RKB Agro Industries Ltd. के अकाउंट के लिये नोट

Mar 31, 2024

2.3.11 Provisions, Contingent Liabilities and Contingent Assets

The Company recognizes provisions when there is present obligation as a result of past events
and it is probable that there will be an outflow of resources and reliable estimate (legal or
constructive) of the amount of the obligation can be made. The amount recognized as provision is
the best estimate of the consideration required to settle the present obligation at the end of the
reporting period taking into account the risk and uncertainties surrounding the obligation

When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognized as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.
Contingent Liabilities are disclosed for

• possible obligation which will be conurmed only by future events not wholly within the control
of the Company

• present obligations arising from past events where it is not probable that an outuow of
resources will be required to settle the obligation or a reliable estimate of the amount of the
obligation cannot be made. Contingent assets are neither recognised nor disclosed in the
unancial statements.

2.3.12 Government Grants

Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the periods that the related costs, for
which it is intended to compensate, are expensed. When the grant relates to an asset, it is treated
as deferred income and released to the statement of profit and loss over the expected useful lives
of the assets concerned.

2.3.13 Financial Instruments

Financial Assets and Financial Liabilities are recognized when the Company becomes a party to
the contractual provisions of the Instrument.

Financial assets and Financial liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of Financial assets and Financial liabilities
(other than Financial assets and Financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the Financial assets or Financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
Financial assets or Financial liabilities at fair value through profit or loss are recognized
immediately in Statement of Profit or Loss.

For the purposes of subsequent measurement, Financial Instruments of the Company are classified
in the following categories:

a) Non derivative Financial assets comprising amortized cost

b) Financial assets fair value at fair value through other comprehensive income

c) Financial assets at fair value through profit or loss

The classification of Financial Instruments depends on the objective of the business model for which
it is held. Management determines the classification of its Financial Instruments at initial recognition.
Financial Assets

Recognition and Initial measurement

The Company initially recognises loans and advances, deposits, debt securities issues and subordinated
liabilities on the date on which they originate. All other Financial Instruments (including regular
way purchases and sales of Financial assets) are recognised on the trade date, which is the date on
which the Company becomes a party to the contractual provisions of the Instrument.

Subsequent measurement of the Financial assets

(i) Financial assets carried at Amortized Cost

A Financial asset is subsequently measured at amortized cost if it is held within a business
model whose objective is to hold the asset in order to collect contractual cash flows and the
contractual terms of the Financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through Other Comprehensive Income (FVTOCI)

A Financial asset is subsequently measured at fair value through Other Comprehensive Income
income if it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling Financial assets and the contractual terms of the Financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding. Further, in case where the Company has made an irrevocable
selection based on its business model, for its investments which are classified as equity Instruments,
the subsequent changes in fair value are recognized in Other Comprehensive Income income.

(iii) Financial assets at fair value through profit or loss (FVTPL)

A Financial asset which is not classified in any of the above categories are subsequently fair
valued through profit or loss. The transaction costs directly attributable to the acquisition of
Financial assets and Financial liabilities at fair value through profit and loss are immediately
recognized in the Statement of Profit or Loss.

Effective Interest Method

The Effective Interest method is a method of calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash receipts (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the debt instrument, or where appropriate, a shorter
period, to the gross carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those Financial
assets classified as at FVTPL. Interest income is recognised in Profit or Loss and is included in
the “Other Income” line item.

Impairment of Financial assets:

The Company applies the expected credit loss (ECL) model for recognising the impairment loss on
Financial assets measured at amortised cost and FVTOCI but are not fair valued through profit and
loss. Loss allowance for Trade receivables with no significant financing component is measured at
an amount equal to lifetime ECL. For all other Financial assets, ECLs are measured at an amount
equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial
recognition, in which case those are measured at lifetime ECL. The amount of ECLs (or reversal)
that is required to adjust the loss allowance at the reporting date to the amount that is required to be
recognized is recognized as an impairment gain or loss in the Statement of profit or loss.

Derecognition of Financial assets:

The Company derecognises financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the Financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the transferred asset, the Company
recognises its retained interest in the asset and an associated liability for amounts it may have to
pay. If the Company retains substantially all the risks and rewards of ownership of a transferred
Financial asset, the Company continues to recognise the Financial asset and also recognises a
collateralised borrowing for the proceeds received.

On derecognition of Financial asset in its entirety, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable and the cumulative gain or loss
that had been recognised in other comprehensive income and accumulated in equity is recognised
in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on
disposal of that Financial asset.

On derecognition of a Financial asset other than in its entirety (e.g. when the Company retains an
option to repurchase part of a transferred asset), the Company allocates the previous carrying
amount of the Financial asset between the part it continues to recognise under continuing
involvement, and the part it no longer recognises on the basis of the relative fair values of those
parts on the date of the transfer. The difference between the carrying amount allocated to the
part that is no longer recognised and the sum of the consideration received for the part no
longer recognised and any cumulative gain or loss allocated to it that had been recognised in
other comprehensive income is recognised in profit or loss if such gain or loss would have
otherwise been recognised in profit or loss on disposal of that Financial asset. A cumulative gain
or loss that had been recognised in other comprehensive income is allocated between the part
that continues to be recognised and the part that is no longer recognised on the basis of the
relative fair values of those parts.

Foreign Exchange gains and losses:

The fair value of Financial assets denominated in Foreign currency is determined in that Foreign currency
and translated at the spot rate at the end of each reporting period.

For Foreign Currency denominated Financial assets measured at amortised cost and FVTPL, the
exchange differences are recognised in profit or loss except for those which are designated as hedging
instruments in a hedging relationship.

For the purposes of recognising Foreign exchange gains and losses, FVTOCI debt instruments are
treated as Financial assets measured at amortised cost. Thus, the exchange differences on the amortised
cost are recognised in profit or loss and other changes in the fair value of FVTOCI Financial assets are
recognised in other comprehensive income.

Financial liabilities

a. Classification as debt or equity

Debt and Equity Instruments issued by Company are classified as either Financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
Financial liability and an equity Instrument.

b. Equity Instruments

An Equity Instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity Instruments issued by a Company entity are recognised at the
proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No
gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s
own equity instruments.

c. Financial Liabilities

All Financial liabilities are subsequently measured at amortised cost using the effective interest method
or at FVTPL.

However, Financial liabilities that arise when a transfer of a Financial asset does not qualify for
derecognition or when the continuing involvement approach applies, Financial guarantee contracts
issued by the Company, and commitments issued by the Company to provide a loan at below-market
interest rate are measured in accordance with the specific accounting policies set out below.

d. Financial Liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the Financial liability is either held for trading or it is
designated as at FVTPL.

A Financial liability is classified as held for trading if :

• it has been incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified Financial Instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

• A Financial liability, other than a Financial liability held for trading may be designated as at
FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise;

• the Financial liability forms part of a Company of Financial assets or Financial liabilities or
both, which is managed and its performance is evaluated on a fair value basis, in accordance
with the Company’s documented risk management or investment strategy, and information
about the Companying is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits
the entire combined contract to be designated as at FVTPL in accordance with IND AS 109

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest
paid on the Financial liability and is included in the ‘Other income’ line item. The Company derecognises
Financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they
expire. The difference between the carrying amount of the Financial liability derecognised and the
consideration paid or payable is recognised in Statement of Profit and Loss.

However, for non-held-for-trading Financial liabilities that are designated as at FVTPL, the amount
of change in the fair value of the Financial liability that is attributable to changes in the credit risk of
that liability is recognised in Other Comprehensive Income, unless the recognition of the effects of
changes in the liability’s credit risk in other comprehensive income would create or enlarge an
accounting mismatch in profit or loss, in which case these effects of changes in credit risk are
recognised in profit or loss. The remaining amount of change in the fair value of liability is always
recognised in profit or loss. Changes in fair value attributable to a Financial liability’s credit risk
that are recognised in other comprehensive income are reflected immediately in retained earnings
and are not subsequently reclassified to profit or loss. Gains or losses on Financial guarantee
contracts and loan commitments issued by the Company that are designated by the Company as
at fair value through profit or loss are recognised in profit or loss.

e. Other Financial liabilities

Other Financial liabilities (including borrowings and Trade and other payables) are subsequently
measured at amortised cost using the effective interest method.

f. Derecognition of Financial liabilities

The Company derecognises Financial liabilities when, and only when, the Company’s obligations
are discharged, cancelled or have expired. An exchange between a lender of debt instruments
with substantially different terms is accounted for as an extinguishment of the original Financial
liability and the recognition of a new Financial liability. Similarly, a substantial modification of the
terms of an existing Financial liability (whether or not attributable to the Financial difficulty of the
debtor) is accounted for as an extinguishment of the original Financial liability and the recognition
of a new Financial liability. The difference between the carrying amount of the Financial liability
derecognised and the consideration paid or payable is recognised in profit or loss.

2.3.14 Operating cycle

Based on the nature of products/activities of the Group and the normal time between acquisition
of assets and their realisation in cash or cash equivalents, the Company has determined its
operating cycle as 12 months for the purpose of classification of its assets and liabilities as
current and non - current.

II. NOTES ON ACCOUNTS

1 Bank has issued one (PY 3 Bank Guarantees) Bank guarantees totalling to Rs.0.66 Lakhs
(P.Y.Rs.3.37 Lakhs) to Director General of Foreign Trade, Bangalore for Export Obligation against
which the Company has kept FDRs worth Rs.0.66 Lakhs (Previous year Rs.3.41 Lakhs) with bank
as Margin Money

2. There are no amounts due to be remitted to “Investor’s Education & Protection Fund” as at the
year end. (P.Y. NIL).

3. Figures for the previous year are regrouped/ rearranged wherever necessary to conform to the
current year’s classification. Figures are rounded off to the nearest Lakhs.

4. The Board of Directors have approved the Financial Statements in their Board Meeting on
18.06.2024

Security against above Term loans

a) Secured by hypothecation of Stock & Book debts and Collateral security by way of EM of Industrial property
Sy. No.198/2/2 at Mukram Gunj, Manchalapur Road, Raichur and Personal property of relative of Director.

b) Guaranteed by Sri S K Bhandari Managing Director, Pavan Bhandari and Chandana Bhandari in their
personal capacity.

Security against above Car loan

a) Secured by hypothecation of Stock & Book debts and Collateral security by way of EM of Industrial property
Sy. No.198/2/2 at Mukram Gunj, Manchalapur Road, Raichur and Personal property of relative of Director.

b) Guaranteed by Sri S K Bhandari Managing Director, Pavan Bhandari and Chandana Bhandari in their personal capacity.

Security against above Car loan

a) Secured by way of hypothecation of Car.

Note:- The tenure of ECGS loan is 4 years with a moratorium of 12 months. ECGS Loan is repayable in
36 equal monthly instalments commencing from January 2022 and ending in December 2024. Interest
payable on monthly interests.

Term Loan 1 is repayable in 84 equal monthly instalments commencing from January 2021 and ending
in December 2027. Interest payable on monthly interests @ 8.25% . Outstanding as on 31.3.24 Rs.
53.57 Lakhs (Non- Current Liability Rs 39.28 Lakhs) (PY Rs. 69.74 Lakhs).

Term Loan 2 is repayable in 60 equal monthly instalments commencing from January 2022 and ending
in December 2026. Interest payable on monthly interests @ 8.25%. Outstanding as on 31.3.24 Rs. 83.19
Lakhs (Non Current Liability Rs. 53.19 Lakhs ) (PY 112.70 Lakhs).

(i) Cash Credit facility is secured by :

a) Hypothecation of stocks & book debts and Collateral security by way of EM of Industrial
property Sy. No.198/2/2 and Commercial property of relative of Director)

b) Guaranteed by Sri S K Bhandari Managing Director, Pavan Bhandari and Chandana handari
in their personal capacity

(ii) Goods Credit loan facility is secured by Hypothecation of stock stored at APMC Warehouse, Raichur
by means of warehouse receipts. Outstanding as on 31.03.24 - Rs. 60.98 Lakhs ( PY Nil)

Note - There are no items giving rise to diluted equity shares. Hence, basic EPS is considered as diluted EPS.
Note 29 : Segment Reporting

The Company’s object is to engage in the business of manufacturing and trading of cotton and cotton
seeds and also carries the services of Ginning & Pressing of cotton and all these operations are carried
out domestically. In accordance with Ind AS 108 “Operating Segments”, whose operating results are
regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to
be allocated to the segment and assess its performance. The Company has no primary reportable
segments. The Company has effected Sales to one party worth Rs. 941.70 Lakhs which is greater than
10% of the total Sales of the Company.

Note 30 : Deferred Tax

Deferred Tax is recognized to the extent that it is probable that future taxable income will be available
against which the deductible temporary differences, unused tax losses, depreciation carry forwards and
unused tax credits could be utilized

Due to the above said reason, MAT Credit balance as on 31st Match 2024 of Rs. 36.28 Lakhs (PY Rs
43.85 Lakhs) is not recognized in books of account.

Note 31 : Employee Benefits

a) Defined Benefit Plan :

Since the Company is recognizing Gratuity amount payable to employees on cash basis, disclosures as
required under Ind AS-19 is not made.

b) Defined Contribution Plan

The Company makes Provident Fund contributions to Defined Contribution plan for all employees. nder
the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund
the benefits. The Company has recognised Rs. 2.23 Lakhs (Year ended 31 March, 2023 INR 1.28
Lakhs) for Provident Fund Contributions in the Statement of Profit and Loss which is grouped under
“Contributions to Provident Fund and other Funds” of Note 22 Employee Benefits Expenses.

Note 32 : Other Disclosures

a. i. The Company has not given any loans or advances in the nature of Loans to Promoters, Directors,
KMP‘s and the Related parties (as defined under Companies Act, 2013) that are repayable on
demand or without specifying any terms or period of repayment.

b. The Company does not holds any Benami Property and there are no proceedings against the
Company under the Benami Transaction (Prohibition) Act 1988 (as amended from time to time)

c. The Company has used the borrowings from banks and financial institutions for the specific purpose
for which it was taken.

d. The Company has not been declared as a wilful defaulter (as per RBI circular) by any bank or financial
institution or any other lender at any time during the financial year or after the end of the reporting period.

e. The Company has had no transactions with Companies struck off under section 248 of the Companies
Act, 2013 or section 560 of Companies Act, 1956.

f. Creation or satisfaction of charges are not pending for registration with Registrar of Companies
beyond the statutory period.

g. To the best of our knowledge and belief, other than as disclosed in the notes to the accounts, no
funds have been advanced or loaned or invested (either from borrowed funds or share premium or
any other sources 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

h. To the best of our knowledge and belief, other than as disclosed in the notes to the accounts, 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, that
the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

i. There are no transactions which are not recorded in the books of accounts that have been surrendered
or disclosed as Income during the year in the tax assessments under the Income Tax Act, 1961.

j. The Provisions of Corporate Social Responsibility under Section 135 of the Companies Act, 2013
are not applicable to the Company for the year.

k. The Company has not traded or invested in Crypto or virtual currency during the year (PY Nil).

l. The quarterly returns or statements of current assets filed by the Company with Banks or financial
Institutions are not in agreement with books of accounts. The details of variance and reasons for
variation are explained below:

j. The Provisions of Corporate Social Responsibility under Section 135 of the Companies Act, 2013
are not applicable to the Company for the year.

k. The Company has not traded or invested in Crypto or virtual currency during the year (PY Nil).

l. The quarterly returns or statements of current assets filed by the Company with Banks or financial

Institutions are not in agreement with books of accounts. The details of variance and reasons for
variation are explained below:_

The Company manages its Capital to ensure that the Company will be able to continue as going concern
while maximising the return to stakeholders through the optimisation of the equity balance. Further, the
Company ensures optimal credit risk profile to maintain/enhance credit rating. The Company is not
exposed to any externally imposed Capital requirement. The Capital structure of the Company consists
of equity and other reserves of the Company. The Company maintains its Financial framework to support
the pursuit of value growth for shareholders, while ensuring a secure Financial base.

The Company’s Management reviews the Capital structure of the Company on an annual basis and
determines the amount of Capital required on the basis of annual business plan coupled with long term
and short term strategic investment and expansion plans. As a part of this review, the Company’s
Management considers the loss of Capital and risks associated with each class of Capital. The funding
needs are met through cash generated from operations, long term and short term bank borrowings. The
Company monitors the Capital structure on the basis of net debt to equity ratio and maturity profile of the
overall debt portfolio of the Company.

Note 35.3 Financial Risk Management
Note 35.3.1 Objective

In the course of its business, the Company is exposed primarily to a number of different Financial risks
arising from natural business exposure as well as its use of Financial Instruments including market risks
(relating to interest rates and foreign currency exchange rate) , credit risk and liquidity risk. The exposure
to these risks and the companies risk management have been summarised as below :

Note 35.3.2 Market Risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in 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 interest rates, foreign currency exchange rates, equity price fluctuations,
liquidity and other market changes. Future specific market movements cannot be normally predicted
with reasonable accuracy.The Company is exposed to the following significant market risks:
INTEREST RATE RISK

Note 35.3.2.1 Interest Rate Risk Management

The Company draws working Capital term loans and avails cash credits etc. for meeting its funding
requirements.

Interest rates on these borrowings are exposed to change in respective benchmark rates. Interest rate
risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement
in the reference rates could have an impact on the Company’s cash flows as well as costs. The Company
is subject to variable interest rates on some of its interest bearing liabilities. The Company’s interest rate
exposure is mainly related to debt obligations.

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in a
Financial loss. The Company has adopted a policy of only dealing with creditworthy counterparties as a
means of mitigating the risk of Financial loss from default. The Company regularly monitors its counterparty
limits by reviewing the outstanding balance and ageing of the same.

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Mar 31, 2023

2.3.11 Provisions, Contingent Liabilities and Contingent Assets

The Company recognizes provisions when there is present obligation as a result of past events and it is probable that there will be an outflow of resources and reliable estimate (legal or constructive) of the amount of the obligation can be made. The amount recognized as provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period taking into account the risk and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be Contingent Liabilities are disclosed for

• possible obligation which will be confirmed only by future events not wholly within the control of the Company

• present obligations arising from past events where it is not probable that an outuow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are neither recognised nor disclosed in the financial statements.

2.3.12 Government Grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is treated as deferred income and released to the statement of profit and loss over the expected useful lives of the assets concerned.

2.3.13 Financial Instruments

Financial Assets and Financial Liabilities are recognized when the Company becomes a party to the contractual provisions of the Instrument.

Financial assets and Financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of Financial assets and Financial liabilities (other than Financial assets and Financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the Financial assets or Financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of Financial assets or Financial liabilities at fair value through profit or loss are recognized immediately in Statement of Profit or Loss. Forthe purposes of subsequent measurement, Financial Instruments of the Company are classified in the following categories:

a) Non derivative Financial assets comprising amortized cost

b) Financial assets fair value at fair value through other comprehensive income

c) Financial assets at fair value through profit or loss

The classification of Financial Instruments depends on the objective of the business model forwhich it is held. Management determines the classification of its Financial Instruments at initial recognition. Financial Assets

Recognition and Initial measurement

The Company initially recognises loans and advances, deposits, debt securities issues and subordinated liabilities on the date on which they originate. All other Financial Instruments (including regular way purchases and sales of Financial assets) are recognised on the trade date, which is the date on which the Company becomes a party to the contractual provisions of the Instrument. Subsequent measurement of the Financial assets

(i) Financial assets carried at Amortized Cost

A Financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the Financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through Other Comprehensive Income (FVTOCI)

A Financial asset is subsequently measured at fair value through Other Comprehensive Income income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial assets and the contractual terms of the Financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Further, in case where the Company has made an irrevocable selection based on its business model, for its investments which are classified as equity Instruments, the subsequent changes in fair value are recognized in Other Comprehensive income.

(iii) Financial assets at fair value through profit or loss (FVTPL)

A Financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss. The transaction costs directly attributable to the acquisition of Financial assets and Financial liabilities at fair value through profit and loss are immediately recognized in the Statement of Profit or Loss.

Effective Interest Method

The Effective Interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or where appropriate, a shorter period, to the gross carrying amount on initial recognition.

Income is recognised on an effective interest basis fordebt instruments otherthan those Financial assets classified as at FVTPL. Interest income is recognised in Profit or Loss and is included in the “Other Income” line item.

Impairment of Financial assets:

The Company applies the expected credit loss (ECL) model for recognising the impairment loss on Financial assets measured at amortised cost and FVTOCI but are not fair valued through profit and loss. Loss allowance for Trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other Financial assets, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition, in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in the Statement of profit or loss.

Derecognition of Financial assets:

The Company derecognises financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the Financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred Financial asset, the Company continues to recognise the Financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of Financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that Financial asset.

On derecognition of a Financial asset otherthan in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the Financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that Financial asset. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts

Foreign Exchange gains and losses:

The fair value of Financial assets denominated in Foreign currency is determined in that Foreign currency and translated at the spot rate at the end of each reporting period.

For Foreign Currency denominated Financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in profit or loss except forthose which are designated as hedging instruments in a hedging relationship.

For the purposes of recognising Foreign exchange gains and losses, FVTOCI debt instruments are treated as Financial assets measured at amortised cost. Thus, the exchange differences on the amortised cost are recognised in profit or loss and other changes in the fair value of FVTOCI Financial assets are recognised in other comprehensive income.

Financial liabilities

a. Classification as debt or equity

Debt and Equity Instruments issued by Company are classified as either Financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a Financial liability and an equity Instrument.

b. Equity Instruments

An Equity Instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity Instruments issued by a Company entity are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

c. Financial Liabilities

All Financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.

However, Financial liabilities that arise when a transfer of a Financial asset does not qualify for derecognition or when the continuing involvement approach applies, Financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

d. Financial Liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the Financial liability is either held fortrading or it is designated as at FVTPL.

A Financial liability is classified as held fortrading if:

• it has been incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified Financial Instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

• A Financial liability, other than a Financial liability held fortrading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;

• the Financial liability forms part of a Company of Financial assets or Financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the Companying is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and IndAS 109 permits the entire combined contract to be designated as at FVTPL in accordance with INDAS 109

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the Financial liability and is included in the ‘Other income’ line item. The Company derecognises Financial liabilities when, and only when, the Company’s obligations are discharged, cancelled orthey expire. The difference between the carrying amount of the Financial liability derecognised and the consideration paid or payable is recognised in Statement of Profit and Loss.

However, for non-held-for-trading Financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the Financial liability that is attributable to changes in the credit risk of that liability is recognised in Other Comprehensive Income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss, in which case these effects of changes in credit risk are recognised in profit or loss. The remaining amount of change in the fair value of liability is always recognised in profit or loss. Changes in fair value attributable to a Financial liability’s credit risk that are recognised in other comprehensive income are reflected immediately in retained earnings and are not subsequently reclassified to profit or loss. Gains or losses on Financial guarantee contracts and loan commitments issued by the Company that are designated by the Company as at fair value through profit or loss are recognised in profit or loss.

e. Other Financial liabilities

Other Financial liabilities (including borrowings and Trade and other payables) are subsequently measured at amortised cost using the effective interest method.

f. Derecognition of Financial liabilities

The Company derecognises Financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or have expired. An exchange between a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original Financial liability and the recognition of a new Financial liability. Similarly, a substantial modification of the terms of an existing Financial liability (whether or not attributable to the Financial difficulty of the debtor) is accounted for as an extinguishment of the original Financial liability and the recognition of a new Financial liability. The difference between the carrying amount of the Financial liability derecognised and the consideration paid or payable is recognised in profit or loss.

2.3.14 Operating cycle

Based on the nature of products/activities of the Group and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non - current.

II. NOTES ON ACCOUNTS

1 Bank has issued three Bank guarantees totalling to Rs.3.37 Lakhs (P.Y.Rs.3.37 Lakhs) to Director General of Foreign Trade, Bangalore for Export Obligation against which the Company has kept FDRs worth Rs.3.41 Lakhs (Previous year Rs.3.41 Lakhs) with bank as Margin Money

2 Certain balances underthe heads of Trade Receivables, Loans and Advances, Trade Payables, Current Liabilities and certain Bank Accounts are subject to confirmation.

3 The Company has not received any memorandum as required to be filed by the Suppliers with the notified authority underthe Micro Small and Medium Enterprises Development Act, 2006. In view of this, information required to be disclosed under Section 22 of the said Act is not given. In view of the above, interest, if any accrued to such enterprises could not be ascertained and provided for

4 Investments (National Savings Certificates) amounting to Rs.0.14 Lakhs (PY. Rs. 0.14 Lakhs) is in the name of Director of the Company and are lodged with Sales Tax authorities /Agriculture Produce Marketing Committee for which the confirmation not received from the Authorities.

5 There are no amounts due to be remitted to “Investor’s Education & Protection Fund” as at the year end. (PY. NIL).

6 Figures for the previous year are regrouped/ rearranged wherever necessary to conform to the current year’s classification. Figures are rounded off to the nearest Lakhs.

7 The Board of Directors have approved the Financial Statements in their Board Meeting on 03.07.2023

Security against above Term loans

a) Secured by hypothecation of Stock & Book debts and Collateral security byway of EM of Industrial property Sy. No.198/2/2 at Mukram Gunj, Manchalapur Road, Raichurand Personal property of relative of Director.

b) Guaranteed by Sri S K Bhandari Managing Director, Pavan Bhandari and Chandana Bhandari in their personal capacity.

Security against above Car loan

a) Secured by way of hypothecation of Car.

Note:-

The tenure of ECGS loan is 4 years with a moratorium of 12 months. ECGS Loan is repayable in 36 equal monthly instalments commencing from January 2022 and ending in December 2024. Interest payable on monthly interests.

Term Loan 1 is repayable in 84 equal monthly instalments commencing from January 2021 and ending in December 2027. Interest payable on monthly interests @ 8.25% . Outstanding as on 31.3.23 Rs. 69.74 Lakhs (Non- Current Liability Rs 53.57 Lakhs) (PY Rs. 82.14 Lakhs).

Term Loan 2 is repayable in 60 equal monthly instalments commencing from January 2022 and ending in December 2026. Interest payable on monthly interests @ 8.25%. Outstanding as on 31.3.23 Rs. 112.70 Lakhs (Non Current Liability Rs. 82.5 Lakhs) (PY 140.4 Lakhs).

Long Term loan from related parties - Rs. 6.18 Lakhs (PY Rs. 54.72 Lakhs) carry interest rate of 6.00% per annum, Rs. NIL (PY Rs. 7.14 Lakhs) carries interest at 8% p.a, and loans of Rs. NIL (PY 130.34 Lakhs) are interest free. The above loans are not expected to be repaid in the next 12 months.

Car Loan is repayable in 48 equal monthly instalments commencing from August 2022 and ending in July 2026. Interest payable on monthly interests @ 8.1%. Outstanding as on 31.3.23 Rs. 17.47 Lakhs (Non Current Liability Rs.12.85 Lakhs) (PY NIL).

(i) Cash Credit facility is secured by :

a) Hypothecation of stocks & book debts and Collateral security by way of EM of Industrial property Sy. No. 198/2/2 and Commercial property of relative of Director)

b) Guaranteed by Sri S K Bhandari Managing Director, Pavan Bhandari and Chandana Bhandari in their personal capacity

(ii) Goods Credit loan facility is secured by Hypothecation of stock stored at APMC Warehouse, Raichur by means of warehouse receipts. Outstanding as on 31.03.23 - Rs. NIL (PY 43.08 Lakhs)

(iil) Short Term loan from related party carrying interest rate of 6.00% per annum has been repaid during the year. (PY 22.93 Lakhs)

Note 32 : Segment Reporting

The Company’s object is to engage in the business of manufacturing and trading of cotton and cotton seeds and also carries the services of Ginning & Pressing of cotton and all these operations are carried out domestically. In accordance with Ind AS 108 “Operating Segments”, whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. The Company has no primary reportable segments. The Company has effected Sales to one party worth Rs. 1,340.45 Lakhs which is greaterthan 10% of the total Sales of the Company.

Note 33 : Deferred Tax

Deferred Tax is recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses, depreciation carry forwards and unused tax credits could be utilized.

Due to the above said reason, MAT Credit balance as on 31st Match 2023 of Rs. 43,85,410/- is not recognized in books of account.

Note 35 : Employee Benefits

a) Defined Benefit Plan :

Since the Company is recognizing Gratuity amount payable to employees on cash basis, disclosures as required under Ind AS-19 is not made.

b) Defined Contribution Plan

The Company makes Provident Fund contributions to Defined Contribution plan for all employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 1.28 Lakhs (Year ended 31 March, 2022 INR 0.98 Lakhs) for Provident Fund Contributions in the Statement of Profit and Loss which is grouped under “Contributions to Provident Fund and other Funds” of Note 26 Employee Benefits Expenses.

Note 36 : Other Disclosures

a) The Company has not given any loans or advances in the nature of Loans to Promoters, Directors, KMP‘s and the Related parties (as defined under Companies Act, 2013) that are repayable on demand or without specifying any terms or period of repayment.

b) The Company does not holds any Benami Property and there are no proceedings against the Company under the Benami Transaction (Prohibition) Act 1988 (as amended from time to time).

c) The Company has used the borrowings from banks and financial institutions forthe specific purpose for which it was taken.

d) The Company has not been declared as a wilful defaulter (as per RBI circular) by any bank or financial institution or any other lender at any time during the financial year or after the end of the reporting period.

e) The Company has had no transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

f) Creation or satisfaction of charges are not pending for registration with Registrar of Companies beyond the statutory period.

g) To the best of our knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources 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

h) To the best of our knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) orentity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by oron behalf ofthe Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

i) There are no transactions which are not recorded in the books of accounts that have been surrendered or disclosed as Income during the year in the tax assessments under the Income Tax Act, 1961.

j) The Provisions of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 are not applicable to the Company forthe year.

k) The Company has not traded or invested in Crypto or virtual currency during the year (PY Nil).

l) The quarterly returns or statements of current assets filed by the Company with Banks or financial Institutions are not in agreement with books of accounts. The details of variance and reasons for variation are explained below:

Notes forming part of the financial statements Note 37 : Capital Management

The Company manages its Capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the equity balance. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating. The Company is not exposed to any externally imposed Capital requirement. The Capital structure of the Company consists of equity and other reserves of the Company. The Company maintains its Financial framework to support the pursuit of value growth for shareholders, while ensuring a secure Financial base.

The Company’s Management reviews the Capital structure of the Company on an annual basis and determines the amount of Capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. As a part of this review, the Company’s Management considers the loss of Capital and risks associated with each class of Capital. The funding needs are met through cash generated from operations, long term and shortterm bank borrowings. The Company monitors the Capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Note 38.3 Financial Risk Management Note 38.3.1 Objective

In the course of its business, the Company is exposed primarily to a number of different Financial risks arising from natural business exposure as well as its use of Financial Instruments including market risks (relating to interest rates and foreign currency exchange rate), credit risk and liquidity risk. The exposure to these risks and the companies risk management have been summarised as below :

Note 38.3.2 Market Risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in 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 interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.The Company is exposed to the following significant market risks: INTEREST RATE RISK

Note 38.3.2.1 Interest Rate Risk Management

The Company draws working Capital term loans and avails cash credits etc. for meeting its funding requirements.

Interest rates on these borrowings are exposed to change in respective benchmark rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs. The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company’s interest rate exposure is mainly related to debt obligations

Exposure to Interest rate risk

The interest rate profile of the Company’s interest bearing Financial Instruments is as follows:

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Mar 31, 2014

1 i. Freehold Land situated at H.No.12-7-136 Sy. No.198/2/2 (Part), and H.No. 12-7-136/1 Sy. No. 198/1, Part 1 A, 2 A, Manchalapur Road, Raichur have been got revalued and stated at the amount revalued based on the appraisal as on 31st March 2012 made by the Government Approved Valuer adopting the GLR guideline rate.

ii. Buildings of Cotton Unit acquired up to 31st March 1994 are stated at the amount revalued based on the appraisal as on 31st March 1994 made by the Approved Valuer.

2. Contingent liabilities not provided for:

Towards disputed VAT for the year 2005-06 - Rs.2,56,916/- (Entire amount has been paid under protest and shown under amounts recoverable in the Financial statements).

3. Estimated amount of contracts remaining to be executed and not provided for:

a. Capital Commitments: Rs.Nil (PY. Rs. 5.18 lakhs):

b. Other Commitments: Rs.Nil (P.Y.Nil)

4. The company has entered into an agreement with a Registered Charitable Trust wherein two of directors of the company are Trustees, for sale of portion of vacant land (not required for company''s business purposes) measuring 22,077 Sft. For Rs.90.52 lakhs

5. Certain balances under the heads of Trade Receivables, Loans and Advances, Trade Payables, Current Liabilities and certain Bank Accounts are subject to confirmation.

6. The Company has not received any memorandum as required to be filed by the Suppliers with the notified authority under the Micro Small and Medium Enterprises Development Act, 2006. In view of this, information required to be disclosed under Section 22 ofthe said Act is not given.

7. The lease arrangements entered into by the company are cancellable. Hence disclosures as envisaged by AS-19 are not applicable.

8. National Saving Certificates amounting to Rs. 14,050/- (P.Y. Rs. 14,050/-) are in the name of Director of the Company and are lodged with Sales Tax authorities /Agriculture Produce Marketing Committee.

9. Plant & Machinery includes 30 Gins, which are discarded and kept for disposal. Though book value of these items is not available, estimated realizable value of these assets is expected to be not less than the written down value as at the year end.

10. There are no amounts due to be remitted to "Investor''s Education & Protection Fund" as at the year end. (Pr. Yr. NIL)

11. Figures for the previous year are regrouped/ rearranged wherever necessary to conform to the current year''s classification. Figures are rounded off to the nearest rupee.

12. Earning per Share (EPS) has been computed in accordance with AS-20.

13. a) Defined Benefit Plans:

Gratuity:

Retirement gratuity to employees is accounted for as and when paid, b) Defined Contribution Plans: Curr.Year (Rs.) Pr.Year (Rs.)

i) Company''s contribution to P F / Pension plan: 76,167 52,4440

14. Related Party disclosures:

A) Names of related parties and description of relationship

a) Key Management Personnel:-

1) S K Bhandari Managing Director

2) V M Bhandari Whole Time Director

3) Ajay Kumar Bhandari Director

b) Relatives of Key management personnel

(1) Pavan Kumar Bhandari

(2) Sanjay Bhandari

(3) Abhay Bhandari

(4) Sushilabai Bhandari

(5) Shantabai Bhandari

(6) Mamta Bhandari

(7) Chandana Bhandari

(8)Veena

c) Associates:

(1) Bhandari Distributors (P) Ltd.

(2) Mukan Marketing (P) Ltd.

(3) RKB Collections

(4) Kushal Enterprises

(5) Rajmal Khemraj HUF

(6) Sanjay Bhandari HUF

(7) Pavan Bhandari HUF

(8) S K Bhandari HUF

(9) SK Bhandari MHUF

(10) V M Bhandari HUF

(11) VM Bhandari MHUF

(12) Ajay Bhandari HUF

(13) Abhay Bhandari HUF

15. Change in name ofthe company:

The company''s name has been changed from existing "Bhandari Udhyog Limited" to "RKB Agro Industries Limited" with effect from 9th April 2013 as per "Fresh Certificate of Incorporation consequent upon change of Name" issued by the Registrar of Companies, Karnataka.

16. Segment Reporting:

As the company transacts in manufacturing and trading of cotton and cotton seeds and other products and also the services of Ginning & Pressing of cotton and all operations are carried domestically. The company has identified two reportable primary segments during the year being trading of cotton and cotton seeds and other products and also the services of Ginning & Pressing of cotton. The information on segment reporting as envisaged in AS 17.

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Mar 31, 2013

1. Contingent liabilities not provided for: NIL (Pr Yr: NIL)

2. Estimated amount of contracts remaining to be executed on

a. Capital Commitments and not provided for: Rs.5.18 lakhs (P.Y. Rs. 181.75 lakhs);

b. Other Commitments - Nil (P.Y.Nil)

3. Certain balances under the heads Trade Receivables, Loans and Advances, Current Liabilities and Bank Accounts are subject to confirmation.

(Included in Salaries & Wages reported in the Notes attached to Statement of Profit & Loss)

4. The Company has not received any memorandum as required to be filed by the Suppliers with the notified authority under the Micro Small and Medium Enterprises Development Act, 2006. In view of this, information required to be disclosed under Section 22 of the said Act is not given.

5. The company is having transactions of purchase/ sales, payments/receipts with three companies for which combined accounts are maintained. In view of the complexity of the transactions the entire balance is considered and no interest is paid / charged on them.

6. National Saving Certificates amounting to Rs. 14,050/- (P. Y. Rs. 14,050/-) are in the name of Directors of the Company and are lodged with Sales Tax authorities /Agriculture Produce Marketing Committee.

7. Plant & Machinery includes 30 Gins, which are discarded and kept for disposal. The estimated realizable value is expected to be not less than the written down value as on 31.03.2013.

8. There are no amounts due to be remitted to "Investor''s Education & Protection Fund" as at the year end.

9. Figures for the previous year are regrouped / rearranged wherever necessary to conform to the current year''s classification. Figures are rounded off to the nearest rupee.

10. Related Party disclosures :

A. Names of related parties and description of relationship

a) Key Management Personnel

1) S K Bhandari Managing Director

2) V M Bhandari Whole Time Director

3) Ajay Kumar Bhandari Director

b) Relatives of Key management personnel

(1) Pavan Kumar Bhandari (2) Sanjay Bhandari (3) Abhay Bhandari

(4) Sushilabai Bhandari (5) Shantabai Bhandari (6) Mamta Bhandari

(7) Chandana Bhandari (8) Veena

c) Associates:

(1) Bhandari Distributors (P) Ltd. (2) Bhandari Cottons Ltd

(3) Mukan Marketing (P) Ltd. (4) RKB Collections (5) Kushal Enterprises

(6) Rajmal Khemraj HUF (7) Sanjay Bhandari HUF (8) Pavan Bhandari HUF

(9) SK Bhandari HUF (10) S K Bhandari MHUF (11) VM Bhandari HUF

(12) VM Bhandari MHUF (13) Ajay Bhandari HUF (14) Abhay Bhandari HUF

11. Lease Transactions :

Office building is taken on lease from Sri. Pavankumar Bhandari on renewable basis and the rents paid to him annually are charged to the Statement of Profit & Loss. Portion of our factory godowns have been leased out to certain parties and the rent collections during the year have been credited to the Statement of Profit & Loss (Cancelable leases).

Hence, additional disclosures as envisaged by AS-19 are not applicable.

12. Segment Reporting :

As the company transacts only in one item that is loose cotton and operates domestically, there are no reportable primary or secondary segments in the current year, the information for the year is not applicable as envisaged in AS-17 ''Segment Reporting''.

13. Loans From Insurance Companies :

Since the three insurance companies have intimated that the policies have been terminated due to non payment by the company, the credit balance lying in the loan accounts as at 31.03.2013 have been treated as income to the company and disclosed as other income in the financial statements of the current year.

14. Change in name of the company:

The company''s name has since been changed from existing "Bhandari Udhyog Limited" to "RKB Agro Industries Limited" with effect from 9th April 2013 as per "Fresh Certificate of Incorporation consequent upon change of Name" issued by the Registrar of Companies, Karnataka.

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Mar 31, 2012

1. Contingent liabilities not provided for: NIL (Pr Yr: NIL)

2. Estimated amount of contracts remaining to be executed on

a. Capital Commitments and not provided for : Rs.181.75 lakhs(P.Y. NIL):

b. Other Commitments Nil (P.Y.Nil)

3. Certain balances under the heads Trade Receivables. Loans and Advances, Current Liabilities and Bank Accounts are subject to confirmation.

4. Persuance to the decision taken by the management, the Freehold Lands of the company situated at H.No.12-7-136 Sy. No.198/2/2 (Part), Manchalapur Road and H.No.12-7-136/1 Sy. No. 198/1, Part 1 A, 2 A, Manchalapur Road, Raichur have been got revalued by Sri Sandesh Sha, Gulbarga, Govt. Approved Valuer as on 31.03.2012 and the valuation made by him at the Guidance Value rates were adopted in the books and the differential amount of Rs.9,61,78,540/- over and above the existing value appearing in the books has been credited to Revaluation Reserve as on 31.03.2012.. The value of lands at Revalued rates as on 31.03.2012 works out to Rs. 10,19,30,700/- as against the pre revaluation value of Rs.57,52,160/ - in respect of the said land done in 1994.

5. The Company has not received any memorandum as required to be filed by the Suppliers with the notified authority under the Micro Small and Medium Enterprises Development Act, 2006. In view of this, information required to be disclosed under Section 22 of the said Act is not given.

6. The company is having transactions of purchase/ sales, payments/receipts with two companies for which combined accounts are maintained. In view of the complexity of the transactions the entire balance is considered and no interest is paid / charged on them.

7. National Saving Certificates amounting to Rs. 14,050/- (P.Y Rs. 14,050/-) are in the name of Directors of the Company and are lodged with Sales Tax authorities /Agriculture Produce Marketing Committee.

8. Plant & Machinery includes 30 Gins, which are discarded and kept for disposal. The estimated realisable value is expected to be not less than the written down value as on 31.03.2012.

9. These financial statements have been prepared in accordance with Revised Schedule VI to the Companies Act, 1956, which has significant implications in presentation as compared to the presentation as per erstwhile Schedule VI. Figures for the previous reporting period have been recast in line with current year's presentation.

10. There are no amounts due to be remitted to "Investor's Education & Protection Fund' as at the year end.

11. Figures for the previous year are regrouped / rearranged wherever necessary to conform to the current year's classification. Figures are rounded off to the nearest rupee.

12. a) Defined Benefit Plans : Gratuity :

Total number of present employees stands below the minimum threshold limits specified in the payment of Gratuity Act.

13. Lease Transactions

The company has given a portion of its building for a temporary period on Operating Lease basis (which is cancelable) during the year and as at the year end the lease was terminated. Hence, additional disclosures as envisaged by AS-19 are not applicable.

14. Segment Reporting

As the company transacts only in one item that is loose cotton and operates domestically " there are no reportable primary or secondary segments in the current year the information for the year is not applicable as envisaged in AS-17 'Segment Reporting'.

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Mar 31, 2010

1. Contingent liabilities not provided for: NIL

2. Certain balances under the heads Sundry debtors, Loans and Advances, Current Liabilities and Bank Balances are subject to confirmation.

3. The Company's land & building and Plant & Machinery other than Oil-Mill (Unit-ll) were revalued as on 31.03.94 based on the valuation report obtained from an approved valuer. Consequently the value of the said assets has been increased by Rs. 1,47,98,041/- and which has been credited to Revaluation Reserve.

4. Sales include Ginning & pressing Charges Received Rs.70,79,625.00 (Previous year - Rs. 51,73,700.00) T.D.S on the said charges Rs. 94,278.00 (Previous year - Rs. 79,401.00).

5. The Company has not received any memorandum as required to be filed by the Suppliers with the notified authority under the Micro Small and Medium Enterprises Development Act, 2006. In view of this, information required to be disclosed under Section 22 of the said Act is not given.

6. The company is having transactions of purchase/ sales and loans with other companies for which combined accounts are maintained. In view of the complexity of the transactions the entire balance is considered as sundry creditors / sundry debtors and no interest is paid/charged on them.

7. National Saving Certificates amounting to Rs. 14,050/- are in the name of Directors of the Company and are lodged with Sales Tax authorities /Agriculture Produce Marketing Committee.

8. Plant & Machinery includes 30 gins, which are discarded and kept for disposal. The estimated realisable value is expected to be not less than the written down value as on 31.03.2010. Based on the company's exercise of impairment with regards to certain items of Fixed Assets, the impairment loss on the same is estimated to be around Rs.6,65,000.00 and charged to Profit & Loss account of the current year.

9. The company had created Debenture Redemption reserve as required under Section 117C of the Companies Act, 1956 only to the extent of Rs.75.75 Lakhs against total Debentures of Rs. 150.00 lakhs issued to KSFC, in the absence of profits. These debentures have been fully redeemed during the year under OTS and hence the Debenture Redemption Reserve of Rs.75.75 lakhs has been withdrawn and credited to Profit & Loss Account of the current year.

10. There are no amounts due to be remitted to "Investor's Education & Protection Fund" as at the year end.

11. Figures for the previous year are regrouped / rearranged wherever necessary to conform to the current year's classification. Figures are rounded off to the nearest rupee.

12. Related Party disclosures :

Names of related parties and description of relationship

a) Key Management Personnel:

1) S K Bhandari (SKB) Managing Director

2) V M Bhandari (VMB) Whole Time Director

3) Ajaykumar Bhandari (AKB) Director

b) Associates :

1) Bhandari Distributors (P) Ltd (BDPL)

2) Bhandari Cottons Ltd (BCL)

3) Mukan Marketing (P) Ltd (MMPL)

4) Bhandari Enterprises (BE)

5) Rajmal Khemraj HUF (RKH)

c) Relatives of Key management personnel

1) Pavan Kumar Bhandari

2) Sanjay Bhandari

3) Susheela Bai, Shanta Bai, Mamta, Chandana & Abhay

13 (A) The Company has made a request with Canara Bank for settlement of the entire dues payable to the bank under One Time Settlement (OTS) and is in the process for final approval. Pending approval of OTS, no provision has been made towards interest accrued on the entire dues till 31st March 2010 amounting to Rs.241.38 lakhs including interest accrued for the current year amounting to Rs.121.69 Lakhs. Necessary adjustments will be carried out in the books of account on receipt of final approval from the bank for the OTS.

(B) Unsecured Loan includes Rs.192.61 lakhs received from M/s Vijay Cotton Company, against which the company has agreed to create first charge on the immovable properties of the company. The company has made application with KSFC & Canara Bank seeking permission for creation of First Charge. Pending approval, the charge is yet to be created.

14. Due to a fire accident in the premises of the company, stock of loose cotton amounting to 96.16 quintals valued about Rs.5.00 Lakhs was destroyed. The company has lodged a claim with the insurance company which is under process. As and when the claim is settled by the insurance company, will be credited to that year's profit & loss account.

15. a) Defined Benefit Plans : Gratuity :

The company has provided for gratuity liability on accrual basis and is in the process of getting it evaluated by Actuarial valuation as required by AS-15 (Revised) prescribed under companies (Accounting Standards) Rules, 2006. Necessary adjustments will be made in the accounts after getting the actuarial valuation. The liability is not covered by funding the same. In view of the above, disclosures envisaged in AS-15 have not been done.

16. Lease Transactions :

The company has given a portion of its building for a temporary period on Operating Lease basis during the year & as at the year end the lease was terminated. Hence, additional disclosures as envisaged by AS-19 are not applicable.

In terms of our attached report of even date