Notes to Accounts of Choksi Laboratories Ltd.

Mar 31, 2025

NOTE ”10.1”

Inventories are valued at cost or net realisable value, whichever is lower. The cost formulas used are FIFO. The cost of inventories comprises all cost of purchase including duties and taxes (other than those subsequently recoverable from the taxing authorities), conversion cost and other costs incurred in purchase including duties and taxes (other than those subsequently recoverable from the taxing authorities), conversion cost and other costs incurred in bringing the inventories to their present location and condition.

NOTE "11.1"

Debts due by directors or other officers of the Company or any of them either severally or jointly with any other persons or debts due by firms or private companies respectively in which any director is a partner or a director or a member as on 31 March 2025 - NIL (31.3.2024 - NIL)

Terms/ Rights attached to equity shares :

The Company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share. Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive reaming assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

State Bank of India :

Cash Credit from State Bank of India is sanctioned for Rs. 590 Lakhs and is secured by hypothecation of all book debts and other chargeable assets (wherever situated) of the company and with a collateral security of Equitable Mortgage of Commercial office situated at D- 4145. Obeoroi Garden Estate, Chandivali Farm Road, Off Western Express Highway, Goregoan (East), Mumbai, 400072, in the name of Choksi Laboratories Limited. Commercial Land and Building (Laboratory) bearing Survey Number : S. No. 166, situated at Plot No C-18 and C 20, Phase 1A, Verna Industrial Estate, Goa , admeasuring total area of 2188 Sq. Mtrs in the name of Choksi Laboratories Ltd. Land situated at survey no 4/2 Village Kumedi, Tehsil Sanwer, Districh Indore in the name of Choksi Laboratories Ltd. Commercial Land and Building (Laboratory) bearing Survey Number : 829, situ-ated at Plot No. 829 GIDC, MAkarpura, Vadodara Gujarat dmeasuring total area of 8665 Sq. Ft in the name of Choksi Laboratories Ltd.

The said cash credit is also personally guaranteed by the directors Mr. Sunil Choksi, Mrs. Stela Choksi & Mr.Vyangesh Choksi.

There are no defaults as on the Balance Sheet date in repayment of the above loans and interest thereon. The company was not declared wilful defaulter by any bank or financial institution.

Trade Payable due to directors or other officer of the company or any of them either severally or jointyl with any other persons or by firms or private companies in which any director is a partner or director or a member as on 31 st March 2025 Rs. NIL (31/03/2024 Rs. NIL)

Note:- Out of the total amount representing the credit balances of debtors i.e. advance payment received from customer as at 31.03.2025, Rs. 4.77 Lakh (P.Y. Rs. 5.78 Lakh) represents the balance which is due for more than 180 days and Rs. 33.00 Lakh (P.Y. Rs. 17.24 Lakh) represents balance which is due for less than 180 days.

32. Defined Benefit Plan

Gratuity is classified as Defined Benefit Plan as company’s obligation is to provide agreed benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act to Plan members. The Company’s net obligation is arrived by deducting Fair Value of Plan Assets from the Present value of Defined Benefit obligation as on the date of valuation. Present Value of Defined Benefit Obligation is calculated by projecting the benefit till the time of retirement of each active member using assumed salary escalation rate, mortality & employee turnover rates. The expected benefit payments are then discounted back from the future payment date to the date of valuation using assumed discounting rate.

The Company pays gratuity to the employees whoever has completed 4 years 240 days of service with the Company at the time of resignation/retirement/superannuation. The gratuity is paid @15 days Plan Salary for every completed year of service (6 months and above shall be considered as 1 year) as per the Payment of Gratuity Act 1972. Maximum Ceiling is Rs. 20 Lacs. The Scheme is funded through approved gratuity fund of LIC formed exclusively for gratuity payment to the employees.

As per IND AS 19 "Employee benefits", the detailed disclosures as per the Actuarial Valuation Report dated 20/05/2025 are given below:

Ind AS 19 Disclosures Background

Gratuity is classified as Defined Benefit plan as enterprise''s obligation is to provide agreed benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act, to plan members. Actuarial & Investment risks are borne by the enterprise.

The Net Defined Benefit Liability/ (Asset) is the Net (Surplus)/Deficit in the plan netted off by effect of Asset Celling, if any. It is arrived by deducting Fair Value of Plan Assets from the Defined Benefit Obligation as on the date of valuation.

As required under Para 67 of Ind AS 19 actuarial valuation is done using Projected Unit Credit Method. Under this method, only benefits accrued till the date of valuation (i.e. based on service up to date of valuation) are to be considered for valuation. Present value of Defined Benefit Obligation is calculated by projecting salaries, exits due to death, resignation and other decrements, if any, and projects the benefit till the time of retirement of each active member using assumed rates of salary escalation, mortality & employee turnover rates. The expected benefit payments are then discounted back from the future date of payment to the date of valuation using the assumed discount rate.

''Service Cost'' is calculated separately in respect of benefit accrued during the current period using the same method as described above. However, instead of all accrued benefits, benefit accrued over the current reporting period is considered.

Recognition of Actuarial Gains/Losses

All the re-measurements, comprising of actuarial gains/losses on DBO & Fair value of assets, arising during the reporting period have been recognized in full through outside of Profit & Loss account through Other Comprehensive Income.

Discount Rate

Discount Rate for this valuation is based on Government bonds having similar term to duration of liabilities. Due to lack of a deep & secondary bond market in India, government bond yields are used to arrive at the discount rate.

Risk Posed by the Plan

Gratuity is a multiple of last drawn salary paid at the time of retirement/resignation/death. The actuarial risk i.e. unusual (typically high) salary growth or turnover rate can increase the cost of providing the benefit. It can also alter timing of cash flows. This risk is borne by the employer. Gratuity is paid as lump sum and hence there is no longevity risk involved.

Asset Information

The scheme is funded through an ''Approved Trust''. The Trust has taken a Policy from the Life Insurance Corporation of India (LIC) and the management ofthe fund is undertaken by the LIC. There has been a fund size of Rs.35.86 Lakhs as ofthe valuation. Funding Requirements

Currently there are no minimum funding requirements in India. The investments made by the trust are regulated by the Income Tax Act. The enterprise and the trustees should ensure compliance with the provisions ofthe said act.

Special Events

No consideration about any benefit improvements, curtailments & settlements during the inter-valuation period.

34. Equity Contribution - Interest-Free Loan from Directors

Interest-free loans from directors are initially measured at fair value. For very short-term loans, the transaction amount is considered to approximate fair value. For other loans, fair value is determined by discounting future cash flows at market interest rates for similar instruments. The difference between face value and fair value is treated as deemed equity contribution. Subsequently, such loans are measured at amortized cost using the effective interest method.

During the year, the Company received an interest-free loan amounting to ?72 Lakhs from its directors in the nature other than very short term loans. In accordance with the requirements of Ind AS 109 - Financial Instruments, the loan has been initially recognized at its fair value of ?69.55 Lakhs. The difference of ?2.45 Lakhs between the transaction value and fair value, being in the nature of a capital contribution by the director, has been recognized as equity under "Other Equity".

The loan is unsecured, interest-free, and repayable on demand. The Company has used an effective interest rate of 8.5% for discounting purposes, in line with prevailing market conditions for similar instruments.

Correspondingly, an amount of ?2.45 Lakhs is included in Interest and Finance charges on financial liabilities. However, no such actual interest is paid to directors.

• It is worth to mention here that this equity amount arises due to Ind AS 109 fair valuation and is not a direct issuance of shares and that the amount is non-distributable and forms part of capital contribution reserve.

35.	Contingent Liabilities and Commitments			('' in Lakhs)
	Sr.No.	Particulars	As At 31st	As At 31st
			March 2025	March 2024
	1	Contingent Liabilities
	a)	Claim against the Company not acknowledged as Debt (Amount Payable to Statutory Authority)
	i)	Amount outstanding payable to Income Tax Department not provided due to appeal pending before CIT(A)	30.16	25.54
	ii)	Litigation case pending before Labour Welfare Court	1.24	1.24
	iii)	TDS Demand AY 2014-15 pending before CIT (A)	1.08	1.08
	b)	Guarantee
	i)	Guarantee issued by the Bank extended to Third Party and other Guarantee	34.06	13.00
	ii)	Statutory Letter of Credit issued	NIL	NIL
	c)	Other Money for which the Company is Contingent Liable
	i)	Liability in respect of Bills Discounted with Bank	NIL	NIL
	ii)	(Including Third Party Bills Discounted) VAT, Excise, GST Appeal matters	NIL	NIL
	2	Commitments
	a)	Estimated Amount of Contracts remaining to be Executed on Capital Account and not provided (net of advances)	1.31	19.01
	b)	Other Commitment	NIL	NIL

36. Financial Instruments

a. Capital management

The Company''s objectives when managing capital is to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain financial strength.

For the purpose of Company’s capital management, Capital includes Issued Equity share capital and other equity.Gearing Ratio is ratio of Net debts (total borrowings (long term as well as short term) (net of cash & cash equivalents) divided by total equity capital. Accordingly, the Company has calculated gearing ratio which is as follows:

b. Financial risk management objective and policies:

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the balance sheet. Details of material accounting policies & other accounting policies including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset and financial liability are disclosed in Note No. 1

Financial assets and liabilities: The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:

c. Financial Risk Management:

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.

The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same.

Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities for the year ended March 31,2025.

Financial risk

The Company’s Board of Directors approves financial risk policies comprising liquidity, foreign currency, interest rate and counterparty credit risk. The Company does not engage in the speculative treasury activity but seeks to manage risk and optimize interest through proven financial instruments.

a. Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument fails to meet its contractual obligations causing financial loss to the company.

Credit risk arises mainly from the outstanding receivables from customers.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.

The Company has used expected credit loss (ECL) model for assessing the impairment loss.

For the purpose, the Company uses a provision matrix to compute the expected credit loss amount.

The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.

Deposits are with government departments and with lessor so chances of default are very minimal.

For short-term loans and advances, counterparty limits are in place to limit the amount of credit exposure to any counterparty. None of the Company’s cash equivalents are past due or impaired.

b. Liquidity risk

Liquidity risk arises from the Company’s inability to meet its financial obligation as it becomes due.

The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The table below provides details regarding the contractual maturities of significant financial liabilities :

c. Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices.

Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long term debt.

The Company is exposed to market risk primarily related to foreign exchange rate risk.

Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

d. Foreign Currency Risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars ). As a result, if the value ofthe Indian rupee appreciates relative to these foreign currencies, the Company’s revenues and expenses measured in Indian rupees may decrease or increase and vice-versa. The exchange rate between the Indian rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.

I. Significant foreign currency risk exposure in US Dollars relating to trade receivables, other receivables, cash

and cash equivalents and trade payables:

Hedge Accounting:

The Company avails Foreign Currency Loans from State Bank of India to reduce the interest cost.

The Company duly takes forward cover to hedge against the foreign currency risks.

The premium paid for the hedging is charged to the Statement of Profit and Loss.

e. Interest rate Risk:

The Company has loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Company’s Finance Department monitors the interest rate movement and manages the interest rate risk by evaluating interest rate swaps etc. based on the market / risk perception.

For the year ended March 31, 2025 and March 31, 2024, every 1% increase in interest rate for the above mentioned financial liabilities would decrease the Company’s profit & equity by approximately ? 28.07 Lakhs and decrease the Company’s profit & equity by approximately ? 29.27 Lakhs respectively.

A 1% decrease in interest rate would lead to an equal but opposite effect.

37. Leases

The Company has adopted Ind AS 116 “Leases” to its leases due to which rental expense is being replaced by depreciation charge on right-of-use asset amounting to ?44.42 Lakhs (Previous Year ?45.18 Lakhs)which is included under depreciation and amortization expense in statement of profit and loss and finance cost on lease liability amounting to?10.56 Lakhs (Previous Year ?13.37 Lakhs). The Company recognizes a lease liability measured at the present value of the remaining lease payments. The right-of-use assets are recognized at cost, which comprises the amount of the measurement of the lease liability adjusted for any lease payments made on or before the inception date of the lease. Accordingly, a right-of-use asset ?78.01 Lakhs (previous year ?122.43 Lakhs)and a corresponding lease liability of ?108.16 Lakhs (previous year ?159.91 Lakhs)has been recognized.

38. Segmental Reporting:

The company is engaged in the sole segment of Analysis and Testing. Therefore, no separate segments within the Company as defined by IndAS-108(Operating Segments) needs to be reported separately.

39. Borrowing cost:

During the year, Borrowing Costs amounting of ? 10.70 Lakhs has been Capitalized to Capital WIP (Previous year ? 6.16 Lakhs)

40. Indications of impairment: In the opinion of Management, there are no indications, internal or external which could have the effect of impairing the value of assets to any material extent as at the balance sheet date requiring recognition in terms of Ind AS 36.

41. The Company has no subsidiary, associate or joint venture. Hence requirement of Consolidated Financial Statement is not applicable to the Company.

42. In the opinion of the Board, Current Assets, Loans & Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for Depreciation and all known liability are adequate. There is no Contingent liability other than stated.

47. Corporate Social Responsibility:

As per Section 135 of the Companies Act, 2013, the Company is not liable to spend the specified amount on CSR activities as per the norms. Hence, no separate reporting is required for the same.

48. The company has not traded or invested in crypto currency or virtual currency during the financial year 2024-25.

49. 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

50. During the year, no proceedings have 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 there under.

51. The Company has raised working capital funds during the year and the same has been applied for the working capital requirements of the company. Further, the quarterly statements of debtors filed by the company with the banks are in agreement with the books of accounts ofthe company.

52. The Company is not declared a wilful defaulter by any Bank or Financial Institution or any other lender.

53. No charges or satisfaction are pending for registration with the Registrar of companies (ROC) except the following:

• Force Traveller Loan from HDFC Bank : Charge for ^18.50 Lakhs not created from 23.01.2024.

54. The Company has no long-term contracts including derivative contracts having material foreseeable losses as at 31st March, 2025.

55. The Company has not granted any loans or advances in the nature of loans to promoters, directors and KMP’s ,either severally or jointly with any other person.

56. During the year, no scheme of Arrangement has been formulated by the Company/ pending with competent authority.

57. The Company has no subsidiary. The Company is in compliance with the number of layers as prescribed under clause (87) of section 2 ofthe Companies Act, 2013 read with the Companies (Restriction on Number ofLayers) Rules, 2017.

58. During the year the company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity 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 person or entities identified in any manner whatsoever by or on behalf of company (ultimate beneficiaries) or (ii) provide any guarantee, security or the like to or behalf ofthe ultimate beneficiaries. The company has not given guarantee or provided security.

59. The Company has 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 (i) directly or indirectly lendor invest in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the (ultimate beneficiaries) or (iii) provide any guarantee, security or the like to or on behalf ofthe ultimate beneficiaries.

60. Provision to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023. Accordingly, the Company have used an accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.

61. The company has not made any investment whether current or non-current in nature.

62. Events occurring after the Balance sheet date: A cybersecurity breach was occurred on May 22, 2025, involving a ransomware attack that temporarily disrupted operations and made financial data inaccessible until May 31, 2025. The Company engaged external IT professionals to recover the data from secured backups and took remedial action, including enhancing cybersecurity controls. The Company continues to evaluate the full impact ofthe incident.

Response to percentage change more than 25%

a) For S.No. 4, The profitability of the Company has increased a compared to previous year and for this reason Return on Equity Reason increased.

b) For S.No. 6, The trade payables have increased as compared to previous year, hence trade payable turnover ratio has declined during the year.

c) For S.No. 7,The net capital turnover ratio has improved during the year as compared to previous year due to increased turnover and increased profitability.

64. The previous year figures have been regrouped/ reclassified, wherever necessary to conform to current year presentation.

65. The figures have been rounded off to the nearest multiple of a rupee in Lakhs.

66. Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors in their Board meeting held on 07th June, 2025.

---

Mar 31, 2024

NOTE ”10.1”

Inventories are valued at cost or net realisable value, whichever is lower. The cost formulas used are FIFO. The cost of inventories comprises all cost of purchase including duties and taxes (other than those subsequently recoverable from the taxing authorities), conversion cost and other costs incurred in purchase including duties and taxes (other than those subsequently recoverable from the taxing authorities), conversion cost and other costs incurred in bringing the inventories to their present location and condition.

NOTE "11.1"

Debts due by directors or other officers of the Company or any of them either severally or jointly with any other persons or debts due by firms or private companies respectively in which any director is a partner or a director or a member as on 31 March 2024 - NIL (31.3.2023 - NIL)

Terms/ Rights attached to equity shares :

The Company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share. Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive reaming assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Bank of India :

"Cash Credit from Bank of India is sanctioned for ' 250 Lakhs and is secured by hypothecation of all book debts and other chargeable assets (wherever situated) of the company and with a collateral security of Leasehold land & Building at Vadodara. The said cash credit is also personally guaranteed by the directors Mr. Sunil Kumar Choksi, Mrs. Stela Choksi & Mr.Vyangesh Choksi. During the year, the said CC Limit has been taken over by SBI.

State Bank of India :

"Cash Credit from State Bank of India is sanctioned for ' 590 Lakhs and is secured by hypothecation of all book debts and other chargeable assets (wherever situated) of the company and with a collateral security of Equitable Mortgage of Commercial office situated at D- 4145. Obeoroi Garden Estate, Chandivali Farm Road, Off Western Express Highway, Goregoan (East), Mumbai, 400072, in the name of Choksi Laboratories Limited. Commercial Land and Building (Laboratory) bearing Survey Number : S.No. 166, situated at Plot No C-18 and C 20, Phase 1A, Verna Industrial Estate, Goa , admeasuring total area of 2188 Sq. Mtrs in the name of Choksi Laboratories Ltd. Land situated at survey no 4/2 Village Kumedi, Tehsil Sanwer, District Indore in the name of Choksi Laboratories Ltd. Commercial Land and Building (Laboratory) bearing Survey Number : 829, situated at Plot No . 829 GIDC, Makarpura, Vadodara Gujarat admeasuring total area of 8665 Sq. Ft in the name of Choksi Laboratories Ltd. The said cash credit is also personally guaranteed by the directors Mr. Sunil Kumar Choksi, Mrs. Stela Choksi & Mr.Vyangesh Choksi."

There are no defaults as on the Balance Sheet date in repayment of the above loans and interest thereon. The company was not declared willful defaulter by any Bank.

Trade Payable due to directors or other officer of the company or any of them either severally or jointly with any other persons or by firms or private companies in which any director is a partner or director or a member as on 31 st March 2024 ' NIL (31/03/2023 ' NIL)

Note:- Out of the total amount representing the credit balances of debtors i.e. advance payment received from customer as at 31.03.2024, ' 5.78 Lacs (P.Y. ' 7.20 Lacs) represents the balance which is due for more than 180 days and ' 17.24 Lacs (P.Y. ' 12.61 Lacs) represents balance which is due for less than 180 days.

The exceptional item represents the amount of profit of ' NIL (P. Y. ' 282.54 ) towards Sale of Manoramaganj Land being registered office of the company change from Manoramaganj, Indore to Kumedi, Indore. The Income for the same has been attributed in exceptional item. Fixed Assets Discarded includes amount of Loss of ' NIL (P.Y. ' 50.86) towards Building at Manoramaganj, Indore & ' NIL (P.Y. ' 2.38) towards Electrical Installation at Manoramaganj, Indore and ' NIL (P.Y. ' 3.72) towards Furniture & Fixtures at Manoramganj, Indore dismantled and vacated for sale.

NOTE "31.1"

The above figure of total deferred tax expenses recognised in the current year is net off of deferred tax on other comprehensive Income i.e., ' 0.27 Lakhs [ P.Y. ' (0.11 )Lakhs] , thus deferred tax expense is ' 48.64 Lakhs, previous year ' 51.26 Lakhs.

33. Defined Benefit Plan

Gratuity is classified as Defined Benefit Plan as company’s obligation is to provide agreed benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act to Plan members. The Company’s net obligation is arrived by deducting Fair Value of Plan Assets from the Present value of Defined Benefit obligation as on the date of valuation. Present Value of Defined Benefit Obligation is calculated by projecting the benefit till the time of retirement of each active member using assumed salary escalation rate, mortality & employee turnover rates. The expected benefit payments are then discounted back from the future payment date to the date of valuation using assumed discounting rate.

The Company pays gratuity to the employees whoever has completed 4 years and 240 days of service with the Company at the time of resignation/retirement/superannuation. The gratuity is paid @15 days Plan Salary for every completed year of service (6 months and above shall be considered as 1 year) as per the Payment of Gratuity Act 1972. Maximum Ceiling is ' 20 Lakhs. The Scheme is funded through approved gratuity fund of LIC formed exclusively for gratuity payment to the employees.

As per IND AS 19 "Employee benefits", the detailed disclosures as per the Actuarial Valuation Report dated 25/04/2024 are given below:

Ind AS 19 Disclosures Background

Gratuity is classified as Defined Benefit plan as enterprise's obligation is to provide agreed benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act, to plan members. Actuarial & Investment risks are borne by the enterprise.

The Net Defined Benefit Liability/ (Asset) is the Net (Surplus) / Deficit in the plan netted offby effect ofAsset Celling, if any. It is arrived by deducting Fair Value of Plan Assets from the Defined Benefit Obligation as on the date of valuation.

As required under Para 67 of Ind AS 19 actuarial valuation is done using Projected Unit Credit Method. Under this method, only benefits accrued till the date of valuation (i.e. based on service up to date of valuation) are to be considered for valuation. Present value of Defined Benefit Obligation is calculated by projecting salaries, exits due to death, resignation and other decrements, if any, and projects the benefit till the time of retirement of each active member using assumed rates of salary escalation, mortality & employee turnover rates. The expected benefit payments are then discounted back from the future date of payment to the date of valuation using the assumed discount rate.

'Service Cost' is calculated separately in respect of benefit accrued during the current period using the same method as described above. However, instead of all accrued benefits, benefit accrued over the current reporting period is considered.

Recognition of Actuarial Gains/Losses

All the re-measurements, comprising of actuarial gains/losses on DBO & Fair value of assets, arising during the reporting period have been recognized in full through outside of Profit & Loss account through Other Comprehensive Income.

Discount Rate

Discount Rate for this valuation is based on Government bonds having similar term to duration of liabilities. Due to lack of a deep & secondary bond market in India, government bond yields are used to arrive at the discount rate.

Risk Posed by the Plan

Gratuity is a multiple of last drawn salary paid at the time of retirement/resignation/death. The actuarial risk i.e. unusual (typically high) salary growth or turnover rate can increase the cost of providing the benefit. It can also alter timing of cash flows. This risk is borne by the employer. Gratuity is paid as lump sum and hence there is no longevity risk involved.

Asset Information

The scheme is funded through an 'Approved Trust'. The Trust has taken a Policy from the Life Insurance Corporation of India (LIC) and the management of the fund is undertaken by the LIC. There has been a fund size of ' 45.38 Lakhs (Previous year ' 49.54 Lakhs) as ofthe valuation date.

Funding Requirements

Currently there are no minimum funding requirements in India. The investments made by the trust are regulated by the Income Tax Act. The enterprise and the trustees should ensure compliance with the provisions ofthe said act.

Special Events

No consideration about any benefit improvements, curtailments & settlements during the inter-valuation period.

35.	Contingent Liabilities and Commitments		Â	(' in Lakhs)
Â	Sr.No.	Particulars	As At 31st	As At 31st
Â	Â	Â	March 2024	March 2023
Â	1	Contingent Liabilities	Â	Â
Â	a)	Claim against the Company not acknowledged as Debt (Amount Payable to Statutory Authority)	Â	Â
Â	i)	Amount outstanding payable to Income Tax Department not provided due to appeal pending before CIT(A)	25.54	25.54
Â	ii)	Litigation case pending before Labour Welfare Court	1.24	1.24
Â	iii)	TDS Demand AY 2014-15 pending before CIT (A)	1.08	1.08
Â	b)	Guarantee	Â	Â
Â	i)	Guarantee issued by the Bank extended to Third Party and other Guarantee	13.00	23.58
Â	ii)	Statutory Letter of Credit issued	NIL	NIL
Â	c)	Other Money for which the Company is Contingent Liable	Â	Â
Â	i)	Liability in respect of Bills Discounted with Bank	NIL	NIL
Â	ii)	(Including Third Party Bills Discounted) VAT, Excise, GST Appeal matters	NIL	NIL
Â	2	Commitments	Â	Â
Â	a)	Estimated Amount of Contracts remaining to be Executed on Capital Account and not provided (net of advances)	19.01	40.00
Â	b)	Other Commitment	NIL	NIL

36. Financial Instruments

a. Capital management

The Company's objectives when managing capital is to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain financial strength.

For the purpose of Company’s capital management, Capital includes Issued Equity share capital and other equity.Gearing Ratio is ratio of Net debts (total borrowings (long term as well as short term) (net of cash & cash equivalents) divided by total equity capital. Accordingly, the Company has calculated gearing ratio which is as follows:

b. Financial risk management objective and policies:

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the balance sheet. Details of material accounting policies & other accounting policies including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset and financial liability are disclosed in Note No. 1

Financial assets and liabilities: The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:

c. Financial Risk Management:

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.

The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same.

Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities for the year ended March 31,2024.

Financial risk

The Company’s Board of Directors approves financial risk policies comprising liquidity, foreign currency, interest rate and counter party credit risk. The Company does not engage in the speculative treasury activity but seeks to manage risk and optimize interest through proven financial instruments.

a. Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument fails to meet its contractual obligations causing financial loss to the company.

Credit risk arises mainly from the outstanding receivables from customers.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.

The Company has used expected credit loss (ECL) model for assessing the impairment loss.

For the purpose, the Company uses a provision matrix to compute the expected credit loss amount.

The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.

Deposits are with government departments and with lessorso chances of default are very minimal.

For short-term loans and advances, counterparty limits are in place to limit the amount of credit exposure to any counterparty. None of the Company’s cash equivalents are past due or impaired.

b. Liquidity risk

Liquidity risk arises from the Company’s inability to meet its financial obligation as it becomes due.

The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The table below provides details regarding the contractual maturities of significant financial liabilities :

c.    Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices.

Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long term debt.

The Company is exposed to market risk primarily related to foreign exchange rate risk.

Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

d.    Foreign Currency Risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars ). As a result, if the value ofthe Indian rupee appreciates relative to these foreign currencies, the Company’s revenues and expenses measured in Indian rupees may decrease or increase and vice-versa. The exchange rate between the Indian rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.

i. Significant foreign currency risk exposure in US Dollars relating to trade receivables, other receivables, cash and cash equivalents and trade payables:

Hedge Accounting:

The Company avails Foreign Currency Loans from State Bank of India to reduce the interest cost.

The Company duly takes forward cover to hedge against the foreign currency risks.

The premium paid for the hedging is charged to the Statement of Profit and Loss.

e. Interest rate Risk:

The Company has loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Company’s Finance Department monitors the interest rate movement and manages the interest rate risk by evaluating interest rate swaps etc. based on the market / risk perception.

For the year ended March 31, 2024 and March 31, 2023, every 1% increase in interest rate for the above mentioned financial liabilities would decrease the Company’s profit & equity by approximately ' 29.27 Lakhs and decrease the Company’s profit & equity by approximately ' 30.35 Lakhs respectively.

Every 1% decrease in interest rate would lead to an equal but opposite effect.

37. Leases

The Company has adopted Ind AS 116 “Leases” to its leases due to which rental expense is being replaced by depreciation charge on right-of-use asset amounting to ? 45.18 Lakhs which is included under depreciation and amortization expense in statement of profit and loss and finance cost on lease liability amounting to ?13.37 Lakhs. The Company recognizes a lease liability measured at the present value of the remaining lease payments. The right-of-use assets are recognized at cost, which comprises the amount of the measurement of the lease liability adjusted for any lease payments made on or before the inception date of the lease. Accordingly, a right-of-use asset ?122.43Lakhs (previous year ? 167.61 Lakhs)and a corresponding lease liability of ?159.91Lakhs (previous year ?206.41 Lakhs) has been recognized.

38.    Segmental Reporting:

The company is engaged in the sole segment of Analysis and Testing. Therefore, no separate segments within the Company as defined by IndAS-108 (Operating Segments) which needs to be reported separately.

39.    Borrowing cost:

During the year, Borrowing Costs amounting of ? 6.16 Lakhs has been Capitalized to Capital WIP (Previous year ' 1.20 Lakhs)

40.    Indications of impairment: In the opinion of Management, there are no indications, internal or external which could have the effect of impairing the value of assets to any material extent as at the balance sheet date requiring recognition in terms of Ind AS 36.

41.    The Company has no subsidiary, associate or joint venture. Hence requirement of Consolidated Financial Statement is not applicable to the Company.

42.    In the opinion of the Board, Current Assets, Loans & Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for Depreciation and all known liability are adequate. There is no Contingent liability other than stated.

47.    Corporate Social Responsibility:

As per Section 135 of the Companies Act, 2013, the Company is not liable to spend the specified amount on CSR activities as per the norms. Hence, no separate reporting is required for the same.

48.    The company has not traded or invested in crypto currency or virtual currency during the financial year 2023-24.

49.    Relationship with struck off Companies :

There are no transactions during the year with struck off Companies as at 31st March, 2024.

50.    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

51.    During the year, no proceedings have 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 there under.

52.    The Company has raised working capital funds during the year and the same has been applied for the working capital requirements of the company. Further, the quarterly statements of debtors filed by the company with the banks are in agreement with the books of accounts ofthe company.

53.    The Company is not declared a wilful defaulter by any Bank or Financial Institution or any other lender.

54.    No charges or satisfaction are pending for registration with the Registrar of companies (ROC) except the following:

•    Force Traveller Loan from HDFC Bank : Charge for ? 18.50 Lakhs not yet created from 23-1-2024.

55.    The Company has no long-term contracts including derivative contracts having material foreseeable losses as at 31st March, 2024.

56.    The Company has not granted any loans or advances in the nature of loans to promoters, directors and KMP’s ,either severally or jointly with any other person.

57.    During the year, no scheme of Arrangement has been formulated by the Company/ pending with competent authority.

58.    The Company has no subsidiary. The Company is in compliance with the number of layers as prescribed under clause (87) of section 2 ofthe Companies Act, 2013 read with the Companies (Restriction on Number ofLayers) Rules, 2017.

59.    During the year the company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity 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 person or entities identified in any manner whatsoever by or on behalf of company (ultimate beneficiaries) or (ii) provide any guarantee, security or the like to or behalf ofthe ultimate beneficiaries. The company has not given guarantee or provided security.

60.    The Company has 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 (i) directly or indirectly lend or invest in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the (ultimate beneficiaries) or (iii) provide any guarantee, security or the like to or on behalf ofthe ultimate beneficiaries.

61.    Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023. Accordingly, the Company have used an accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.

62.    The company has not made any investment whether current or non-current in nature.

Response to percentage change more than 25%

a)    For S.No.1, a major portion of the long term borrowings from bank have been repaid and converted into short term borrowings afresh and moreover the trade payables have also been significantly increased as compared to previous year, which have resulted in the decrease in Current ratio.

b)    For S.No. 4, The profitability of the Company is normal but when compared to previous year , there were exceptional items of income to the tune of ?225.58 Lakhs and therefore with that comparison the Return on equity ratio has been declined.

c)    For S.No. 7, The turnover of the Company has been increased during the year as compared to previous year , however the Current ratio has been declined which has resulted in the change for this ratio.

d)    For S.No. 8,The net profit of the Company is normal but when compared to previous year , there were exceptional items of income to the tune of ?225.58 Lakhs and therefore with that comparison the Net Profit ratio has been declined.

e)    For S.No. 9, The return on capital employed has also been declined due to the reason that last year there were exceptional items of income to the tune of ?225.58 Lakhs and therefore with that comparison the Net Profit ratio has been declined.

64.    The previous year figures have been regrouped/ reclassified, wherever necessary to conform to current year presentation.

65.    The figures have been rounded off to the nearest multiple of a rupee in Lakhs.

66.    Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors in their Board meeting held on 29 May, 2024.

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Mar 31, 2015

BACKGROUND :

Choksi Laboratories Limited ("the Company") was incorporated on 29/01/1993 under the Companies Act, 1956.The Company is engaged in the business of Testing & Analytical Services.The Company's equity shares are listed at BSE.

1. The Company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share.Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

2. The Term Loans from Axis Bank is secured by hypothecation of Indore & Goa fixed assets. The above loans are also personally guaranteed by the directors Mr. Sunil Choksi & Mr. Vyangesh Choksi. Loan from Bank of India is secured by Freehold Land at Kumedi in Indore.

3. All unsecured Loans are also personally guaranteed by the director Mr. Vyangesh Choksi.

4. There are no defaults as on the Balance Sheet date in repayment of the above loans and interest thereon.

5. Working Capital Loans are secured by joint hypothecation of running stocks of consumable and all Book debts, both present and future alongwith Indore and Goa Fixed Assets.

*The above loans are also personally guaranteed by the directors Mr. Sunil Choksi & Mr.Vyangesh Choksi.

6. Segmental Reporting :

The Company is engaged in the sole segment of Analysis and Testing. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

7. Related Party Disclosures :

Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

8. Related Parties

(a) Individual having control & Key Management Personnel

Mr. Sunil Choksi Managing Director

Mrs. Himika Varma Jt. Managing Director (up to 01/09/2014)

Mrs. Stela Choksi Whole Time Director

Mr.Vyangesh Choksi Whole Time Director &CFO

(b) Relatives of KMP Mrs.Neeta Shah D. G Choksi HUF Mrs. Khyati Choksi

9. Contingent liabilities not provided for in respect of :

a) Guarantees issued by Bank on behalf of the Company Rs.1478612/-(Previous year Rs. 1,34,264).

b) An amount of Rs.32,04,212/- has been shown as recoverable from Commissioner of Customs (EPCG) under current assets.This amount was forfieted by the said authority during FY 2012-13 . The Company has timely fulfilled all export obligations & is under the process of recovering the same from the said authority.

10. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. Nil (Previous year Rs. Nil).

11. The previous year figures have been regrouped/ reclassified, wherever necessary to confirm to current year presentation.

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Mar 31, 2014

1) i. The Company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share.Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

ii. The Term Loan from Axis Bank is secured by hypothecation of entire movable fixed assets of the Company (present & future) & Equitable mortgage of property at Goa & Indore.

Term Loan from Bank of India is secured by Diverted Plot No. 11, & 12 at Vyaapaar Vikas Parishad, Village Devguradiya & Freehold Land at Kumedi in Indore.

The above loans are also personally guaranteed by the directors Mr. Sunil Choksi & Mr.Vyangesh Choksi.

iii. All unsecured Term Loans are personally guaranteed by the director Mr. Vyangesh Choksi.

iv. There are no defaults as on the Balance Sheet date in repayment of the above loans and interest thereon.

v. Working Capital Loans are secured by joint hypothecation of running stocks of consumable and all Book debts both present and future alongwith Indore and Goa Fixed Assets *The above loans are also personally guaranteed by the directors Mr. Sunil Choksi, Mr.Vyangesh Choksi

2) Defined Benefit Plan

The employees'' gratuity Fund Scheme managed by a Trust (Life Insurance Corporation of India) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

3. Segmental Reporting : The Company is engaged in the sole segment of Analysis and Testing. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

4. Contingent liabilities not provided for in respect of:

a) Guarantees issued by Bank on behalf of the Company Rs.1,34,264/-(Previous year Rs.3,68,396).

b) Income Tax Demand AY 2009-10 Rs.576960/- (the Company has undergone for Appeal before CIT (Appeals)) (Previous Year- Rs. 576,960/-).

c) An amount of Rs.32,04,212/- has been shown as recoverable from Commissioner of Customs (EPCG) under current assets.This amount was forfieted by the said authority during FY 2012-13 . The Company has timely fulfilled all export obligations & is under the process of recovering the same from the said authority.

5. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. Nil (Previous year Rs. 1.96 Crores).

6. The previous year figures have been regrouped/ reclassified, wherever necessary to conform to current year presentation.

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Mar 31, 2013

1) Defined Benefit Plan

The employees'' gratuity Fund Scheme managed by a Trust (Life Insurance Corporation of India) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

2. Segmental Reporting : The Company is engaged in the sole segment of Analysis and Testing, There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting ) issued by the ICAI.

3. Contingent liabilities not provided for in respect of:

a) Guarantees issued by Bank on behalf of the Company Rs.3,68,396/-(Previous year 7 .8,772,608)

b) Income Tax Demand AY 2009-10 Rs.576960/- (the Company has undergone for Appeal before CIT (Appeals)) (Previous Year- 7 576,960/-)

c) During the year, a Bank Guarantee of 7 32,04,212/- has been encashed by Commissioner of Customs (EPCG) towards their charge against non-fulfillment of EPCG Commitments which were supposed to be fulfilled upto 27-4-2014. The Company is under the process of recovering the same amount from this department and is sure regarding the recovery of 7 32,04,212/-The same amount is therefore, shown as recoverable from the said authority in the financial statements.

d) During the year the company has discharged two other EPCG licences after fulfilmentof export obligation worth rupees 3.84 crores during the period 2005 to 2012 resulting into release of Bank Guaranty worth 1 52,20,000/- from customs.

4. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advances) 7 1.96 Crores (Previous year 7 4.21 Crores)

5. The previous year figures have been regrouped/ reclassified, wherever necessary to conform to current year presentation.

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Mar 31, 2012

1.1 The company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share. Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

1.2 The Company has converted 301263 warrants allotted in FY 2009-10 into equal number of equity shares during the year. Further, out of 800000 warrants, allotted in FY 2010-11, 500000 warrants were convereted into equal number of fully paid up equity shares of Rs. 10/- each after receiving balance payment due thereon and another 300000 warrants out of total 800000 Warrants in which balance payment not received in stipulated time period, consequenlty the amount already paid towards allotment of 300000 warrants were forfeited by the Company and the said warrants were cancelled.

2.1 The Term Loan from Axis Bank is secured by hypothecation of Indore & Goa fixed assets

The above loans are also personally guaranteed by the directors Mr. Sunil Choksi, Mr.Vyangesh Choksi.

2.2 Term Loans from Religare & Magma are personally guaranteed by the director Mr. Vyangesh Choksi.

3.1 Working Capital Loans are secured by joint hypothecation of running stocks of consumable and all Book debts both present and future alongwith Indore and Goa Fixed Assets

*The above loans are also personally guaranteed by the directors Mr. Sunil Choksi, Mr.Vyangesh Choksi

4. Segmental Reporting : The Company is engaged in the sole segment of Analysis and Testing. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

5. Related Party Disclosures :

Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

1. Related Parties

(a) Individual having control & Key Management Personnel

Mr. Sunil Choksi Managing Director

Mrs. Himika Varma Jt. Managing Director

Mrs. Stela Choksi Whole Time Director

Mr.Vyangesh Choksi Whole Time Director

(b) Relatives of KMP

Mrs.Neeta Shah

D. G Choksi HUF

Mrs. Khyati Choksi

6. Contngent liability not provided for in respect of :

(a) Guarantees issued by Bank of behalf of the Company Rs. 8,772,608/- (Previous year Rs. 8,433,912)

(b) Service Tax Rs. Nil (Previous year Rs 708,349/-)

(c) Income Tax Demand A.Y. 2009-10 Rs. 576960/- (the Company has undergone for Appel before CIT (Appeals) (Previous year - Nil).

7. Estimated amount of Contracts remaining to be exected on Capital Account and not provided for (net of advances) Rs. 4.21 Crores (Previous year Rs. 0.22 Crores)

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Mar 31, 2010

01. Contingent liability for Bank Guarantee issued by Bank on behalf of the Company Rs.84339121- (Previous year -8459212/-)

02. In the opinion of the Board of Directors of the Company, the Current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and the provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary.

03. The balances appearing under the heads Debtors, Loans and Advances and Current Liabilities are subject to confirmation from respective parties and reconciliation, if any.

04. The Company has purchased Land for its building which is yet to be registered in the name of the Company.

05. The Company has received application money of Rs.45,73,852/- for issue of Convertible equity Warrants during the financial year. These Warrants are being issued subject to confirmation of shareholders of the Company and in-principal approval from Bombay Stock Exchange in terms of "Securities and Exchange Board of India (Issue of Capital And Disclosure Requirements) Regulations, 2009". Both the approvals i.e. shareholders and Bombay Stock Exchange, have been received by Company after current balance sheet date (31.03.2010) and accordingly allotment of 12,35,663 Convertible Warrants (partly paid) has been made in the month of April 2010.

06. Since its inception, the Company follows the practice of charging to revenue the purchase of chemicals and glassware during the year of purchase itself.

07. As per the accounting standard 22 issued by the ICAI, the Deferred Tax Liability is accounted for in respect of timing differences. The accumulated Deferred Tax Liability comprise of the following:

08. Segmental Reporting : The Company treats Analytical Charges & Consultancy.Receipts as a single segment and therefore details of segments are not separately shown. The Company is a Commercial Testing House engaged in testing of various products and also offers services in the field of pollution control as allied activity.The company is managed organisationally as a unified entity with various functional heads reporting to the top management and is not organised along segments. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

09. Related Party Disclosures:

Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

I. Related Parties

Individual having control & Key Management Personnel

Mr. Sunil Choksi Managing Director

Mrs. Himika Varma Jt. Managing Director

Mrs. Stela Choksi Whole Time Director

Mr. Vyangesh Choksi Whole Time Director

Relatives of KMP

Mrs.Neeta Shah

D. G Choksi HUF

Mrs. Khyati Choksi

II. Disclosure of transactions between the Company and Related Parties and the Status of outstanding balances as on March 31, 2010:

10. There are no amounts payable to any Small Scale Industrial Undertaking in excess of Rs. One lakh which is outstanding for more than thirty days.

11. Disclosure pertaining to Micro, Small and Medium Enterprises (as per information available with the Company): The management is continuously in the process of identifying enterprises which have provided goods and services to the Company and which qualify under the definition of Micro, Small & Medium enterprise, as defined under Micro, Small & Medium Enterprises Development Act, 2006. Based on information received and available with the Company, no amount is payable to such enterprises as at 31" March 2010. The Company has not received any claim for interest from any supplier under the said Act.

12. Disclosure in terms of Accounting Standard "Impairment Losses":

13. Prior Period Expenses include Rent for Rs. 4000/-for FY 08-09 & Memberships Subscription Fees Rs. lOOOOforFY 07-08 & 08-09 not provided for earlier. (Previous Year Rs.24626/-).

14. Capacities and Production

a. Licensed Capacity NotApplicable

b. Installed Capacity NotApplicable

c. Actual Production NotApplicable

15. The Company is not carrying out any manufacturing activities but engaged in the business of testing of various products. The Companys business requires variety of chemicals and consumables in small quantities and does not require any raw materials. It is not practicable to furnish the quantitative details of these chemicals & consumables as number of small quantities are consumed. Hence, aggregate value of all imported & indigenous chemicals & consumables and spares & components consumed and the percentage of each to total consumption are furnished below:

16. Computation of net profit in accordance with section 349 of the Companies Act, 1956 has not been given, as commission by way of percentage of profit is not payable for the year to any of the director of the Company.

17. Figures have been rounded off to the nearest Rupee.

18. Figures of previous year have been regrouped / rearranged / recast wherever necessary to confirm to this years classification.