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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Everest Kanto Cylinder Ltd.

Mar 31, 2025

(i) Execution of lease deed is pending for two land parcels acquired at Tarapur Plant having gross carrying value '' 111 lakhs (31 March 2024: ''111 lakhs).

(ii) Includes '' 750 (31 March 2024: '' 750) paid for shares acquired in co-operative societies.

(iii) The assets of the Company include certain plant and equipment (including capital work-in-progress) having net carrying amount of '' 2,965 lakhs (includes CWIP of '' 1,871 lakhs) as at 31 March 2025 (31 March 2024 net carrying amount of '' 2,999 lakhs includes CWIP of '' 1,438 lakhs); which have remained idle for a considerable period due to contraction in demand. Accordingly, management has performed impairment test on these assets and have recorded an impairment provision of '' 648 lakhs (includes impairment on CWIP of '' 628 lakhs for the current year) (31 March 2024: '' 217 lakhs (including impairment on CWIP of '' 142 lakhs)). Refer note 4 for CWIP.

Recoverable amount of the asset is derived by reducing cost of disposal from fair value. The aforesaid impairment loss is disclosed under exceptional items (Refer note 42).

Details of valuation:

a) Level of the fair value hierarchy - Level 3

b) Description of the valuation technique - Depreciated Replacement Cost (DRC) method under Cost Approach

c) Key assumptions - Salvage value, costs of disposal, latest quotations with same / similar specifications, economic indices as per Reserve Bank of India, etc.

(iv) During the year ended 31 March 2025, certain tangible assets having written down value of '' 44 lakhs ('' 29 lakhs as at 31 March 2024) has been additionally classified as ''Assets classified as held for sale'', pursuant to the decision of the Company to dispose off the same.

(v) Disclosure of contractual commitments for the acquisition of property, plant and equipment [Refer note 48(B)(i)].

(vi) Information on property, plant and equipment pledged as security by the Company [Refer note 53].

Note:

(i) During the year ended 31 March 2017, the Company had entered into an agreement towards sale of agricultural land (the âSpecified Assetsâ), situated at Gandhidham. However, pending receipt of relevant government approvals towards conversion of agricultural land to industrial land, the agricultural land was classifed as âAssets classified as held for saleâ. The sales consideration and carrying value of the agricultural land is USD 4 Million and '' 274 lakhs as at 31 March 2025 (31 March 2024: USD 4 Million and '' 274 lakhs), respectively. An amount of USD 2 Million received during the year ended 31 March 2017 as an advance against the said agricultural land has been included in Note 32 - ''Other current liabilitiesâ. During current year, the Company has entered into a lease agreement with the acquirer of the land for a period of 3 years. Pursuant to the execution of lease agreement, the Company has classified the said land to Investment Property from the earlier classification of Assets classified as held for sale.

Estimation of fair value

The Company obtains independent valuations atleast annually. The fair valuation of the investment property have been determined by registered independent valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, using ''Sales Comparison Method'' under Market Approach using composite rate of commercial offices by comparing the investment property with similar properties that have recently been sold near the location of investment property. Comparable properties are selected for similarity to the subject property by considering attributes like age, size, shape, quality of construction, building features, condition, design, etc. The fair value measurement is categorised as level 3 fair value hierarchy.

(ii) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the shareholding. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. [Refer note 46(iii)]

Nature and purpose of reserves

(i) Securities premium

Securities premium is created due to premium on issue of shares. This reserve is utilised in accordance with the provisions of the Act.

(ii) General reserve

The general reserve represents amounts appropriated out of retained earnings based on the provisions of the Act.

(iii) Retained earnings

Retained earnings pertain to the accumulated earnings / losses by the Company over the years.

(iv) Equity instruments at fair value through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated under this head. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Working capital loans from bank

(i) Working capital facilities from various banks having an outstanding balance of '' 8,469 lakhs as at 31 March 2025 (31 March 2024: '' Nil) are secured by way of (i) first pari passu charge in the form of hypothecation of stocks, book debts and all other current assets of the Company and (ii) second pari passu charge on certain land and buildings and moveable fixed assets of the Company.

(iii) secured by personal guarantees from two promoter directors. Working capital facility is also secured by exclusive mortgage charge on specific property to each lender bank. Working capital facilities from a bank has been secured by fixed deposits aggregating '' 500 lakhs of the Company, which have been held as lien against this facility. The interest rate of the working capital facilities ranges from 9.35% per annum to 10.80% per annum (31 March 2024 : 9.35% per annum to 10.80% per annum)).

(ii) For the year ended 31 March 2025 and 31 March 2024, the quarterly returns / statements filed by the Company with working capital lending banks are in agreement with the books of account of the Company.

(iii) Refer note 53 for carrying amount of financial assets and non-financial assets pledged as security for secured borrowings.

I. Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level as follows :

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.

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

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

11. Valuation techniques used to determine fair value

Significant valuation techniques used to value financial instruments include:

(i) The fair values for investment in equity instrument are based on intrinsic value of the investee company.

(ii) The lease liability is initially measured at amortised cost at the present value of the future lease payments and are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. Accordingly, these are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

(iii) Fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, trade receivables, trade payables, other current financial assets / liabilities and borrowings approximate their carrying amounts largely due to short term maturities of these instruments. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

45 Financial risk management

The Company is exposed primarily to fluctuations in foreign currency risk, credit, liquidity and interest rate risk which may adversely impact the fair value of its financial instrument. The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Managing Board.

The Company''s principal financial liabilities comprises of borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, trade and other receivables, cash and bank balances, bank deposits and investments that derive directly from its operations.

The Company is exposed to foreign currency risk, credit risk, market risk and liquidity risk. The Companyâs senior management oversees the management of these risks.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its investing activities (deposits with banks and government and other financial instruments). The Company considers factors such as track record, size of institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Bank balances and deposits are held with only high rated banks and security deposits are placed majorly with government agencies. Hence, in these cases, the credit risk is negligible. Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into

account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

(i) Actual or expected significant adverse changes in business,

(ii) Actual or expected significant changes in the operating results of the counter-party,

(iii) Financial or economic conditions that are expected to cause a significant change to the counter-partyâs ability to meet its obligations,

(iv) Significant increase in credit risk on other financial instruments of the same counter-party,

(v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the Standalone Statement of Profit and Loss.

(B) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, lease liabilities, trade payables and other financial liabilities.

Liquidity risk management

The Companyâs corporate treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.

(i) Foreign currency risk

The Company is exposed to foreign exchange risk on their receivables and payables which are held in USD and AED.

Foreign currency risk management

In respect of the foreign currency transactions, the Company does not hedge the exposures since the management believes that the same will be partly offset by the corresponding receivables and payables which will be in the nature of natural hedge.

48	Contingent liabilities, capital and other commitments			('' in lakhs)
			As at	As at
			31 March 2025	31 March 2024
	(A)	Contingent liabilities:
	(i)	Income tax matters under dispute	1,508	1,443
	(ii)	Value added tax	7	7
	(iii)	Excise duty and interest thereon	174	131
	(iv)	Goods and service tax and interest & penalty thereon	35,210	106
	(v)	Claims against Company not acknowledged as debts	88	54
		Future cash flows in respect of the above are determinable only on pronouncements of judgments / decisions pending with various forums / authorities.
	(B)	Commitments:
	(i)	Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances)	924	752
	(ii)	Uncalled amount of partly paid equity shares of a subsidiary company	177	177
	(iii)	The Company has provided letter committing financial support to its step down subsidiary, CP Industries Holdings, Inc. till 31 May 2025 to enable it to meet its day to day obligations/commitments; to the extent this entity may be unable to meet its obligations.

(B) Defined benefit plan:

Gratuity (funded scheme)

The Company provides gratuity benefit for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognised funds in India.

(xii) Description of risk exposures

Valuations are performed on certain basic set of pre-determined assumptions which may vary over time. Thus, the Company is exposed to various risks in providing the above benefit which are as follows:

Interest rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability (as shown in financial statements).

Liquidity risk: This is the risk that the Company is not able to meet the short term benefit payouts. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary escalation risk: The present value of the above benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase in salary in future for plan participants

from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability. Demographic risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption. Regulatory risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts. Asset liability mismatching or market risk: The duration of the liability is longer compared to duration of assets exposing the company to market risks for volatilities/fall in interest rate. Investment risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

50 Segment reporting

In accordance with Ind AS 108, ''Operating Segments'', segment information has been disclosed in the Consolidated Financial Statements of the Company, and therefore, no

separate disclosure on segment information is given in the standalone financial statements.

51 Revenue from contracts with customers

The Company derives revenues primarily from sale of high pressure seamless gas cylinders and other cylinders, equipments, appliances and other related services. Further, the Company is engaged in the trading of fire extinguishment and related equipment.

Under Ind AS 115, an entity recognises revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company determines revenue recognition through the following steps:

1. Identification of the contract, or contracts, with a customer.

2. Identification of the performance obligations in the contract.

3. Determination of the transaction price.

4. Allocation of the transaction price to the performance obligations in the contract.

5. Recognition of revenue when, or as, we satisfy a performance obligation.

At contract inception, the Company assesses the goods and services promised in the contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all of the goods and services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

The majority of customer contracts that Company enters into consist of a single performance obligation for the delivery of cylinders, fire fighting equipment and castor oil. The Company recognizes revenue from product sales when control of the product transfers i.e. generally upon shipment.

Some contracts provide customers with a right of return and Company recognises provision for sales return, based on the historical results, measured as net margin of such sale. [Refer notes 19 and 33].

58 Other Statutory Information:

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off by Registrar of Companies (ROC)

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

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company does not have any transaction which is previously 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).

(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âthe Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

59 The Company is using accounting software for maintaining its books of accounts which has feature of recording audit trail and same has operated throughout the year for all relevant transactions recorded in the software. The audit trail feature has not been tampered with and being preserved by the Company as per the statutory requirements for record retention.

60 Figures of previous period / year have been regrouped / rearranged, wherever considered necessary.

61 The standalone financial statements were authorised for issue by the Board of Directors on 23 May 2025.

Mar 31, 2024

13) Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are measured at the present value of management''s best estimate of the amount required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects the current market assessments of time value of money and the risks specific to the liability. The increase in the provision due to passage of time is recognised as interest expense. The provisions are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.

Contingent assets are not recognised in the standalone financial statements. However, it is recognised only when an inflow of economic benefits is probable.

14) Revenue Recognition

Revenue is recognised on satisfaction of performance obligation upon transfer of control of promised products or services to customers, at an amount that reflects the consideration expected to be received by the Company in exchange for those products or services. Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts and returns, etc., if any.

The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

(i) The customer simultaneously receives and consumes the benefits provided by the Companyâs performance as the Company performs; or

(ii) The Companyâs performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

(iii) The Companyâs performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue is recognised at the

point in time at which the performance obligation is satisfied.

Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional. Generally, the credit period upto 45-60 days from the shipment or delivery of goods as the case may be. Consideration are determined based on its most likely amount.

The Company recognises provision for sales return, based on the historical results. The Company accounts for sales returns accrual by recording an allowance for sales returns concurrent with the recognition of revenue at the time of sale of product. The estimate of sales returns is determined primarily by the Companyâs historical experience in the markets in which the Company operates.

Export benefits are recognised in the year of export when right to receive the benefit is established and conditions attached to the benefits are satisfied.

Trade Receivable:

Trade receivables are amounts due from customers for goods sold in the ordinary course of business and reflects companyâs unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.

15) Other Income

Interest income for all debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

Dividend is recognised in standalone statement of profit and loss only when the right to receive payment is established.

a) Short term employee benefits: All employee benefits which are due within twelve months of rendering the services are classified as shortterm employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the year in which the employee renders the related service.

b) Post-employment benefits

(i) Defined Contribution Plans: Companyâs contribution to the state governed provident fund scheme, Employees State Insurance corporation (ESIC), etc. are recognised during the year in which the related service is rendered.

(ii) Gratuity: The Company has an obligation towards gratuity, a defined benefit plan covering eligible employees. The Company account for the liability towards future payments of gratuity to employees, on actuarial valuation basis, using Projected Unit Credit Method as at balance sheet date and the charge for current year is debited to the standalone statement of profit and loss. Actuarial gains and losses arising on the measurement/remeasurement of defined benefit obligation is charged/ credited to Other comprehensive income. The fair value of the plan assets is reduced from the gross obligation under the defined benefit plan to recognise the obligation on net basis.

(iii) Compensated absences: Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end. Employees generally have an unconditional right to avail the accumulated leaves, however there are certain circumstances which also gives a right to the Company to defer the employee''s leave (for example: Company''s right to postpone/ deny the leave, restriction to avail leave in the next year for a maximum number of days etc.). Thus, for the bifurcation of provision between current and non-current, actuarial services are availed.

Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as other long-term employee benefits. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognised in the standalone statement of profit and loss in the year in which they arise.

c) Termination Benefits: These are recognised as an expense in the standalone statement of profit and loss of the year in which they are incurred.

17) Foreign Currency Transactions and Translations

(i) Functional and presentation currency

The standalone financial statements are presented in Indian rupee (INR), which is Company''s functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the standalone statement of profit and loss. Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the standalone statement of profit and loss. Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not translated thereafter.

18) Income tax

Tax expense comprise of current income tax and deferred income tax and include any adjustment related to past periods. Current and deferred tax is recognised in the standalone statement of profit and loss, except to the extent it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The income tax expense for the year is the tax payable on the current year''s taxable income based on the applicable income tax rate adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is accounted in full, using the Balance Sheet approach, on temporary differences arising between the tax bases of assets and liabilities

and their carrying amount in the standalone financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Tax assets and tax liabilities are off set where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

There are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. The uncertain tax positions are measured at the amount expected to be paid to taxation authorities when the Company determines that the probable outflow of economic resources will occur. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

19) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the standalone balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

When items of income and expense within standalone statement of profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the year, the nature and amount of such material items are disclosed separately as exceptional items.

(E) Critical estimates and judgements

The preparation of standalone financial statements in conformity with Ind AS requires estimates and assumptions to be made by the management of the Company that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The Management believes that these estimates are prudent and reasonable and are based upon the Managementâs best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the year in which the results are known or materialised.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

(i) Estimated useful life of property, plant and equipment, intangible assets, and investment property:

The Company reviews the useful lives of property, plant and equipment, investment properties and intangible assets at the end of each reporting period. This reassessment may result in change in depreciation and amortization expense in future periods.

(ii) Impairment of carrying value of property, plant and equipment, capital work-in-progress, intangible assets and investment property:

The recoverable amount of property, plant and equipment, capital work-in-progress is based on estimates and assumptions regarding the expected Depreciated Replacement Cost (DRC) method under Cost Approach. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

(iii) Fair value less cost to sell for assets classified as held for sale:

The fair valuation of the investment property is determined using ''Sales Comparison Method'' under Market Approach using composite rate of commercial offices by comparing the investment property with similar properties that have recently been sold near the location of investment property. Comparable properties are selected for similarity to the subject

property by considering attributes like age, size, shape, quality of construction, building features, condition, design, etc.

(iv) Estimation of current tax expenses and recognition of deferred tax assets:

The Company calculates income tax expense based on reported income and estimated exemptions / deduction likely available to the Company. Recognition of deferred tax assets depends upon the availability of future profits against which tax losses carried forward can be used.

(v) Probable outcome of matters included under contingent liabilities:

Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in respect of contingencies/ litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

(vi) Provision for doubtful debts:

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss (ECL) model. Estimated irrecoverable amounts are based on the ageing of the receivable balance and historical experience. Individual trade receivables are written off if the same are not collectible.

(vii) Estimation of Defined benefit obligation

The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases and mortality rates. Due to the long term nature of these plans, such estimates are subject to significant uncertainty.

(viii) Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

(F) Standards issued but not effective

The Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended 31 March 2024, MCA has not notified any new standards or amendments to existing standards applicable to the Company.

I. Fair value hierarchy

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.

II. Valuation techniques used to determine fair value

Significant valuation techniques used to value financial instruments include:

(i) The fair values for investment in equity instrument are based on intrinsic value of the investee company.

44 Financial risk management

The Companyâs principal financial assets include loans, trade and other receivables, cash and bank balances, bank deposits and investments that derive directly from its operations.

The Company is exposed to foreign currency risk, credit risk, market risk and liquidity risk. The Companyâs senior management oversees the management of these risks.

(A) Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial

reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

(i) Actual or expected significant adverse changes in business,

(ii) Actual or expected significant changes in the operating results of the counter-party,

(iii) Financial or economic conditions that are expected to cause a significant change to the counter-partyâs ability to meet its obligations,

(iv) Significant increase in credit risk on other financial instruments of the same counter-party,

(v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

45 Capital Management

(i) Risk management

The Companyâs objectives when managing capital are as below -

â¢ 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

â¢ maintain an optimal capital structure to reduce the cost of capital.

The Company monitors its capital by using gearing ratio, which is net debt divided by total equity. Net debt includes non-current and current borrowings net of cash and cash equivalents and bank balances other than cash and cash equivalent and total equity comprises of equity share capital and other equity.

(xii) Description of risk exposures

Salary escalation risk: The present value of the above benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of

increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Asset liability mismatching or market Risk:

The duration of the liability is longer compared to duration of assets exposing the company to market risks for volatilities/fall in interest rate.

Investment risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

50 Revenue from contracts with customers

The Company determines revenue recognition through the following steps:

1. Identification of the contract, or contracts, with a customer.

2. Identification of the performance obligations in the contract.

3. Determination of the transaction price.

4. Allocation of the transaction price to the performance obligations in the contract.

5. Recognition of revenue when, or as, we satisfy a performance obligation.

57 Other Statutory Information:

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off by Registrar of Companies (ROC).

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

(iv) The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.

(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

58 The Company is using accounting software for maintaining its books of accounts which has feature of recording audit trail and same has operated throughout the year for all relevant transactions recorded in the software. The audit trail feature has not been tampered with and being preserved by the Company as per the statutory requirements for record retention.

59 Figures of previous period / year have been regrouped / rearranged, wherever considered necessary.

60 The standalone financial statements were authorised for issue by the Board of Directors on 24 May 2024.

As per our report of even date attached

For Suresh Surana & Associates LLP For and on behalf of the Board of Directors

Chartered Accountants

Firmâs Registration No: 121750W/W100010

Vinodkumar Varma Pushkar Khurana Puneet Khurana

Partner Chairman and Executive Director Managing Director

Membership No. 105545 DIN: 00040489 DIN: 00004074

Place : Dubai Place : Mumbai

Date : 24 May 2024 Date : 24 May 2024

Sanjiv Kapur Vishal Totla

Chief Financial Officer Company Secretary

Membership No: A26757

Place : Mumbai Place : Mumbai Place : Mumbai

Date : 24 May 2024 Date : 24 May 2024 Date : 24 May 2024

Mar 31, 2023

(i) Execution of lease deed is pending for two land parcels acquired at Tarapur Plant having gross carrying value '' 111.42 lakhs (31 March 2022: '' 111.42 lakhs).

(ii) Includes '' 750 (31 March 2022: '' 750) paid for shares acquired in co-operative societies.

(iii) As at 31 March 2023, certain vehicle was in the personal name of directors having gross carrying amount of '' 40 lakhs (31 March 2022: '' 40 lakhs) and net carrying amount of '' 2 lakhs (31 March 2022: '' 6.72 lakhs).

(iv) The assets of the Company include certain plant and equipment (including capital work-in-progress) having net carrying amount of '' 2,114.25 lakhs (includes CWIP of '' 307.34 lakhs as at 31 March 2023 (31 March 2022: '' 1,073.50 lakhs)) as at 31 March 2023 (31 March 2022: '' 4,258.57 lakhs), which have remained idle for a considerable period due to contraction in demand. Accordingly, management has performed impairment test on these assets and have recorded an impairment provision of '' 288.84 lakhs (includes impairment on CWIP of '' 50.93 lakhs for the current year) (31 March 2022: '' 402.88 lakhs (including impairment on CWIP of '' 140.83 lakhs)). Refer note 3 for CWIP.

Recoverable amount of the asset is derived by reducing cost of disposal from fair value. The aforesaid impairment loss is disclosed under exceptional items (Refer note 41).

Details of valuation:

a) Level of the fair value hierarchy - Level 3.

b) Description of the valuation technique - Depreciated Replacement Cost (DRC) method under Cost Approach.

c) Key assumptions - Salvage value, costs of disposal, latest quotations with same / similar specifications, economic indices as per Reserve Bank of India, etc.

(v) During the year ended 31 March 2023, certain plant & machines (including CNG cascades) having written down value of '' 101.84 lakhs ('' 40.77 lakhs as at 31 March 2022) has been additionally classified as ''Assets classified as held for sale'', pursuant to the decision of the Company to dispose off the same.

(vi) During the current year, buildings having net carrying amount as at 31 March 2023 of '' 1,287.93 lakhs fulfills the criteria given in Ind AS 40, Investment Property, and accordingly, have been transferred to Investment Property.

(vii) Disclosure of contractual commitments for the acquisition of property, plant and equipment [Refer note 47(B)(i)].

(viii) Information on property, plant and equipment pledged as security by the Company [Refer note 52].

Premises given on operating lease:

For current year, the Company has two non-factory building premises on operating lease. These lease arrangements are for a period of 5 and 9 years and is a cancellable lease. The lease is renewable for further period on mutually agreeable terms.

For previous year, the Company had given single non-factory building premises on operating lease for term of 9 years and was cancellable lease.

Estimation of fair value

The Company obtains independent valuations atleast annually. The fair valuation of the investment property have been determined by registered independent valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, using ''Sales Comparison Method'' under Market Approach using composite rate of commercial offices by comparing the investment property with similar properties that have recently been sold near the location of investment property. Comparable properties are selected for similarity to the subject property by considering attributes like age, size, shape, quality of construction, building features, condition, design, etc. The fair value measurement is categorised as level 3 fair value hierarchy.

(i) The net worth of CC&LE has been fully eroded and accordingly, loan granted during the year amounting to '' 6.00 lakhs (during the year ended 31 March 2022 : '' 75.00 lakhs) has been provided for based on managementâs assessment of the recoverable value of the aforementioned loan. Thus, till 31 March 2023, total provision of '' 663.73 lakhs (31 March 2022, total '' 657.73 lakhs) has been made by the Company. Further, for the year ended 31 March 2023, recognition of interest income of '' Nil ('' Nil for the year ended 31 March 2022) in respect of the aforesaid loan given to CC&LE has been deferred by the Company, due to uncertainties with respect to ultimate collection of outstanding amounts. Refer notes 47.

(i) Includes '' 10 lakhs (31 March 2022: '' 10 lakhs), a security deposit to a private company in which directors are directors / members [Refer Note 46].

(ii) During the year ended 31 March 2020, pursuant to sale of investment in EKC Industries (Tianjin) Co., Ltd, the Company then had recognised receivable under "non-current financial assets" amounting to RMB 5.19 million (equivalent to '' 617.41 lakhs) and corresponding provision towards consideration retained by the buyer for contingencies and open litigations under "other current financial liabilities" amounting to RMB 2.95 million (Equivalent to INR 352.82 lakhs). During the current year ended 31 March 2023, based on the the outcome of the litigation, Company is liable to pay liquidated damages and compensation of RMB 2.08 million (equivalent to INR 248.77 lakhs) and accordingly excess provision of RMB 0.87 million (equivalent to INR 103.63 lakhs) is written back and presented as exceptional item during the current year. Further, the Company has offset the aforementioned liability of RMB 2.08 million against receivable of RMB 5.19 million resulting which receivable outstanding as at 31 March 2023 is RMB 3.11 million (equivalent to '' 371.37 lakhs).

(ii) As at 31st March 2023, building at Aurangabad, which was earlier part of Capital-work-in-progress, having book value '' 767.68 lakhs (31 March 2022 : '' 767.68 lakhs) has been classified as ''Assets classified as held for sale'', pursuant to the decision of the Company to dispose off the same. [Refer note 3(i)].

(iii) During the year ended 31 March 2023, certain plant & machineries (including CNG Cascades) having written down value of '' 142.60 lakhs (31 March 2022 : '' 40.77 lakhs) has been classified as ''Assets classified as held for sale'', pursuant to the decision of the Company to dispose off the same. [Refer note 2(v)].

(iv) Assets classified as held for sale during the year was measured at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification.

The fair value of the land has been determined based on contractual rate agreed with the buyer. The fair valuation has been categorised under Level 3 of the fair value hierarchy.

(ii) Rights, preferences and restrictions attached to equity shares

Nature and purpose of reserves

(i) Securities premium

Securities premium is created due to premium on issue of shares. This reserve is utilised in accordance with the provisions of the Act.

(ii) General reserve

The general reserve represents amounts appropriated out of retained earnings based on the provisions of the Act prior to its amendment.

(iii) Retained earnings

Retained earnings pertain to the accumulated earnings / losses by the Company over the years.

(iv) Equity instruments at fair value through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

(i) Vehicle loan includes loan outstanding amounting to '' 145.24 as at 31 March 2023 has been availed from the financial institution during the year ended 31 March 2023, of which current portion amounting to '' 18.24 lakhs has been disclosed under current borrowings. The said loan carries an interest rate of 8.85% per annum and is repayable in 48 monthly instalments starting from July 2022 through June 2026. This loan is secured by hypothecation of underlying vehicle.

Vehicle loan outstanding to financial institution/bank as at 31 March 2023 amounting to '' 42.79 lakhs (includes current portion of '' 12.45 lakhs shown under current borrowings) (31 March 2022: '' 53.93 lakhs (including current portion of '' 11.14 lakhs)) is repayable in 48 monthly instalments which commenced from August 2020 with the last instalment falling due in July 2024. This loan is secured by hypothecation of underlying vehicle and is at fixed rate of interest of 11.00% per annum.

(ii) Refer note 44 for liquidity risk and note 52 for carrying amount of financial assets and non-financial assets pledged as security for secured borrowings.

(i) Working capital facilities from various banks having an outstanding balance of '' 4,809.43 lakhs as at 31 March 2023 (31 March 2022: '' 4,833.47 lakhs) are are secured by way of (i) first pari passu charge in the form of hypothecation of stocks, book debts and all other current assets of the Company and (ii) second pari passu charge on certain land and buildings and moveable fixed assets of the Company. (iii) secured by personal guarantees from two promoter directors. Working capital facility is also secured by exclusive mortgage charge on specific property to each lender bank. Working capital facilities from a bank has been secured by fixed deposits aggregating '' 500 lakhs of the Company, which have been held as lien against this facility. The interest rate of the working capital facilities ranges from 8.95% per annum to 10.60% per annum (31 March 2022 : 8.95% per annum to 13.30% per annum)).

(ii) Unsecured loans from related parties were repaid fully during the year ended 31 March 2023. The loans carried an interest rate of 9% per annum (during year ended March 2022: 9%).

(iii) Vehicle loan from bank of '' 3.08 lakhs outstanding as at 31 March 2022 has been fully repaid during the year. This loan is

secured by hypothecation of underlying vehicle and carried a fixed rate of interest of 8.35% per annum.

Vehicle loan from bank of '' 66.35 lakhs outstanding as at 31 March 2022 has been fully repaid during the year. This loan is

secured by hypothecation of underlying vehicle and carried a fixed rate of interest of 11.75% per annum.

(iv) The quarterly returns / statements filed by the Company with working capital lending banks are in agreement with the books of account of the Company except, the followings:

(i) Pursuant to sale of investment in EKC Industries (Tianjin) Co., Ltd, the Company then had outstanding receivable under "noncurrent financial assets" amounting to RMB 5.19 million (equivalent to '' 617.41 lakhs) as at 31 March 2022 and corresponding provision towards consideration retained by the buyer for contingencies and open litigations under "other current financial provisions" amounting to RMB 2.95 million (equivalent to '' 350.93 lakhs) as at 31 March 2022. During the current year ended 31 March 2023, based on the the outcome of the litigation, Company is liable to pay liquidated damages and compensation of RMB 2.08 million (equivalent to '' 248.98 lakhs) and accordingly excess provision of RMB 0.87 million (equivalent to '' 103.63 lakhs) is written back and presented as exceptional item during the current year. Further, the Company has offset the aforementioned liability of RMB 2.08 million against receivable of RMB 5.19 million resulting which receivable outstanding as at 31 March 2023 is RMB 3.11 million (equivalent to '' 371.37 lakhs).

(ii) A provision is recognized for sales returns on products sold during the last six months, based on past experience of the level of returns. It is expected that significant portion of these costs will be incurred in the next financial year. Assumptions used to calculate the provision for sales return were based on current sales levels and current information available about returns for all products sold. The table below gives information about movement in provision for sales returns.

Fair value hierarchy

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.

II. Valuation techniques used to determine fair value

Significant valuation techniques used to value financial instruments include:

(i) The fair values for investment in equity instrument are based on intrinsic value of the investee company.

The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity and interest rate risk which may adversely impact the fair value of its financial instrument. The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management

^ 11 /Â¦M i i r* r* /-\ ki i /-\

The Company is exposed to credit risk, market risk and liquidity risk. The Companyâs senior management oversees the management of these risks.

A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its investing activities (deposits with banks and government and other financial instruments) except loans to related parties. The Company considers factors such as track record, size of institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Bank balances and deposits are held with only high rated banks and security deposits are placed majorly with government agencies. Hence, in these cases, the credit risk is negligible.

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in

credit risk, the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counter-party,

iii) Financial or economic conditions that are expected to cause a significant change to the counter-partyâs ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counter-party,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

B Liquidity risk

Liquidity risk management

C) Market risk

(i) Foreign currency risk

The Company is exposed to foreign exchange risk on their receivables and payables which are held in USD, AED EUR and CNY. Foreign currency risk management

(iii) Price Risk

The Company is exposed to price risk from its investment in equity instruments measured at fair value through other comprehensive income.

The table below summarizes the impact of increases/decreases of the share price on the Companyâs equity and Gain/(Loss) for the period. The analysis is based on the assumption that the share price has increased by 5% or decreased by 5% with all there variables held constant, and that the Companyâs equity instruments moved in line with the share price.

45 Capital Management (i) Risk management

The Companyâs objectives when managing capital are as below -

â¢ 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

â¢ maintain an optimal capital structure to reduce the cost of capital.

(ii) Loan covenants

Working capital facilities from banks contain certain debt covenants which are required to be complied with. As of the reporting date, the Company is in compliance with those performance linked financial covenants.

47	Contingent liabilities, capital and other commitments			('' in lakhs)
			As at	As at
			31 March 2023	31 March 2022
	(A)	Contingent liabilities:
	(i)	Income tax matters under dispute	1,183.30	1,319.13
	(ii)	Lease tax	-	13.69
	(iii)	Sales tax and Value Added Tax	7.16	285.97
	(iv)	Excise duty	89.26	47.11
	(v)	Provident fund	Amount not	Amount not
		The Hon''ble Supreme Court, has passed an order on 28 February 2019 in relation to inclusion of certain allowances within the scope of âBasic wagesâ for the purpose of determining contribution to provident fund under the Employeesâ Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management, which is supported by legal advice, the aforesaid matter is not likely to have a significant impact and accordingly, the Company has provided for the liability in accordance with the judgement from the date of pronouncement and retrospective liability, if any, will be provided when the final legal view emerges from the authority.	determinable	determinable
	(vi)	Company''s liabilities/obligations pertaining to the period upto the date of	Amount not	Amount not
		transfer of investment in EKC Industries (Tianjin) Co. Ltd. [Refer note 17(ii)]	determinable	determinable
	(vii)	Claims against Company not acknowledged as debts Future cash flows in respect of the above are determinable only on pronouncements of judgments / decisions pending with various forums / authorities.	50.75	50.75
	(B)	Commitments
	(i)	Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances)	1,121.77	2,049.79
	(ii)	Uncalled amount of partly paid equity shares of a subsidiary company	176.96	176.96
	(iii)	The Company has provided letter committing financial support to its step down subsidiary, CP Industries Holdings, Inc. till 31 May 2024 to enable it to meet its day to day obligations / commitments; to the extent this entity may be unable to meet its obligations.

(B) Defined benefit plan:

Contribution to gratuity fund (funded scheme)

(xii) Description of risk exposures

Valuations are performed on certain basic set of pre-determined assumptions which may vary over time. Thus, the Group is exposed to various risks in providing the above benefit which are as follows:

Interest rate risk: The plan exposes the Group to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability (as shown in financial statements).

Liquidity risk: This is the risk that the Group is not able to meet the short term benefit payouts. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic risk: The Group has used certain mortality and attrition assumptions in valuation of the liability. The Group is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts. Asset liability mismatching or market Risk: the duration of the liability is longer compared to duration of assets exposing the company to market risks for volatilities/fall in interest rate.

Investment risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

49 Segment reporting

In accordance with Ind AS 108, ''Operating Segments'', segment information has been disclosed in the Consolidated Financial Statements of the Company, and therefore, no separate disclosure on segment information is given in the standalone financial statements.

50 Revenue from contracts with customers

The Company determines revenue recognition through the following steps:

1. Identification of the contract, or contracts, with a customer.

2. Identification of the performance obligations in the contract.

3. Determination of the transaction price.

4. Allocation of the transaction price to the performance obligations in the contract.

5. Recognition of revenue when, or as, we satisfy a performance obligation.

53 Ind AS 116, ''Leases''

The disclosure required in accordance with Ind AS 116 are as follows:

a) The Company''s leased assets primarily consist of leases for land, building (premises) and warehouses having various lease terms.

b) The maturity analysis of lease liabilities are disclosed in note 44(B).

c) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Notes:

a. Earnings for debt service = Earnings before finance costs, depreciation and amortisation, exceptional items and tax (EBIDTA).

b. Debt Service = Finance cost for the year Repayment of debt within one year.

c. Cost of Good sold = Cost of materials consumed Purchases of stock-in-trade Changes in inventories of finished goods, stock-in-trade and work-in-progress Manufacturing expenses (included under the head operating expenses).

d. Average inventory = (Opening inventory closing inventory)/2.

e. Average trade receivables = (Opening trade receivables closing trade receivables)/2.

f. Net purchases = Purchases of stock in trade purchases of raw materials.

g. Average trade payables = (Opening trade payables closing trade payables)/2.

h. Working Capital = Current Assets - Current Liabilities.

i. Earnings before Interest and Tax (EBIT) = Profit after exceptional item and before tax Finance costs (recognised).

j. Capital Employed = Tangible Net Worth Total Debt Deferred Tax Liability.

56 Expenditure towards corporate social responsibility

Section 135 of the Companies Act, 2013 and rules made thereunder prescribe that every company having a net worth of '' 500 crore or more, or turnover of '' 1,000 crore or more, or net profit of '' 5 crore or more during the immediately preceding financial year shall ensure that the company spends, in every financial year, atleast 2% of the average

net profits earned during the three immediately preceding financial years, in pursuance of the Corporate Social Responsibility Policy. The provisions pertaining to corporate social responsibility as prescribed under the Companies Act, 2013 are applicable to the Company. The financial details as sought by the Companies Act, 2013 are as follows:

* During the year ended 31 March 2023, amount spent by the Company includes '' 50.00 lakhs (31 March 2022: Nil) which has been deposited in escrow account created for CSR with a bank before the reporting date. The Company will contribute the aforesaid funds to a chartitable trust as approved by the CSR committee in their meeting dated 08 February 2023.

** The aforesaid payments were made to various charitable trusts for eradication of hunger, poverty, malnutrition and promoting education etc.

57 Other Statutory Information:

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off by Registrar of Companies (ROC).

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

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) 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.

(vi) No funds have been advanced or loaned or invested by the Company to or in any person(s) or entity(ies), including foreign entities (âthe intermediariesâ), with the

understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

58 The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

59 The standalone financial statements were authorised for issue by the Board of Directors on 29 May 2023.

Mar 31, 2018

NOTE 1:

Company information

Everest Kanto Cylinder Limited (âthe Companyâ) is a listed company domiciled and incorporated in India in 1978. The registered and corporate office of the Company is situated at 204, Raheja Centre, Free Press Journal Marg, 214, Nariman Point, Mumbai - 400002. The Company is engaged in the manufacture of high pressure seamless gas cylinders and other cylinders, equipments, appliances and tanks with their parts and accessories used for containing and storage of liquefied petroleum gases and other gases, liquids and air.

Basis of Preparation

The Company has prepared its separate financial statements to comply in all material respects with the provisions of the Companies Act, 2013 (the Act) and rules framed thereunder and the guidelines issued by Securities and Exchange Board of India. In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 under Section 133 of the Act, with effect from 1 April 2017. Till 31 March 2017, the Company used to prepare its financial statements as per Companies (Accounting Standards) Rules, 2014 (Previous GAAP) read with rule 7 and other relevant provisions of the Act. There are the first Ind AS Financial Statements of the Company. The transition from Previous GAAP to Ind AS has been accounted for in accordance with Ind AS 101 âFirst Time Adoption of Indian Accounting Standardsâ, with 1 April 2016 being the transition date and balance for the comparative period have been restated accordingly. As per Ind As 101, the Company has presented a reconciliation of its transition Previous GAAP to Ind AS of its total equity as at 1 April 2016 and 31 March 2017 and reconciliation of total comprehensive income for the year ended 31 March 2017. Please refer note 46 for detailed information on the transition.

The separate financial statements have been prepared on a historical cost convention and accrual basis, except for the following assets and liabilities:

i) Certain financial assets and liabilities that are measured at fair value

ii) Defined benefit plans-plan assets measured at fair value

All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in Schedule III of Companies Act, 2013.

# Execution of lease deed for land acquired at Tarapur Plant is pending, Rs.111.42 lakhs (31 March 2017: Rs.111.42 lakhs) (1 April 2016: Rs. 111.42 lakhs)]. ## Includes Rs.750 (31 March 2017: Rs.750) (1 April 2016: Rs.750) paid for shares acquired in co-operative societies.

* Includes vehicles in the personal name of directors having gross block of Rs.118.50 lakhs and written down value of Rs.76.24 lakhs[(31 March 2017 Rs.118.50 lakhs and written down value of Rs.87.65 lakhs) (1 April 2016 - Gross block Rs.118.50 lakhs and written down value Rs.104.39 lakhs).

** Gas Cylinders includes Gas Cylinders given on lease having gross block of to Rs.Nil and written down value of Rs.Nil (31 March 2017 Rs.14.18 lakhs and written down value of Rs.12.63 lakhs).

As at 31st March, 2018, the Company is holding a majority stake of Rs.431.72 lakhs (Rs.431.72 lakhs as at 1st April, 2016 and as at 31 March 2017) in its subsidiary, Calcutta Compression & Liquefaction Engineering Limited (CC&L). Further, the Company has trade receivables, loans and other receivables, aggregating Rs.1,201.40 lakhs [(Rs.1,406.40 lakhs as at 31 March 2017)] due from it. The Net Worth of CC&L has fully eroded. Provision of Rs.Nil (31 March 2017 Rs. 43.87 Lakhs and 1st April 2016: Rs.826.47 lakhs) towards trade receivables, loans and other receivables have been made on managementâs assessment and independent valuation of the recoverable value of the investment, loans and receivables. This provision has been disclosed as an Exceptional item in the Statement of Profit and Loss.

i) Since 31st March, 2013, the investment in equity shares, amounting to Rs.6,925.07 lakhs of EKC Industries (Tianjin) Company Ltd., the subsidiary in China, has been considered as current investment pursuant to the decision of the Board of Directors of the Company to dispose off the investment in the subsidiary by sale of the equity shares or in any other manner most beneficial to the Company. Accordingly, the amounts recoverable as loans and advances and interest thereon aggregating to Rs.4,181.70 lakhs as on 31st March, 2018 [(Rs.4,167.20 lakhs as at 31st March, 2017) (Rs.4,296.76 as at 1 April 2016)] have been classified as current assets. The Company, based on the assessment of the fair value of the assets of EKC Industries (Tianjin) Company Ltd., is of the considered view, that no provision for the diminution in the value of the Investment is required. However, on conservative basis, during the current year, an amount of Rs.1,000 lakhs [(31 March, 2017: Rs.2,000 lakhs)] has been provided towards such diminution and has been disclosed as an Exceptional Item in the Statement of Profit and Loss. The total provision towards such diminution as at 31 March, 2018 stands at Rs.6,500 lakhs [(Rs.5,500 lakhs as at 31st March, 2017) (Rs.3,500 lakhs as at 1 April 2016)].

ii) The Company and EKC International FZE (UAE subsidiary) had, in earlier years, provided loan to EKC Industries (Tianjin) Co., Ltd. (China subsidiary). During the current period, the Company has obtained in-principle approval from Commerce Bureau, Tianjin for conversion of loans of the Company and its UAE subsidiary into equity shares of the China subsidiary. Upon receipt of final approval, the shareholding of the Company and UAE subsidiary in China subsidiary would be in proportion of 63.96% and 36.04% respectively.

On 15 April 2018, the Company along with UAE subsidiary has entered into an agreement to sell the China subsidiary to You Yuan office Union (Tianjin) Company limited for an aggregate consideration of RMB 93.50 million (approx. Rs.9700 lakhs) subject to shareholders and various regulatory approvals in India and China. The Company has already initiated the process of obtaining the requisite shareholders approvals by circulating postal ballot notice in this regard.

The Company had advanced an inter-corporate deposit to Hubtown Limited during the year ended 31 March 2012. However, in the absence of certainty, the Company had discontinued the recognition of revenue with effect from 1 April 2015. Currently, the Company has entered into a revised agreement with Hubtown Limited and have made recoveries in accordance with the revised agreement. Accordingly, considering the recent positive developments, the Company has recognized interest income of Rs.815 lakhs (including unrecognised income of Rs.532 lakhs till 31 March 2017). Further, the provision towards doubtful recovery of intercorporate deposit of Rs.100 Lakhs has also been reversed during the year ended 31 March 2018. These amounts are forming part of ''Other Income'' for the year ended 31 March 2018.

i) During the year ended 31 March 2017, the Company has entered into an agreement towards sale of building, electrical installations along with land appurtenant thereto (the âSpecified Assetsâ), situated at Gandhidham, for an aggregate consideration of USD 29 Million. Pursuant to this transaction and subsequent realizations post year end, the Company has recognised sale of the Specified Assets (except agricultural land) and have considered the gain of Rs.12,923.38 lakhs from the transaction as an âExceptional Itemâ in the the Statement of Profit and Loss for the year ended 31 March 2017. However, pending receipt of relevant government approvals towards conversion of agricultural land to industrial land, the agricultural land has been continued as âAssets held for saleâ. The sales consideration and carrying value of the agricultural land is USD 4 Million and Rs.273.85 lakhs [(31 March 2017: Rs.273.85 lakhs) (1 April 2016: Rs.235.56 lakhs), respectively]. An amount of USD 2 Million received in the previous year as an advance against the said agricultural land has been included under âOther Current Liabilitiesâ.

To give effect to the above agreement and ensure smooth continuance of the business, the Company has shifted its manufacturing facilities from Gandhidham to Kandla Plant and have incurred shifting expenses to the extent of '' Nil ('' 696.33 lakhs in the previous year ended 31 March 2017). These shifting expenses have also been disclosed as an Exceptional Item in the Statement of Profit and Loss.

ii) During the year ended 31 March 2017, the Company has sold/discarded certain items of plant of machinery rendered unusable for an aggregate loss of Rs.1,539.44 lakhs (including impairment loss of Rs.61.92 lakhs on Assets held for sale with residual carrying value Rs.19.97 lakhs). The loss has been disclosed as an Exceptional Item in the Statement of Profit and Loss during the year ended 31 March 2017. These impaired assets were disposed off during the year ended 31 March 2018.

iii) During the year ended 31 March 2017, the Company has decided to sell certain items of plant and machinery forming part of âCapital work in progressâ. Accordingly, these assets have been considered as âAssets held for Saleâ. The carrying value of these assets has been written down to their net realizable value at Rs.1,548.48 lakhs as on 31 March 2017 and an impairment loss of Rs.628.71 lakhs has been disclosed as an Exceptional Item in the Statement of Profit and Loss. âAssets held for Saleâ as on 31 March 2018 also includes assets amounting to Rs.1,548.48 lakhs as stated above.

iv) As at 31st March, 2018, ''Assets classified as held for sale'' include office premises at Mumbai having book value Rs.1,248.29 lakhs (Rs.1,235.68 lakhs as at 31 March 2017) (Rs.1,235.68 lakhs as at 1st April, 2016)] being property, plant and equipment''s considered as âAssets held for Saleâ, pursuant to the decision of the Company to dispose off the same in the near future.

v) Assets classified as held for sale during the reporting period was measured at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification. This has resulted in write down of the value of the assets by Rs.Nil (Rs.690.63 lakhs as at 31 March 2017) (Nil as at 1st April, 2016).

The fair value of the land has been determined based on contractual rate agreed with the buyer. The fair value of the building was determined based on government notified rates plus market value margin which represents the fair value of the building in that area. The key inputs under this approach are price per square meter of comparable lots of building in the area of similar location and size. Plant and Machinery (CWIP) has been valued based on independent quotes received from various vendors. The fair valuation has been categorized under level 2 of the fair value hierarchy (Refer note 39).

(ii) Rights, preferences and restrictions

The Company has only one class of Equity Shares having a par value of Rs.2 per Share. Each Shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the share holding.

Nature and Purpose of Reserves

i) Securities Premium Account

Securities premium reserve is created due to premium on issues of shares. This reserve is utilised in accordance with the provisions of the Act.

ii) General Reserve

The general reserve represents amounts appropriated out of retained earnings based on the provisions of the Act prior to its amendment.

iii) Retained earnings

Retained earnings pertain to the accumulated earnings / losses made by the Company over the years.

iv) FVOCI - Equity investments

Refer note 2 for liquidity risk

Notes :

i) Indian Rupee Term Loan from a bank up to Rs.32,500.00 lakhs is secured by way of (a) first pari passu charge on all the property, plant and equipment''s of the Company, excluding specific immovable properties (b) second pari passu charge on the current assets of the Company (c) pledge of 29.99% of the shares of the Company held by the promoters (d) pledge of all the shares of the subsidiaries held by the Company (e) unconditional and irrevocable personal guarantees from three promoter directors and (f) exclusive charge on certain residential and commercial immovable properties owned by the Company, promoters, group companies/firms. The loan is repayable in quarterly unequaled instalments by October 2020. The interest rate of the Borrowing is 11% per annum.

ii) Foreign Currency Term Loan of US$ 5.00 Million from a bank is secured by way of (a) first pari passu charge on entire property, plant and equipment''s both present and future (excluding residential flat at Cuffe Parade, Mumbai and office premises situated at Nariman Point, Mumbai) (b) Second pari passu charge on current assets of the Company (both present and future)

(c) Unconditional and irrevocable personal guarantees from three promoter directors (d) no disposal undertaking of shareholding of the Company in its subsidiaries located in China and Dubai (e) pledge of 29.99% of the shares held by the Company in its subsidiaries located in China and Dubai. The loan has bullet repayment in June 2018. The interest rate of the Borrowings is 6 Monthsâ LIBOR plus 5.0% per annum.

iii) Vehicle Loans from Bank and Financial Institution are repayable in 60 and 35 monthly instalment respectively, with the last instalment falling due in February 2023 and April 2019 respectively. These loans are secured by hypothecation of underlying vehicle and are at fixed rate of interest of 8.35% and 10.83% per annum respectively.

iv) The Interest-free Sales Tax Deferment Loan is repayable in six equal annual instalments, with the last instalment falling due in financial year 2018-19.

v) Unsecured loans from related parties are repayable on demand and carry interest rate of 12% per annum. However, as per the terms of the loans, except for an amount of Rs.201.95 lakhs (31 March 2017 : Nil) (1 April 2016 : Nil) repayment of loans cannot be demanded before 1 April 2019.

I. Fair value hierarchy

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.âThis section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.

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

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

II. Valuation techniques used to determine fair value

Significant valuation techniques used to value financial instruments include:

The fair values for investment in equity instrument are based on discounted cash flows using a discount rate determined considering Company''s incremental borrowing rate.

(a) The above financial assets and liabilities are categorised under level 2 of fair value hierarchy.

(b) During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.

(c) The carrying amounts of Trade receivables, Cash and cash equivalents, other bank balances, loans, other current financial assets, current borrowings, trade payables, other current financial liabilities are considered to be approximately equal to the fair value.

3 Financial risk management

The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity and interest rate risk which may adversely impact the fair value of its financial instrument. The Company has a risk management policy which covers risk associated with the financial assets and liabilities. The risk management policy is approved by Board of Directors. The focus of the risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effect on the financial performance of the company.

The Company''s principal financial liabilities comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, trade and other receivables, cash and bank balances, bank deposits and investments that derive directly from its operations.

The Company is exposed to credit risk, market risk and liquidity risk. The Companyâs senior management oversees the management of these risks.

A. Credit risk

The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities (deposits with banks and other financial instruments) except loans to related parties. Further, the Inter Corporate deposits given by the Company are based on adequate collateral provided by the party.

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counter-party,

iii) Financial or economic conditions that are expected to cause a significant change to the counter-partyâs ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counter-party,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.

B. Liquidity risk

Liquidity risk management

C Market risk

(i) Foreign currency risk

The Company is exposed to foreign exchange risk on their receivables and payables which are held in USD, Thai Baht, AED and EUR.

Foreign currency risk management

In respect of the foreign currency transactions, the Company does not hedge the exposures since the management believes that the same will be offset by the corresponding receivables and payables which will be in the nature of natural hedge.

4. Capital Management

Risk managementThe Companyâs objectives when managing capital are as below -

- 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

- maintain an optimal capital structure to reduce the cost of capital.

The Company monitors its capital by using gearing ratio, which is net debt divided to total equity. Net debt includes non-current and current borrowings net of cash and bank balances and total equity comprises of Equity share capital, security premium, general reserve, other comprehensive income and retained earnings.

Loan covenants

Bank loans availed by the Company contain certain debt covenants which are required to be complied with. The Limitation of indebtedness covenant gets suspended once the Company meets the certain prescribed criteria. As of the reporting date, the Company is not in compliance with certain performance linked financial covenants. The Company is trying to ensure compliance with the covenants as soon as possible. The banks have not levied any interest/penalty towards above matter.

Notes:

i) Foreign currency balances are restated at year end rates.

ii) Loans given to subsidiaries and loans raised by subsidiaries backed by guarantees given on their behalf have been utilised by them for acquisition of property, plant and equipments and for working capital.

iii) Personal Guarantees given to banks of Rs. 40,000.00 lakhs and US$ 5 Mn (Rs. 40,000.00 lakhs and US$ 5 Mn as on 31 March 2017 and April 1, 2016) by Promoter Directors for the Term Loans and Working Capital Loans against which Rs.14,787.69 lakhs (Rs. 28,544.38 lakhs as on 31 March 2017) and (Rs. 29,477.42 lakhs as on April 1, 2016) were outstanding as at the end of the year.

(B) Defined Benefit Plan :

(1) Contribution to Gratuity fund (funded scheme)

The Company provided for gratuity for employee in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is funded plan and the Company makes contribution to recognised funds in India.

The Plan typically exposes the Company to actuarial risk such as Interest Risk, Longevity Risk and Salary Risk

a) Interest Risk:- A decrease in the bond interest rate will increase the plan liability.

b) Longevity Risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.

c) Salary Risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the planâs participants will increase the planâs liability.

5. Segment reporting

In accordance with Ind AS 108- ''operating Segment'', segment information has been given in the Consolidated Financial Statements of the Company, therefore, no separate disclosure on Segment information is given in these financial statements.

6. First time adoption of Ind AS

A. First Ind AS Financial statements

These are the Companyâs first separate financial statements prepared in accordance with Ind AS applicable as at 31 March 2018.

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).

An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position and financial performance is as follows:

i) Optional exemptions availed

Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combination prior to the transition date.

The Company has availed the business combination exemption on first time adoption of Ind AS and accordingly the business combinations prior to date of transition have not been restated to the accounting prescribed under Ind AS 103 - Business combinations.

Investment in subsidiaries

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its subsidiaries as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

Accordingly, the Company has elected to measure all of its investments in subsidiaries at their previous GAAP carrying value.

ii) Mandatory exceptions applied Estimates

An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

The estimates as at 1 April 2016 and 31 March 2017 are consistent with those made for the same dates in accordance with previous GAAP (after adjustment to reflect differences if any, in accounting policies) apart from the below item where the application of previous GAAP did not require estimation: - Impairment of financial assets based on the expected credit loss model.

De-recognition of financial assets and liabilities

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

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

Classification and measurement of financial assets

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

As per Ind AS 101, if the first time adopter did not, under the previous GAAP, recognise and measure a government loan at below market rate of interest on the basis consistent with Ind AS requirement, it shall use its previous GAAP carrying amount of the loan at the date of transition to Ind ASs as the carrying amount of the loan in the opening Ind AS balance sheet. An entity shall apply Ind AS 109 to the measurement of such loans after the date of transition to Ind ASs.

Under the previous GAAP, these loans were carried at amounts that will be repaid. Accordingly, the Company applies this exception and does not make any changes to the interest free deferred sales tax loan outstanding as at the date of transition.

7. In accordance with Indian Accounting Standard (AS) - 18 -''Revenue from customers'', the Company has deferred the recognition of interest income of Rs.158.37 lakhs [(as at 31 March 2017: Rs.537.69 lakhs) (as at 1 April, 2016: Rs.298.79 lakhs)], due to uncertainties involved in ultimate collection of the outstanding amounts.

8. During the year, the Chairman & Managing Director was entitled to remuneration. However, the CMD has voluntarily decided not to draw any remuneration from the Company.

9. The outstanding balances as at 31 March, 2018 include trade payables aggregating Rs.8,469.71 lakhs, trade receivables aggregating Rs.16.26 lakhs and interest receivable aggregating to Rs.1,341.00 lakhs to/from companies situated outside India. These balances are pending for settlement due to financial difficulties and have resulted in delays in remittance of payments, receipts of receivables and receipt of interest, beyond the timeline stipulated by the FED Master Direction No. 17/2016-17, FED Master Direction No. 16/2015-16 and Notification No. FEMA 120/ RB-2004 respectively, under the Foreign Exchange Management Act, 1999. The Company is in the process of regularizing these defaults by filing necessary applications with the appropriate authority for condonation of delays.

10. The Company currently does not have Chief Financial officer and Company Secretary as required under Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company is in the process of hiring a suitable candidate.

Mar 31, 2016

SIGNIFICANT ACCOUNTING POLICIES AND EXPLANATORY INFORMATION TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016

1. Loan Funds:

(a) Term Loans:

(i) Term Loan of US$ 5.00 Million from a bank is secured by way of first pari passu charge on entire fixed assets both present and future (excluding residential flat at Cuffe Parade, Mumbai and office premises situated at Nariman Point, Mumbai), Second pari passu charge on current assets of the Company (both present & future), unconditional and irrevocable personal guarantees from three promoter directors and non-disposal undertaking of shareholding of the Company in its subsidiary located in China. The loan is repayable in bullet in May 2016. The interest rate of the Borrowings is 6 Months'' LIBOR plus 5.50% per annum.

(ii) Term Loan from another bank up to Rs. 32,500.00 Lakh is secured by way of (a) first pari passu charge on all the fixed assets of the Company, excluding specific immovable properties (b) second pari passu charge on the current assets of the Company (c) pledge of 29.99% of the shares of the Company held by the promoters (d) pledge of all the shares of the subsidiaries held by the Company (e) unconditional and irrevocable personal guarantees from three promoter directors and (f) exclusive charge on certain residential and commercial immovable properties owned by the Company, promoters, group companies/firms. The loan is repayable in quarterly unequated installments by October 2020. The interest rate of the Borrowing ranges from 11% to 13% per annum.

(b) Working Capital facilities from banks are secured by way of (i) first pari passu charge in the form of hypothecation of stocks, book debts and all other current assets of the Company and (ii) second pari passu charge on all the fixed assets (excluding specific fixed assets) of the Company. One of the banks has been provided personal guarantees from two directors and one other bank has been provided personal guarantee from a director. Two of the banks have been provided additional security over separate specific immovable properties of the Company. The interest rate of the working capital facilities ranges from 11% to 15% per annum.

(c) The Interest-free Sales Tax Deferment Loan is repayable in six equal annual installments, with the last installment falling due in financial year 2018-19.

(d) Unsecured loans from related parties are repayable on demand and carry interest rate of 12% per annum. However, as per the terms of the loans, repayment of loans cannot be demanded before 1 April 2017.

1. Bonds / Undertakings given by the Company under concessional duty / exemption schemes to government authorities (net of obligations fulfilled) aggregate Rs. 19.94 Lakh as at the close of the year (March 31, 2015: Rs. 2,978.77 Lakh).

2. During the year 2015-16, the Chairman & Managing Director (CMD) is entitled to a remuneration of Rs. 61.19 Lakh (March 31, 2015: Rs. 61.95 Lakh) as per Schedule V to the Companies Act, 2013. However, in absence of profits, the CMD has voluntarily decided not to draw any remuneration from the Company.

3. In accordance with Accounting Standard (AS) 15 -âEmployee Benefitsâ, an amount of Rs. 57.85 Lakh (Previous Year Rs. 69.89 Lakh) as contribution towards defined contribution plans is recognised as expense in the Statement of Profit and Loss.

4 In accordance with Accounting Standard - 17 ''Segment Reporting, segment information has been given in the Consolidated Financial Statements of the Company and, therefore, no separate disclosure on Segment information is given in these financial statements.

5 The Company has an investment of Rs. 200 Lakh in 2,000,000 Equity Shares of GPT Steel Industries Private Limited (GPT). Based on the financial statements of GPT, its Net Worth has fully eroded. The Company had made an assessment during the year 2010-11 and had accordingly provided for 100% diminution in value of investments made in GPT. The position at the end of this financial year remains the same.

6 As on March 31, 2016, the Company is holding a majority stake of Rs. 431.72 Lakh (Rs. 431.72 Lakh as on March 31, 2015) in its subsidiary, Calcutta Compression & Liquefaction Engineering Limited (CC&L). Further, the Company has trade receivables, loans and other receivables, aggregating Rs. 1,413.40 Lakh (Rs. 1,328.09 Lakh as at March 31, 2015) due from it. The Net Worth of CC&L has fully eroded. Provision for impairment of Rs. Nil (Previous year Rs. 431.72 Lakh) towards the investment in share capital and Rs. 826.47 Lakh (Previous year Rs. 48.28 Lakh) towards trade receivables, loans and other receivables have been made based on management''s assessment and independent valuation of the recoverable value of the investment, loans and receivables. These provisions have been disclosed as an Exceptional Item in the Statement of Profit and Loss.

7 Since March 31, 2013, the investment in equity shares, amounting to Rs. 6,925.07 Lakh of EKC Industries (Tianjin) Company Limited, the subsidiary in China, has been considered as current investment pursuant to the decision of the Board of Directors of the Company to dispose off the investment in the subsidiary by sale of the equity shares or in any other manner most beneficial to the Company. Accordingly, the amounts recoverable as loans and advances and interest thereon aggregating to Rs.4,295.76 Lakh as on March 31, 2016 (Rs. 3,950.82 Lakh as at March 31, 2015) have been classified as current. The Company is of the considered view based on the assessment of the relevant factors, such as, the long term nature of the investment, future business prospects in the markets in which EKC Industries (Tianjin) Company Limited operates, expected appreciation in the fair value of the assets of EKC Industries (Tianjin) Company Limited, etc., that no provision for the diminution in the value of the Investment is required. However, on conservative basis, during the current year, an amount of Rs. 2,000 Lakhs (Previous year Rs. 1,500 Lakhs) has been provided towards such diminution and has been disclosed as an Exceptional Item in the Statement of Profit and Loss. The total provision towards such diminution as at 31 March 2016 stands at Rs. 3,500 Lakhs (Previous year Rs. 1,500 Lakhs).

8 Exceptional Item includes benefit on closure of borrowing obligation of Rs. 507.73 Lakhs (Previous year Rs. Nil).

9 Exceptional item includes provision towards diminution in value for slow and non-moving inventory of Rs. 615.68 Lakhs (Previous year Rs. Nil).

10 Short term loans and advances and other current assets includes an aggregate amount of Rs. 1,724.09 Lakh (Rs. 1,779.2 Lakh as at 31 March 2015) towards secured inter-corporate deposit advanced to Akruti City Limited (now Hubtown Limited) and accrued interest thereon. The deposit and accrued interest are outstanding for a considerable period. These deposits are secured against mortgage rights of an under-construction commercial property in favor of the Company. Based on on-going discussion with Akruti City Limited (now Hubtown Limited), the management is confident of recovering the inter-corporate deposit with accrued interest thereon and therefore believes that no provision for losses on account of non-recoverability of amounts, if any, is necessary at present.

11 As on March 31, 2016, Other Current Assets include land at Gandhidham having book value Rs. 235.56 Lakh (As on March 31, 2015 Rs. 223.25 Lakh) and office premises at Mumbai having book value Rs. 1,235.68 Lakh (As on March 31, 2015 Rs. 1,235.68 Lakh) being Fixed assets held for disposal, pursuant to the decision of the Board of Directors of the Company to dispose off the same in the near future.

12 In accordance with Accounting Standard (AS) - 9 - Revenue recognition, the Company has deferred the recognition of interest income of Rs. 299 Lakh, due to uncertainties involved in ultimate collection of the outstanding amounts.

13 Previous year''s figures have been reclassified / regrouped to conform to current year''s classification / grouping.

14 Significant Accounting Policies followed by the Company are as stated in the Statement annexed to this note as Annexure I.

Mar 31, 2015

1. Rights, Preferences and Restrictions attached to Shares

The Company has only one class of Equity Shares having a par value of Rs. 2/- per Share. Each Shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts in proportion to the share holding.

2. Loan Funds:

(a) Term Loans:

(i) Term Loan of US$ 5.00 Million from a bank is secured by way of first pari passu charge on entire fixed assets both present and future (excluding residential flat at Cuffe Parade, Mumbai and office premises situated at Nariman Point, Mumbai), Second pari passu charge on current assets of the Company (both present & future), unconditional and irrevocable personal guarantees from three promoter directors and non- disposal undertaking of shareholding of the Company in the subsidiary in China. The loan has been renewed during the year and is repayable in bullet in May 2016. The interest rate of the Borrowings is 6 Months' LIBOR plus 5.50% per annum.

(ii) Term Loan from another bank up to Rs. 32,500.00 Lakh is secured by way of (a) first pari passu charge on all the fixed assets of the Company, excluding specific immovable properties (b) second pari passu charge on the current assets of the Company (c) pledge of 29.99% of the shares of the Company held by the promoters (d) pledge of all the shares of the subsidiaries held by the Company (e) personal guarantees from three promoter directors and (f) exclusive charge on certain residential and commercial immovable properties owned by the Company, promoters, group companies/firms. The loan is repayable in quarterly unequated installments commencing from January 2015 and ending in October 2020. The current interest rate of the Borrowing is 13% per annum.

(b) Working Capital facilities from banks are secured by way of (i) first pari passu charge in the form of hypothecation of stocks and book debts of the Company and (ii) second pari passu charge on all the fixed assets (excluding specific fixed assets) of the Company. One of the banks has been provided personal guarantees from two directors. Two of the banks have been provided additional security over separate specific immovable properties of the Company. The interest rate of the working capital facilities ranges from 13.20% per annum to 15.50% per annum.

(c) The Interest-free Sales Tax Deferment Loan is repayable in six equal annual installments, with the last installment falling due in financial year 2018-19.

(d) Short-term unsecured loans from related parties are repayable on demand and carry interest rate of 12% per annum.

(e) Details of borrowings due and outstanding as on March 31, 2015:

Name of Nature of Amount Period to the parties the dues (in Lakh) which payment the amount relates

Yes Bank Interest on 94.86 FY 2014-15 term loan 166.69 FY 2014-15

Everest Kanto Interest on 26.10 FY 2013-14 Investment & unsecured Finance Ltd loan

Khurana Interest on 0.48 FY 2013-14 Fabrication unsecured Industries loan Limited

Khurana Interest on 4.80 FY 2013-14 Gases unsecured Private Ltd loan

Name of Due date Date of the parties

Yes Bank 1-March-15 24-April-15

1-March-15 29-April-15

Everest Kanto 1- April-14 Not paid Investment & till date Finance Ltd

Khurana 1- April-14 Not paid Fabrication till date Industries Limited

Khurana 1- April-14 Not paid Gases till date Private Ltd

3. Contingent Liabilities As at As at in respect of: 31st March, 31st March, 2015 2014 (Rs. in Lakh) Rs. in Lakh)

(a) Disputed Tax Matters

Income Tax 806.30 1,664.60

Sales Tax and Value Added Tax 461.36 53.92

Lease Tax 21.05 21.05

Future cash flows in respect of the above are determinable only on pronouncements of judgments/ decisions pending with various forums/authorities.

(b) Corporate Guarantees given on behalf of subsidiaries and step down subsidiaries. 11,579.30 11,118.46

Amounts outstanding there against 7,258.56 9,206.27

(c) Claims against the Company not acknowledged as Debts 56.80 233.80

(d) Bonds executed in favour of Government Authorities (Also refer Clause No. 12 of Note xxvii) 2,978.77 3,222.14

4. (a) Trade Payables include Rs. 157.40 Lakh (Rs. 117.03 Lakh as at 31/03/2014) due to Micro and Small Enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME).

(b) No interest is paid/payable during the year to any enterprise registered under MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

As at As at 5. Commitments: 31st March, 31st March, 2015 2014 (Rs. in Lakh) Rs. in Lakh)

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) 218.44 218.44

(b) Uncalled amount on partly paid Equity Shares of a Subsidiary Company 128.56 128.56

10. Related Parties Disclosures:

1. Relationships:

(a) Subsidiary Companies :

EKC Industries (Tianjin) Co. Limited, China

EKC International FZE, UAE

EKC Industries (Thailand) Co. Limited, Thailand

Calcutta Compressions & Liquefaction Engineering

Limited (C C & L), India

(b) Step Down Subsidiary Companies :

EKC Hungary Kft, Hungary

EKC Europe GmbH, Germany

CP Industries Holdings Inc., USA

(c) Other Related Parties where Promoters, Directors & Relatives exercise significant influence :

Everest Kanto Investment and Finance Private Limited

Khurana Gases Private Limited

Medical Engineers (India) Limited

Khurana Fabrication Industries Private Limited

Khurana Exports Private Limited

Everest Industrial Gases Private Limited

Khurana Charitable Trust

Khurana Education Trust

G.N.M. Realtors Private Limited

Ukay Valves & Founders Private Limited

(d) Key Management Personnel :

Mr. Prem Kumar Khurana (Chairman and Managing Director)

Mr. Vipin Chandok (Chief Financial Officer)

Ms. Kanika Sharma (Company Secretary) (till February 20, 2015)

(e) Relatives of Key Management Personnel, with whom transactions have taken place :

Mr. S. S. Khurana

Mrs. Suman Khurana

Mr. Pushkar Khurana

Mr. Puneet Khurana

Mr. Varun Khurana

# Foreign currency balances are restated at year end rates.

* Loans given to subsidiaries and loans raised by subsidiaries backed by guarantees given on their behalf have been utilised by them for acquisition of fixed assets and for working capital.

@ Personal Guarantees given to banks of ' 34,700.00 Lakh and US$ 5 Mn (Rs. 32,500.00 Lakh and US$ Nil as on March 31,2014) by Promoter Directors for the Term Loans against which Rs. 31,219.90 Lakh (Rs. 26,531.53 Lakh as on March 31, 2014) were outstanding as at the end of the year. (Previous year figures are in brackets).

6. Bonds/Undertakings given by the Company under concessional duty / exemption schemes to government authorities (net of obligations fulfilled) aggregate Rs. 2,978.77 Lakh as at the close of the year (March 31,2014: Rs. 3,222.14 Lakh).

7. (a) During the year 2014-15, the Chairman & Managing

Director (CMD) is entitled to a remuneration of Rs. 61.95 Lakh as per Schedule V to the Companies Act, 2013. However, in absence of profits, the CMD has voluntarily decided not to draw any remuneration from the Company.

(b) In the absence of profits during the financial year 2012- 13, the remuneration of Rs. 289.84 Lakh for that financial year of the CMD and two Whole Time Directors (WTDs) as per their respective terms of appointments was in excess by Rs. 228.78 Lakh computed in accordance with the provisions of the Companies Act, 1956 and Schedule XIII thereto. The Company had obtained approval of the shareholders of the Company by way of postal ballot for payment of the excess remuneration and had applied to the Central Government for seeking its approval. During the year 2014-15, the Central Government has approved 50% of the remuneration paid to the CMD and the two WTDs. The CMD and the two WTDs have refunded the excess remuneration not approved by the Central Government.

8. In accordance with Accounting Standard (AS) 15 - "Employee Benefits", an amount of Rs. 69.89 Lakh (Previous Year Rs. 77.48 Lakh) as contribution towards defined contribution plans is recognised as expense in the Statement of Profit and Loss.

Expected Employer's Contribution next year ' 25.00 Lakh (Previous Year Rs. 30.00 Lakh)

* The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

9. In accordance with Accounting Standard - 17 'Segment Reporting, segment information has been given in the Consolidated Financial Statements of the Company and, therefore, no separate disclosure on Segment information is given in these financial statements.

10. The Company has an investment of Rs. 200 Lakh in 2,000,000 Equity Shares of GPT Steel Industries Private Limited (GPT). Based on the financial statements of GPT, its Net Worth has fully eroded. The Company had made an assessment during the year 2010-11 and had accordingly provided for 100% diminution in value of investments made in GPT. The position at the end of this financial year remains the same.

11. As on March 31, 2015, the Company is holding majority stake of Rs. 431.72 Lakh (Rs. 431.72 Lakh as on March 31, 2014) in its subsidiary, Calcutta Compression & Liquefaction Engineering Limited (CC&L). Further, the Company has loans and other receivables, aggregating Rs. 1,328.09 Lakh (Rs. 1,068.91 Lakh as at March 31,2014) due from it. The Net Worth of CC&L has fully eroded. Provision for impairment of Rs. 431.72 Lakh towards the investment and Rs. 48.28 Lakh towards loans and receivables have been made during the year 2014-15 (Financial Year 2013-14: Nil) based on management's assessment and independent valuation of the recoverable value of the investment, loans and receivables. These provisions have been disclosed as an Exceptional Item in the Statement of Profit and Loss.

12. Since March 31, 2013, the investment in equity shares, amounting to Rs. 6,925.07 Lakh of EKC Industries (Tianjin) Company Limited, the subsidiary in China, has been considered as current investment pursuant to the decision of the Board of Directors of the Company to dispose off the investment in the subsidiary by sale of the equity shares or in any other manner most beneficial to the Company. Accordingly, the amounts recoverable as loans and advances and interest thereon aggregating to Rs. 3,950.82 Lakh as on March 31, 2015 (Rs. 7,628.67 Lakh as at March 31,2014) have been classified as current. The Company is of the considered view based on the assessment of the relevant factors, such as, the long term nature of the investment, future business prospects in the markets in which EKC Industries (Tianjin) Company Limited operates, expected appreciation in the fair value of the assets of EKC Industries (Tianjin) Company Limited, etc., that no provision for the diminution in the value of the Investment is required. However, on conservative basis, during the current year, an amount of Rs. 1,500 Lakhs (Rs. Nil as at March 31, 2014) has been provided towards such diminution and has been disclosed as an Exceptional Item in the Statement of Profit and Loss.

13. As on March 31,2015, Other Current Assets include land at Gandhidham having book value Rs. 223.25 Lakh and office premises at Mumbai having book value Rs. 1,235.68 Lakh being Fixed assets held for disposal, pursuant to the decision of the Board of Directors of the Company to dispose off the same during near future.

14. Previous year's figures have been reclassified/regrouped to conform to current year's classification/grouping.

15. Significant Accounting Policies followed by the Company are as stated in the Statement annexed to this note as Annexure I.

Mar 31, 2014

1. Loan Funds:

(a) Term Loans:

(i) Term Loan of US$ 5.00 Million from a bank is secured by way of first pari passu charge on movable fixed assets of the plant at Kandla SEZ up to a value of 125% of the loan amount and non-disposal undertaking of the shareholding of the Company in the subsidiary in China. The loan is repayable in bullet in May 2014. The interest rate of the Borrowings is 6 Months'' LIBOR plus 5.50% pa.

(ii) Term Loan from another bank up to Rs. 32,500.00 Lakh is secured by way of (a) first pari passu charge on all the fixed assets of the Company, excluding specific immovable properties (b) second pari passu charge on the current assets of the Company (c) pledge of 29.99% of the shares of the Company held by the promoters (d) pledge of all the shares of the subsidiaries held by the Company (e) personal guarantees from promoter directors and (f) exclusive charge on certain residential and commercial immovable properties owned by the Company, promoters, group companies/firms. The loan is repayable in quarterly unequated installments commencing from January 2015 and ending in October 2020. The current interest rate of the Borrowing is 13% pa.

(b) Working Capital facilities from banks are secured by way of (i) first pari passu charge in the form of hypothecation of stocks and book debts of the Company and (ii) second pari passu charge on all the fixed assets (excluding specific fixed assets) of the Company. One of the banks has been provided additional security over a specific immovable property of the Company.

(c) The Interest-free Sales Tax Deferment Loan is repayable in six equal annual installments, with the last installment falling due in financial year 2018-19. Short-term unsecured loans from related parties are repayable on demand and carry interest rate of 12% p.a.

2. Contingent Liabilities As at As at in respect of: 31st March, 31st March, 2014 2013 (Rs. in Lakh)
(a) Disputed Tax Matters

Income Tax 1,664.60 108.12

Sales Tax and Value Added Tax 53.92 440.48

Lease Tax 21.05 14.34

Future cash flows in respect of the above are determinable only on pronouncements of judgments/ decisions pending with various forums/ authorities.

(b) Corporate Guarantees given on behalf of subsidiaries and step down subsidiaries. 11,118.46 8,702.29

Amounts outstanding there against 9,206.27 6,935.35

(c) Claims against the Company not acknowledged as Debts 233.80 189.57

3. (a) Trade Payables include Rs. 117.03 Lakh (Rs. 55.27 Lakh as at 31/03/2013) due to Micro and Small Enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME).

(b) No interest is paid / payable during the year to any enterprise registered under MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

10. Related Parties Disclosures:

1. Relationships:

(a) Subsidiary Companies :

EKC Industries (Tianjin) Co. Limited, China EKC International FZE, UAE EKC Industries (Thailand) Co. Limited, Thailand Calcutta Compressions & Liquefaction Engineering Limited (C C & L), India

(b) Step Down Subsidiary Companies : EKC Hungary Kft, Hungary

EKC Europe GmbH, Germany CP Industries Holdings Inc., USA

(c) Other Related Parties where Promoters, Directors & Relatives exercise significant influence :

Everest Kanto Investment and Finance Private Limited Khurana Gases Private Limited Medical Engineers (India) Limited

Khurana Fabrication Industries Private Limited

Khurana Exports Private Limited

Everest Industrial Gases Private Limited

Khurana Charitable Trust

Khurana Education Trust

G.N.M. Realtors Private Limited

Ukay Valves & Founders Private Limited

(d) Key Management Personnel : Mr. Prem Kumar Khurana

Mr. Puneet Khurana (Till 30th September, 2012) Mr. Pramod Samvatsar (Till 28th February, 2013)

(e) Relatives of Key Management Personnel and their Enterprises, with whom transactions have taken place : Mr. S.S. Khurana

Mrs. Suman Khurana Mr. Pushkar Khurana Mr. Puneet Khurana (Since 1st October, 2012)

12. Bonds / Undertakings given by the Company under concessional duty / exemption schemes to government authorities (net of obligations fulfilled) aggregate Rs. 3,222.14 Lakh as at the close of the year (March 31, 2013: Rs. 3,554.24 Lakh).

13. (a) During the year 2013-14, the remuneration paid to

Chairman & Managing Director (CMD) is within the limits prescribed under Schedule XIII to the Companies Act, 1956. However, in absence of profits, the CMD has voluntarily decided not to draw any remuneration from the Company from November 2013.

(b) In absence of the profits for the financial year 2012-13, the remuneration of Rs. 289.84 Lakh for the previous year of the CMD and the two Whole Time Directors (WTD) as per their respective terms of appointments was in excess by Rs. 228.78 Lakh computed in accordance with the provisions of the Companies Act, 1956 and Schedule XIII thereto. The Company has obtained approval of the shareholders of the Company by way of postal ballot for payment of the excess remuneration and has applied to the Central Government for seeking its approval. The Central Government has approved 50% of the remuneration paid to the two WTDs. The WTDs have refunded to the Company, the excess remuneration not approved by the Central Government. The approval of the excess remuneration of CMD amounting to Rs. 149.90 Lakh has not yet been received and the remuneration paid to him is held in trust by him.

14. In accordance with Accounting Standard (AS) 15 Â "Employee Benefits", an amount of Rs. 77.48 Lakh (Previous Year Rs. 100.72 Lakh) as contribution towards defined contribution plans is recognised as expense in the Statement of Profit and Loss.

15. In accordance with Accounting Standard Â 17 ''Segment Reporting,'' segment information has been given in the Consolidated Financial Statements of the Company and, therefore, no separate disclosure on Segment information is given in these financial statements.

16. The Company has an investment of Rs. 200 Lakh in 2,000,000 Equity Shares of GPT Steel Industries Private Limited (GPT). Based on the audited financial statements of GPT, its Net Worth has fully eroded. The Company had made an assessment during the year 2010-11 and had accordingly provided for diminution in value of investments made in GPT. The position at the end of this financial year remains the same.

17. During the year 2012-13, the Company had made additional investment of Rs. 96.42 Lakh in Calcutta Compression & Liquefaction Engineering Limited (CC&L), which is a subsidiary of the Company, wherein the Company has majority stake. As on March 31, 2014, the investment aggregates to Rs. 431.72 Lakh (Rs. 431.72 Lakh as on March 31, 2013). Further, the Company has recoverable loans and other receivables, aggregating Rs. 1,068.91 Lakh (Rs. 903.58 Lakh as at March 31, 2013) from it. The Net Worth of CC&L has fully eroded. However, in the opinion of the management, after considering the long term recurring nature of its business, its projected earnings and cash flows, the improvements in its current operational performance and the intention to hold this investment on a long term and strategic basis, no provision for diminution in the value of investment or for losses on account of loans and other receivables is considered necessary, at present.

18. As on March 31, 2014 and March 31, 2013, the investment in equity shares, amounting to Rs. 6,925.07 Lakh (Rs. 6,925.07 Lakh as on March 31, 2013), of EKC Industries (Tianjin) Company Limited, the subsidiary in China, has been considered as current investment pursuant to the decision of the Board of Directors of the Company to dispose off the investment in the subsidiary by sale of the equity shares or in any other manner most beneficial to the Company. Accordingly, the amounts recoverable as loans and advances and interest thereon aggregate Rs. 7,628.67 Lakh as on March 31, 2014 (Rs. 7,695.29 Lakh as at March 31, 2013) have been classified as current. As per the independent valuation obtained by the Company, the valuation of the Subsidiary exceeds the carrying value of the net assets.

19. Previous year''s figures have been reclassified / regrouped to conform to current year''s classification / grouping.

20. Significant Accounting Policies followed by the Company are as stated in the Statement annexed to this note as Annexure I.

Mar 31, 2013

GENERAL INFORMATION

The Company is engaged in the manufacture of high pressure seamless gas cylinders and other cylinders, equipments, appliances and tanks with their parts and accessories used for containing and storage of liquefied petroleum gases and other gases, liquids and air.

1. Loan Funds:

(a) Term Loans:

(i) Term Loan of US$ 5.00 Mn. from a bank is secured by way of first pari passu charge on movable fixed assets of the plant at Kandla SEZ up to 125% of the loan amount and non-disposal undertaking of the shareholding of the Company in the subsidiary in China. The loan is repayable in bullet in May 2014. The interest rate of the Borrowings is 6 Months'' LIBOR plus 5.50% pa.

(ii) Term Loan from another bank up to Rs. 325 Crore is secured by way of (a) first pari passu charge on all the fixed assets of the Company, excluding a specific immovable property (b) second pari passu charge on the current assets of the Company (c) pledge of 29.99% of the shares of the Company held by the promoters (d) pledge of all the shares of the subsidiaries held by the Company (e) personal guarantees from promoter directors and (f) exclusive charge on certain residential and commercial immovable properties owned by the Company, promoters, group companies/firms. The loan is repayable in quarterly unequated installments commencing from January 2015 and ending in October 2020. The interest rate of the Borrowing is 12.75% pa.

(b) Working Capital facilities from banks are secured by way of (i) first pari passu charge in the form of hypothecation of stocks and book debts of the Company and (ii) second pari passu charge on all the fixed assets (excluding specific fixed assets) of the Company. One of the banks has been provided additional security over a specific immovable property of the Company.

(c) The Interest-free Sales Tax Deferment Loan is repayable in six equal annual installments, with the last installment falling due in financial year 2018-2019.

2. Contingent Liabilities not As at As at provided for in respect of:

31.03.2013 31.03.2012 (Rs. in Lakh) (Rs. in Lakh)

(a) Disputed Tax Matters

Income Tax 108.12 156.54

Sales Tax and Value Added Tax 440.48 486.74

Lease Tax 14.34 16.34

Future cash flows in respect of the above are determinable only on receipt of judgments/ decisions pending with various forums/ authorities.

(b) Corporate Guarantees given on behalf of subsidiaries and step down subsidiaries. 8702.29 33,963.29

Amounts outstanding there against 6935.35 5,942.66

(c) Claims against the Company not acknowledged as Debt 189.57

3. (a) Trade Payables include Rs. 55.27 Lakh (Rs. 91.08 Lakh as at 31/03/2012) due to Micro and Small Enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME).

(b) No interest is paid / payable during the year to any enterprise registered under MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

4. As none of the Zero Coupon Foreign Currency Convertible Bonds (FCCBs), 2007, of the aggregate principal value of USD 35 Million were converted into equity shares of the Company at the option of the holders, as per the terms of the issue, the FCCBs were fully redeemed on their due date i.e. October 10, 2012, at the premium of 42.8010% amounting to US$ 49.98 Mn. at the US$ / Rupee exchange rate of 52.64. The premium amounting to Rs. 87.62 Crore, including the withholding tax of Rs. 8.76 Crore, has been charged off to the Securities Premium Account.

5. Related Party Disclosures: 1. Relationships:

(a) Subsidiary Companies :

EKC Industries (Tianjin) Co. Limited, China

EKC International FZE, UAE

EKC Industries (Thailand) Co. Limited, Thailand

Calcutta Compressions &

Liquefaction Engineering Limited (C C & L)

(b) Step Down Subsidiary Companies : EKC Hungary Kft, Hungary

EKC Europe GmbH, Germany CP Industries Holdings Inc., USA

(c) Other Related Parties where Promoters, Directors & Relatives exercise significant influence : Everest Kanto Investment and Finance Private Limited Khurana Gases Private Limited

Medical Engineers (India) Limited

Khurana Fabrication Industries Private Limited

Khurana Exports Private Limited

Everest Industrial Gases Private Limited

Khurana Charitable Trust

Khurana Education Trust

G.N.M.Realtors Private Limited

Ukay Valves & Founders Private Limited

(d) Key Management Personnel : Mr. Prem Kumar Khurana

Mr. Puneet Khurana (Till 30th September, 2012) Mr. Pramod Samvatsar (Till 1st March, 2013)

(e) Relatives of Key Management Personnel and their Enterprises, where transactions have taken place : Mr. S.S. Khurana

Mrs. Suman Khurana

6. Bonds / Undertakings given by the Company under concessional duty / exemption schemes to government authorities (net of obligations fulfilled) aggregate Rs. 3,554.24 Lakh as at the close of the year (31/03/2012 : Rs. 3,708.24 Lakh).

7. (a) In absence of the profits for the financial year 2012-13, the remuneration of Rs. 289.84 Lakh for the year of the Managing Director (MD) and the two Whole-Time Directors (WTD) as per their respective terms of appointments is in excess by Rs. 228.78 Lakh computed in accordance with the provisions of the Companies Act, 1956 and Schedule XIII thereto. The Company has obtained approval of the shareholders of the Company by way of postal ballot for payment of the excess remuneration and have applied to the Central Government for seeking its approval. Pending approval of the Central Government such excess remuneration is being held in trust by the Managing Director and Whole-Time Directors.

(b) As regards the excess remuneration of Rs. 207.31 Lakhs of the Managing Director and the two Whole-Time Directors for the financial year 2011-12, approval of the waiver of the excess remuneration has been obtained from the shareholders at the Annual General Meeting held in August 2012. On applications by the Company, the Central Government has approved the excess remuneration of Rs. 91.63 Lakh of the two Whole- Time Directors while its approval for the excess remuneration of Rs. 115.68 Lakh of the Managing Director is awaited. Pending approval of the Central Government the amount is held in trust by the Managing Director.

8. In accordance with Accounting Standard (AS) 15- "Employee Benefits", an amount of Rs. 100.72 Lakh (Previous Year Rs. 127.98 Lakh) as contribution towards defined contribution plans is recognised as expense in the Statement of Profit and Loss.

The disclosures in respect of the Defined Benefit Gratuity

9. In accordance with Accounting Standard Â 17 ''Segment Reporting,'' segment information has been given in the Consolidated Financial Statements of the Company and, therefore, no separate disclosure on Segment information is given in these financial statements.

10. The Company has an investment of Rs. 200 Lakh in 2,000,000 Equity Shares of GPT Steel Industries Private Limited (GPT). Based on the audited financial statements of GPT, its Net Worth has fully eroded. The Company had made an assessment during the year 2010-11 and had accordingly provided for diminution in value of investments made in GPT. The position at the end of this financial year remains the same.

11. During the year, the Company has made additional investment of Rs. 96.42 Lakh in Calcutta Compression & Liquefaction Engineering Limited (CC&L), which is a subsidiary of the Company, wherein the Company has majority stake. Accordingly, the investment aggregates Rs. 431.72 Lakh (Rs. 335.30 Lakh as on 31/03/2012). Further, the Company has recoverable loans and other receivables, aggregating Rs. 903.58 Lakh (Rs. 877.16 Lakh as at 31/03/2012) from it. The Net Worth of CC&L has fully eroded. In the opinion of the management, after considering the projected earnings and cash flows of CC&L, the improvements in its current operational performance and the intention to hold this investment on a long term and strategic basis, no provision for diminution in the value of investment or for losses on account of loans and other receivables is considered necessary, at present.

12. As on March 31, 2013, the investment in equity shares, amounting to Rs. 6,925.07 lakhs, of EKC Industries (Tianjin) Company Limited, the subsidiary in China, has been considered as current investment pursuant to the decision of the Board of Directors of the company to dispose off the investment in the subsidiary by sale of the equity shares or in any other manner most beneficial to the company. Accordingly, the amounts recoverable as loans and advances and interest thereon aggregate Rs. 7,695.29 lakhs as on March 31, 2013 have been classified as current. As per the independent valuation obtained by the Company, the valuation of the Subsidiary exceeds the carrying value of the exposure.

13. Previous year''s figures have been reclassified / regrouped to conform to current year''s classification / grouping.

Mar 31, 2012

(a) Rights, Preferences and Restrictions attached to Shares

The Company has one class of Equity Shares having a par value of Rs 2/- per Share. Each Shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts in proportion to the share holding.

ADDITIONAL NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012

1. Loan Funds:

(a) External Commercial Borrowing is secured by first charge on the specific fixed assets of the Kandla SEZ. The interest rate on the Borrowings is 5.75% per annum and the principal is repayable in two installments, the last installment falling due in September 2012.

(b) Working Capital facilities are secured against hypothecation of stocks and book debts of the Company and further secured by way of second charge on all the fixed assets (excluding specific fixed assets) of the Company. Out of the same Rs 1,389.99 Lakh (PY : Rs 3,127.45 Lakh) borrowings are guaranteed by Directors and their relatives.

(c) The Interest-free Sales Tax Deferment Loan is repayable in six equal annual installments, with the last installment falling due in financial year 2018-2019.

2. Contingent Liabilities not As at As at provided for in respect of: 31.03.2012 31.03.2011 (Rs in Lakh) (Rs in Lakh)

(a) Disputed Tax and other Matters

Income Tax 156.54 21.14

Sales Tax 486.74 114.82

Lease Tax 16.34 16.34

Future cash flows in respect of the above are determinable only on receipt of judgments/decisions pending with various forums/ authorities.

(b) Corporate Guarantees given on behalf of subsidiaries and step down subsidiaries 33,963.29 34,380.50

Amounts outstanding there against 5,942.66 10,848.92

3. (a) Trade Payables include Rs 91.08 Lakh (Rs 16.77 Lakh as at 31/03/2011) due to Micro and Small Enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME).

(b) No interest is paid / payable during the year to any enterprise registered under MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

4. During the Financial Year 2007-08, the Company had raised a sum of USD 35 Million by issue of Zero Coupon Foreign Currency Convertible Bonds (FCCB) which are due in October 2012. The principal terms of the FCCBs are given below:

(i) The bond holders can exercise the option to convert into equity shares at any time after 41 days from the date of issue, up to seven days prior to maturity, at a fixed conversion price of Rs 303.36 per share with a fixed rate of Rs 39.84 to USD 1 (i.e. a conversion ratio of 13,133.1279 shares per bond).

(ii) On expiry of one year from the date of issue of the bonds, i.e. on the 9th October, 2008, the conversion price has been reset to Rs 271.32 (i.e. a conversion ratio of 14,684.0103 shares per bond).

(iii) The Company may opt for early redemption of the bonds at a redemption premium that gives the bond holder a gross yield of 7.25% per annum (compounded half yearly), provided bonds outstanding are less than 10 per cent of the bonds originally issued.

(iv) The Company may at its absolute discretion, at any time on or after 3 years from the date of issue of bonds, convert all outstanding bonds, provided the closing price of shares, during the specified period, is at least 130 per cent of the applicable early redemption amount.

(v) Bonds outstanding on the maturity date will be redeemed at 142.8010 % of the principal amount.

Due to variables currently indeterminable, the premium on actual redemption is not computable and hence will be recognized if and as and when the redemption option is exercised. The premium shall be first charged to the available balance in Securities Premium Account.

** Loans availed by step down subsidiaries are secured by way of first charge on all fixed assets at the Aurangabad, Tarapur and Gandhidham units.

# Foreign currency balances are restated at year end rates.

@ To the extent of amounts outstanding there against.

(Previous year figures are in brackets.)

5. Bonds / Undertakings given by the Company under concessional duty / exemption schemes to government authorities (net of obligations fulfilled) aggregate Rs 3,708.24 Lakh as at the close of the year (31/03/2011 : Rs 2,045.47 Lakh).

6. In absence of the profits for the year, the remuneration of Rs 279.31 Lakh paid during the year to the Managing Director and the two Whole-Time Directors as per their respective terms of appointment is in excess by Rs 207.31 Lakh computed in accordance with the provisions of the Companies Act, 1956 and Schedule XIII thereto. The Company would be obtaining approval of the shareholders of the Company at the ensuing Annual General Meeting of the Company and of the Central Government for waiver of the excess remuneration.

7. In accordance with Accounting Standard (AS) 15 - "Employee Benefits", an amount of Rs 127.98 Lakh (Previous Year Rs 126.42 Lakh) as contribution towards defined contribution plans is recognized as expense in the Statement of Profit and Loss.

The disclosures in respect of the Defined Benefit Gratuity Plan (to the extent of information made available by LIC) are given below:

8. In accordance with Accounting Standard - 17 'Segment Reporting,' segment information has been given in the Consolidated Financial Statements of the Company and, therefore, no separate disclosure on Segment information is given in these financial statements.

9. Considering foreign exchange exposures and the volatility in exchange rates, mark to market losses during the year on outstanding foreign currency derivative contracts to hedge highly probable forecast transactions have been charged to the Statement of Profit and Loss, discontinuing the Hedge Accounting principles followed upto 31st March, 2010. Accordingly, debit balance in the Hedging Reserve, as at 31st March, 2012, representing mark to market losses, considered as probable hedge transactions as at 31st March 2012, contracts of which are maturing up to December, 2012, stands at Rs 154.81 Lakh (Rs 365.43 Lakh as at 31/03/2011).

10. The Company has an investment of Rs 200 Lakh in 2,000,000 Equity Shares of GPT Steel Industries Private Limited (GPT). Based on the audited financial statements of GPT, its Net Worth has fully eroded. The Company had made an assessment during the year 2010-11 and had accordingly provided for diminution in value of investments made in GPT. The position at the end of this financial year remains the same.

11. During the year, the Company has made additional investment of Rs 96.42 Lakh in Calcutta Compression & Liquefaction Engineering Limited (CC&L), which is a subsidiary of the Company, wherein the Company has majority stake. Accordingly, the investment aggregates Rs 335.30 Lakh (Rs 238.88 Lakh as on 31/03/2011). Further, the Company has recoverable loans and other receivables, aggregating Rs 877.16 Lakh (Rs 846.73 Lakh as at 31/03/2011) from it. The Net Worth of CC&L has fully eroded. In the opinion of the management, after considering the projected earnings and cash flows of CC&L, the improvements in its current operational performance and the intention to hold this investment on a long term and strategic basis, no provision for diminution in the value of investment or for losses on account of loans and other receivables is considered necessary, at present.

12. During the year, as a part of global expansion plans, the Company has set up a step down wholly owned subsidiary in Germany viz. EKC Europe Gmbh, through EKC International FZE, Dubai, a wholly owned subsidiary company. The said Company will cater to the needs of European market and will also be engaged in technical developments.

13. The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre- revised Schedule VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.

14. Significant Accounting Policies followed by the Company are as stated in the Statement annexed to this Schedule as Annexure I.

Mar 31, 2011

1. Loan Funds:

(a) External Commercial Borrowing from DBS Bank is secured by first charge on the specific fixed assets of the Kandla SEZ.

(b) Working Capital facilities are secured against hypothecation of stocks and book debts of the Company and further secured by way of second charge on all the fixed assets (excluding specific fixed assets) of the Company. The borrowings are guaranteed by Directors and their relatives.

2. Contingent liabilities not As at As at provided for in respect of: 31.03.2011 31.03.2010 (Rs. in Lac) (Rs. in Lac)

(a) Disputed Tax and other Matters

Income Tax 21.14 Ã

Sales Tax 114.82 Ã

Lease Tax 16.34 16.34

Claims not acknowledged

as debts Ã 1.74

The Company has taken legal and other steps necessary to protect its position in respect of these claims, which in its opinion, based on professional advice are not expected to devolve. It is not possible to make any further determination of the liabilities which may arise or the amounts which may be refundable in this respect.

(b) Corporate Guarantees given on behalf of subsidiaries and step down subsidiaries 34,380.50 36,112.00

(Amounts outstanding there against) 10,848.92 19,247.55

3. (a) Sundry Creditors in Schedule L to the Accounts include (i) Rs. 16.77 Lac (Rs. 36.31 Lac as at 31.03.2010) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME) and (ii) Rs. 6,232.34 Lac (Rs. 9,226.86 Lac as at 31.03.2010) due to other creditors.

(b) No interest is paid / payable during the year to any enterprise registered under MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

4. During an earlier year, the Company had raised a sum of USD 35 Million by issue of Zero Coupon Foreign Currency Convertible Bonds (FCCB) which is due in 2012. The principal terms of the FCCBs are given below:

(i) The bond holders can exercise the option to convert into equity shares at any time after 41 days from the date of issue, upto seven days prior to maturity, at a fixed conversion price of Rs. 303.36 per share with a fixed rate of Rs. 39.84 to USD 1 (i.e. a conversion ratio of 13,133.1279 shares per bond).

(ii) On expiry of one year from the date of issue of the bonds, i.e. on 9th October, 2008, the conversion price has been reset to Rs. 271.32 (i.e. a conversion ratio of 14,684.0103 shares per bond).

(iii) The Company may opt for early redemption of the bonds at a redemption premium that gives the bond holder a gross yield of 7.25% per annum (compounded half yearly), provided bonds outstanding are less than 10 per cent of the bonds originally issued.

(iv) The Company may at its absolute discretion, at any time on or after 3 years from the date of issue of bonds, convert all outstanding bonds, provided the closing price of shares, during the specified period, is at least 130 per cent of the applicable early redemption amount.

(v) Bonds outstanding on the maturity date will be redeemed at 142.8010% of the principal amount.

Due to variables currently indeterminable, the premium on actual redemption is not computable and hence will be recognised if and as and when the redemption option is exercised. Such premium shall be first charged to the available balance in securities premium account.

5. Related parties disclosures: 1. Relationships:

(a) Subsidiary Companies:

EKC Industries (Tianjin) Co. Ltd., China

EKC International FZE, UAE

EKC Industries (Thailand) Co. Ltd., Thailand

Calcutta Compressions & Liquefaction Engineering Ltd. (CC&L)

(b) Step Down Subsidiary Companies:

EKC Hungary Kft, Hungary

CP Industries Holdings, Inc., USA

(c) Other related parties where control exists:

Everest Kanto Investment and Finance Private Limited

Khurana Gases Private Limited

Medical Engineers (India) Limited

Khurana Fabrication Industries Private Limited

Khurana Exports Private Limited

Everest Industrial Gases Private Limited

Khurana Charitable Trust

Khurana Education Trust

G.N.M. Realtors Private Limited

Ukay Valves & Founders Private Limited

(d) Key Management Personnel:

Mr. Prem Kumar Khurana

Mr. Puneet Khurana

Mr. Pramod Samvatsar

(e) Relatives of Key management personnel and their enterprises, where transactions have taken place:

Mr. S.S. Khurana

Mrs. Suman Khurana

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

6. Bonds / Undertakings given by the Company under concessional duty / exemption schemes to government authorities (net of obligations fulfilled) aggregate Rs. 2,045.47 Lac as at the close of the year (31.03.2010 Rs. 5,874.44 Lac).

7. In accordance with Accounting Standard (AS) 15 - "Employee Benefits", an amount of Rs. 126.42 Lac (Previous Year Rs. 99.53 Lac) as contribution towards defined contribution plans is recognised as expense in the Profit and Loss Account.

8. In accordance with Accounting Standard Ã 17 Segment Reporting segment information has been given in the consolidated financial statements of the Company and therefore, no separate disclosure on Segment information is given in these financial statements.

9. Considering foreign exchange exposures and the volatility in exchange rates, mark to market losses during the year on outstanding foreign currency derivative contracts to hedge highly probable forecast transactions have been charged to the Profit and Loss Account, discontinuing the Hedge Accounting principles followed upto 31st March, 2010. Accordingly, debit balance in the Hedging Reserve, as at 31st March, 2011, representing mark to market losses, considered as probable hedge transactions as at 31st March, 2010, contracts of which are maturing upto December, 2012, stands at Rs. 365.43 Lac.

10. The Company has an investment of Rs. 200 Lac in 2,000,000 Equity Shares of GPT Steel Industries Private Limited (GPT). As per the latest audited financial statements of GPT, the networth has fully eroded. The Company has during the year made an assessment and has accordingly provided for diminution in value of investments made in GPT.

11. The Company has investments of Rs. 238.88 Lac in and loans and other receivables aggregating Rs. 853.34 Lac recoverable from Calcutta Compressions & Liquefaction Engineering Limited (CC&L), a subsidiary with a majority stake. The networth of CC&L has fully eroded mainly on account of pre-operating losses. In the opinion of the management, after considering the projected earnings and cash flows of CC&L, the improvements in its operational performance during the last quarter of the current financial year and the intention to hold this investment on a long term and strategic basis, no provision for diminution in the value of investment or for losses on account of loans and other receivables is considered necessary, at present.

12. As a part of its global expansion plans, the Company has formed a wholly owned subsidiary in Thailand viz., EKC Industries (Thailand) Company Limited on 7th October, 2010. The said Company will cater to the needs of Thailand market, since Thailand is promoting Natural Gas Vehicles in a big way.

13. The Company, during Financial Year 2009 - 2010, changed its method of providing for depreciation on fixed assets, from Written Down Value Method (WDV) to Straight Line Method (SLM). Accordingly, depreciation was recalculated in accordance with SLM from the date the assets were put to use and surplus of Rs. 1,986.69 Lac (net of tax) in respect of earlier years was credited to the Profit and Loss Account.

14. With a view to consolidate and promote synergy amongst similar facilities and effective utilisation of the manufacturing facilities, it was considered prudent to shift the entire activities of Aurangabad plant to larger unit located at Gandhidham, during the quarter ended 31st December, 2010.

15. Previous year figures have been regrouped / recast wherever necessary.

Mar 31, 2010

1. Loan Funds:

(a) External Commercial Borrowing from DBS Bank is to be secured by first charge on the specific fixed assets of Kandla SEZ and till such time is guaranteed by a director.

(b) Working Capital facilities are secured against hypothecation of stocks and book debts of the Company and further secured by way of second charge on all the fixed assets (excluding specific fixed assets) of the Company. The borrowings are guaranteed by Directors and their relatives.

2. (a) Sundry Creditors in Schedule Ã LÃ to the Accounts include (i) Rs. 36.31 Lac (Rs. 2.05 Lac as at 31.03.2009) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME) and (ii) Rs. 9,226.86 Lac (Rs. 11,654.61 Lac as at 31.03.2009) due to other creditors.

(b) No interest is paid / payable during the year to any enterprise registered under MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

5. During an earlier year, the Company had raised a sum of USD 35 Million by issue of Zero Coupon Foreign Currency Convertible Bonds (FCCB) which are due in 2012. The principal terms of the FCCBs are given below:

(i) The bond holders can exercise the option to convert into equity shares at any time after 41 days from the date of issue, upto seven days prior to maturity, at a fixed conversion price, which has been reset w.e.f. 9th October, 2008 to Rs. 271.32 per share with a fixed rate of Rs. 39.84 to USD 1 (i.e. a conversion ratio of 14,684.0103 shares per bond).

(ii) The Company may opt for early redemption of the bonds at a redemption premium that gives the bond holder a gross yield of 7.25% per annum (compounded half yearly), provided bonds outstanding are less than 10% of the bonds originally issued.

(iii) The Company may at its absolute discretion, at any time on or after 3 years from the date of issue of bonds, convert all outstanding bonds, provided the closing price of shares, during the specified period, is at least 130% of the applicable early redemption amount.

(iv) Bonds outstanding on the maturity date will be redeemed at 142.8010% of the principal amount.

Due to variables currently indeterminable, the premium on actual redemption is not computable and hence will be recognised if and as and when the redemption option is exercised. Such premium shall be first charged to the available balance in securities premium account.

The employee wise break - up of benefits, calculations of which are based on actuarial valuations are not ascertainable. The amounts relatable to the Directors are, therefore, disclosed in the year of payment.

3. The Company, during the year, has changed its method of providing for depreciation on fixed assets, from the existing Written Down Value (WDV) method to Straight Line Method (SLM). This change would enable the Company to make a more appropriate allocation of depreciation so as to charge a fair proportion of the depreciable amount in each accounting year during the expected useful and economical life of the assets. Consequently, the said change would also result in more accurate presentation of carrying value of fixed assets at the balance sheet date.

Accordingly, depreciation has been recalculated in accordance with SLM from the date the assets were put to use and the surplus of Rs. 1,986.69 Lac (net of tax) in respect of earlier years has been credited to the Profit and Loss Account. Consequent to such change in the method, the depreciation charge for the year is lower by Rs. 1,175.58 Lac and the profit for the year is higher by the said amount and the reserves and surplus is higher by Rs. 2,771.77 Lac.

4. Related parties disclosures:

1. Relationships:

a) Subsidiary Companies:

EKC Industries (Tianjin) Co. Limited, China

EKC International FZE, UAE

Calcutta Compressions &

Liquefaction Engineering Limited (CC&L)

(b) Step Down Subsidiary Companies: EKC Hungary Kft, Hungary CP Industries Holdings, Inc., USA

(c) Other related parties where control exists: Everest Kanto Investment and Finance Pvt. Ltd. Khurana Gases Pvt. Ltd.

Medical Engineers (India) Ltd. (MEIL) Khurana Fabrication Industries Pvt. Ltd. Khurana Exports Pvt. Ltd. Everest Industrial Gases Pvt. Ltd. Khurana Charitable Trust Khurana Education Trust G.N.M.Realtors Pvt. Ltd. Ukay Valves & Founders Pvt. Ltd.

(d) Key Management Personnel: Mr. Prem Kumar Khurana Mr. Puneet Khurana

Mr. Pramod Samvatsar

(e) Relatives of Key management personnel and their enterprises, where transactions have taken place:

Mr. S. S. Khurana Mrs. Suman Khurana

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

5. Bonds / Undertakings given by the Company under concessional duty / exemption schemes to government authorities (net of obligations fulfilled) aggregate Rs. 5,874.44 Lac as at the close of the year (31.03.2009 Rs. 3,104.65 Lac).

6. In respect of currency options contracts entered into, to hedge highly probable forecast export transactions, the Company has followed the principles set out in Accounting Standard - 30 - Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India. Consequently, such exchange variations are accumulated in hedging reserve and recognized in the Profit and Loss Account only on completion of the transaction. Accordingly, debit balance in the Hedging Reserve, as at 31st March, 2010, representing mark to market losses, in respect of contracts maturing upto December, 2012, stands at Rs. 640.15 Lac.

7. The Company has an investment of Rs. 200 Lac in 2,000,000 equity shares of GPT Steel Industries Private Limited (GPT). As per the latest audited financial statements of GPT, the net worth has eroded. However, as per information available with the Company, GPT continues to be a going concern and has now embarked upon a revival plan. Considering the same and the intention of the management to hold this investment on a long term basis, no diminution in the value of the above investment is considered necessary, at present.

8. In accordance with Accounting Standard Ã 17 ÃSegment ReportingÃ segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on Segment information is given in these financial statements.

9. Previous year figures have been regrouped / recast wherever necessary.

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