Vidhi Specialty Food Ingredients Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

(xiii) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.

The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.

Contingent liability is disclosed in the case of:

Present obligation arising from past event, when it is not probable that an outflow of resources will be required to
settle the obligation.

• A present obligation arising from past event, when no reliable estimate is possible.

• A possible obligation arising from past events, unless the probability of outflow of resources is remote.
Commitments include the amount of purchase order (net of advances) issued to parties for completion of
assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

(xiv) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

(xv) Financial instruments
(a) Financial assets:

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in case of financial asset not recorded at fair value
through profit or loss, transaction cost that are attributable to the acquisition of the financial asset.

Financial assets are classified, at initial recognition, as financial assets measured at fair value or as financial asset
measured at amortised cost.

Subsequent measurement

For purposes of subsequent measurement financial assets are classified into two broad categories:

• Financial asset at fair value

• Financial asset at amortised cost

Where assets are measured at fair value, gains and losses are either recognised entirely in the statement of profit
or loss (i.e. fair value through profit or loss), or recognised in other comprehensive income (i.e. fair value through
other comprehensive income)

A financial asset that meet the following two conditions is measured at amortised cost (net of any write down for
impairment) unless the asset is designated at fair value through profit or loss under the fair value option.

• Business model test: the objective of the Company''s model is to hold the financial asset to collect the
contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realise its fair value
changes)

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payment of principal and interest on the principal amount outstanding.

A financial asset that meet the following two conditions is measured at fair value through other comprehensive
income unless the asset is designated at fair value through profit or loss under the fair value option.

• Business model test: the financial asset is held within a business model whose objective is achieved both by
collecting contractual cash flows and selling the financial assets

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payment of principal and interest on the principal amount outstanding.

Debt Instruments included within the fair value through profit or loss (FVTPL) category are measured at fair value
with all changes recognized in the statement of profit or loss.

Equity Instruments: All equity instruments within scope of Ind AS 109 are measured at fair value. Equity instruments
which are classified as held for trading are measured at FVTPL. For all other equity instruments, the company
decides to measure the same either at fair value through other comprehensive income (FVTOCI) or FVTPL.
The Company makes such selection on an instrument-by-instrument basis. The classification is made on initial
recognition and is irrevocable.

For equity instruments measured at FVTOCI, all fair value changes on the instrument, excluding dividends, are
recognised in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to Statement of
profit or loss, even on sale of such instruments.

The Investments are measured at Fair Market Value. The diminution in the market value of investments is not
considered unless such diminution is considered permanent and accordingly provision for diminution is made in
books of accounts.

All other financial asset is measured at fair value through profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement;
and either

a) the Company has transferred substantially all the risks and rewards of the asset, or

b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of
the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing
involvement. In that case, the company also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of
the original carrying amount of the asset and the maximum amount of consideration that the Company could be
required to repay.

Impairment of financial assets:

In accordance with Ind-AS 109, the company applies Expected Credit Losses (ECL) model for measurement
and recognition of impairment loss on trade receivables and other advances. The company follows “Simplified
Approach” for recognition of impairment loss on these financial assets. The application of simplified approach does
not require the company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on
lifetime ECLs at each reporting date, right from its initial recognition.

(b) Financial liabilities:

Initial recognition and measurement:

Financial Liabilities are classified at initial recognition as:

(i) Financial liabilities at fair value through profit or loss,

(ii) Loans and borrowings, payables, net of directly attributable transaction costs or

(iii) Derivatives designed as hedging instruments in an effective hedge, as appropriate.

The company''s financial liabilities include trade and other payables, loans and borrowings including derivative
financial instruments.

Subsequent measurement:

The measurement of financial liabilities depends on their classification, as described below:

Borrowings:

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the effective
interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to
the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until
the draw down occurs.

Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished
and the consideration paid is recognised in the Statement of Profit and Loss as other gains / (losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of
the liability for at least twelve months after the reporting period. Where there is a breach of a material provision of
a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes
payable on demand on the reporting date, the entity does not classify the liability as current, if the lender has
agreed, after the reporting period and before the approval of the financial statements for issue, not to demand
payment as a consequence of the breach.

Trade and other payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial
period which are unpaid. The amounts are unsecured and are usually paid within twelve months of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within twelve months after
the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost
using the effective interest method.

Derivative financial instruments:

The Company uses derivative financial instruments, such as foreign exchange forward contracts to hedge its
foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each
reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities
when the fair value is negative.

Loans and borrowings - subsequent measurement

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using
the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the Effective Interest Rate (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the Effective Interest Rate (EIR). The Effective Interest Rate (EIR) amortisation is included as
finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.

(xvi) Investment Property

Investment properties are properties held to earn rentals and / or for capital appreciation (including property under
construction for such purpose). Investment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are measured in accordance with the requirements of Ind
AS 16 for cost model.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn
from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecongnition
of the property is included in the Statement of Profit and Loss in the period in which the property is derecognized.

(xvii) Borrowing Costs

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition /
construction of and asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

(xviii) Impairment of Non-financial Assets

At each balance sheet date, an assessment is made of whether there is any indication of impairment.

If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s
(CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets.

When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Company''s CGUs to which the individual assets are allocated.

Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has not
notified any new standards or amendments to the existing standards applicable to the Company.

(vi) Terms/rights attached to equity shares

"The Company has only one class of issued equity shares capital having par value of ?1/.- per share
(31 March 2024 ? 1/-per share). Each shareholder is entitled to one vote per share held. The Company
declares and pays dividend in Indian Rupees The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation,
the equity shareholders are eligible to receive the remaining assets of the Company after distribution
of all preferential assets, in proportion to their shareholding. The Shareholders have all other rights as
available to equity shareholders as per the provisions of the Companies Act, 2013, read together with
the Memorandum of Association and Articles of Association of the Company, as applicable.

(vii) Shares issued for consideration other than cash

There are no equity shares issued as bonus shares , issued for consideration other than cash and
shares bought back during the period of 5 years immediately preceeding the reporting period

25 Segment information

The Company operates in single business segment namely manufacturing and trading of food colors and
chemicals. Hence, no separate disclosure as per "Ind AS-108" is required for the business segment.

The Company’s operating divisions are managed from India. The principal geographical areas in which the
Company operates are Asian Countries, European Countries, South Africa, Middle East Countries, United
States and others.

For the purpose of geographical segment the sales are divided into two segments - within India and outside
India. The accounting policies of the segments are the same

Notes:

(i) Capital expenditure consists of additions to property, plant and equipment, Capital work in progress net
of capitalisation from previous year.

(ii) There are two customers having revenue exceeding 10% of total revenue of the Company.

(iii) Non-current oassets includes property, plant and equipment, right of use assets, capital work in progress
under development and other non-current assets, but excludes Income tax & Deferred tax Assets.

26 Disclosure of Defined benefit plans and defined contribution plan
(A) Defined benefit plan

The Group operates following defined benefit obligations:

(a) Defined benifit plan :

The following tables summaries the components of net benefit expense recognised in the
statement of profit or loss and the funded status and amounts recognised in the balance sheet for
the resDective Dian:-

(x) The sensitivity analyses above have been determined based on Gratuity which is a lump sum plan
and the cost of providing these benefits is typically less sensitive to small changes in demographic
assumptions. The key actuarial assumptions to which the benefit obligation results are particularly
sensitive to are discount rate and future salary escalation rate. These sensitivities have been
calculated to show the movement in defined benefit obligation in isolation and assuming there are
no other changes in market conditions at the accounting date. There have been no changes from
the previous periods in the methods and assumptions used in preparing the sensitivity analyses.
The following table summarizes the change in defined benefit obligation and impact in percentage
terms compared with the reported defined benefit obligation at the end of the reporting period
arising on account of an increase or decrease in the reported assumption by 50 basis points

(xi) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into
account inflation, seniority, promotion and other relevant factors including supply and demand in
the employment market. The above information is as certified by the Actuary.

(xii) The methods and types of assumptions used in preparing the sensitivity analysis did not change
compared to the prior period.

(B) Defined contribution plan

Following are the contribution to Defined Contribution Plan, recognised as expense for the year:

Notes:

(a) The transactions with related parties are made on terms equivalent to those that prevail in arm’s
length transactions. Outstanding balances at the year-end are unsecured and interest free. The
settlement for these balances occurs through payment. There have been no guarantees provided
or received for any related party receivables or payables. For the year ended March 31, 2025,
the Company has not recorded any impairment of receivables relating to amounts owed by
related parties (March 31,2024: NIL). This assessment is undertaken each financial year through
examining the financial position of the related party and the market in which the related party
operates.

(b) As at March 31,2025 , the Company has not granted any loans to the promoters, directors, KMPs
and the related parties (as defined under Companies Act, 2013), either severally or jointly with any
other person.

(c) All the liabilities for post retirement benefits being ‘Gratuity, compensated absence and pension
benefit’ are provided on actuarial basis for the Group as a whole, accordingly the amount pertaining
to Key management personnel are not included above.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The
following methods and assumptions were used to estimate the fair value

(i) The fair value of unquoted instruments, loans from banks other non-current financial assets and non¬
current financial liabilities is estimated by discounting future cash flows using rates currently available
for debt on similar terms, credit risk and remaining maturities. The valuation requires management to
use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the
tables below. Management regularly assesses a range of reasonably possible alternatives for those
significant unobservable inputs and determines their impact on the total fair value.

(ii) Costs of unquoted equity instruments has been considered as an appropriate estimate of fair value
because of a wide range of possible fair value measurements and cost represents the best estimate of
fair value within that range. These investments in equity instruments are not held for trading. Instead,
they are held for long-term strategic purpose.

(iii) Fair value hierarchy

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded
derivatives and equity securities) is based on quoted market prices at the end of the reporting period
for identical assets or liabilities. The mutual funds are valued using the net assets value (NAV) available
in open market. The quoted market price used for financial assets held by the group is the current bid
price. These instruments are included in level 1.

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

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

There are no transfers among levels 1,2 and 3 during the year

This section explains the judgement and estimates made in determining the fair value of financial assets
that are:

a) Recognized and measured at Fair value

b) Measured at amortized cost and for which fair value is disclosed in financial statements

On the basis of information and records available with the Company, the above disclosures are made in
respect of amount due to the micro, small and medium enterprises, which have been registered with the
relevant competent authorities.

30 Financial risk management objectives and policies

The Company being the active supplier for the automobile industry is exposed to various market risk, credit
risk and liquidity risk. The Company has global presence and has decentralised management structure. The
regulations, instructions, implementation rules and in particular, the regular communication throughout the
tightly controlled management process consisting of planning, controlling and monitoring collectively form the
risk management system used to define, record and minimise operating, financial and strategic risks. The
Company has set up a risk management committee (RMC) which comprise of Company chief finance officer
and three directors of parent company of which two are independent directors. RMC periodically reviews
operating, financial and strategic risk in the business and their mitigating factors. RMC has formulated a risk
management policy for the Individaul Company company and Company as a whole, which outlines the risk
management framework to help minimise the impact of uncertainty. The main objective of this policy is to
ensure sustainable business growth with stability and to promote a proactive approach in reporting, evaluating
and resolving risk associated with the business. This process provides assurance that the Company''s
financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are
identified, measured and managed in accordance with Company policies and Company risk objective. The
Company''s financial risk management is an integral part of how to plan and execute its business strategies.
Below notes explain the sources of risks in which the Company is exposed to and how it manages the risks.

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates
and equity prices - will affect the Company’s income or the value of its holdings of financial instruments.
Market risk is attributable to all market risk sensitive financial instruments including foreign currency
receivables and payables . We are exposed to market risk primarily related to foreign exchange rate
risk and interest rate risk. Thus, our exposure to market risk is a function of revenue generating and
operating activities in foreign currency. The objective of market risk management is to avoid excessive
exposure in our foreign currency revenues and costs.

(i) Foreign currency risk

The Company is exposed to currency risk on account of transaction with foreign subsidiaries
and other parties. The functional currency of the Company is Indian Rupee. The exchange rate
between the Indian rupee and foreign currencies has changed substantially in recent periods and
may continue to fluctuate substantially in the future.

The Company exposure to foreign currency risk at the end of the reporting periods are as
follows

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and
collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times
maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely
monitors its liquidity position and deploys a robust cash management system. It maintains adequate
sources of financing through the use of short term bank deposits, short term loans, and cash credit facility
etc. Processes and policies related to such risks are overseen by senior management. Management
monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.
The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

(c) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations towards the Company and arises principally from the
Company’s receivables from customers and deposits with banking institutions and funds with mutual
fund asset management companies (AMC). The maximum amount of the credit exposure is equal to
the carrying amounts of these receivables. Management has a credit policy in place and the exposure
to credit risk is monitored on an ongoing basis.

(i) Trade Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of
each customer. The demographics of the customer, including the default risk of the industry and
country in which the customer operates, also has an influence on credit risk assessment. Credit
risk is managed through credit approvals, establishing credit limits and continuously monitoring the
creditworthiness of customers to which the Company grants credit terms in the normal course of

business. The Company establishes an allowance for doubtful debts and impairment that represents
its estimate of incurred losses in respect of trade and other receivables and investments.

The Company uses an allowance matrix to measure the expected credit losses of trade receivables
(which are considered impaired). The following table provides information about the exposure to
credit risk and loss allowance (including expected credit loss provision) for trade receivables:

(ii) Financial instruments and deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s
treasury department in accordance with the Company’s policy. Investments of surplus funds
are made in bank deposits and other risk free securities. The limits are set to minimize the
concentration of risks and therefore mitigate financial loss through counterparty’s potential failure
to make payments. The Company’s maximum exposure to credit risk for the components of the
balance sheet at March 31, 2025 is the carrying amounts . The Company’s maximum exposure
relating to financial instrument is noted in liquidity table below.

Trade Receivables and other financial assets are written off when there is no reasonable expectation
of recovery, such as debtor failing to engage in the repayment plan with the Company.

31 Capital management

For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders
of the company and all other equity reserves. The primary objective of the Company''s capital management is
to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure
and maximize shareholder value. The Company manages its capital structure and makes adjustments in light
of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust
the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares.
The Company is not subject to any externally imposed capital requirements. No changes were made in the
objectives, policies or processes for managing capital during the year ended March 31,2025 and March 31,
2024. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net
debt. Net debt is calculated as loans and borrowings less cash and cash equivalent.

33 Additional information required

(i) Details of Benami property: No proceedings have been initiated on or are pending against the company
for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
Rules made thereunder.

(ii) Wilful defaulter: The Company has not been declared wilful defaulter by any bank or financial institution

or government or any government authority.

(iii) Compliance with approved scheme of arrangements: The Company has not entered into any scheme of

arrangement which has an accounting impact on current or previous financial year.

(iv) "Utilisation of borrowed funds and share premium: The Company has not advanced or loaned or invested

funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that
the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the group (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

The Company has not received any fund from any person or entity, including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. 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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries"

(v) Details of crypto currency or virtual currency: The Company has not traded or invested in crypto currency
or virtual currency during the current or previous year.

(vi) Valuation of PP&E, intangible asset and investment property: The Company has not revalued its
property, plant and equipment (including right-of-use assets) or intangible assets or both during the
current or previous year.

(vii) Utilisation of borrowings availed from banks and financial institutions: The borrowings obtained by the
Company from banks and financial institutions have been applied for the purposes for which such loans
were was taken.

(viii) Relationship with struck off companies - The company do not have any transactions with the companies
struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956

(ix) Registration of charges or satisfaction with Registrar of Companies - The Company do not have any
charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(x) Undisclosed income - There is no income surrendered or disclosed as income during the current or
previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in
the books of accounts.

34 Other Disclosures

The other additional disclosures and information''s (not specifically disclosed) as required by Schedule III are
either nil or not applicable.

35 Corporate social responsisbilty

During the year the company is required to contribute Rs.120.42 Lakhs towards the CSR contribution and
company has incurred Rs. 120.42 Lakhs towards the "Education Purpose".

During the year CSR expenses incurred by the company as per the section 135 of the companies act 2013
as provided below:-

37 GST Balance as on Balance Sheet date is subject to confirmation wiith the balances from GST portal. However,
the Management does not forsee any material variation between the book balance and the portal balance.

38 The accompanying notes form an integral part of the standalone financial statements.Previous year figures
have been regrouped/rearranged to confirm them to current years figures.

As per our report of even date

For Bhuta Shah & Co LLP For and on behalf of the board of directors of

Chartered Accountants Vidhi Specialty Food Ingredients Limited

Firm Registration No. 101474W / W100100

Bipin M. Manek Mihir B. Manek

Atul Gala Chairman & Managing Director Joint Managing Director

Partner DIN: 00416441 DIN: 00650613

Membership No. 048650

Mitesh D. Manek

Chief Financial Officer

Place : Mumbai Place : Mumbai

Date : 12th May, 2025 Date : 12th May, 2025

---

Mar 31, 2024

(xiii) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.

Contingent liability is disclosed in the case of:

• Present obligation arising from past event, when it is not probable that an outflow of resources will be required to settle the obligation.

• A present obligation arising from past event, when no reliable estimate is possible.

• A possible obligation arising from past events, unless the probability of outflow of resources is remote. Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

(xiv) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

(xv) Financial instruments

(i) Financial assets:

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in case of financial asset not recorded at fair value through profit or loss, transaction cost that are attributable to the acquisition of the financial asset.

Financial assets are classified, at initial recognition, as financial assets measured at fair value or as financial asset measured at amortised cost.

Subsequent measurement

For purposes of subsequent measurement financial assets are classified into two broad categories:

• Financial asset at fair value

• Financial asset at amortised cost

Where assets are measured at fair value, gains and losses are either recognised entirely in the statement of profit or loss (i.e. fair value through profit or loss), or recognised in other comprehensive income (i.e. fair value through other comprehensive income)

A financial asset that meet the following two conditions is measured at amortised cost (net of any write down for impairment) unless the asset is designated at fair value through profit or loss under the fair value option.

• Business model test: the objective of the Company’s model is to hold the financial asset to collect the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realise its fair value changes)

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

A financial asset that meet the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option.

• Business model test: the financial asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling the financial assets

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

Debt Instruments included within the fair value through profit or loss (FVTPL) category are measured at fair value with all changes recognized in the statement of profit or loss.

Equity Instruments: All equity instruments within scope of Ind AS 109 are measured at fair value. Equity instruments which are classified as held for trading are measured at FVTPL. For all other equity instruments, the company decides to measure the same either at fair value through other comprehensive income (FVTOCI) or FVTPL. The Company makes such selection on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments measured at FVTOCI, all fair value changes on the instrument, excluding dividends, are recognised in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to Statement of profit or loss, even on sale of such instruments.

The Investments are measured at Fair Market Value. The diminution in the market value of investments is not considered unless such diminution is considered permanent and accordingly provision for diminution is made in books of accounts.

All other financial asset is measured at fair value through profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either

a) the Company has transferred substantially all the risks and rewards of the asset, or

b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets:

In accordance with Ind-AS 109, the company applies Expected Credit Losses (ECL) model for measurement and recognition of impairment loss on trade receivables and other advances. The company follows “Simplified Approach” for recognition of impairment loss on these financial assets. The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

(ii) Financial liabilities:

Initial recognition and measurement:

Financial Liabilities are classified at initial recognition as:

(i) Financial liabilities at fair value through profit or loss,

(ii) Loans and borrowings, payables, net of directly attributable transaction costs or

(iii) Derivatives designed as hedging instruments in an effective hedge, as appropriate.

The company’s financial liabilities include trade and other payables, loans and borrowings including derivative financial instruments.

Subsequent measurement:

The measurement of financial liabilities depends on their classification, as described below: Borrowings:

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.

Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished and the consideration paid is recognised in the Statement of Profit and Loss as other gains / (losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender has agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

Trade and other payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial period which are unpaid. The amounts are unsecured and are usually paid within twelve months of recognition. Trade and other payables are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

Derivative financial instruments:

The Company uses derivative financial instruments, such as foreign exchange forward contracts to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-

measured at fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Loans and borrowings - subsequent measurement

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the Effective Interest Rate (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the Effective Interest Rate (EIR). The Effective Interest Rate (EIR) amortisation is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms,or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

(xvi) Investment Property

Investment properties are properties held to earn rentals and / or for capital appreciation (including property under construction for such purpose). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with the requirements of Ind AS 16 for cost model.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecongnition of the property is included in the Statement of Profit and Loss in the period in which the property is derecognized.

(xvii) Borrowing Costs

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition / construction of and asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

(xviii) Impairment of Non-financial Assets

At each balance sheet date, an assessment is made of whether there is any indication of impairment.

If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company''s CGUs to which the individual assets are allocated.

Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1st, 2023, as below:

Ind AS 103 - Reference to Conceptual Framework

The amendments specifiy that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These changes do not significantly change the requirements of Ind AS 103. The Company does not expect the amendment to have any significant impact in its financial statements.

Ind AS 16 - Proceeds before intended use

The amendments clarify the accounting of the proceeds before intended use wherein the amounts received from selling items produced while the company is preparing the asset for its intended use needs to be deducted from the cost of property, plant and equipment. The Company does not expect the amendments to have any impact in its recognition of its property, plant and equipment in its financial statements.

Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract

The amendments specify that that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a clarification and 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 amendment clarifies which fees an entity includes when it applies the ‘10 percent’ test of Ind AS 109 in assessing whether to derecognise a financial liability. The Company does not expect the amendment to have any significant impact in its financial statements.

(C) Contingent Liability and Capital Commitments ( As certified by the Management)

The Company has trade receivables of '' 34,12,574 from Export debtors which is receivable in US $ 39,522.40, as the same is outstanding more than 9 months. As per the Foreign Exchange Management Act 1999, the company need to apply for extension to Reserve Bank of India (“RBI”) for receipt of foregin exchange from Export Debtors if same is not received within 9 months from the date of invoice. As the debt is receivable in US $, the writing off of the debt also needs approval from RBI. However, this trade receivables are received in part earlier. The company is confident to receive the balance of '' 34,12,574 in US $ 39,522.40 from export debtors in due course. The export debtors are regularly doing the business with the company. The delay in amount receivable from export debtors is due to ongoing discussion with those/that with them by company.

26 Segment information

The Company operates in single business segment namely manufacturing and trading of food colors and chemicals. Hence, no separate disclosure as per "Ind AS-108" is required for the business segment.

The Company’s operating divisions are managed from India. The principal geographical areas in which the Company operates are Asian Countries, European Countries, South Africa, Middle East Countries, United States and others.

For the purpose of geographical segment the sales are divided into two segments - within India and outside India. The accounting policies of the segments are the same

(viii) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

(ix) The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period while holding all other assumptions constraint. In practice it is unlikely to occur and change in some of the assumption may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

(x) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

(xi) The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Management of the Company has assessed that trade receivables, cash and cash equivalents, other bank balances, other financial assets, borrowings, trade payables, lease liabilities and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair value

(i) The fair value of unquoted instruments, loans from banks other non-current financial assets and non

current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

(ii) The fair values of the investment in mutual fund has been determined based on net assets value (NAV)

available in open market.

(iii) Costs of unquoted equity instruments has been considered as an appropriate estimate of fair value

because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. These investments in equity instruments are not held for trading. Instead, they are held for medium or long-term strategic purpose.

(iv) Fair value hierarchy

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives and equity securities) is based on quoted market prices at the end of the reporting period for identical assets or liabilities. The mutual funds are valued using the net assets value (NAV) available in open market. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.

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

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

There are no transfers among levels 1, 2 and 3 during the year

This section explains the judgement and estimates made in determining the fair value of financial assets that are:

a) Recognized and measured at Fair value

b) Measured at amortized cost and for which fair value is disclosed in financial statements

30 Financial risk management objectives and policies

The Company being the active supplier for the automobile industry is exposed to various market risk, credit risk and liquidity risk. The Company has global presence and has decentralised management structure. The regulations, instructions, implementation rules and in particular, the regular communication throughout the tightly controlled management process consisting of planning, controlling and monitoring collectively form the risk management system used to define, record and minimise operating, financial and strategic risks. The Company has set up a risk management committee (RMC) which comprise of Company chief finance officer and three directors of parent company of which two are independent directors. RMC periodically reviews operating, financial and strategic risk in the business and their mitigating factors. RMC has formulated a risk management policy for the Individaul Company company and Company as a whole, which outlines the risk management framework to help minimise the impact of uncertainty. The main objective of this policy is to ensure sustainable business growth with stability and to promote a proactive approach in reporting, evaluating and resolving risk associated with the business. This process provides assurance that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective. The Company''s financial risk management is an integral part of how to plan and execute its business strategies. Below notes explain the sources of risks in which the Company is exposed to and how it manages the risks.

(a) Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables . We are exposed to market risk primarily related to foreign exchange rate risk and interest rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

The Company is exposed to currency risk on account of transaction with foreign subsidiaries and other parties. The functional currency of the Company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future.

The Company exposure to foreign currency risk at the end of the reporting periods are as follows

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 main interest rate risk arises from long-term borrowings with variable rates. The company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. To manage this, the Group enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 31 March 2024, after taking into account the effect of interest rate swaps, the Company has following fixed rate and variable rate borrowing:

(b) Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing through the use of short term bank deposits, short term loans, and cash credit facility etc. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

(c) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations towards the Company and arises principally from the Company’s receivables from customers and deposits with banking institutions and funds with mutual fund asset management companies (AMC). The maximum amount of the credit exposure is equal to the carrying amounts of these receivables. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

(i) Trade Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The Company uses an allowance matrix to measure the expected credt losses of trade receivables (which are considered good). The following table provides information about the exposure to credit risk and loss allowance (including expected credit loss provision) for trade receivables:

(ii) Financial instruments and deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2024 is the carrying amounts . The Company’s maximum exposure relating to financial instrument is noted in liquidity table below.

31 Capital management

For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders of the parent company and all other equity reserves. The primary objective of the Company''s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient

capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2024 and March 31,2023. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt is calculated as loans and borrowings less cash and cash equivalent.

Notes:-

1. During the year the working capital borrowings has reduced, resulting in favourable current ratio.

2. During the year the Company has repaid borrowed Term loan, resulting in favourable debt equity ratio.

3. During the year the Company has repaid borrowed Term loan alongwith interest substantiall,resulting in favourable debt service ratio.

4. During the year the Company has maintained the similar level of profitability even though reduction in the total revenue, resulted in favourable net profit ratio

33 Additional information required

(i) Details of Benami property: No proceedings have been initiated on or are pending against any of the group companies for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Wilful defaulter: Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iii) Compliance with approved scheme of arrangements: The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(iv) Utilisation of borrowed funds and share premium: The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. 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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(v) Details of crypto currency or virtual currency: The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(vi) Valuation of PP&E, intangible asset and investment property: The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(vii) Utilisation of borrowings availed from banks and financial institutions: The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were was taken.

34 Corporate social responsisbilty

During the year the company is required to contribute Rs.120 Lakhs towards the CSR contribution and company has incurred Rs. 120 Lakhs towards the "Education Purpose".

35 Previous year figures have been regrouped/rearranged to confirm them to current years figures.

The accompanying notes form an integral part of the standalone/consolidated financial statements.

As per our report of even date

For Bhuta Shah & Co LLP For and on behalf of the board of directors of

Chartered Accountants Vidhi Specialty Food Ingredients Limited

Firm Registration No. 101474W / W100100

Bipin M. Manek Mihir B. Manek

At_ul G_al_a Chairman & Managing Director Joint Managing Director

p_art_ner DIN: 00416441 DIN: 00650613

Membership No. 048650

Mitesh D. Manek Vishaka Pandya

Chief Financial Officer Company Secretary

PAN: ALDPM9178K Membership No. 59436

Place : Mumbai Place : Mumbai

Date : 29th May, 2024 Date : 29th May, 2024

---

Mar 31, 2023

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability.

Contingent liability is disclosed in the case of:

• Present obligation arising from past event, when it is not probable that an outflow of resources will
be required to settle the obligation.

• A present obligation arising from past event, when no reliable estimate is possible.

• A possible obligation arising from past events, unless the probability of outflow of resources is
remote. Commitments include the amount of purchase order (net of advances) issued to parties for
completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet
date.

(xiv) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.

(xv) Financial instruments(i) Financial assets:Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in case of financial asset not recorded at
fair value through profit or loss, transaction cost that are attributable to the acquisition of the financial
asset.

Financial assets are classified, at initial recognition, as financial assets measured at fair value or as
financial asset measured at amortised cost.

Subsequent measurement

For purposes of subsequent measurement financial assets are classified into two broad categories:

• Financial asset at fair value

• Financial asset at amortised cost

Where assets are measured at fair value, gains and losses are either recognised entirely in the
statement of profit or loss (i.e. fair value through profit or loss), or recognised in other comprehensive
income (i.e. fair value through other comprehensive income)

A financial asset that meet the following two conditions is measured at amortised cost (net of any
write down for impairment) unless the asset is designated at fair value through profit or loss under
the fair value option.

• Business model test: the objective of the Company’s model is to hold the financial asset to collect
the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to
realise its fair value changes)

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payment of principal and interest on the principal amount
outstanding.

A financial asset that meet the following two conditions is measured at fair value through other
comprehensive income unless the asset is designated at fair value through profit or loss under
the fair value option.

• Business model test: the financial asset is held within a business model whose objective is
achieved both by collecting contractual cash flows and selling the financial assets

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payment of principal and interest on the principal amount
outstanding.

Debt Instruments included within the fair value through profit or loss (FVTPL) category are measured
at fair value with all changes recognized in the statement of profit or loss.

Equity Instruments: All equity instruments within scope of Ind AS 109 are measured at fair value.
Equity instruments which are classified as held for trading are measured at FVTPL. For all other
equity instruments, the company decides to measure the same either at fair value through other
comprehensive income (FVTOCI) or FVTPL. The Company makes such selection on an instrument-
by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments measured at FVTOCI, all fair value changes on the instrument, excluding
dividends, are recognised in Other Comprehensive Income (OCI). There is no recycling of the
amounts from OCI to Statement of profit or loss, even on sale of such instruments.

The Investments are measured at Fair Market Value. The diminution in the market value of
investments is not considered unless such diminution is considered permanent and accordingly
provision for diminution is made in books of accounts.

All other financial asset is measured at fair value through profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
‘pass-through’ arrangement; and either

a) the Company has transferred substantially all the risks and rewards of the asset, or

b) the Company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into
a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company continues to recognise the transferred asset
to the extent of the Company’s continuing involvement. In that case, the company also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset and the maximum amount of consideration that
the Company could be required to repay.

Impairment of financial assets:

In accordance with Ind-AS 109, the company applies Expected Credit Losses (ECL) model for
measurement and recognition of impairment loss on trade receivables and other advances. The
company follows “Simplified Approach” for recognition of impairment loss on these financial assets.
The application of simplified approach does not require the company to track changes in credit risk.
Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.

(ii) Financial liabilities:

Initial recognition and measurement:

Financial Liabilities are classified at initial recognition as:

(i) Financial liabilities at fair value through profit or loss,

(ii) Loans and borrowings, payables, net of directly attributable transaction costs or

(iii) Derivatives designed as hedging instruments in an effective hedge, as appropriate.

The company’s financial liabilities include trade and other payables, loans and borrowings including
derivative financial instruments.

Subsequent measurement:

The measurement of financial liabilities depends on their classification, as described below:
Borrowings:

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period
of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities
are recognised as transaction costs of the loan to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred until the draw down occurs.

Borrowings are removed from the Balance Sheet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished and the consideration paid is recognised in the Statement of Profit and
Loss as other gains / (losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to
defer settlement of the liability for at least twelve months after the reporting period. Where there is a
breach of a material provision of a long-term loan arrangement on or before the end of the reporting
period with the effect that the liability becomes payable on demand on the reporting date, the entity
does not classify the liability as current, if the lender has agreed, after the reporting period and before
the approval of the financial statements for issue, not to demand payment as a consequence of the
breach.

Trade and other payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end
of financial period which are unpaid. The amounts are unsecured and are usually paid within twelve
months of recognition. Trade and other payables are presented as current liabilities unless payment
is not due within twelve months after the reporting period. They are recognised initially at their fair
value and subsequently measured at amortised cost using the effective interest method.

Derivative financial instruments:

The Company uses derivative financial instruments, such as foreign exchange forward contracts to
hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair

value on the date on which a derivative contract is entered into and are subsequently re-measured
at fair value at the end of each reporting period. Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when the fair value is negative.

Loans and borrowings - subsequent measurement

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well as through the Effective Interest Rate (EIR)
amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the Effective Interest Rate (EIR). The Effective Interest Rate (EIR)
amortisation is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms,or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement of
profit or loss.

(xvi) Investment Property

Investment properties are properties held to earn rentals and / or for capital appreciation (including
property under construction for such purpose). Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial recognition, investment properties are measured in
accordance with the requirements of Ind AS 16 for cost model.

An investment property is derecognized upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss
arising on derecongnition of the property is included in the Statement of Profit and Loss in the period in
which the property is derecognized.

(xvii) Borrowing Costs

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition
/ construction of and asset that necessarily takes a substantial period of time to get ready for its intended
use or sale.

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to
the borrowing costs.

(xviii) Impairment of Non-financial Assets

At each balance sheet date, an assessment is made of whether there is any indication of impairment.

If any indication exists, or when annual impairment testing for an asset is required, the Company
estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or
cash-generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount
is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets.

When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken
into account. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Company’s CGUs to which the individual assets are allocated.

Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2023,
MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from
April 1st, 2023, as below:

Ind AS 103 - Reference to Conceptual Framework

The amendments specifiy that to qualify for recognition as part of applying the acquisition method, the
identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities
in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual
Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These
changes do not significantly change the requirements of Ind AS 103. The Company does not expect the
amendment to have any significant impact in its financial statements.

Ind AS 16 - Proceeds before intended use

The amendments clarify the accounting of the proceeds before intended use wherein the amounts
received from selling items produced while the company is preparing the asset for its intended use
needs to be deducted from the cost of property, plant and equipment. The Company does not expect
the amendments to have any impact in its recognition of its property, plant and equipment in its financial
statements.

Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract

The amendments specify that that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly
to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that
contract (examples would be direct labour, materials) or an allocation of other costs that relate directly
to fulfilling contracts. The amendment is essentially a clarification and 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 amendment clarifies which fees an entity includes when it applies the ‘10 percent’ test of Ind AS 109
in assessing whether to derecognise a financial liability. The Company does not expect the amendment
to have any significant impact in its financial statements.

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Mar 31, 2018

Maturity profile of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments 26 Capital Management

For the purposes of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial statements.

30.2 Notes to Financial Statements for the period ended March 31, 2018 Notes to first time adoption Note I: Fair valuation of investments

Under previous GAAP, long term investments were measured at cost less diminution in the value which is other than temporary. Under Ind AS, these assets are classified as financial assets measured at fair value through profit or loss (FVOCI). On the date of transition to Ind AS, these financial assets have been measured at their fair value which is lower/higher than the cost as per previous GAAP, resulting in an decrease in the carrying amount by Rs, 8,01,450/- lakhs as at 01^st April, 2016 and increase by Rs, 1,44,736/- as at 31^st March, 2017. Note II: Security Deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value. Accordingly, the group has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent. Consequent to this change, the amount of security deposits increased by Rs, 1,29,999/- as at 31^st March 2017 (Decreased by Rs, 31,16,860/- as at 01^st April 2016). The prepaid rent decreased by Rs, 1,29,999/- as at 31^st March 2017 (Increased by 1^st April 2016 - Rs, 31,16,860/-).

Note III: Dividend (including Dividend Distribution Tax)

Under previous GAAP, proposed dividends including Dividend Distribution Tax (DDT) are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the company, the declaration of dividend occurs after period end. Therefore, the short term provision of Rs, 1,20,79,182/- (including DDT) for the year ended on 31^stMarch, 2016 recorded for dividend has been derecognized against retained earnings on 01^st April, 2016.

Note IV: Deferred Tax

The impact of transition adjustments together with Ind AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred taxes has resulted in charge to the Reserves, on the date of transition, with consequential impact to the Statement of Profit and Loss for the subsequent periods.

Note V: Other Comprehensive income

Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains or losses are required to be presented in other comprehensive income.

---

Mar 31, 2016

4 Nature of security

i. Term Loan from Vijaya bank is secured as under:

Primary security

Charge on Movable and Immovable assets financed under Vijaya Bank Term loan.

Collateral security

1. Charge in favour Vijaya Bank by way of mortgage of Property mentioned as per below details:

Nature of security (Refer Note 4.1)

i. Working capital loan from HDFC bank is secured as under:

Primary security

1. Charge in favour of HDFC Bank, Vijaya Bank & HSBC Bank by way of hypothecation of stocks and book debts of the company.

2. Charge in favour of HDFC Bank, Vijaya Bank & HSBC Bank by way of hypothecation of existing movable and immovable asset including plant and machinery of the company.

ii. Working capital loan from Vijaya bank is secured as under:

Primary security

1. Charge by way of hypothecation of fully insured raw material, work in progress and finished goods comprising of food colours and other material.

7.2 In the opinion of the directors, trade payables and other current liabilities have the value at which they are stated in the balance sheet. Trade Payables and Advances are subject to confirmation. Periodically, the company evaluates all supplier dues for payment.

27 Related Party Disclosures:

Disclosures as required by the Accounting Standard 18 “Related Party Disclosures” are given below: Key management personnel, relatives and related parties

Key management personnel

1. Bipin M. Manek - Chairman and Managing Director

2. Mihir B. Manek - Joint Managing Director

3. Vijay K. Atre - Technical Director

4. Pravina B. Manek - Director

5. Ajay V. Pande - Factory Manager (died on 1 January 2016)

Enterprises over which key management personnel have significant influence:

6. Arjun Food Colorants Manufacturing Private Limited

7 segment Reporting

The Company''s main activity is manufacturing and trading of food colours and trading in chemicals which constitutes a single reportable segment in the context of Accounting Standard - 17 “Segment Reporting” issued by the Institute of Chartered Accountants of India.

8 Previous period''s figures have been regrouped/ reclassified, wherever necessary to make them comparable.

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Mar 31, 2015

Company Overview:

Vldhi Dyestuffs Manufacturing Limited ("the Company") was incorporated on 19s' January, 1994 and is engaged in the business of manufacturing and trading in synthetic food coiors and trading in chemicals. The registered office of the company is atE/27( Commerce Centre, 78,Tardeo Road, Mumbai-400034.

i. Rights of Equity Shareholders

The Company has only one class of equity shares having a par value of' 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares arid pays dividends in Indian rupees.

In the event of liquidation of die company, the holders of equity shares will be entitled to receive remaining assets of die company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Shareholders have all other rights as available to equity shareholders as per the provisions of the Companies Act, 2013, read together with die Memorandum of Association and Articles of Association of the Company, as applicable.

1.1 Nature of Security

i. Term Loan from HDFC bank is secured as under:

Primary Security

First charge on Movable and Immovable assets financed under HDFC Bank Term loan with second charge to Vijaya bank (on repayment of term loan of HDFC Bank, die said securities will be shared on Pari Passu basis with Vijaya Bank in respect ofworking capital loan)

Collateral Security

1, First Pari Passu charge In favour of HDFC Bank with Vijaya Bank by way of mortgage of Property mentioned as per below details:

2. First charge on movable and immovable assets financed under HDFC Term Loan with second charge to Vijaya Bank (on repayment of term loan of HDFC Bank, the said securities will be shared on Pari Passu basis with Vijaya Bank in respect of working capital loans.)

i. Term Loan from Vijaya bank is secured as under:

Primary Security

First charge on plant and machinery to be purchased from the Term Loan disbursed by the said bank Collateral Security

1. First pari passu charge with HDFC Bank on all fixed assets of the company such as land and building, plant and machinery having value as stated in audited financial statements as at 31st March 2011.

2. Lien on Term Deposits of ^ 441,11 lacs

4. Second charge on new unit at Plot no. 88, MIDC, Roha financed under term loan availed from HDFC Bank, iii. Loan from Bajaj Allianz Is secured against Keyman Insurance Policies.

Terms of Repayment

i. Term loan from Vijaya Bank is to be repaid in 20 equal quarterly instalments reckoned from the date of first drawdown on 28th December 2011.

ii. Term loan from Bajaj Allianz Life Insurance Company Limited will be repaid through maturity proceeds of Keyman Insurance policies commencing from 22nd December 2013

Natura of Security (Refer Note 4.1)

i. Working capital loan from HDFC bank is secured as under:

Primary Security

1 .First Pari Passu charge in favour of HDFC Bank with Vijaya Bank by way of hypothecation of stocks and bookdebts of the company.

2.First Pari Passu charge in favour of HDFC Bank with Vijaya Bank by way of hypothecation of existing movable and immovable asset including plant and machinery of the company, li Working capital loan from Vijaya bank is secured as under:

Primary Security

1. First Pan Passu charge by way of hypothecation of fully insured raw material, work in progress and finished goods comprising of food colours and other material, iii Loan from Standard Chartered bank is secured by personal assets of a director.

2.1 In the opinion of the directors, trade receivables, current assets, loans and advances have the value at which they are stated in the balance sheet, if realised in the ordinary course of business. Sundry debtors, creditors and advances are subject to confirmation. Periodically, the company evaluates all customer dues to die company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, general economic factors, which could affect the customer's ability to settle.

3. Related Party Disclosures:

Disclosures as required by the Accounting Standard 18 "Related Party Disclosures" are given below: Key management personnel, relatives and related parties

Key management personnel

1. Bipin M. Manek™ Chairman and Managing Director

2. Mihir B. Manek-Joint Managing Director

3. Vijay K, Atre-Technical Director

4. Pravina B, Manek™ Director

5. Ajay V. Pande ™ Factory Manager

Enterprises over which kev management personnel have significant influence:

1. Arjurs Food Colorants Manufacturing Private Limited

Rs. in Lakhs

Particulars 2015 2014

4 Contingent Liabilities Nature of Dues

Export of excisable goods without payment of duty under Form UT-1 - -

Custom duty payable in respect of export obligation plant and machinery - -

5. Pending Capital Commitments Nil Nil

6. Segment Reporting

The Company's main activity is manufacturing and trading of food colours and trading in chemicals which constitutes a single reportable segment in the context of Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India,

7. The company has imported Mono Sodium Glutamate from China. Import duty at higher rate was charged on such import. Company paid differential duty of ' 10,00,000/- under protest and has filed appeal before the Commissioner of Customs(Appeals), Jawaharlai Nehru Custom House. The appeal Is been decided in favour of company,

8. Previous period's figures have been regrouped/ reclassified, wherever necessary to make them comparable.

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Mar 31, 2014

1. Share Capital

i. Rights of Equity Shareholders

The Company has only one class of equity shares having a par value of Rs. 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Shareholders have all other rights as available to equity shareholders as per the provisions of the Companies Act, 1956, read together with the Memorandum of Association and Articles of Association of the Company, as applicable.

2 Nature of Security

i. Term Loan from HDFC bank is secured as under:

Primary Security

First charge on Movable and Immovable assets financed under HDFC Bank Term loan with second charge to Vijaya bank (on repayment of term loan of HDFC Bank, the said securities will be shared on Pari Passu basis with Vijaya Bank in respect of working capital loan)

Collateral Security

First charge on movable and immovable assets financed under HDFC Term Loan with second charge to Vijaya Bank (on repayment of term loan of HDFC Bank, the said securities will be shared on Pari Passu basis with Vijaya Bank in respect of working capital loans.

ii. Term Loan from Vijaya bank is secured as under:

Primary Security

First charge on plant and machinery to be purchased from the Term Loan disbursed by the said bank

Collateral Security

1. First pari passu charge with HDFC Bank on all fixed assets of the company such as land and building, plant and machinery having value as stated in audited financial statements as at 31st March 2011.

2. Lien on Term Deposits of Rs. 77.51 lacs

3. Second charge on new unit at Plot no. 68, MIDC, Roha financed under term loan availed from HDFC Bank

iii. Loan from Bajaj Allianz is secured against Keyman Insurance Policies.

3. Terms of Repayment

i. Term loan from HDFC Bank is to be repaid in 48 equal monthly instalments commencing from April 2010.

ii. Term loan from Vijaya Bank is to be repaid in 20 equal quarterly instalments reckoned from the date of first drawdown on 28th December 2011.

iii. Term loan from Bajaj Allianz Life Insurance Company Limited will be repaid through maturity proceeds of Keyman Insurance policies commencing from 22nd December 2013.

4. Short Term Borrowings

Nature of Security

i. Working capital loan from HDFC bank is secured as under:

Primary Security

1. First Pari Passu charge in favour of HDFC Bank with Vijaya Bank by way of hypothecation of stocks and book debts of the company.

2. First Pari Passu charge in favour of HDFC Bank with Vijaya Bank by way of hypothecation of existing movable and immovable asset including plant and machinery of the company.

ii. Working capital loan from Vijaya bank is secured as under:

Primary Security

1. First Pari Passu charge by way of hypothecation of fully insured raw material, work in progress and finished goods comprising of food colours and other material.

iii. Loan from Standard Chartered bank is secured by personal assets of a director.

5. Long-term Loans and Advances

In the opinion of the directors, trade receivables, current assets, loans and advances have the value at which they are stated in the balance sheet, if realised in the ordinary course of business. Sundry debtors, creditors and advances are subject to confirmation Periodically, the company evaluates all customer dues to the company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, general economic factors, which could affect the customer''s ability to settle

6. Pending Capital Commitments Nil Nil

Segment Reporting

i. The Company''s main activity is manufacturing and trading of food colours and trading in chemicals which constitutes a single reportable segment in the context of Accounting Standard -17 "Segment Reporting" issued by the Institute of Chartered Accountants of India

ii. The Company''s Branch Office at Ahmedabad has started its operation during the year. Books of Accounts of Branch is maintained at Head Office. The transaction of Ahmedabad Branch is incorporated in the Books of Head Office.

iii. The company has imported Mono Sodium Glutamate from China. Import duty at higher rate was charged on such import. Company paid differential duty of Rs. 10,00,000/- under protest and has filed appeal before the Commissioner of Customs(Appeals), Jawaharlal Nehru Custom House. The appeal is been decided in favour of company.

iv. The assessing officer has levied penalty of Rs. 6,72,776/- for assessment year 2011-12 on various disallowances made in scrutiny assessment for the year 2011-12. The company has filed appeal before the Commissioner of Income Tax (Appeals)-13 ,Mumbai.

v. Previous period''s figures have been regrouped/ reclassified, wherever necessary to make them comparable.

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Mar 31, 2013

1. Background

The Company has been incorporated on 19th January, 1994 and is engaged in the business of manufacturing and trading of synthetic food colours and trading in chemicals.

2 Related Party Disclosures:

Disclosures as required by the Accounting Standard 18 "Related Party Disclosures" are given below:

Key management personnel, relatives and related parties

Key management personnel

1. Bipin M. Manek - Chairman and Managing Director

2. Mihir B. Manek - Joint Managing Director

3. Vijay K. Atre - Technical Director

4. Pravina B. Manek - Director

5. Ajay V. Pande - Factory Manager

in Lakhs

2013 2012

3 Contingent Liabilities Nature of Dues

Export of excisable goods without payment of duty under Form UT-1 78.53 59.11

Custom duty payable in respect of export obligation plant and machinery - 6.91

4 Pending Capital Commitments Nil Nil

5 Segment Reporting

The Company''s main activity is manufacturing and trading of food colours and trading in chemicals which constitutes a single reportable segment in the context of Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India

6 The company has imported Mono Sodium Glutamate from China. Import duty at higher rate was charged on such import. Company paid differential duty of" 10,00,000/- under protest and has filed appeal before the Commissioner of Customs (Appeals), Jawaharlal Nehru Custom House.

7. Previous period''s figures have been regrouped/ reclassified, wherever necessary to make them comparable.

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Mar 31, 2012

1. BACKGROUND

The Company has been incorporated on 19th January, 1994 and is engaged in the business of manufacturing and trading of food colours and trading in chemicals

RIGHTS OF EQUITY SHAREHOLDERS

The Company has only one class of equity shares having a par value of' 1 per share.

Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts.

The distribution will be in proportion to the number of equity shares held by the shareholders.

The Shareholders have all other rights as available to equity shareholders as per the provisions of the Companies Act, 1956, read together with the Memorandum of Association and Articles of Association of the Company, as applicable.

4.1 Nature of Security

A Term Loan from HDFC bank is secured as under:

Primary Security

First charge on Movable and Immovable assets financed under HDFC Bank Term loan with second charge to Vijaya bank (on repayment of term loan of HDFC Bank, the said securities will be shared on Pari Passu basis with Vijaya Bank in respect of working capital loan)

2. First charge on movable and immovable assets financed under HDFC Term Loan with second charge to Vijaya Bank (on repayment of term loan of HDFC Bank, the said securities will be shared on Pari Passu basis with Vijaya Bank in respect of working capital loans.)

Nature of Security (Refer Note 4.1)

A Working capital loan from HDFC bank is secured as under:

Primary- Security

1. First Pari Passu charge in favour of HDFC Bank with Vijaya Bank by way of hypothecation of stocks and

book debts of the company.

2. First Pari Passu charge in favour of HDFC Bank with Vijaya Bank by way of hypothecation of existing movable and immovable asset including plant and machinery of the company.

B Working capital loan from Vijaya bank is secured as under:

Primary- Security

First Pari Passu charge by way of hypothecation of fully insured raw material, work in progress and finished goods comprising of food colours and other material.

C Loan from Standard Chartered bank is secured by personal assets of a director.

D Loan from Yes Bank is secured by personal asset and personal guarantee of a director's relative.

12.1 In the opinion of the directors, trade receivables, current assets, loans and advances have the value at which they are stated in the balance sheet, if realised in the ordinary course of business. Sundry debtors, creditors and advances are subject to confirmation. Periodically, the company evaluates all customer dues to the company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, general economic factors, which could affect the customer's ability to settle.

In view of the accounting policy followed by the company, exciseduty payable on finished neithesgoods included in theexpenditure nor included in the value of such stocks, but is accounted for on clearance of the goods. This accounting treatment has no impact on profit. The amount of excise duty payable onfinished goods not cleared as at 31st March, 2012 are' 38.56 lacs (Previous year 23.70 lacs)

As At 31-03-2012 As At 31-03-2011 Rs. In lakhs Rs. In lakhs

3 Contingent Liabilities Nature of dues Export of excisablegoodswithout paymentof 59.11 126.63 duty under Form UT-1 Custom duty payable in respect of export obligation

- plant and machinery 6.91 -

-goods - 6.23

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Mar 31, 2010

Background

The Company is engaged in the business of manufacturing and trading of food colours and trading in chemicals. The Company has been incorporated on 19th January, 1994.

1. Depreciation for the year has been calculated at the rates and in the manner specified in schedule xiv to the companies act, 1956. Plant and machinery falling in the category of continuous process plants has been identified on the basis of technical opinion obtained by the Company.

2. Break-up of expenditure incurred during the year on employees in respect of remuneration exceeding Rs.24 lakhs per year or Rs.2 lakhs or more per month or part of the month – none (previous year – none).

3. In view of the accounting policy followed by the Company, excise duty payable on finished goods is neither included in the expenditure nor included in the value of such stocks, but is accounted for on clearance of the goods. This accounting treatment has no impact on profits. The amount of excise duty payable on finished goods not cleared as at 31st March, 2010 is Rs. 13.56 lakhs (previous year Rs. 12.05 lakhs).

4. In the opinion of the directors, current assets, loans and advances have the value at which they are stated in the balance sheet, if realised in the ordinary course of business. Sundry debtors, creditors and advances are subject to confirmation. Periodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, general economic factors, which could affect the customers ability to settle.

5. Segment reporting

The Companys main activity is manufacturing and trading of food colours and trading in chemicals which constitutes a single reportable segment in the context of accounting standard – 17 “segment reporting” issued by the institute of chartered accountants of india.

6. Motor car reflected in the balance sheet is owned and belongs to the Company. However, for the sake of convenience it has been purchased in the name of a director.

7. The Company has provided bank guarantee commission payable to directors amounting to rs.11,25,000/- which is subject to approval of the members.

8. The amounts receivable from government authorities are subject to completion of final assessment.

9. Contingent liabilities (Rs. In lakhs)

Nature of dues 2009-2010 2008-2009

Income tax for a.y. 2004-05(income-tax departments appeal

pending before honble high court of bombay) 48.61 40.76

10. The Company has not received information from vendors regarding their status under the micro, small and medium enterprises development act, 2006 and hence disclosures relating to amounts unpaid as at the year end together with interest paid/payable under this act have not been given.

11. Additional information pursuant to the provisions of paragraphs 3, 4, 4 – A, 4 – B and 4 – C of part ii of schedule vi of the companies act, 1956

f) Deferred Tax

The deferred tax during the year for timing difference is accounted using tax rates that have been enacted; the net difference arising thereon is debited to Profit and Loss Account. As per the management, since there is no other timing difference other than depreciation and therefore no deferred tax assets have been created for the accounting year.

m) Related Party Disclosures:

Disclosures as required by the Accounting Standard 18 "Related Party Disclosures" are given below:

Key management personnel and relatives

Key management personnel

1. Mr. Bipin M. Manek – Chairman and Managing Director

2. Mr. Vijay K. Atre – Technical Director

3. Mrs. Pravina B. Manek – Director

4. Mr. Mihir B. Manek – Executive Director

5. Mr. Ajay V. Pande – Factory Manager

Enterprises over which key management personnel have

significant influence:

M/s. Arjun Food Colorants Manufacturing Private Limited

12. Previous years figures have been regrouped and rearranged, wherever necessary, to confirm to the years classification.