Notes to Accounts of Regency Ceramics Ltd.

Mar 31, 2024

1.11) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when
there is a present obligation as a result of past events and it is probable that there will be an
outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes
on accounts. Contingent Assets are neither recognized nor disclosed in the Financial
Statements.

1.12) Income Taxes

Income Tax expense comprises current tax and deferred tax charge or credit. The current tax is
determined as the amount of tax payable in respect of the estimated taxable income of the period.
The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted
tax rates. Where there are unabsorbed depreciation or carry forward Losses, deferred tax asset is
recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets
are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax
assets are reviewed at each Balance Sheet date based on the developments during the year and
available case laws, to reassess realisation/liabilities.

MAT Credit is recognized as an asset only when and to the extent there is convincing evidence
that the Company will pay normal Income Tax during the specified period. In the year in which
the Minimum Alternative Tax (MAT) Credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in Guidance Note issued by the Institute of
Chartered Accountants of India, the said asset is created by way of a credit to the Profit and Loss
account and shown as MAT Credit Entitlement. The Company reviews the same at each Balance
Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is
no longer convincing evidence to the effect that Company will pay normal Income Tax during the
specified period.

1.13) Earnings Per Share

The Company presents basic and diluted Earnings Per Share (“EPS”) data for its ordinary shares.
Basic EPS is calculated by dividing the Profit or Loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the period.
Diluted EPS is determined by adjusting the Profit or Loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares, which includes all stock options granted to employees.

1.14) Cash Flow Statement

Cash Flows are reported using the Indirect Method. Whereby Profit for the period is adjusted for
effects of transactions of a non-cash nature, any deferrals are accruals of past or future Operating
cash receipts or payments and item of income or expenses associated with Investing or Financing
cash flows. The cash flows from Operating, Investing and Financing activities of the Company
are segregated.

1.15) Segment Reporting

Segment Reporting is not applicable since the entire operations of the Company are related to one
segment i.e. manufacturing of ceramics tiles in terms of Ind AS 108 on operating segments.

1.16) Exceptional Items

Exceptional items refer to items of Income or Expenses within the Statement of Profit and Loss
from ordinary activities which are non-recurring and are of each size, nature or incidence that
their separate disclosure is considered necessary to explain the performance of the Company.

1.17) Recent Accounting Pronouncements and Adoption

The Company applied for the first time these amendments of Ind AS 8 , Ind AS 1 and Ind AS 12 and there
is no material impact on financials.

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

1.18) Events after Reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end
of the reporting period, the impact of such events is adjusted within the Financial Statements. Otherwise,
events after the Balance Sheet date of material size or nature are only disclosed.

1.19) Critical Accounting Estimates and Judgments

The preparation of Financial Statements is in conformity with generally Accepted Accounting Principles
that require management to make estimates and assumptions that affect the reported amounts of Assets
and Liabilities and disclosure of contingent liabilities at the date of the Financial Statements and the result
of operations during the reporting period. Although these estimates are based upon management’s best
knowledge of current events and actions, actual results could differ from these estimates. Revisions in
accounting estimates are recognized prospectively.

The areas involving critical estimates or judgments are -

- Estimates of Useful life of Plant and Equipment and Intangibles

- Measurement of Defined Benefit Obligation

- Recognition of Deferred Taxes

- Estimation of Impairment

Financial Risk Management

The Company’s activities expose it to Market Risk, Credit Risk and Liquidity Risk.
Company’s overall risk management focuses the unpredictability of financial markets and seeks
to minimize potential adverse effects on the financial performance.

i. Market Risk

Market Risk is the risk of Loss of future earnings, fair values or future cash flows that may
result from a change in the price of a Financial Instrument. The value of a Financial
Instrument may change as a result of changes in the interest rates, foreign currency
exchange rates, commodity prices and other market changes that affect Market Risk
sensitive instruments. Market Risk is attributable to all market risk sensitive Financial
Instruments including investments and deposits, foreign currency receivables, payables and
borrowings.

ii. Foreign Currency Risk

Foreign Currency Risk is the risk of impact related to fair value or future cash flows of an
exposure in foreign currency, which fluctuate due to change in foreign currency rates. The
Company’s exposure to the risk of changes in foreign exchange rates is negligible.

The Company did not enter into any derivative instruments for trading or speculative
purposes.

iii. Interest Rate Risk

Interest Rate Risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The Company’s
exposure to the risk of changes in market rates relates primarily to the Company’s Short¬
term borrowing. The Company constantly monitors the credit markets and re-balances its
financing strategies to achieve an optimal maturity profile and financing cost.

iv. Credit Risk

Credit Risk arises when a customer or counterparty does not meet its obligations under a
financial instrument or custom contract, leading to a Financial Loss. The Company is
exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing/investing activities, including deposits with banks. The Company has a prudent
and conservative process for managing its credit risk arising in the course of its business
activities. The Company receives payments regularly from its customers and hence the
Company has no significant credit risk.

v. Liquidity Risk

Liquidity Risk is defined as the risk that the Company will not be able to settle or meet
obligations on time or at a reasonable price. Prudent liquidity risk management implies
maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of credit facilities to meet obligations when due. The Company
is responsible for liquidity, funding as well as settlement management. In addition,
processes and policies related to such risks are overseen by senior management.
Management monitors the Company’s liquidity position through rolling forecasts based on
expected cash flows.

Note 24

Capital Management

The Company’s objectives when managing capital are to

I) Safeguard their ability to continue as a going concern, so that they can continue to provide
returns for shareholders and benefits for other stakeholders.

II) Maintain an optimal capital structure to reduce the cost of capital consistent with others
in the industry, the Company monitors capital on the basis of the following gearing ratio:

Note 25
Factory Status

The Company suffered extensive damage to the Buildings, Plant & Machinery and other assets
situated at Factory, Yanam due to unprecedented violence, occurred on January 27, 2012. Stocks of
Finished goods, Raw materials, stores and spares, stocks-in-process and other inventories were
damaged / looted to a large extent. The Company declared lock-out of the Plant from January 31,
2012.

The extent of Loss/damage to Plant & Machinery, Buildings and other assets of the Company were
not considered in the books pending assessment and disclosed at book value after providing

depreciation without considering 5% residual value on account of efflux of time. The Company has
started the process of estimating the condition of the existing fixed assets & its realizable value. As
such, the machinery & buildings have not been insured.

Note 26

Status with lenders

The Company has paid entire OTS amount and thereafter, all the lenders have filed Satisfaction of
Memo in the DRT and Satisfaction of Charge with ROC.

Note 27

Exceptional Loss for FY 2023-24 of Rs. 43 Lakhs is on account of Penalties imposed by BSE
Note 28

Status of Insurance

The claim in respect of Loss/damage to Company’s Plant and Equipment, Finished Goods and Raw
Materials during labour unrest on 27.01.2012 was not settled by the Insurance Company on
reinstatement/ replacement basis. Thereafter, the Company invoked arbitration clause as per the terms
of Policy. The Hon’ble Arbitral Tribunal had pronounced an unanimous award in favour of the
Company. The Insurance Company had filed set-aside petition U/s 34 of the Arbitration and
Conciliation Act 1996 before the court of Principal District Judge, Puducherry. Pending final
Judgement, the Principal District Judge ordered the Insurance Company to pay the amount accepted
by the Insurance Company along with interest to the Company. Accordingly, Rs. 15.17 Crores
including interest of Rs.24.89 Lakhs was received in January, 2023. Out of the said amount, Rs.2.76
crores (claims accepted on Inventories) was adjusted against the claim receivable and the balance is
shown in current liabilities since the same is to be utilized for the reinstatement/ replacement of assets
damaged / destroyed.

Note 30

Confirmation of Balances

The Company could not obtain confirmation of balances in respect of Sundry Debtors & Sundry
Creditors, loans and advances, other current assets and other liabilities.

Note 31

Fair Value Measurement Hierarchy

The following table provide analysis of financial instruments that are measured subsequent to
initial recognition at fair value, grouped into level 1 to 3 as described below.

Level 1 -Quoted Prices in an Active Market

Level 1 hierarchy includes financial instruments measured using quoted prices. This included listed
equity instruments, traded bonds, ETFs and mutual funds that have quoted prices. The fair value of
all equity instruments (including bonds) which are traded in the Stock Exchanges is valued using
the closing price as at the reporting period.

Level 2 -Valuation Techniques with Observable Inputs.

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 maximize the
use of observable market data and really as little as possible and entity-specific estimates if all
significant in put required to fail value an instrument are observable, the instrument is included in
level 2.

Level 3 -Valuation Techniques with Significant unobservable inputs.

This level of hierarchy includes financial assets and liabilities measured using inputs that are not
based on observable market data (unobservable inputs). Fair values are determined in whole or in
part, using a valuation model based on assumptions that are neither supported by prices from
observable current market transactions in the same instruments nor are they based on available market
data. The following table provides the fair value measurement hierarchy of the Company’s assets
and liabilities.

Disclosure in accordance with Ind AS 19 On Employee Benefits

The unprecedented industrial violence on 27.01.2012 resulted in deaths of personnel and destruction
of buildings and Equipment in the factory. Consequent to this, a lock-out was declared at the factory
from 31.01.2012. After series of negotiations with the workers union, Memorandum of settlement was
arrived on 24.10.2019 at Puducherry under Section 12 (3) of the Industrial Disputes Act, 1947 before
the Commissioner of Labour -cum- Chief Conciliation Officer, U T of Puducherry between the
Company and the Regency Ceramics Staff and Workers Union. As per the MOU, the management
has agreed to provide house sites at Yanam to all the displaced workers of the Company in three
categories as proposed by the union. In this connection, two stretches of land owned by ancillary units
to the extent of about 25.35 Acres was registered on 18.10.2019 in favour of the union through
settlement deeds. The conversion of agricultural land into residential plots, development of land, lying
of roads, allotment of plots, etc. is in progress.

Gratuity Provision as per Ind AS-19 and Leave Encashment were not applicable in view of the
Memorandum of settlement duly signed by both the Management and the Union.

Provisions for gratuity if any required under The Payment of Gratuity Act shall be provided for and
paid as and when liability arises.

a) There are no transactions with struck off companies under section 248 or 560

b) No charges or satisfaction is yet to be registered with Registrar of Companies beyond the statutory
period.

c) The Company has complied with the no. of layers prescribed u/s 2(87) read with the applicable
Rules

d) There is no Scheme of Arrangements that has been approved in terms of sections 230 to 237

e) The Company has not advanced /loaned/invested or received funds (either borrowed funds or share
premium or any other sources or kind of funds) to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise)
that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified

in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide
any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f) There are no transactions that are not recorded in the books of account to be surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

g) The provisions with respect to Corporate Social Responsibility are not applicable to the Company,
as the Company does not fall within the purview of the section135 of the Companies Act,2013 and
Rules made thereunder.

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

Note 40. Previous year figures have been regrouped /reclassified wherever necessary to suit the current
year''s layout.

As per our report of even date.

For K.S.Rao & Co
Chartered Accountants
Firm Registration No.003109S

Sd/- Sd/-

Dr.Naraiah Naidu Gudaru Narala Satyendra Prasad

Executive Chairman Managing Director & CFO

DIN:00105597 DIN:01410333

Sd/-

V Venkateshwara Rao
Partner

Membership No:-219209

Sd/-

Anji Reddy Deverapalli

Company Secretory and Compliance Officer

Membership No.A57611

Place : Hyderabad
Date : 30.05.2024

---

Mar 31, 2023

1.11) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes on accounts. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

1.12) Income Taxes

Income Tax expense comprises current tax and deferred tax charge or credit. The current tax is detennined as the amount of tax payable in respect of the estimated taxable income of the

period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there are unabsorbed depreciation or carry forward Losses, deferred tax asset is recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets are reviewed at each Balance Sheet date based on the developments during the year and available case laws, to reassess realisation/liabilities.

MAT Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) Credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit and Loss account and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

1.13) Earnings Per Share

The Company presents basic and diluted Earnings Per Share (“EPS") data for its ordinary shares. Basic EPS is calculated by dividing the Profit or Loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the Profit or Loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees.

1.14) Cash Flow Statement

Cash Flows are reported using the Indirect Method. Whereby Profit for the period is adjusted for effects of transactions of a non-cash nature, any deferrals are accruals of past or future Operating cash receipts or payments and item of income or expenses associated with Investing or Financing cash flows. The cash flows from Operating, Investing and Financing activities of the Company are segregated.

1.15) Segment Reporting

Segment Reporting is not applicable since the entire operations of the Company are related to one segment i.e. manufacturing of ceramics tiles in terms of Ind AS 108 on operating segments.

1.16) Exceptional Items

Exceptional items refer to items of Income or Expenses within the Statement of Profit and Loss from ordinary activities which are non-recurring and are of each size, nature or incidence that their separate disclosure is considered necessary to explain the performance of the Company.

Note on Exceptional Loss: Exceptional Loss of Rs. 1263.34 Lakhs is on account of short recovery of Insurance claim on inventory as the said amount cannot be recovered as per the award of Arbitral Tribunal.

1.17) Recent Accounting Pronouncements and Adoption

a) Amendment in Schedule III of the Companies Act, 2013

On 24^th March,2021, the Ministry of Corporate Affairs (“MCA”) through a notification amended Schedule III of the Companies Act, 2012 which is applicable from 01^st April, 2021. The effect of said amendment has been incorporated in these Financial Statements to the extent applicable to the Company.

b) Standards issued but not Effective

Ind AS 16- Proceeds before intended use

The amendments mainly prohibit an entity from deducting the cost of Plant and Equipment amounts received from selling items produced while the Company is preparing the asset for its intended use. Instead, an entity will recognize such sale proceeds and related cost in Profit or Loss. The Company does not expect the amendments to have any impact in its recognition of its Plant and Equipment in its financial statements.

Ind AS 106 - Annual Improvements to Ind AS (2021)

The amendment removes the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives were described in that illustration. The Company does not expect the amendment to have any significant impact in its Financial Statements.

Ind AS 109 - Annual Improvements to Ind AS (2021)

The amendments clarifies which fees an entity includes when it applies the ''10 percenf test of Ind AS 109 in Assessing whether to de-recognized a Financial Liability. The Company does not expect the amendment to have any significant impact in its Financial Statements.

1.18) Events after Reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the Financial Statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

1.19) Critical Accounting Estimates and Judgments

The preparation of Financial Statements is in conformity with generally Accepted Accounting Principles that require management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities and disclosure of contingent liabilities at the date of the Financial Statements and the result of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Revisions in accounting estimates are recognized

prospectively.

The areas involving critical estimates or judgments are -

- Estimates of Useful life of Plant and Equipment and Intangibles

- Measurement of Defined Benefit Obligation

- Recognition of Deferred Taxes

- Estimation of Impairment

Estimation of Provisions and Contingent Liabilities Note 23

Financial Risk Management

The Company’s activities expose it to Market Risk, Credit Risk and Liquidity Risk. Company’s overall risk management focuses the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance.

i. Market Risk

Market Risk is the risk of Loss of future earnings, fair values or future cash flows that may result from a change in the price of a Financial Instrument. The value of a Financial Instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices and other market changes that affect Market Risk sensitive instruments Market Risk is attributable to all market risk sensitive Financial Instruments including investments and deposits, foreign currency receivables, payables and borrowings.

ii. Foreign Currency Risk

Foreign Currency Risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to change m foreign currency rates. The Company’s exposure to the risk of changes in foreign exchange rates is negligible.

The Company did not enter into any derivative instruments for trading or speculative purposes.

iii. Interest Rate Risk

Interest Rate Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market rates relates primarily to the Company’s Short-term borrowing. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

iv. Credit Risk

Credit Risk arises when a customer or counterparty does not meet its obligations under a financial instrument or custom contract, leading to a Financial Loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its fmancmg/mvesting activities, including deposits with banks. The Company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. The Company receives payments regularly from its customers and hence the Company has no significant credit risk.

v. Liquidity Risk

Liquidity Risk is defined as the risk that the Company will not be able to settle or meet obligations on time or at a reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts based on expected cash flows.

Note 24

Capital Management

The Company’s objectives when managing capital are to

I) Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.

II) Maintain an optimal capital structure to reduce the cost of capital consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio:

Note 25 Factory Status

The Company suffered extensive damage to the Buildings, Plant & Machinery and other assets situated atFactory, Yanam due to unprecedented violence, occurred on January 27,2012. Stocks of Finished goods, Raw materials, stores and spares, stocks-in-process and other

inventories were damaged / looted to a large extent. The Company declared lock-out of the Plant from January 31, 2012.

The extent of Loss/damage to Plant & Machinery, Buildings and other assets of the Company were not considered in the books pending assessment and disclosed at book value after providing depreciation without considering 5% residual value on account of efflux of time. The Company has started the process of estimating the condition of the existing fixed assets & its realizable value. As such, the machinery & buildings have not been insured.

Note 26

Status with lenders

The Company has paid entire OTS amount and thereafter, all the lenders have filed Satisfaction of Memo in the DRT and Satisfaction of Charge with ROC.

Note 27

Exceptional Items

Exceptional Loss of Rs. 1263.34 Lakhs is on account of short recovery of Insurance claim on inventory as the said amount cannot be recovered as per the award of Arbitral Tribunal.

Note 28

Status of Insurance

The claim in respect of Loss/damage to Company’s Plant and Equipment, Finished Goods and Raw Materials during labour unrest on 27.01.2012 was not settled by the Insurance Company on reinstatement/ replacement basis. Thereafter, the Company invoked arbitration clause as per the terms of Policy. The Hon’ble Arbitral Tribunal had pronounced an unanimous award in favour of the Company. The Insurance Company had filed set-aside petition U/s 34 of the Arbitration and Conciliation Act 1996 before the court of Principal District Judge, Puducherry. Pending final Judgement, the Principal District Judge ordered the Insurance Company to pay the amount accepted by the Insurance Company along with interest to the Company. Accordingly, Rs.15.17 Crores including interest of Rs.24.89 Lakhs was received in January, 2023. Out of the said amount, Rs.2.76 crores (claims accepted on Inventories) was adjusted against the claim receivable and the balance is shown in current liabilities since the same is to be utilized for the reinstatement/ replacement of assets damaged / destroyed.

Note 30

Confirmation of Balances

The Company could not obtain confirmation of balances in respect of Sundry Debtors & SundryCreditors, loans and advances, other current assets and other liabilities.

Note 31

Fair Value Measurement Hierarchy

The following table provide analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into level 1 to 3 as described below.

Level 1 -Quoted Prices in an Active Market

Level 1 hierarchy includes financial instruments measured using quoted prices. This included listed equity instruments, traded bonds, ETFs and mutual funds that have quoted prices. The fair value of all equity instruments (including bonds) which are traded in the Stock Exchanges is valued using the closing price as at the reporting period.

Level 2 -Valuation Techniques with Observable Inputs.

The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is detennined using valuation techniques which maximize the use of observable market data and really as little as possible and entity-specific estimates if all significant in put required to fail value an instrument are observable, the instrument is included in level 2.

Level 3 -Valuation Techniques with Significant unobservable inputs.

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are detennined in whole or in part, using a valuation model based on assumptions that are neither supported by

Note 37

Disclosure in accordance with Ind AS 19 On Employee Benefits

The unprecedented industrial violence on 27.01.2012 resulted in deaths of personnel and destruction of buildings and Equipment in the factory. Consequent to this, a lock-out was declared at the factory from 31.01.2012. After series of negotiations with the workers union, Memorandum of settlement was arrived on 24.10.2019 at Puducherry under Section 12 (3) of the Industrial Disputes Act, 1947 before the Commissioner of Labour -cum- Chief Conciliation Officer, U T of Puducherry between the Company and the Regency Ceramics Staff and Workers Union. As per the MOU, the management has agreed to provide house sites at Yanam to all the displaced workers of the Company in three categories as proposed by the union. In this connection, two stretches of land owned by ancillary units to the extent of about 25.35 Acres was registered on 18.10.2019 in favour of the union through settlement deeds. The conversion of agricultural land into residential plots, development of land, lying of roads, allotment of plots, etc. is in progress.

or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f) There are no transactions that are not recorded in the books of account to be surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

g) The provisions with respect to Corporate Social Responsibility are not applicable to the Company, as the Company does not fall within the purview of the sectionl35 of the Companies Act,2013 and Rules made thereunder.

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

Note 40. Previous year figures have been regrouped /reclassified wherever necessary to suit the

current year''s layout.

As per our report of even date.

For K.S.Rao & Co

Chartered Accountants Sd/- Sd/-

Firm Registration No.003109S Dr.Naraiah Naidu Gudaru Narala Satyendra Prasad

Chairman and Whole Time Director/CFO

Managing Director DIN:01410333

DIN:00105597

Sd/-

M. Naga Prasad

Partner

Membership No:-231388

Sd/-

Neha Bung

Company Secretory and Compliance Officer Membership No.A71478

Place : Hyderabad

Date : 26.05.2023

---

Mar 31, 2015

1. Regency Ceramics Limited was incorporated in 1983. The company manufactures ceramic floor and wall tiles suitable to domestic and international markets. The company introduced glazed vitrified tiles, parking tiles and heavy duty tiles for high traffic areas.

2. The company is operating from its Registered cum Corporate office in Hyderabad and operates through various Depot network across the country. The plant is located at Yanam, Union Territory of Puducherry. The Company delcared lock-out of its plant on 31st January, 2012 and since then, there is no production.

3. The company has recorded a Net Loss of Rs.1341.06 Lakhs for the year and has accumulated loss of Rs.9455.42 Lakhs as on 31.03.2015 resulting in erosion of the net worth. Further, there were no cash flows from the existing business activities. The company has defaulted in payment of dues to banks/financial institution and could not comply with the terms of sanction and/or repayment schedules of the lenders. Consequently, the lenders recalled the loans and initiated legal proceedings for recovery of the debts. However, the company is of the opinion that One Time Settlement package already sanctioned by the lenders where part amount is already paid and the promoters are in the process of arranging the balance amount, will be fulfilled shortly.

4. The matter was referred to Board for Industrial and Financial Reconstruction (BIFR) and the case was registered. The management is hopeful that BIFR will declare the company sick and grant an acceptable and viable rehabilitation package to the company.

5. Further, the company is confident of an amicable settlement with the agitating workers and is also hopeful of receiving insurance claim for refurbishing the plant and to recommence the plant operations. In view of the above, the financial statements have been prepared by the company on a "going concern" basis.

6. The company paid 28.93% of loan Outstanding as One time Settlement (OTS) amount as a compromise towards settlement of dues to the lenders and requested for extension of time for balance payment. However, the lenders issued a Demand Notice under section 13(2) of SARFAESI Act. State Bank of India on behalf of its bank, Corporation Bank and State Bank of Travancore issued a Possession Notice (Symbolic) under Rule 8(1) of Security Interest (Enforcement) Rules, 2002 stating that the undersigned has taken possession of the properties in exercise of powers conferred on him under section 13(4) of the SARFAESI Act on 04.03.2015 State Bank of Bikaner & Jaipur assigned and transferred the facilities sanctioned by them together with all underlying securities interests thereto to Phoenix ARC Private Limited (Trustee of Phoenix Trust - FY15-5). The lenders filed an application under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 in the Debts Recovery Tribunal, Hyderabad for recovery of their dues.

7. In view of the above, the Long Term Borrowings are considered as current maturities of long term borrowings and shown under Note No.10 (Other Current Liabilities). Hypothecation / Hire purchase loans under (D) are repayable within one year and shown under Note No.10 (Other Current Liabilities)

8. Terms of Repayment and Security

The Short term borrowings are repayable on demand, secured by first charge on current assets of the company, ranking paripassu with other member banks and further secured by second charge on the company's fixed assets ranking paripassu with other member banks of the consortium. These Borrowings are further secured by i) pledge of 10% equity shares of the company held by the promoters, ii) tangible collateral security provided by the promoters equivalent to 15% of the share capital of the company and iii) personal guarantee of 3 promoter directors of the company on paripassu basis to all the lenders. Interest is payable on monthly basis.

9. The company paid 28.93% of loan Outstanding as One Time Settlement (OTS) amount as a compromise towards settlement of dues to the lenders and requested for extension of time for balance payment. However, the lenders issued a Demand Notice under section 13(2) of SARFAESI Act. State Bank of India on behalf of its bank, Corporation Bank and State Bank of Travancore issued a Possession Notice (Symbolic) under Rule 8(1) of Security Interest (Enforcement) Rules, 2002 stating that the undersigned has taken possession of the properties in exercise of powers conferred on him under section 13(4) of the SARFAESI Act on 04.03.2015 State Bank of Bikaner & Jaipur assigned and transferred the facilities sanctioned by them together with all underlying securities interests thereto to Phoenix ARC Private Limited (Trustee of Phoenix Trust - FY15-5). The lenders filed an application under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 in the Debts Recovery Tribunal, Hyderabad for recovery of their dues.

10. Term Loans under A,B and C above are repayable in quarterly instalments. Interest is payable on monthly basis.These loans are secured by first paripasu charge by way of mortgage and hypothecation over all the fixed assets of the company, both existing and future, further securedby second paripassu hypothecation charge over current assets of the company both present and future. These loans are further secured by i) pledge of 10% equity shares of the company held by the promoters, ii) tangible collateral security provided by the promoters equivalent to 15% of the share capital of the company and iii) personal guarantee of 3 promoter directors of the company on paripassu basis to all the lenders. Hypothecation / Hire Purchase loans under (A) above are secured by hypothecation of vehicles and guaranteed by the promoter directors of the company.

11. The Interest on Term Loans and Working Capital Loans for the year 2014-15 amounting to Rs.1021.93 lakhs (Previous Year Rs.978.11 Lakhs) calculated @ interest rates as per sanction was not provided in the books in line with the treatment made by the banks. The actual interest liability shall vary depending upon the actual date of payment.

12. Creditors for Other Finance and Creditor for Expenses include dues payable to the Statutory Authorities. The liability towards Interest and Penalities payable on account of Statutory Dues were not provided in the books expecting waiver in the current situation.

13. Terms of Repayment and Security:

Term Loans under A,B and C above are repayable in quarterly instalments. Interest is payable on monthly basis.These loans are secured by first paripasu charge by way of mortgage and hypothecation over all the fixed assets of the company, both existing and future, further secured by second paripassu hypothecation charge over current assets of the company both present and future. These loans are further secured by i) pledge of 10% equity shares of the company held by the promoters, ii) tangible collateral security provided by the promoters equivalent to 15% of the share capital of the company and iii) personal guarantee of 3 promoter directors of the company on paripassu basis to all the lenders. Hypothecation / Hire Purchase loans under (A) above are secured by hypothecation of vehicles and guaranteed by the promoter directors of the company.

14. The Interest on Term Loans and Working Capital Loans for the year 2014-15 amounting to Rs.1021.93 lakhs (Previous Year Rs.978.11 Lakhs) calculated @ interest rates as per sanction was not provided in the books in line with the treatment made by the banks. The actual interest liability shall vary depending upon the actual date of payment.

15. The company paid 28.93% of the OTS amount under settlement to all the banks. Corporation Bank had shown the same in the No-lien Account, State Bank of India had shown part of this amount in the No-Lien Account while others have adjusted against the regular Term loan Accounts. The Company made similar treatment in the books in line with the treatment made by the respective banks.

16. The unprecedented industrial violence on 27.1.2012 had resulted in deaths of personnel and destruction of buildings and equipment in the factory. Consequently, a lock-out was declared at the factory from 31.01.2012. The Salary, Wages and other benefits to employees were not considered as provisional liability and not taken in the books under "No Work - No Pay" principle pending orders / judgment of the Industrial Tribunal.

As at As at 31.03.2015 31.03.2014 (Rs. in lakhs) (Rs. in lakhs) 17. Estimated Amount of contracts remaining to be executed on Capital Accounts and not provided for - -

18. Contingent Liabilities not provided for:

i) On account of Letters of Credit and Bank Guarantees given by Bankers. - -

ii) Demand from Directorate of Enforcement, disputed by the Company pending in Appellate Tribunal for Foreign Exchange. 5.50 5.50

iii) Demand from Customs & Central Excise (Service Tax Cell), disputed by the company, Pending in appeal before CESTAT, Bangalore. 35.04 35.04

iv) Demand from Yanam Municipality (Property Tax-With retrospective effect) disputed by the company- pending with commissioner, Yanam Municipality 32.35 32.35

v) Demand from The Deputy Commissioner of Income Tax, Hyderabad, disputed by the Company. Appeal allowed by ITAT,

Hyderabad. DCIT modified the demand to Rs.90.98 Lakhs after giving partial effect to ITAT orders.. The company again requested DCIT to set aside the modified order by giving effect to the entire ITAT orders. 90.98 101.17

19. The company suffered extensive damage to the Buildings, Plant & Machinery and other assets situated at Factory, Yanam due to unprecedented violence, occurred on 27th January, 2012. Stocks of Finished goods, Raw materials, stores and spares, stocks-in-process and other inventories were damaged / looted to a large extent. The Company declared lock-out of the Plant from 31st January 2012.

20. The extent of loss/damage to Plant & Machinery, Buildings and other assets of the company were not considered in the books pending assessment and disclosed at book value after providing depreciation without considering 5% residual value on account of efflux of time. The company could not estimate the condition of the existing fixed assets & its realizable value. As such, the machinery & buildings could not be insured.

21. Similarly, the condition of the raw materials, stores & spares and its realizable value could not be estimated by the company, not insured and disclosed at book value.

22. The Company could not obtain confirmation of balances in respect of Sundry Debtors & Sundry Creditors, loans and advances, other current assets and other liabilities.

23. The company has not provided the provisional liability towards salary, wages and other benefits to its factory employees pending orders/judgment of the industrial Tribunal. Further, the company has not provided for its liability towards Gratuity and leave encashment as per AS-15 due to loss of employee records in the factory during the violent incidence occurred on 27th January, 2012.

24. The company paid part of One Time Settlement (OTS) amount to the lenders and requested for extension of time for balance payment. However, the lenders issued a Demand Notice under section 13(2) of SARFAESI Act. State Bank of India on behalf of its bank, Corporation Bank and State Bank of Travancore issued a Possession Notice (Symbolic) under Rule 8(1) of Security Interest (Enforcement) Rules, 2002 stating that the undersigned has taken possession of the properties in exercise of powers conferred on him under section 13(4) of the SARFaESI Act on 04.03.2015 State Bank of Bikaner & Jaipur assigned and transferred the facilities sanctioned by them together with all underlying securities interests thereto to Phoenix ARC Private Limited (Trustee of Phoenix Trust - FY15-5). The lenders filed an application under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 in the Debts Recovery Tribunal, Hyderabad for recovery of their dues.

In view of the above, the Long Term Borrowings are considered as current maturities of long term borrowings and shown under Other Current Liabilities. Hypothecation / Hire purchase loans are repayable within one year and shown under Other Current Liabilities.

25. The company filed a reference under section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 with the Board for Industrial and Financial Reconstruction. The reference made by the company has been registered in the BIFR as Case No.19/2014.

26. Remittance in foreign currency on account of Dividend:

There is no remittance in foreign currency on account of Dividend during the year 2014-15.

27. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

28.Segment Reporting : The entire operations of the Company relate only to one segment.

29.Related Party Disclosure:

Name of the party Nature of relationship:

1) Regma Ceramics Limited : Company under the same management:

2) Regency Educational Society : Other entities where Directors/their relatives are interested

3) Dr. G.N. Naidur

4) Smt. Bindu G Naidu } Key Management Personnel

5) Sri. N. Satyendra Prasad

30. The Scheduled III to the Companies Act, 2013 has become effective from 1st April, 2014 for the pereparation of Finacial Statements and accordingly, disclosure and presentation have been made in the financial statements.

31. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosere.

32. Members may fill up the Ballot Form printed overleaf and submit the same in a sealed envelope to Mr. K.V.Chalama Reddy, Practicing Company Secretary, Flat No.301, Madhava Apartments, Hill Colony, Khairtabad, Hyderabad-500004, so as to reach by 5.00 pm on September 29, 2015. Ballot Form received thereafter will strictly be treated as if not received.

33. The Company will not be responsible if the envelope containing the Ballot Form is lost in transit.

34. Unsigned, incomplete or incorrectly ticked forms are liable to be rejected and the decision of the Scrutinizer on the validity of the forms will be final.

35. In the event member casts his votes through both the processes i.e. E-voting and Ballot Form, the votes in the electronic system would be considered and the Ballot Form would be ignored.

36. The right of voting by Ballot Form shall not be exercised by a proxy.

37. To avoid fraudulent transactions, the identity/signature of the members holding shares in electronic/demat form is verified with the specimen signatures furnished by NSDL/CDSL and that of members holding shares in physical form is verified as per the records of the share transfer agent of the Company (i.e. XL Softech Systems Pvt Ltd.). Members are requested to keep the same updated.

38. There will be only one Ballot Form for every Folio/DP ID/CLIENT ID irrespective of the number of joint members.

39. In case of joint holders, the Ballot Form should be signed by the first named shareholder and in his/her absence by the next named shareholders. Ballot Form signed by a joint holder shall be treated valid if signed as per records available with the Company and the Company shall not entertain any objection on such Ballot Form signed by other joint holders.

40. representative of the Body Corporate/Trust/Society, etc. a certified copy of the relevant authorization/ Board resolution to vote should accompany the Ballot Form.

41. The voting rights of shareholders shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date 25th September, 2015.

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Mar 31, 2014

Terms of Repayment and Security:

Term Loans under A,B and C above are repayable in quarterly instalments. Interest is payable on monthly basis.These loans are secured by first paripasu charge by way of mortgage and hypothecation over all the fixed assets of the company, both existing and future, further secured by second paripassu hypothecation charge over current assets of the company both present and future. These loans are further secured by i) pledge of 10% equity shares of the company held by the promoters, ii) tangible collateral security provided by the promoters equivalent to 15% of the share capital of the company and iii) personal guarantee of 3 promoter directors of the company on paripassu basis to all the lenders. Hypothecation / Hire Purchase loans under (A) above are secured by hypothecation of vehicles and guaranteed by the promoter directors of the company

The Interest on Term Loans and Working Capital Loans for the year 2013-14 amounting to Rs.978.11 lakhs (Previous Year Rs.1114.23 Lakhs) calculated @ interest rates as per sanction was not provided in the books in line with the treatment made by the banks. The actual interest liability shall vary depending upon the actual date of payment.

Creditors for Other Finance and Creditor for Expenses include dues payable to the Statutory Authorities. The liability towards Interest and Penalities payable on account of Statutory Dues were not provided in the books expecting waiver in the current situation.

02. The company has not provided the provisional liability towards salary, wages and other benefits to its factory employees pending orders/judgment of the industrial Tribunal. Further, the company has not provided for its liability towards Gratuity and leave encashment as per AS-15 due to loss of employee records in the factory during the violent incidence occurred on 27th January, 2012.

03. The lenders opted for settlement of dues under OTS as a compromise. The company paid part amount and requested for extension of time. The company has not provided interest on term loans, working capital loans to the extent of Rs.978.11 Lakhs (Previous Year Rs.1114.23 Lakhs) calculated @ interest rates as per sanction in line with the treatment given by the banks.

04. The lenders, however, issued a Demand Notice under SARFAESI Act for recovery of their dues.

05. The company filed a reference under section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 with the Board for Industrial and Financial Reconstruction (BIFR). The reference made by the company has been registered in the BIFR as Case No.19/2014.

06. Remittance in foreign currency on account of Dividend:

There is no remittance in foreign currency on account of Dividend during the year 2013-14.

07. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

08. Segment Reporting :

The entire operations of the Company relate only to one segment.

09. Related Party Disclosure:

Name of the party Nature of relationship:

1) Regma Ceramics Limited : Company under the same management:

2) Regency Educational Society : Other entities where Directors/their relatives are interested

3) Dr. G.N. Naidu

4) Smt. Bindu G Naidu Key Management Personnel

5) Sri. N. Satyendra Prasad

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Mar 31, 2013

01. The company suffered extensive damage to the Buildings, Plant & Machinery and other assets situated at Factory, Yanam due to unprecedented violence, occurred on 27th January, 2012. Stocks of Finished goods, Raw materials, stores and spares, stocks-in-process and other inventories were damaged / looted to a large extent. The Company declared lock-out of the Plant from 31st January 2012.

The financial results for the year ended 31st March 2013 were prepared considering the effect of the loss / damage to FG stocks, Raw Materials, stores and spares, stocks-in-process and other inventories in the books of accounts. However, the value of loss/damage to Plant & Machinery, Buildings and other assets of the company and also, claim under loss of profit were not considered in the books pending assessment.

02. The Company has not obtained confirmation of balances from Sundry Debtors and Sundry Creditors and is in the process of obtaining confirmation of balances from Sundry Debtors, Sundry Creditors, other liabilities and advances.

03. The company extended "Letter of Comfort" to ICICI Bank aggregating to Rs.23.70 Lakhs with an undertaking to convert the same into Corporate Guarantee in line with terms and conditions of the sanction to M/s. Regma Ceramics Ltd., a Body Corporate under the same management.

04. Gratuity provision as per AS-15 was not provided in the books due to loss of employee records in the factory during the voilent incidence occurred on 27h January,2012.

05. Remittance in foreign currency on account of Dividend:

There is no remittance in foreign currency on account of Dividend during the year 2012-13

06. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

07. Segment Reporting: The entire operations of the Company relate only to one segment.

08. Related Party Disclosure:

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Mar 31, 2010

01. Secured Loans:

i) The Term Loans ( including fresh loans, Funded Interest Term Loans and Working Capital Term Loans) availed from Banks are secured by first paripassu charge by way of mortgage and hypothecation over all the fixed assets of the Company, both existing and future; further secured by second paripassu hypothecation charge over current assets of the Company both present and future ( except on the assets on which exclusive charge is created against the loans sanctioned by hypothecation/ hire purchase vendors).

ii) The working capital limits availed from banks are secured by first charge on current assets of the Company, ranking paripassu with other member banks and further secured by second charge on the Companys fixed assets ranking paripassu with other member banks of the consortium.

iii) The loans availed under (i) and (ii) above are further secured by (a) pledge of 10% Equity shares of the Company held by the promoter (b) Tangible collateral security provided by the promoters equivalent to 15% of the share capital of the Company and (c) personal guarantees of three promoter Directors of the Company on paripassu basis to all the lenders.

As at 31.03.10 As at 31.03.09 (Rs.in lakhs) (Rs.in lakhs)

02. Estimated Amount of contracts remaining to be executed on Capital Accounts and not provided for - -

03. Contingent Liabilities not provided for:

i) On account of Letters of Credit and Bank 861.92 1587.66 Guarantees given by Bankers.

ii) Demands from Sales Tax Dept., disputed - 17.89 by the Company pending in appeals, amounting to Rs. 17.89 lakhs.

iii) Demand from Directorate of Enforcement, 5.50 5.50 disputed by the Company pending in Appellate Tribunal for Foreign Exchange.

iv) Demand from Customs & Central Excise Dept. (Service Tax cell), disputed by the Company, pending in appeal, amounting to Rs.62.36 lakhs. Against these demands, the Company paid an amount of Rs.9.97 lakhs. 62.36 62.36

v) Demand from Customs & Central Excise (Service Tax Cell), disputed by the Company, Pending in appeal before CESTAT, Bangalore amounting to Rs. 35.04 Lakhs 35.04 35.04

vi) Demand from Commissioner, Central Excise (Service Tax Cell) Visakhapatnam - II disputed by the Company, pending in appeal before CESTAT, Bangalore amounting to Rs.1.22 Lakhs 1.22 1.22

vii) Demand from Yanam Municipality (Property Tax) disputed by the Company- pending with commissioner, Yanam Municipality. 32.35 32.35

viii) Demand from Regional Provident Fund Commissioner, Rajahmundry, disputed by the Company pending in appeal, amounting to Rs.46.26 Lakhs. Against this demand, the Company paid an amount of Rs. 11.57 Lakhs during the Financial Year 2009-10 46.26 46.26

ix) Demand from Dy. Commissioner of Income Tax, Hyderabad, disputed by the Company, pending in appeal before Income Tax Appellate Tribunal, Hyderabad amounting to Rs. 130.97 Lakhs 130.97 130.97

04. The Company incurred Rs.118.85 Lakhs in the earlier years on installation of 132KV electric line for getting uninterrupted power supply from Pondicherry Electricity Board. The line is the property of the Electricity board on energigation in the month of July05 and thus the expenditure is being written off in five equal annual installments from the year of energigation. Accordingly, Rs.23.77 Lakhs is charged to Revenue in the current year.

05. The Company has obtained confirmation of balances from few parties from Sundry Debtors and Sundry Creditors and is in the process of obtaining confirmation of balances from the balance parties included under Sundry Debtors, Sundry Creditors, other liabilities and advances.

06. In the opinion of the Board, the current Assets and Loans & Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

07. The Company extended "Letter of Comfort" to the Banks aggregating to Rs.52 Lakhs with an undertaking to convert the Same into Corporate Guarantee in line with terms and conditions of the sanction to M/s. Regma Ceramics Ltd., a Body Corporate under the same management.

08. Remittance in foreign currency on account of Dividend:

There is no remittance in foreign currency on account of Dividend during the year 2009-10

09. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

10. Segment Reporting: The entire operations of the Company relate only to one segment.

11. Related Party Disclosure:

Name of the party Nature of relationship:

1) Regma Ceramics Limited : Company under the same management:

2) Regency Educational Society : Other entities where Directors/their relatives are interested:



3) Dr. G.N. Naidu ")

4) Smt. G. Radhika Key Management Personnel

5) Smt. Bindu G Naidu

6) Sri. K.C. Chandrasekhar



12. Lease rentals payable towards vehicles acquired under operating lease:

- not later than one year: - 2.83

- later than one year but not later than five years :

13. Previous years figures have been regrouped /re-arranged wherever necessary to make them comparable with the current years figures.