Notes to Accounts of Kothari Industrial Corporation Ltd.

Mar 31, 2025

2.16 Provisions and contingencies
Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. Expected future operating losses are
not provided for. Where the Company expects some or all of the expenditure required to settle a provision
will be reimbursed by another party, the reimbursement is recognised when and only when it is virtually
certain that reimbursement will be received if the entity settles the obligation.

Contingencies

Contingent liabilities are not recognized but are disclosed in notes. Contingent assets are neither recognized
nor disclosed in the financial statements.

2.17 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to
equity shareholders and the weighted average number of equity shares outstanding during the year are
adjusted for the effects of all potential equity shares.

2.18 Accounting Policy, Change in Accounting Estimates and Error

If the Material error occurred before the earliest prior period presented then entity shall correct the same
retrospectively in the first set of financial statement approved for issue after the discovery after restating
the opening balance of assets, Liabilities and equity for the earliest prior period presented.

2.19 Segment Reporting

Operating segments are reported in a manner consistent with the internal reposting provided to the chief
Operating Decision Maker (“CODM”)

2.20 Dividend to Shareholders

Final dividend distributed to equity shareholders is recognized in the period in which it is approved by the
members of the Company in the Annual General Meeting. Interim dividend is recognized when approved by
the Board of Directors at the Board meeting. Dividend distributed (including interim dividend) is recognized
in the Statement of changes in Equity.

2.21 Investments in Subsidiaries and Associates

Investments in subsidiaries and associates are carried at cost less accumulated impairment losses., if any.
Where an indication of impairment exists, the carrying amount of the investment is assessed and written
down immediately to its recoverable amount. On disposal of investments in subsidiaries and associates, the
difference between net disposal proceeds and the carrying amounts are recognised in the Statement of Profit
and Loss.

2.22 Government grants

Government grants are recognised where there is reasonable assurance that the grant will be complied with.
When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis
over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and
recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.

Acquisition of Parveen Roadways

The Company has acquired Parveen Roadways, a sole proprietorship firm engaged in logistics and railway-related
services, for a consideration of ''24.04 crores (Paid as an advance on 28/03/2025) through a business transfer
agreement dated 8th April 2025. The business includes over 100 vehicles (such as tippers, trailers, buses, and
forklifts) and a workforce of approximately 500 employees. Major clients include Integral Coach Factory, Southern
Railways, Port Trusts, and Aavin Milk Factory.

Strategic Investment in Phoenix Kothari Footwear Limited (PKFL)

The Company has entered into an agreement to acquire 30% equity stake in Phoenix Kothari Footwear Limited (PKFL)
from Mr. Rafiq Ahmed for a total consideration of ''9906 lakhs. PKFL is a reputed contract manufacturer for global
footwear brands such as CROCS and Adidas. This strategic investment is aimed at strengthening KICL’s global
supply chain presence and supporting PKFLs growth and innovation initiatives in the footwear sector. Advance of Rs
7000 lakhs was given during the year for this purpose. As the transaction had not been concluded by the reporting
date, no adjustments have been made in the financial statements in respect of the proposed acquisition as at 31st
March 2025.

32. Employee Benefit Obligations

(a) Defined Contribution Plan

The Company makes provident fund contributions to the fund maintained with the office of Regional Provident Fund
Commissioner. The company has recognized Rs. 29,63,977/- (Previous year Rs. 40,17,763/-) in the Statement of Profit
and Loss under ‘Contribution to provident and other funds''.

(b) Defined Benefit Plan

The Company has a gratuity benefit plan applicable to all employees. Employees are eligible for gratuity as per the provisions
of the Payment of Gratuity Act, 1972, with a vesting period of five years of service, on resignation, retirement or death.

The following tables summarize the components of the net benefit expenses recognized in the Statement of Profit and Loss
and the unfunded status and amounts recognized in the balance sheet for the gratuity benefit plan.

Note : Refer Note No.14 for Provisions

IND AS 19 - Employee Benefits: The Company has made the following disclosures as per IND AS 19:

Investment Risk: The present value of the defined benefit obligation is calculated using a discount rate determined
by reference to market yields on government bonds at the end of the reporting period.

Interest Rate Risk: A decrease in the bond interest rate will increase the plan liability.

Salary Risk: Higher-than-expected salary increases will increase the defined benefit obligation.

Longevity Risk: The present value of the defined benefit obligation is calculated by reference to the best estimate of
the mortality of plan participants.

Attrition Rate: The actuarial assumption for employee attrition is based on the Company’s past history.

Expected Rate of Return on Plan Assets: The expected rate of return on plan assets is based on the average long¬
term rate of return expected on investments of the fund during the estimated term of the obligation.

34. In accordance with IND AS 12 - “Income Taxes,” the company has recognized a deferred tax asset amounting to
INR 45,39,133/-. This recognition is based on the reasonable certainty of the availability of future taxable profits
against which this deferred tax asset can be utilized.

35. With respect to the pending litigations, the company has not provided for additional financial commitment over
and above the amount due and appearing in the books of accounts to the various litigations.

36. During the financial year 2023-24, the Company sold its land and plant & machinery at Ennore to Coromandel
International Limited for ''50.28 crore. However, the Sub-Registrar valued the land and plant & machinery at
''128.74 crore and ''8.51 crore, respectively, and stamp duty was paid on these values. In case of any action
initiated by the Income Tax Assessing Officer, the Company intends to seek a valuation assessment from the
Income Tax Valuation Officer. Based on the outcome of such assessment, the Company will proceed with filing
an appropriate appeal, if required

37. The figures in brackets relate to Previous year and regrouped / reclassified to confirm to the requirements of
schedule III .

38. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other
source or kind of funds) by the company to or in any other person(s) or entity(ies) including foreign entities
(“intermediaries”), 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 (“ultimate beneficiaries”) or provide any guarantee, security or the like on behalf of
the ultimate beneficiaries as per Clause (e)(i) of Rule 11 of Companies Audit and Auditors Rules, 2014.

39. No funds have been received by the Company from any person(s) or entity(ies), including foreign entities
(“Funding parties”), with the understanding, whether recorded in writing or otherwise, 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 (“Ultimate Beneficiaries”) or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries as per Clause (e)(ii) of Rule 11 of Companies Audit and Auditors Rules,
2014.

40. The proceedings initiated by the Collector of Nilgiris for the repossession of certain plots of land in Coonoor,
earmarked for public use, have been challenged by the company through a writ petition filed before the Madras
High Court. The matter is currently pending adjudication.

41. Contingent liabilities and commitments (to the extent not provided for):

a) Income Tax Liability: For FY 2021-22, creating a contingent liability for income tax Notice of Demand under
Section 156 of the Income-Tax Act, 1961, Rs. 95.34 lakhs (FY 2023-24: Rs. 95.34 lakhs)

b) Legal Opinion on Land Dispute: the legal opinion on the 5.33 acres land dispute. This dispute concerns the
parking area at the Nungambakkam head office and is still pending in court. Rs 882.80 lakhs (FY 2023-24:
Rs. 882.80 lakhs)

c) Ennore Land Sale: The company sold the Ennore factory during FY 2024-24. As per Section 50C, the
company is required to pay capital gains tax on the fair market value of the property, which is INR 110
crores. Rs 1284.67 lakhs (FY 2023-24: Rs 1284.67 lakhs)”

42. Subsequent to the submission of financial results under Regulation 33 of SEBI (LODR) for FY 2024-25, the
Company has regrouped certain items in the audited financial statements presented in this Annual Report.
These changes have been made to enhance clarity and align with the revised presentation format adopted by
the Company.

The regrouping does not impact the previously reported profit/loss or total equity. Comparative figures have
been restated accordingly.

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

For Ray & Ray T.A. Rajalaxmi J. Rafiq Ahmed

Chartered Accountants Director Executive Chairman &

Regn.No.301072E DIN : 08148628 Managing Director

DIN : 02861341

Swetha Srinivasan

Partner Anil Kumar Padhiali Hari Kishore

Membership No. 240553 Company Secretary Chief Financial Officer

Place: Chennai
Date : 30.05.2025

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Mar 31, 2024

(a) Rights, Preferences and restrictions attached to equity shares

Each shareholder is entitled to one vote per share and dividend when declared. Other rights are governed by the Articles of Association of the Company and the Companies Act 2013.

(v) In accordance with the shareholders'' consent obtained at the 39^th Annual General Meeting held on 14^th December 2009, the company allotted 66,27,000 equity shares of Rs. 5/- each, aggregating to Rs. 331.35 lakhs, to promoters and associates on 31^st March 2016.

Subsequently, these shares were cancelled based on the order of the National Company Law Tribunal (NCLT) dated 10^th May 2023.

(vi) The consent terms filed on 05.03.2000 with the Supreme Court and decreed by the said Court in the matter of share allotment and sale of 5.33 grounds of land effects of the decree has not been considered in the books of accounts of the company, since the consent decree terms are yet to be implemented. A suit has since been filed in Madras High Court for implementation of the scheme.

(vii) During the year, NCLT, Chennai vide its order dated 10.05.2023 had allowed for reduction of share capital from Rs. 9,55,54,425 to Rs. 6,24,19,425. Pursuant to NCLT order on reduction of capital, Promoters and Promoters group holding reduced from 93,05,038 to 26,78,038 shares.

Rs. in Lakhs
19.		31st March 2024	31st March 2023
	Contingent liabilities and commitments (to the extent not provided for)
	Contingent liabilities Claims against the company not acknowledged as debt
	- Disputed sales tax demands under appeal including stay of recovery granted for Rs.854.65 lakhs (Rs.20.50 lakhs paid under protest included under advances) (Based on another Supreme Court order and legal Opinion such demands may not be sustainable)
	- Others(Exclusive of Interest)	-	145.00
	Guarantees	-	7.00
	Other money for which the company is contingently liable
	- Differential Customs Duty on Import machinery Availed under export obligation scheme	-	84.07
	Pursuant to an arbitration award dated 30.09.2017 relating to additional electricity dues of Costic Soda plant sold by the Company in the year 1986 . together with interest at 6% p.a.		231.37
	Income Tax Liability : For FY 2021-22, creating a contingent liability for income tax Notice of Demand under Section 156 of the Income-Tax Act, 1961.	95.34
	Legal Opinion on Land Dispute: the legal opinion on the 5.33 acres land dispute. This dispute concerns the parking area at the Nungambakkam head office and is still pending in court.	882.80
	Ennore Land Sale: The company sold the Ennore factory during FY 2023-24. As per Section 50C, the company is required to pay capital gains tax on the fair market value of the property, which is InR 110 crores.	1,284.67
	Sub Total	2,262.81	467.44
	Commitments
	Estimated amount of contracts unexecuted on capital account	-	-
	Uncalled liability on shares and other investments partly paid	-	-
	Other commitments	-	-
	Sub Total	-	-
	Total	2,262.81	467.44

31. Employee Benefit Obligations

(a) Defined Contribution Plan

The Company makes provident fund contributions to the fund maintained with the office of Regional Provident Fund Commissioner. The company has recognized Rs. 40,17,763/- (Previous year Rs. 7,70,730/-) in the Statement of Profit and Loss under ‘Contribution to provident and other funds''.

(b) Defined Benefit Plan

The Company has a gratuity benefit plan applicable to all employees. Employees are eligible for gratuity as per the provisions of the Payment of Gratuity Act, 1972, with a vesting period of five years of service, on resignation, retirement or death.

The following tables summarize the components of the net benefit expenses recognized in the Statement of Profit and Loss and the unfunded status and amounts recognized in the balance sheet for the gratuity benefit plan.

Compensated Absences: The Company provides for the encashment of leave or leave with pay to employees. The employees are entitled to accumulate leave subject to certain limits, for future availment/ encashment. The liability is provided based on the number of days of unutilized days of leave at each Balance sheet date on the basis of year-end actuarial valuation usinq projected unit credit method. The scheme is unfunded.

33. In accordance with IND AS 12 - “Income Taxes”, the company has recognized a deferred tax asset amounting to INR 45,39,133/-. This recognition is based on the reasonable certainty of the availability of future taxable profits against which this deferred tax asset can be utilized.

34. With respect to the pending litigations, the company has not provided for additional financial commitment over and above the amount due and appearing in the books of accounts to the various litigations.

35. The figures in brackets relate to Previous year and regrouped / reclassified to confirm to the requirements of schedule III.

36. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other source or kind of funds) by the company to or in any other person(s) or entity(ies) including foreign entities (“intermediaries”), 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 (“ultimate beneficiaries”) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries as per Clause (e)(i) of Rule 11 of Companies Audit and Auditors Rules, 2014.

37. No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding parties”), with the understanding, whether recorded in writing or otherwise, 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 (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries as per Clause (e)(ii) of Rule 1l of Companies Audit and Auditors Rules, 2014.

1. Going Concern Disclosure : The financial statements have been prepared on a going concern basis, which assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

2. IND AS 113 - Fair Value Measurement : The Company has applied IND AS 113 to measure the fair value of its financial instruments and other assets as required. The fair value hierarchy used for measurement and disclosures is in accordance with the prescribed levels in IND AS 113.

3. Trade Receivables Aging Schedule : The trade receivables aging schedule is as follows:

Less than 6 months: '' -32.56 Lakhs 6 months - 1 year: '' 14.61 Lakhs 1 year - 2 years: '' 34.53 Lakhs More than 2 years: '' 2.51 Lakhs

4. Trade Payables Aging Schedule : The trade payables aging schedule is as follows:

Less than 1 year: '' 39.04 Lakhs

1 year - 2 years: Nil More than 2 years: Nil

5. Financial Risk Management : The Company is exposed to various financial risks, including market risk, currency risk, credit risk, and liquidity risk. The Company’s risk management framework is designed to identify and mitigate these risks:

Market Risk : The Company manages market risk through diversification and hedging strategies.

Currency Risk : Exposure to currency risk is managed through forward contracts and natural hedges.

Credit Risk : The Company manages credit risk by setting credit limits and monitoring the creditworthiness of customers.

Liquidity Risk : The Company maintains sufficient cash and liquid investments to meet its obligations.

6. IND AS 19 - Employee Benefits : The Company has made the following disclosures as per IND AS 19:

Investment Risk : The present value of the defined benefit obligation is calculated using a discount rate determined by reference to market yields on government bonds at the end of the reporting period.

Interest Rate Risk : A decrease in the bond interest rate will increase the plan liability.

Salary Risk : Higher-than-expected salary increases will increase the defined benefit obligation.

Longevity Risk : The present value of the defined benefit obligation is calculated by reference to the best estimate of the mortality of plan participants.

Attrition Rate : The actuarial assumption for employee attrition is based on the Company’s past history.

Expected Rate of Return on Plan Assets : The expected rate of return on plan assets is based on the average long-term rate of return expected on investments of the fund during the estimated term of the obligation.

7. Additional Disclosures: :

a) The Company does not have any benami property, and no proceedings have been initiated or are pending against the Company.

b) The Company has not traded or invested in cryptocurrency or virtual currency during the financial year.

c) The Company has not advanced, loaned, or invested funds to any entity with the understanding that they will lend, invest, or provide guarantees on behalf of ultimate beneficiaries.

d) The Company has not received any funds from any entity with the understanding that the Company will lend, invest, or provide guarantees on behalf of ultimate beneficiaries.

e) The Company does not have any transactions not recorded in the books of accounts that have been surrendered or disclosed as income during the year under the Income Tax Act, 1961.

f) The Company has complied with the number of layers prescribed under section 2(87) of the Companies Act, 2013.

g) The Company has not been declared a wilful defaulter by any bank, financial institution, or lender during the year.

h) The Company does not have any charges or satisfaction pending for registration with ROC beyond the statutory period.

i) Quarterly returns or statements of current assets filed with banks or financial institutions are in agreement with the books of accounts.

j) The Company has used the borrowings from banks and financial institutions for the specific purpose for which they were obtained.

k) The title deeds of all immovable properties disclosed in the financial statements are held in the name of the Company as at the balance sheet date.

l) The Company does not have any transactions with companies that have been struck off.

m) The Indian Parliament has approved the Code on Social Security, 2020, which may impact contributions towards Provident Fund and Gratuity. The Company will assess the impact and provide appropriate disclosures once the corresponding rules are notified.

8. Financial Assets - Investment at Fair Value Through OCI : These equity shares are designated as FVTOCI to reflect the Company’s intention to hold these investments for strategic purposes rather than for trading. This designation is made to avoid volatility in the profit or loss statement due to changes in market value.

9. Payment to Auditors : The payment to auditors for the financial year is as follows:

Statutory Audit: '' 300,000/-

Tax Audit: '' 50,000/-Other Services: NIL

10. Category-wise Classification of Financial Instruments:

Financial Assets Measured at Amortized Cost: NIL Financial Assets Measured at FVTPL: '' 999,940/-Financial Assets Measured at FVTOCI: NIL Financial Liabilities Measured at Amortized Cost: NIL

11. No Significant Changes:

a. There have been no changes in the composition of the entity during the period.

b. There have been no business combinations, obtaining or losing control of subsidiaries, or other long-term investments during the period.

c. No restructuring activities have been undertaken, and no related costs have been provided for or reversed during the period. There have been no discontinued operations during the period.

12. No Dividends Paid : No dividends have been paid during the period ended.

13. No Transfers Between Levels of Fair Value Hierarchy : There have been no transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments during the period.

14. No Changes in Classification of Financial Assets : There have been no changes in the classification of financial assets into those at amortized cost, fair value through OCI, or fair value through P&L, during the period.

15. No Correction of Prior Period Errors : There has been no correction of prior period errors during the period.

16. Capital Management - Debt-Equity Ratio : The Company’s capital management strategy focuses on maintaining a healthy debt-equity ratio. As at the end of the period, the debt-equity ratio is 6.96.

17. Appointment of Company Secretary : The Company Secretary of the Company was appointed from 19-03-2018. Prior to this, the position remained vacant.

18. Approval of Financial Statements : The financial statements were approved for issue by the Audit Committee and the Board of Directors at their respective meetings conducted on 29-05-2024.

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Mar 31, 2014

BACK GROUND

The Company is engaged in manufacturing and mixing of fertilisers and has a network of distributors in the southern states and has developed a brand value recognised in the market place. The company has planned to develop a Container Terminal at Ennore.

1

The Company presently is facing certain difficulty in servicing debt and repayment on time of loans, due to insufficient cash flow from operations. The Company''s SSP plant has not been put in operation since May ''14. The Company has business plans to utilize the full capacity of super phosphate factory in the coming financial year which would significantly improve profitability. Besides optimum utilization of additional land available at Ennore for certain specified diversified business activity would also ensure additional cash inflows. Further the Company is contemplating to dispose off certain small parcels of land not useful to the Company to settle certain creditors.

Taking all the above developments which would significantly improve the profitability and net worth of the Company, the financial statements have been prepared on the principles applicable to going concern.

2 Additional Disclosures

Out of the Paid-up Capital

(i) 22,25,850 Equity Shares of Rs.10/- each were allotted as fully paid on amalgamation in

February 1972 for consideration other than cash.

(ii) 8,29,760 Equity Shares of Rs.10/- each fully paid were allotted for consideration other than cash

to certain financial institutions on conversion of part of secured loans, in the year 1981.

(iii) 20,00,000 Equity Shares of Rs.10/- each fully paid were allotted for consideration other than cash on 01.10.1983 as per the terms of issue to the holders of 13.5% Convertible Secured Debentures issued to the Public.

(iv) 45,68,200 Equity Shares of Rs.10/- each were allotted on 25.08.93 as fully paid on part conversion of 16% Secured Partly convertible Redeemable Debentures allotted on 25.02.93.

(v) The consent terms filed on 05.03.2000 with the Supreme Court and decreed by the said Court in the matter of share allotment and sale of 5.33 grounds of land effects of the decree has not been considered in the books of accounts of the company, since the consent decree terms are yet to be implemented. A suit has since been filed in Madras High Court for implementation of the scheme.

3 Loans and advances from banks are secured on immovable properties and current assets of the Company and guaranteed in certain cases by the promoter. Negotiations have reached a final stage with respect to loans due and payable by the Company to a Bank. Secured loans from a Company and an individual respectively are secured by equitable charge on certain properties of the Company.

4 The Company''s liability towards Gratuity to employees has been provided on reasonable basis but not on actuarial basis. The company has taken steps to determine the liability in accordance with the Accounting Standard No.15 on "Retirement Benefits" and adjust the provision accordingly, however in the opinin of the management the incremental adjustment would not be material.

5 The issue of transfer of unclaimed/unencashed dividends of Rs.6.98 lakhs upto 1981-82 to Government is pending before the High Court of Judicature at Madras.

Rupees in Lacs March 31, 2014 March 31, 2013

6 Contingent liabilities and commitments (to the extent not provided for)

Contingent liabilities

(a) Claims against the company not acknowledged as debt

* Disputed sales tax demands under appeal including stay of recovery granted for Rs.854.65 lakhs (Rs.20.50 lakhs paid under protest included under advances) (Based on another Supreme Court order and legal Opinion such demands may not be sustainable) 876.89 876.89

* Others(Exclusive of Interest) 145.00 145.00

Guarantees 7.00 7.00

Other money for which the company is contingently liable

* Differential Customs Duty on Import machinery availed under export obligation scheme 117.00 84.07

* Duty on non-fulfilment of Export Obligations 153.00 153.00

* Interest if any, on Mortgage Loan of is 45000000.00 under negotiation along with other connected issues and the rate of interest and quantum thereof, if any, and is presently under negotiation and pending resolution and quantification of the liability, if any, has not recognized in the accounts

(b) (i) With regard to interest of Rs.161.33 lakhs claimed by an trade creditor, the company has since disputed the basis of the claim and the company proposes to settle the matter through negotiation.

(ii) With regard to another creditor who has claimed an interest of Rs.74.39 lakhs, there is disagreement with respect to the rate of interest and this matter is expected to be resolved shortly.

(iii) The claim of interest from Bank i.e., State Bank of India (assignee Kotak Mahindra Bank Ltd) on the principal amount outstanding is subject of reference to Debt Recovery Tribunal (DRT) and pending direction from the Recovery Authority, the loan interest is not quantifiable at present.

26 Related Parties Disclosure:

(i) Name of the Key Management Personnel:

Mr. Pradip D. Kothari - Chairman and Managing Director No remuneration was paid to the Managing Director during the year.

(ii) Mrs.Surekha P Kothari, W/o.Chairman & Managing Director has joined the Board of the company on 19.09.2011.

(iii) Mrs.Antara Pandit, D/o.Chairman and Managing Director has been working in the company as Vice President (Business Development).

(iv) Name of the transacting related party & description of the relationship between the parties: Associate Companies/Firms Kothari (Madras) International Limited

(v) Particulars of Transactions

Nature of Transaction Amount (Rs. in lakhs)

Purchase of Raw Materials & finished goods 1,921.68

Amount of Rs. 63.12 lakhs is outstanding as on 31st March, 2014 from M/s. Kothari (Madras) International Ltd Remuneration paid to Mrs.Antara Kothari Rs.3.30 Lacs

7 Earnings /(Loss) per Share - Calculation of weighted average number of Equity Shares of Rs. 5 each:

March 31, 2014 March 31, 2013

Number of shares of Rs.5/- each 12,483,885 12,483,885

Basic & Diluted Earnings (in Rupees) per Share (6.91) (168)

8 As per the records and information available with the company there are no amounts outstanding as on 31st March, 2014 payable to :

(i) Small Scale Industries

(ii) Micro, Small and Medium Enterprises

9 With regard to the pending winding up petition before the Hon''ble High Court of Judicature at Madras, the Company is under negotiation with the petitioner for withdrawal of the case

10 The figures in brackets relate to Previous year and regrouped / reclassified to confirm to the requirements of schedule VI (as amended) of the companies act 1956.

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Mar 31, 2013

A BACK GROUND

The Company is engaged in manufacturing and mixing of fertilisers and has a network of distributors in the southern states and has developed a brand value recognised in the market place. The company has planned to develop a Container Terminal at Ennore.

Rupees in Lacs

March 31, 2013 March 31, 2012

1 Contingent liabilities and commitments (to the extent not provided for)

Contingent liabilities

Claims against the company not acknowledged as debt

-Disputed sales tax demands under appeal including stay of recovery granted for Rs.854.65 lakhs (Rs.20.50 lakhs paid unde protest included under advances) (Based on another Supreme Court order and legal Opinion such demands may not be sustainable) 876.89 876.89

-Others(Exclusive of Interest) 145.00 145.00

Guarantees 7.00 7.00

Other money for which the company is contingently liable

- Differential Customs Duty on Import machinery Availed under export obligation scheme

- Interest if any, on Mortgage Loan of is 45000000.00 84.07 84.07 under negotiation along with other connected issues and the rate of interest and quantum thereof, if any, and is presently under negotiation and pending resolution and quantification of the liability, if any, has not recognized in the accounts

Total 1,112.96 1,112.96

2 Related Parties Disclosure:

(i) Name of the Key Management Personnel:

Mr. Pradip D. Kothari - Chairman and Managing Director

No remuneration was paid to the Managing Director during the year. (ii) Mrs.Surekha P Kothari, W/o.Chairman & Managing Director has joined the Board of the company on 19.09.2011 (iii) Mrs.Antara Kothari, D/o.Chairman and Managing Director is working in the company as Vice President (Business Development) (iv) Name of the transacting related party & description of the relationship between the parties: Associate Companies / Firms Kothari (Madras) International Limited

(v) Particulars of Transactions

Nature of Transaction Amount(Rs. in lakhs)

(a)Purchase of Raw Materials & finished goods 1,615.81

Amount of Rs. 122.35 lakhs is outstanding as on 31st March, 2013 from M/s.Kothari (Madras) International Limited

(b) Remuneration paid to Mrs.Antara Kothari Rs.16.20 lakhs

3 As per the records and information available with the company there are no amounts outstanding as on 31st March, 2013 payable to :

(i) Small Scale Industries

(ii) Micro, Small and Medium Enterprises

4 With regard to the pending winding up petition before the Hon''ble High Court of Judicature at Madras, the Company is under negotiation with the petitioner for withdrawal of the case

5 The figures in brackets relate to Previous year and regrouped / reclassified to confirm to the requirements of schedule VI (as amended) of the companies act 1956.

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Mar 31, 2012

A BACKGROUND

The Company is engaged in manufacturing and mixing of fertilisers and has a network of distributors in the ' southern states and has developed a brand value recognised in the market place. The company has planned to develop a Container Terminal at Ennore.

Note No :

1. The Company presently is facing' certain difficulty in servicing debt and repayment on time of loans, due to insufficient cash flow from operations. The Company has business plans to utilize the full capacity of super phosphate factory which would significantly improve profitability besides optimum utilization of additional land available at Ennore for certain specified diversified business activity which would ensure additional cash inflows. Further the Company is contemplating to dispose off certain small parcels of land not useful to the Company to settle certain creditors. Due to reduction of the paid-up value of Equity Shares of the Company pursuant to the Order of the Hon'ble High Court dated 31.08.2010, the net worth of the Company is fully eroded as at 31s1 March, 2012. The Company has plans to issue preference shares to Promoters/ Promoter Group and associates which would bring in additional inflow for operations.

Taking all the above developments which would significantly improve the profitability and net worth of the Company, the financial statements have been prepared on the principles applicable to going concern.

2.1 Additional Disclosures

Out of the Paid-up Capital

(i) 22,25,850 Equity Shares of Rs.10/- each were allotted as fully paid on amalgamation in .

February 1972 for consideration 6ther than cash.

(ii) 8,29,760 Equity Shares of Rs.10/- each fully paid were allotted for consideration other than cash to certain financial institutions on conversion of part of secured loans, in the year 1981.

(iii) 20,00,000 Equity Shares of Rs.10/- each fully paid were allotted for consideration other than cash on 01.10.1983 as per the terms of issue to the holders of 13.5% Convertible Secured Debentures issued to the Public.

(iv) 45,68,200 Equity Shares of Rs.10/- each were allotted on 25.08.93 as fully paid on part conversion of 16% Secured Partly convertible Redeemable Debentures allotted on 25.02.93.

(v) The consent terms filed on 05.03.2000 with the Supreme Court and decreed by the said Court in the matter of share allotment and sale of 5.33 grounds of land effects of the decree has not been considered in the books of accounts of the company, since the consent decree terms are yet to be implemented. A suit has since been filed in Madras High Court for implementation of the scheme.

The Board is authorized by the shareholders to issue of Equity Shares on preferential basis to promot- ers / promoters' group / associates and others immediately after the approval for Reduction of Capital has been obtained from the Hon'ble High Court of Judicature at Madras and on completion of necessary formalities regarding listing of shares with Bombay Stock Exchange.

The shareholders are entitled to dividend when declared. Their rights are governed by the Articles of Association and the Companies Act, 1956.

3.1 Loans and advances from banks are secured on immovable properties and current assets of the Company and guaranteed in certain cases by the promoter. Negotiations have reached a final stage with respect to loans due and payable by the Company to a Bank. Secured loans from a Company and an individual respectively are secured by equitable charge on certain properties of the Company.

4.1 The Company's liability towards Gratuity to employees has been provided on reasonable basis but not on actuarial basis. The Company has taken Steps to determine the liability in accordance with the Accounting Standard No. 15 on "Retirement Benefits” and adjust the provision accordingly, how ever, in the opinion of the management the incremental adjustment would not be material.

5.1 Additional Disclosure

(i) Land and buildings at Fertilizer Division were revalued in the years 1989, 1992 and again on 1st April 1995.

(ii) Part of the "Kothari Building” belonging to the Company was revalued at the fair market value on 31st March 2012 and on 31st March 2002 respectively by an approved valuer.

6 Contingent liabilities and commitments (to the extent not provided for) Contingent liabilities Claims against the company not acknowledged as debt -Disputed sales tax demands under appeal including stay of recovery granted for Rs.854.65 lakhs (Rs.20.50 lakhs paid under protest included under advances)

(Based on another Supreme Court order and legal

Opinion such demands may not be sustainable) 876.89 876.89

-Others(Exclusive of Interest) 145.00 145.00

Guarantees 7.00 7.00

Other money for which the company is contingently liable

- Differential Customs Duty on Import machinery Availed

under export obligation scheme 84.07 84.07

- Interest if any, on Mortgage Loan of is 45000000.00 under negotiation along with other connected issues and the rate of interest and quantum thereof, if any, and is presently under negotiation and pending resolution and quantification of the liability, if any, has not recognized in the accounts Total 1,112.96 1,112.96

7 Related Parties Disclosure:

(i) Name of the Key Management Personnel:

Mr. Pradip D. Kothari - Chairman and Managing Director No remuneration was paid to the Managing Director during the year.

(ii) Mrs.Surekha P Kothari, W/o.Chairman & Managing Director has

joined the Board of the company on 19.09.2011

(iii) Mrs.Antara Kothari, D/o.Chairman and Managing Director has joined the company as Vice President (Business Development)

(iv) Name of the transacting related party & description of the relationship between the parties:

Associate Companies / Firms Kothari (Madras) International Limited

8 As per the records and information available with the company there are no amounts outstanding as on 31st March, 2012 payable to :

(i) Small Scale Industries

(ii) Micro, Small and Medium Enterprises

9 With regard to the pending winding up petition before the Hon'ble High Court of Judicature at Madras, the Company is under negotiation with the petitioner for withdrawal of the case

10 The figures in brackets relate to Previous year and regrouped / reclassified to confirm to the requirements of schedule VI (as amended) of the companies act 1956.

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Mar 31, 2010

1. The Company presently is facing certain difficulty in servicing debt and repayment on time of loans, due to insufficient cash flow from operations. The Company has business plans to utilize the full capacity of super phosphate factory which would significantly improve profitability besides optimum utilization of additional iand available at Ennore for certain specified diversified business activity which would-ensure additional cash inflows. Further the Company is contemplating to dispose off certain small parcels of land not useful to the Company to settle certain creditors. In view of the foregoing the "Going Concern" aspect of the Company would never get jeoparadised.

2. The Company continues its activities of fertilizer mixing and trading in pesticides besides receiving the rental income.

The super phosphate factory at Ennore has restarted after the closure of more than eight years. Considerable expenses had to be incurred to bring the plant back to production capability as well as the factory building and other infrastructure having had been in a stage of neglect. The Board after careful consideration decided appropriately to capitalize the one time restart expenses which include total overhauling of the machinery, motors besides adding peripheral equipments.

The start up expenses including production stabilization being exceptional in nature have been grouped under Deferred Revenue Expenditure which being intangible are being amortised over the next two years during which period the benefit would accrue to the Company.

The Company settled its dues to a bank which involved payment of arrears of finance charges which has been shown as an exceptional item.

3. SHARE CAPITAL

Out of the Paid-up Capital

(i) 22,25,850 Equity Shares of Rs. 10/- each were allotted as fully paid on amalgamation in February 1972 for consideration other than cash.

(ii) 8,29,760 Equity Shares of Rs.10/- each fully paid were allotted for consideration other than cash to certain financial institutions on conversion of part of secured loans, in the year 1981.

(iii) 20,00,000 Equity Shares of Rs. 10/- each fully paid were allotted for consideration other than cash on 01.10.1983 as per the terms of issue to the holders of 13.5% Convertible Secured Debentures issued to the Public.

(iv) 45,68,200 Equity Shares of Rs.10/- each were allotted on 25.08.93 as fully paid on part conversion of 16% Secured Partly convertible Redeemable Debentures allotted on 25.02.93.

(v) 24,74,569 Equity Shares of Rs.10/- each were allotted on 16.05.95 to the Promoters group of which Rs.2.50 per share being the amount payable on application and allotment amount to Rs.61.86 lakhs was paid up. The resolution passed by the shareholders authorizing the issue of above shares has been set aside by the City Civil Court on 14.12.2000 and upon compliance of the necessary formalities including an order from the High Court, if so required, appropriate adjustments would be made in the accounts.

(vi) 6,60,598 Equity Shares of Rs. 10/- each were allotted on 20.06.95 to a Overseas Bodies Corporate of which Rs.2.50 per share being amount payable on application and allotment amounting to Rs. 16.52 lakhs was paid up. The resolution passed by the shareholders authorizing the issue of above shares has been set aside by the City Civil Court on 14.12.2000 and upon compliance of the necessary formalities, including an order from the High Court, if so required, appropriate adjustments would be made in the accounts.

(vii) The consent terms filed on 05.03.2000 with the Supreme Court and decreed by the said Court in the matter of share allotment and sale of 5.33 grounds of land effects of the decree has not been considered in the books of accounts of the company, since the consent decree terms are yet to be implemented. A suit has since been filed in Madras High Court for implementation of the scheme.

(viii) An Extra-Ordinary. General Meeting (EGM) of the shareholders of the Company was held on 12th February, 2009 wherein the shareholders have approved the proposal for reduction of Face Value of the Equity Shares from Rs. 10/- each to Rs.5/- per Equity Share along with the proposal for proportionate reduction of premium on such Equity Shares.

This proposal for Reduction of Capital is subject to approval of the Honble High Court of Judicature at Madras and the Company has already filed necessary application with the said Honble High Court in this regard.

The management is authorized by the shareholders to issue of Equity Shares on preferential basis to promoters / promoters group / associates and others immediately after the approval for Reduction of Capital has been obtained from the Honble High Court of Judicature at Madras and on completion of necessary formalities with respect to the Stock Exchanges.

4. SECURED LOANS

Loans and advances from banks are secured on immovable properties and current assets of the Company and guaranteed in certain cases by the promoter. The Company has already negotiated with four of its banks and arrived at One Time Settlement (OTS) on the loans payable to them. With the funds made available by the funder, the Company has settled in full the OTS amounts. The dues on account of a bank, one of the bankers, have been allegedly assigned to Kotak Mahindra Bank Ltd. who has not substituted themselves in the place of the Bank before the Debt Recovery Tribunal(DRT). The Company has obtained an interim stay from the Honble High Court of Judicature at Madras restraining Kotak Mahindra Bank Ltd. from dealing with any of the properties of the Company. Secured loans from a company & an individual respectively are secured by equitable charge on certain properties of the Company.

5. UNSECURED LOANS

Pursuant to the approval of the shareholders at the last Annual General Meeting for the issue of shares on preferential basis after the Courts sanction for the reduction in the face value of equity shares, promoters and few of his business associates have placed share monies as deposits aggregating to Rs.275.35 lakhs.

6. CONTINGENT LIABILITIES

Rs.in lakhs Rs. in lakhs 31.03.2010 31.03.2009

(i) Outstanding guarantees 7.00 7.00

(ii) Disputed sales tax demands under appeal including

stay of recovery granted for Rs.854.65 lakhs 876.89 876 89

(Rs.20.50 lakhs paid under protest included under

advances) (Based on another Supreme Court order and legal

Opinion such demands may not be sustainable)

(iii) Claims against the Company not acknowledged as

debt (exclusive of interest) 145.00 145.00

(iv) Differential Customs Duty on Import machinery

Availed under export obligation scheme 84.07 84.07

(v) Debonding charges on imported machinery is under representation and presently not quantifiable - -

(vi) Interest if any payable on Mortgage Loan of 450.00

lakhs is under negotiation along with other connected issues and the rate of interest and quantum thereof, if any, and is presently under negotiation and pending resolution the liability has not recognized in the accounts

7. The issue of transfer of unclaimed/unencashed dividends of Rs.6 98 lakhs upto 1981-82 to Government is pending before the High Court of Judicature at Madras.

8. Fixed Assets

(i) Land and buildings at Fertilizer Division were revalued in the years 1989, 1992 and again on 1st April 1995.

(ii) Part of the "Kothari Building" belonging to the Company was revalued at the fair market value on 31st March 2002 by an approved valuer.

(iii) The appreciation in the value of the above fixed assets has been credited to Fixed Asset Revaluation Reserve.

9. The Companys liability towards Gratuity to employees has been provided on reasonable estimates but not on actuarial basis. The Company has taken steps to determine the liability in accordance with the Accounting Standard No. 15 on "Retirement Benefits" and adjust the provision accordingly; however, in the opinion of the management the incremental adjustment would not be material.

10. Related Parties Disclosure:

(a) Name of Key Management Personnel:

Mr.Pradip D. Kothari - Chairman and Managing Director

No remuneration was paid to the Managing Director during the year.

(b) Name of transacting related party & description of the relationship between the parties:

Associate Companies / Firms Kothari (Madras) International Limited

11. As per the records and information available with the company there are no amounts outstanding as on 31st March, 2010 payable to: (i) Small Scale Industries

(ii) Micro, Small and Medium Enterprises

12: The Company is contesting a winding up application before the Honble High Court of Judicature at Chennai. The Company is reasonably confident, based on senior counsels opinion, that the petition would be ultimately disposed off in favour of the Company and no liability would devolve upon the Company.

13. The figures in brackets relate to previous year and regrouped wherever necessary.

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Jun 30, 2003

1. Share Capital

Out of the Paid-up Capital

(i) 22,25,850 Equity Shares of Rs.10/- each were allotted as fully paid on amalgamation in February 1972 for consideration other than cash.

(ii) 8,29,760 Equity Shares of Rs.10/- each fully paid were allotted for consideration other than cash to certain financial institutions on conversion of part of secured loans, in the year 1981.

(iii) 20,00,000 Equity Shares of Rs.10/- each fully paid were allotted for consideration other than cash on 1.10.1983 as per the terms of issue to the holders of 13.5% Convertible Secured Debentures issued to the Public.

(iv) 45,68,200 Equity Shares of Rs.10/- each were allotted on 25.8.93 as fully paid on part conversion of 16% Secured Partly Convertible Redeemable Debentures allotted on 25.2.93.

(v) 24,74,569 Equity shares of Rs.10 each were allotted on 16.5.95 to the Promoters group of which Rs.2.50 per share being the amount payable on application and allotment amounting to Rs.61.86 lacs was paid up. The resolution passed by the shareholders authorising the issue of above shares has been set aside by the City civil court on 14/12/2000 and upon compliance of the necessary formalities including an order from the High Court if so required, appropriate adjustments would be made in the accounts.

(vi) 6,60,598 Equity Shares of Rs.10 each were allotted on 20.6.95 to a Overseas Bodies Corporate of which Rs.2.50 per share being amount payable on application and allotment amounting to Rs. 16.52 lacs was paid up. The resolution passed by the shareholders authorising the issue of above shares has been set aside by the City civil court on 14/12/2000 and upon compliance of the necessary formalities, including an order from the High Court, if so required, appropriate adjustments would be made in the accounts.

(vii)The Consent terms filed on 5.3.2000 with the Supreme Court and decreed by the said Court in the matter of disputed share allotment and sale of 5.33 grounds of land for adequate consideration, effects of the decree have not be considered in the books of accounts of the Company, since the consent decree terms are yet to be implemented.

2. SECURED LOANS

( i ) 16% Secured Redeemable Partly Convertible Debentures

The non-convertible portion of Rs.150/- per debenture, in respect of 16% Secured Redeemable Partly Convertible Debentures (PCD) is to be redeemed at par in 3 equal installments of Rs.50/- per debenture each on 25-2-1999, 25-2-2000, and 25-2-2001. The repayment of the principal amount of the non convertible portion of the PCDs, accrued interest, remuneration of the Trustees and all other costs, charges and expenses payable by the Company, on the said non- convertible portion of the partly convertible debentures are secured by a charge/mortgage on the immovable properties of the Company excluding assets specifically charged/mortgaged and such charge/mortgage shall rank second and subservient to the charges created in favour of the term lending Institutions/ banks and Trustees for debentureholders in respect of debentures issued by the Company. Interest on Debenture is net of remission of interest of Rs.154.15 lacs pursuant to the resolution passed at the Debentureholders Meeting held on 20th April 2003. This is subject to the approval of a major debentureholder viz., UTI. Overdue / penal interest and other charges on account of non-redemption of debentures on time have not been considered pending the outcome of negotiations with the debenture trustee.

(ii) Loans and advances from banks are secured on immovable properties and current assests of the company including immovable property of a subsidiary of the company and guaranteed in certain cases by the promoter. Due to non repayment of loans, cash credit including interest, proceedings have been initiated by the term loan lenders and banks before Debt Recovery Tribunal and under the Securitisation Act. The Company has made suitable representation for time for repayment. The Debt Recovery Tribunal in respect of the term loan has passed an interim order quantifying the amount due and the interest payable thereafter which have been recognised in the accounts. The term loan lender has however initiated proceedings for auctioning the specified charged property and the matter is before the said Tribunal. The auction has since been stayed. The Company is in the process of sourcing funds for repayment of existing amounts due to debenture holders, banks and financial institutions and also additional working capital for the business operations.

3. In the absence of profits for the period no allocation could be made towards Debenture Redemption Reserve. The debentures have however fallen due for redemption oh 30.9.2003.

4. The Balance available in the approved gratuity fund of Rs. 343.49 lacs as on 30th June 2003 is in the opinion of the management to cover the liability not evaluated on actuarial basis.

5. Fixed Deposit includes unclaimed matured fixed deposit of Rs.70.16 lacs (including N.RI Deposit of Rs.65.14 lacs). Of the balance Rs.0.03 lacs is repayable within a year.

Rupees in lacs As on As on 30.06.03 31.03.02

6. Contingent Liabilities

(i) Outstanding guarantees including guarantee given on behalf of other companies 820.00 851.45

(ii) Disputed sales tax demands under appeal including stay of recovery granted for Rs.854.65 lacs 891.97 960.47 (Rs.20.50 lacs paid under protest included under advances) (Based on Supreme Court order and legal opinion such demands may not be sustainable)

(iii) Concessional power tariff withdrawn including belated payment surcharge relating to erstwhile chemical division (The matter is under appeal) An amount of Rs.100 lacs paid under protest has not been absorbed pending outcome of the appeal 328.73 328.73

(iv) Claims against the Company not acknowledged as debt (exclusive of interest) 34.72 32.30

(v) Interest payable on future instalments of the hire purchased assets 1.54 1.51

(vi) Co-leasee obligation on behalf of other company (Refer Note No.17(b) Not quantifiable 2097.63

(vii)Differential Customs Duty on Import machinery availed under Export Obligation Scheme 84.07 235.03 (Customs authorities have invoked guarantee amounting to Rs.62.11 lacs which has been charged in the accounts)

7. The transfer of unclaimed/uncashed dividends of Rs.6.98 lacs up to 1981-82 to Government is pending for want of certain clarification from the High Court of Madras consequent on the disposal of writ petition filed in 1986 in this regard.

8. (i) Plantation lands were revalued in the years 1983,1989,1992 and again on 1st April 1995. The aggregate amount of such revaluations after necessary adjustments for sales/transfers up to 30th June 2003, is Rs.1797.75 Lacs.

(ii) Land,buildings and plant and machinery at Coimbatore and at Plantations (other than those covered under Note 9(i) above, Fertiliser division and Coffee Curing Works were revalued in the years 1989,1992 and again on 1st April 1995. The aggregate amount of such revaluations after necessary adjustments for sales/transfers up to 30th June 2003, is Rs.2347.48 Lacs.

(iii) Part of the "Kothari Building" belonging to the Company was revalued at the fair market value on 31st March 2002 by an approved valuer and the appreciation in the value has been credited to Fixed Assets Revaluation Reserve. The aggregate amount of such revaluation after necessary adjustments upto 30.06.03 is Rs.1386.38 lacs.

9 (i) The transfer formalities in respect of Kothari Mill No.2 were completed during the period.

(ii) The Granite Division is under transfer to a wholly owned subsidiary, for eventual sale subject to approval of the banks. Effective from April 2002, the operations of the division are not reflected in the accounts.

10. Kothari Coffee Curing Works ceased its operations from 1st October 2001. The transfer of the curing works to the identified buyer is subject to approval of the banks.

11.ADVANCES INCLUDE : a (i) Dues by Subsidiary

Kothari (Madras) International Limited Rs. Nil (Rs.100.19 Lacs) (maximum amount due in the year - Rs. 102.54 lacs)

(ii) Subsidy receivable on single super-phosphate from the State Governments Rs.4.52 lacs (Rs.35.91 lacs) (since Received Rs.3.86 lacs)

(iii)Amount due from erstwhile subsidiaries Waterfall (East) Private Limited and Water fall (West) Private Limited aggregating to Rs.106.73 lacs which is under negotiation for recovery.

b (i) Rs.659.77 lacs (Rs.659.77 lacs) given to a Public Limited Company in earlier years which is under liquidation proceedings.

(ii) Rs.120.99 lacs (Rs.120.99 lacs) (provided as doubtful debt in the previous year accounts) has been given to a Public Limited Company in earlier years, which has suspended Operations.

(iii)Rs.842.58 lacs given to a private limited company including Rs.57.71 lacs during the year having the object of non-banking finance company.

12 (i) Due to certain unavoidable reasons the operation of Superphosphate factory was disrupted and consequently there was no production during the period. Steps are being taken to resume production for the current season. However production and sale of N.P.K. mixtures was not affected and were able to achieve a production of 31711 M.T. of N.P.K. Mixture for the period April 2002 to June 2003.

(ii) Winding up petitions have been filed in the Court by two trade Creditors for recovery of Rs.41.50 lacs out of which major amounts have already been settled.

(iii)Certain proceedings are pending before Mumbai High Court under Negotiable Instruments Act and the case is being represented by the company.

13.(i) Interest on Cash Credit Overdraft account and Working Capital Demand Loan from Banks has been accounted based on the statement of accounts received.

(ii) Interest on Term Loan with a Bank accounted based on the onetime settlement arrived on 31.3.2001.

(iii)lnterest has not been accrued on unsecured advances amounting to Rs. 113.95 lacs.

14.a) One of the leasing Company (since merged with a bank) has repossesed certain textile machineries acquired under financial lease arrangements on account of non-payment of overdue instalments of lease rentals and the matter is before Mumbai High Court. The Company may become liable for the shortfall of the value of machineries compared to the amount that would become ultimately payable which is not capable of quantification at present.

b) No provision has been made in respect of co-lessee obligation in favour of finance company pending quantification thereof in respect of which a charge has been created (Note 2 - Schedule 5 - Fixed Assets).

15.(i) Due to change in State Governments policy, the construction activities of Brewery project in Andhra Pradesh had to be suspended and an amount of Rs.188.16 lacs included under Capitaf work-in-progress is being carried forward and is capable of realization on eventual sale of land and building structures.

(ii) Balance amount of Rs.2.00 lacs included under Capital work-in-progress is in respect of certain capital expenditure at Tea Estates pending completion.

16.The accumulated losses incurred by subsidiary - Kothari (Madras) International Limited - Rs.76.85 Lacs as on 30.9.2002 have not been presently considered in the accounts.

17.Related Parties Disclosure:

a) Name of Key Management Personnel Mr.Pradip D. Kothari - Chairman and Director

b) Name of the transacting related party & Description of the relationship between the parties.

Associate Companies/Firms

i) Kothari Orient Finance Limited

ii) Kothari and Sons (Agencies) Pvt.Ltd.**

iii) Kothari Brown Engineers (India) Pvt. Ltd.

iv) Kothari Enterprises

v) Industrial & Project Consultants Ltd.

vi) Dayanand Mills Ltd.

vii) Fort Agencies Private Limited

viii) Securities Operations & Investments Ltd.**

ix) Underwriters & Financiers Pvt.Ltd.**

x) Ennore chemicals & Fertilisers Pvt. Ltd.**

xi) Mount Agencies Pvt, Ltd.

xii) Teatex Pvt. Ltd.

xiii) Kothari & Sons

xiv) Vaibhava India Pvt. Ltd.

xv) Kothari Realtors Pvt. Ltd.

xvi) Tata Kothari Steels Ltd.

Subsidiary Companies

i) Kothari (Madras) International Limited (KMIL) **

ii) Brooklands Plantations Private Limited (Subsidiary of KMIL)

iii) Adadi Plantations Private Limited (Subsidiary of KMIL)

iv) Burlier Plantations Private Limited (Subsidiary of KMIL)

v) Gurensy Plantations Private Limited (Subsidiary of KMIL)

vi) Chennai Agrotech and Stones Limited**

** Represents Companies with whom transactions have taken place during the period.

18.As per the accounting Standard AS 22-Accounting for taxes on income , the company reviewed the deferred tax assets and liabilities. The timing differences relates mainly to depreciation and carry forward losses for the period up to 31.03.2003 and for the year ended 30.06.2003, resulting in a net deferred tax asset of Rs. 8416.21 lacs. As a prudent measure, this net deferred tax asset has not been recognised in the accounts in view of uncertainity of taxable income in the immediate future years.

19.a) In the absence of Audit Committee, accounts have been directly approved by the Board.

b) The post of the Company Secretary who has resigned recently, has not been filled up.

20.Certain Customers accounts are to be confirmed/reconciled.

21.The accounts of the current and previous financial years are for the period of 15 months and 12 months respectively.

22.Events after Balance Sheet

a) The Companys tea plantations Glendale and Adderly estates which have since been put to auction in December 2004 by the Debenture Trustee M/s. ICICI Bank is presently under review of the Mumbai High Court which has passed a conditional order on 12th January 2005, which conditions if satisified by the Company, the auction would be set aside.

b) The leasing company (since merged with a bank) referred to in Note No.17(a) above has since launched legal proceedings for recoveries of the dues and the matter is pending before the Mumbai High Court.

c) Kothari (Madras) International Limited, ceased to be the Companys subsidiary since September 2003.

23.The figure in brackets relate to previous year and regrouped wherever necessary.