileges to equity shareholders are general in nature and defined under the Articles of Association.

Equity Shares : The Company has only class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, if any, in proportion to their shareholding.

2. The Company has calls in arrears / unpaid calls amounting to Rs. 1,52,150/- in respect of 78000 equity shares, however it does not have any outstanding calls in due from directors and officers of the company. The company has not forfeited any shares at balance sheet date.

3. (a) The company had entered in to derivatives contracts (for sale of foreign currency) with HDFC bank Limited which have already been concluded in earlier years. The company had incurred loss on such contracts against which the sum of Rs. 78,70,798/- (including adjustment of fixed deposit amounting to Rs. 23,64,200/-) have already been paid and charged to Statement of Profit and Loss under the head “Loss on Derivative Contract”. The company had also received summons / show cause notice from Mumbai Debt Recovery Tribunal in the month of May, 2009. In response to the same, based on legal advice, the company had filed its reply with appropriate authority. Pending final outcome, the management is of the opinion that the aforesaid liability is of contingent nature and therefore the company has not recognized as liability for the balance loss of Rs. 1,47,07,069/- including interest up to January, 2013.

4. The Company has not recognized and acknowledged the claims as liability in the books of account amounting to Rs. 4,84,830/- (P.Y. Rs. NIL ) which have been made against the company by Department of Income Tax since such claims have been disputed and pending before the appropriate authorities for final adjudication and accordingly sub-judice. The final outcome of such lawsuits filed against the Company is not presently ascertained and accordingly no provision in respect thereof has been made in the books of account of the company.

5. Employee Benefits

6. Defined contribution to Provident fund and Employee state insurance

The company makes contribution towards employees'' provident fund and employees'' state insurance plan scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognized Rs. 3,75,237/- (P.Y. Rs. 3,94,899/-) as expense towards contributions to these plans.

7. The Company operates within a solitary business segment i.e. dealing & manufacturing of chemicals, the disclosure requirements of Accounting Standard - 17 “Segment Reporting” issued by the Institute of Chartered Accountants of India is not applicable.

8. Borrowing Cost

Adhering to significant accounting policy, the company has capitalized the sum of Rs. 29,82,307/-(P.Y. Rs. NIL) being borrowing cost comprising of Interest on term loans, exchange difference in long term Monetary items, etc of specific asset.

9. Balances of Trade Payables, Trade Receivable and Loans and Advances are subject to confirmations and reconciliation if any, by the respective parties.

10. Statement of Management

11. The current assets, loans and advances are good and recoverable and are approximately of the values, if realized in the ordinary courses of business unless and to the extent stated otherwise in the Accounts. Provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

12. Balance Sheet and Statement of Profit and Loss read together with Notes to the accounts thereon, are drawn up so as to disclose the information required under the Companies Act, 2013 as well as give a true and fair view of the statement of affairs of the Company as at the end of the year and results of the Company for the year under review.

13. The previous year''s figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.

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Mar 31, 2015

Note 1:

Rights, Preferences and Restrictions

The rights and privileges to equity shareholders are general in nature and defined under the Articles of Association.

Equity Shares : The Company has only class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, if any, in proportion to their shareholding.

Note 2:

Contingent Liabilities and Capital commitments

Contingent Liabilities

- Claims not acknowledged by as debt 1,47,07,069 1,47,07,069

Capital Commitments

- Estimated amount of contracts remaining to be executed on capital account and not provided for NIL NIL

- Other commitments NIL NIL

Note 3:

The company had entered in to derivatives contracts (for sale of foreign currency) with HDFC bank Limited which have already been concluded in earlier years. The company had incurred loss on such contracts against which the sum of Rs. 78,70,798/- (including adjustment of fixed deposit amounting to Rs. 23,64,200/-) have already been paid and charged to Statement of Profit and Loss under the head "Loss on Derivative Contract". The company had also received summons / show cause notice from Mumbai Debt Recovery Tribunal in the month of May, 2009. In response to the same, based on legal advise, the company had filed its reply with appropriate authority. Pending final outcome, the management is of the opinion that the aforesaid liability is of contingent nature and therefore the company has not recognized as liability for the balance loss of Rs. 1,47,07,069/- including interest up to January, 2013.

Note 4:

Employee Benefits

(a) Defined contribution to Provident fund and Employee state insurance

The company makes contribution towards employees'' provident fund and employees'' state insurance plan scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognized Rs. 3,94,899/- (P.Y. Rs. 2,89,648/-) as expense towards contributions to these plans.

Note 5:

The Company operates within a solitary business segment i.e. dealing & manufacturing of chemicals, the disclosure requirements of Accounting Standard -17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

Note 6:

Related Party Disclosures

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(a) List of related parties with whom transactions have taken place during the year and relationship:

Sr. Name of related party Relationship

No.

1 Krishna Orgochem Enterprise over which key management personnel exercise significant influence

2 Adonis Lifecare Private Limited

3 Kandarp K. Amin Key Management Personnel (KMP)

4 Archana K. Amin

5 Archit K. Amin

6 Suchit K Amin Relative of Key Management Personnel

7 Shimoli A. Amin

Note 7:

Statement of Management

(a) The current assets, loans and advances are good and recoverable and are approximately of the values, if realized in the ordinary courses of business unless and to the extent stated otherwise in the Accounts. Provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

(b) Balance Sheet and Statement of Profit and Loss read together with Notes to the accounts thereon, are drawn up so as to disclose the information required under the Companies Act, 2013 as well as give a true and fair view of the statement of affairs of the Company as at the end of the year and results of the Company for the year under review.

Note 8:

The previous year''s figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.

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Mar 31, 2013

1 Contingent Liabilities and Capital commitments

[Amount in Rs.]

As at As at Particulars 31st March, 2013 31st March, 2012

Contingent Liabilities (See Note 30 below)

Claims not acknowledged by as debt 1,47,07,069 2,13,40,422

Bank Guarantee 1,00,00,000 1,00,00,000

Capital Commitments

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

Other commitments NIL NIL

2 The company had entered in to derivatives contracts (for sale of foreign currency) with HDFC bank Limited which have already been concluded in earlier years. The company had incurred loss on such contracts against which the sum of Rs. 55,06,598/- have already been paid and charged to Statement of Profit and Loss under the head "Loss on Derivative Contract" in financial year 2008-2009. The company had also received summons / show cause notice from Mumbai Debt Recovery Tribunal in the month of May, 2009. In response to the same, based on legal advise, the company had filed its reply with appropriate authority. Pending final outcome, the management is of the opinion that the aforesaid liability is of contingent nature and therefore the company has not recognized as liability for the balance loss ofRs. 1,70,71,269/- including interest.

Further the company had fixed deposit amounting to Rs. 23,64,200/- including interest amounting to Rs. 2,21,821/- accrued thereon with HDFC Bank Limited. During the current financial year the Bank has adjusted the amount of fixed deposit against the aforesaid dues and therefore the company has charged the sum of Rs. 23,64,200/- to statement of profit and loss under the head "Loss on Derivative Contracts".

Consequent to such adjustments the liability in respect of balance loss on account of concluded derivative contracts gets reduced to Rs. 1,47,07,069/- including interest.

3 Employee Benefits

(a) Defined contribution to Provident fund and Employee state insurance

The company makes contribution towards employees'' provident fund and employees'' state insurance plan scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognized Rs. 3,95,460/- (P.Y. Rs. 1,79,360/-) as expense towards contributions to these plans.

4 The Company operates within a solitary business segment i.e. dealing & manufacturing of chemicals, the disclosure requirements of Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

5 Balances of Trade Payables, Trade Receivable and Loans and Advances are subject to confirmations and reconciliation if any, by the respective parties.

6 Statement of Management

(a) The current assets, loans and advances are good and recoverable and are approximately of the values, if realized in the ordinary courses of business unless and to the extent stated otherwise in the Accounts. Provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

(b) Balance Sheet and Statement of Profit and Loss read together with Notes to the accounts thereon, are drawn up so as to disclose the information required under the Companies Act, 1956 as well as give a true and fair view of the statement of affairs of the Company as at the end of the year and results of the Company for the year under review

7 The previous year''s figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.

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Mar 31, 2012

The equity shareholders shall have:

(i) One Vote and a poll when present in person (including a body corporate by a duly authorised representative) or by an agent duly authorised under a power of attorney or by aproxy his voting right shall be in proportion to his share of the paid equity share capital of the company. However, no member shall exercise any voting rights in respect of any share registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the company has exercised any right of lien,

(ii) subject to the rights of person if any, entitled to share with special rights as to dividends, all dividends shall be declared and paid according to the amount paid or credited as paid to the shares in respect where of the dividend is paid but if and so long as nothing is paid upon any shares in the company , dividends may be decleared and paid according to the amounts of the

(iii) A special resolution sancationing a sale to any other company duly passed pursuant to section 494 of the act may, subject to the provision of the act, in like manner as aforesaid determined that any shares or other consideration receivable by the liquidator be distributed against the memebers otherwise then in accordance with their existing rights and any such determination shall be binding upon all the members subject to the rights of dissent and consequential right conferred by the said section

(a) The Company have calls in arrears / unpaid calls amounting to Rsl.,53,150/-, however it does not have any outstanding calls in due from directors and officers of the company. The company has not forfeited any shares at balance sheet date.

Nature of Security

1 The Term Loans amounting to Rs. 48,96,536/- (P.Y. Rs. 1,12,72,705/-) are secured by mortgage of Land and Building at plot no. 25/9/A and 25/9/B, hypothecation of plant and machinery at plot no. 25/9/A and 25/9/B and FDR. Further it is secured by personal guarantee of Directors.

2 The Vehicle loans amounting to Rs. 16,38,652/- (P.Y.Rs. 15,92,906/-) are secured by Vehicles

1.1 Contingent Liabilities and Capital commitments

[Rs. in lacs]

Particulars As at As at

31 st March, 2012 31 st March, 2011

Contingent Liabilities ( See Note 2.26 below)

Claims not acknowledged by as debt 213.39 187.66

Capital Commitments

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

Other commitments NIL NIL

1.2

(a) The company had entered in to derivatives contracts (for sale of foreign currency) with HDFC bank Limited which have already been concluded in earlier years. The company had incurred the loss on such contracts to the tune of Rs. 259.83 lacs and against the same the sum of Rs. 55.07 lacs have already been paid. The company had also received summons /show cause notice from Mumbai Debt Recovery Tribunal in the month of May, 2009. In response to the same, based on legal advise, the company had filed its reply with appropriate authority. Pending final outcome and as in the opinion of the management the aforesaid liability is of contingent nature, the company has not provided for the balance loss of Rs. 142.45 lacs and interest amounting to Rs. 62.31 lacs aggregating to Rs. 204.76 lacs.

Further the company has placed fixed deposit amounting to Rs. 23.30 lacs including interest amounting to Rs. 1.87 lacs accrued thereon till year end with HDFC bank limited. However the bank has not given any confirmation in respect thereof in view of above referred dues to bank on account of concluded derivative contract. Although the settlement of Fixed Deposit is pending against the aforesaid dues, the company is of the opinion that the dues on account of derivative contract is restricted to Rs. 181.46 only if at all the liability gets crystallized.

(b) The Company has received Sales Tax Assessment orders for the financial year 2006-2007 assessing the Central Sales Tax amounting to Rs. 10.10 lacs and Gujarat Value added Tax amounting to Rs. 7.46 lacs aggregating to Rs. 17.56 lacs payable by the company. The company has recognized principle dues amounting to Rs. 8.92 lacs as statutory dues payable and paid Rs. 6.00 lacs against such demand. However the company has not provided interest amounting to Rs. 6.86 lacs and penalty amounting to Rs. 1.78 lacs aggregating to Rs. 8.64 as the company has preferred an appeal before Joint Commissioner of Commercial Tax (Appeal),hence considered as contingent liability.

1.3 Employee Benefits

(a) Defined contribution to Provident fund and Employee state insurance The company makes contribution towards employees' provident fund and employees' state insurance plan scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognized Rs. 1,79,360/- (P.Y Rs. 1,57,682/-) as expense towards contributions to these plans.

1.4.

The Company operates within a solitary business segment i.e. dealing & manufacturing of chemicals, the disclosure requirements of Accounting Standard -17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

1.5

Related Party Disclosures

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

1.6 Change in name and Object Clause

During the year, the company has applied for change in name from Shri Chlochem Limited to Archit Organosys Limited. Subsequent to year end, on receipt of fresh certificate of incorporation consequent upon change of name date 19th may, 2012, the name of the company is changed to Archit Organosys Limited.

1.7 Balances of unsecured loans, sundry creditors, sundry debtors, loans and advances and amounts due to sundry debtors are subject to confirmations and reconciliation if any, by the respective parties.

1.8 In the opinion of the Board of Directors, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business equal to the amount at which they are stated in the Balance Sheet. Provision for all known liabilities has been made and is not in excess of amount reasonably necessary.

1.9 Additional information, to the extent applicable, required under para 5(8) of part-ll of Schedule VI to the Companies Act, 1956.

1.10 The previous year's figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.

---

Mar 31, 2011

1. The company had entered in to derivatives contracts (for sale of foreign currency) which have been concluded by the previous period. The company had incurred the loss on such contracts to the tune of Rs. 242.73 lacs and against the same the sum of Rs. 55.07 lacs have already been paid. The company had also received summons /show cause notice from Mumbai Debt Recovery Tribunal in the month of May, 2009. In respect to the same, based on legal advise, the company had filed its reply with appropriate authority. Pending final outcome and as in the opinion of the management the aforesaid liability is of contingent nature, the company has not provided for the balance loss of Rs.142.45 lacs and Interest amounting to Rs, 45,21 lacs aggregating to Rs. 187.66 lacs.

2. Employee Benefits

(a) Defined contribution to Provident fund and Employee state insurance

The company makes contribution towards employees' provident fund and employees' state insurance plan scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognized Rs.1,57,682/- (P.Y. Rs. 51,359/-) as expense towards contributions to these plans.

(b) Defined Contribution Benefit Plans(Gratuity)

The following table sets out the status of the gratuity scheme non funded plan as at 31st March, 2011.

3. The Company operates within a solitary business segment i.e. dealing & manufacturing of chemicals, the disclosure requirements of Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

4. Related Party Disclosures

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

5. The Company estimates deferred tax/(charge) using the applicable rate of taxation based on the Impact of timing difference between financial statements and estimated taxable Income for the current year.

6. Balances of unsecured loans, sundry creditors, sundry debtors, loans and advances and amounts due to sundry debtors are subject to confirmations and reconciliation tf any, by the respective parties. *

7. in the opinion of the Board of Directors, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business equal to the amount at which they are stated in the Balance Sheet. Provision for all known liabilities has been made and is not in excess of amount reason a be necessary.

8. The company is yet to initials the process of obtaining the confirmation from suppliers who have registered them selves under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). In the absence of relevant information relating to the suppliers registered under the Micro, Small and Medium Enterprises (Development) Act, 2006, the balance due to Micro, Small and Medium Enterprises at year end and interest paid or payable under MSMED Act, 2006 during the year could not be compiled and disclosed.

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Mar 31, 2010

1. The company had entered in to derivatives contracts (for sale of foreign currency) which have been concluded during the period under review. The company has incurred the loss on such contracts to the tune of Rs. 225.64 lacs and against the same the sum of Rs. 55.07 lacs have already been paid. The company has also received summons /show cause notice from Mumbai Debt Recovery Tribunal in the month of May, 2009. In respect to the same, based on legal advise, the company has filed its reply with appropriate authority. Pending final outcome and as in the opinion of the management the aforesaid liability is of contingent nature, the company has not provided for the balance loss of Rs. 142.45 lacs and interest amounting to Rs. 28.12 lacs aggregating to Rs. 170.57 lacs.

2. Employee Benefits

(a) Defined contribution to Provident fund and Employee state insurance

The company makes contribution towards employees provident fund and employees state insurance plan scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognized Rs.51,359/- (P.Y. Rs. 1,07,237/-) as expense towards contributions to these plans.

3. The Company operates within a solitary business segment i.e. dealing & manufacturing of chemicals, the disclosure requirements of Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

4. Related Party Disclosures:

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(a) List of related parties with whom transactions have taken place during the year and relationship:

Sr.No. Name of related party Relationship

1 Krishna Orgochem Enterprise over which key management

2 Archit Polymers Pvt. Ltd. personnel exercise significant influence

3 Kandarp K. Amin Key Management Personnel

4 Archana K. Amin Key Management Personnel

5 Archit K. Amin Relative of Key Management Personnel

5. The Company estimates deferred tax/(charge) using the applicable rate of taxation based on the impact of timing difference between financial statements and estimated taxable income for the current year.

6. Pursuant to Accounting Standard-29, Provisions, Contingent Liabilities and Contingent Assets, the disclosure relating to provisions made in the accounts for the year ended 315t March, 2010 is as follows:

Contingent Liabilities [Amount in Rs.]

Particulars As at As at

31/03/2010 30/09/2009

Claims not acknowledge by 170.57 157.87 the company (See Note No. 2 above)

Provisions [Amount in Rs.]

Particulars

Provision for Excise duty and other Expenses

Opening Balance 4.53.910

Additions 7.35.220

Payment 4.53.910

Reversals NIL

Closing Balance 7.35.220



7. Balances of unsecured loans, sundry creditors, sundry debtors, loans and advances and amounts due to sundry debtors are subject to confirmations and reconciliation if any, by the respective parties.

8. In the opinion of the Board of Directors, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business equal to the amount at which they are stated in the Balance Sheet. Provision for all known liabilities has been made and is not in excess of amount reasonably necessary.

9. The company is yet to initiate the process of obtaining the confirmation from suppliers who have registered them selves under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). In the absence of relevant information relating to the suppliers registered under the Micro, Small and Medium Enterprises (Development) Act, 2006, the balance due to Micro, Small and Medium Enterprises at year end and interest paid or payable under MSMED Act, 2006 during the year could not be compiled and disclosed.

10. The previous years figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.

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Sep 30, 2009

1. The company had entered in to derivatives contracts (for sale of foreign currency) which have been concluded during the period under review. The company has incurred the loss on such contracts to the tune of Rs. 212.94 lacs and against the same the sum of Rs. 55.07 lacs have already been paid. The company has also received summons /show cause notice from Mumbai Debt Recovery Tribunal in the month of May, 2009. In respect to the same, based on legal advise, the company has filed its reply with appropriate authority. Pending final outcome and as in the opinion of the management the aforesaid liability is of contingent nature, the company has not provided for the balance loss of Rs. 142.45 lacs and interest amounting to Rs. 15.42 lacs aggregating to Rs. 157.87 lacs.

2. The company has placed two fixed deposits amounting to Rs. 8,00,000/- and Rs. 9,00,000/- aggregating to Rs. 17,00,000/- with HDFC Bank Limited as margin money towards derivative contracts entered into by the company. The aforesaid fixed deposits have been matured during the period under review. However the Bank has neither repaid the matured amount to company for confirmed the balance with them in fixed deposits since the liability on account of option loss under derivative contracts is under dispute and pending for recovery with Mumbai Debt Recovery Tribunal. In the absence of any confirmation, the company has neither provided for interest amounting to Rs. 1.94 lacs accrued thereon till maturity date nor adjusted the amount of fixed deposits against option loss.

3. Employee Benefits

(a) Defined contribution to Provident fund and Employee state insurance

The company makes contribution towards employees provident fund and employees state insurance plan scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognized Rs. 1,07,237 /- (P.Y. Rs. 64,908/-) as expense towards contributions to these plans.

4. The Company operates within a solitary business segment i.e. dealing & manufacturing of chemicals, the disclosure requirements of Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

5. Related Party Disclosures:

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(a) List of related parties with whom transactions have taken place during the year and relationship:

Sr.No. Name of related party Relationship

1 Krishna Orgochem Enterprise over which key management

2 Archit Polymers Pvt. Ltd. personnel exercise significant influence

3 Kandarp K. Amin Key Management Personnel

4 Archana K. Amin Key Management Personnel

5 Archit K. Amin Relative of Key Management Personnel

6 Shri Chlochem Globle FZE 100% Subsidiary Company



6. The Company estimates deferred tax/(charge) using the applicable rate of taxation based on the impact of timing difference between financial statements and estimated taxable income for the current year.

7. The company had invested the sum of Rs. 12.61 lacs by way ot share capital in subsidiary company Shri Chlochem Global FZE, Dubai. The subsidiary company has discontinued its operations and therefore consolidation of financial statements of subsidiary company is not warranted.

8. Pursuant to Accounting Standard-29, Provisions, Contingent Liabilities and Contingent Assets, the disclosure relating to provisions made in the accounts for the year ended 30th September, 2009 is as follows :

Contingent Liabilities [Amount in Rs.]

Particulars As at 30/09/2009 2007-2008

Claims not acknowledge by the company-Excise Duty - Not Determined

Provisions [Amount in Rs.]

Particulars

Provision for Gratuity

Opening Balance 85,412

Additions 3,50,400

Utilisation -

Reversals -

Closing Balance 4,35,812



9. Balances of unsecured loans, sundry creditors, sundry debtors, loans and advances and amounts due to sundry debtors are subject to confirmations and reconciliation if any, by the respective parties.

10. In the opinion of the Board of Directors, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business equal to the amount at which they are stated in the Balance Sheet. Provision for all known liabilities has been made and is not in excess of amount reasonably necessary.

11. The company is yet to initiate the process of obtaining the confirmation from suppliers who have registered them selves under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). In the absence of relevant information relating to the suppliers registered under the Micro, Small and Medium Enterprises (Development) Act, 2006, the balance due to Micro, Small and Medium Enterprises at year end and interest paid or payable under MSMED Act, 2006 during the year could not be compiled and disclosed.

12. Additional information pursuant to provision of para 3, 4C and 4D of Part-ll of Schedule-VI of the Companies Act, 1956:

13. The previous years figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.