Notes:

(i) 5,00,000 (previous Year 5,00,000) Zero Interest Unsecured Optionally Convertible Debentures (Series A) of Rs.100/- each convertible into Equity Shares of Rs.10/- each fully paid up in one or more tranches or in full at the option of Debenture Holders (Modi Naturals Limited) anytime after one year from the date of allotment(s) but within 31st March, 2041 at the Net Asset Value per equity share as on the date of conversion to be determined on the basis of valuation report of a registered valuer, or redeemable at the option of the Board of Directors of the Modi Biotech Private Limited at par or premium as may be mutually decided by the Modi Biotech Private Limited and the debenture holders (Modi Naturals Limited) anytime after one year from the date of allotment(s) but within 31st March, 2041

(ii) 5,00,000 (previous Year 5,00,000) Zero Interest Unsecured Optionally Convertible Debentures (Series B) of Rs.100/- each convertible into Equity Shares of Rs.10/- each fully paid up in one or more tranches or in full at the option of Debenture Holders anytime after one year from the date of allotment(s) but within 31st March, 2041 at the Net Asset Value per equity share as on the date of conversion to be determined on the basis of valuation report of a registered valuer, or redeemable at the option of the Board of Directors of the company at par or premium as may be mutually decided by the company and the debenture holders anytime after one year from the date of allotment(s) but within 31st March, 2041.

(iii) 8,00,000 (previous Year 3,00,000) Zero Interest Unsecured Optionally Convertible Debentures (Series C) of Rs.100/- each convertible into Equity Shares of Rs.10/- each fully paid up in one or more tranches or in full at the option of Debenture Holders (Modi Naturals Limited) anytime after one year from the date of allotment(s) but within 31st March, 2041 at the Net Asset Value per equity share as on the date of conversion to be determined on the basis of valuation report of a registered valuer, or redeemable at the option of the Board of Directors of the Modi Biotech Private Limited at par or premium as may be mutually decided by the Modi Biotech Private Limited and the debenture holders (Modi Naturals Limited) anytime after one year from the date of allotment but within 31st March, 2041

11.2 The company has only one class of equity shares, having a par value of Rs.10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company' s residual assets. Each shareholder is eligible to one vote per share held. The dividend proposed, if any, by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. The repayment of equity share capital in the event of liquidation and buy back of shares are possible subject to prevalent regulations. In the event of liquidation, normally the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

11.5 Issued, subscribed and paid-up capital of the company includes:-

(i) 4238967 shares (Previous Year 4238967) allotted as Bonus Shares by way of Capitalisation of Profits

(ii) 2640000 Shares (Previous Year 2640000) issued by way of conversion of Optionally Convertible Warrants into equity shares Rs.10/- each at a premium of Rs.20/- each.

(iii) 1538463 Shares (Previous Year 1538463) issued by way of conversion of Optionally Convertible Warrants into equity shares Rs.10/- each at a premium of Rs.120/- each.

13.1 Term Loan from banks is secured by way of equitable mortgage of Factory Land & Building and Hypothecation of Plant & Machinery of all the units at Bisalpur Road and Bareilly Road, Stock and Book Debts, Personal guarantees of Mr. Anil Modi, Mrs. Nita Modi and Mr. Akshay Modi

13.2 Working Capital facility comprises cash credit from bank and is secured against hypothecation of raw materials, semi -finished goods, finished goods, consumable stores, book debts of units at Bisalpur Road and Bareilly Road, Pilibhit and personal guarantees of Mr. Anil Modi and Mr Akshay Modi.

13.3 Vehicle Loans are secured against hypothecation of respective Vehicles

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the company's favour in respect of all the items listed at (i) to (vi) above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company's financial position and results of operations.

32. On May 18, 2022, the Board of Directors of the Company has, pursuant to special resolution passed by the Members at its extraordinary general meeting held on May 04, 2022 in terms of SEBI (ICDR) Regulations, 2018, allotted 6,50,000 convertible warrants carrying a right exercisable by the warrant holder to subscribe to one fully paid up equity share per warrant at a price of ?207/ (“Issue Price”) [including premium of Rs. 197/] per equity share on preferential basis to promoter category as under:

The amount equivalent to 25% of the warrant issue price was received upfront and balance 75% is payable by the Warrant Holder at the time of allotment of the Equity Share which may be exercised at any time on or before expiry of 18 months from the date of allotment of Warrants, failing which the warrants shall lapse and the amount paid shall stand forfeited by the Company.

33. During the previous year, the Company incorporated a wholly owned subsidiary Modi Biotech Private Limited in the State of National Capital Territory of Delhi, on April 27, 2021. In line with the Ethanol Blended Petrol (EBP) program, the Company has diversified into ethanol manufacturing, with a state of the art greenfield Ethanol Plant being established in the state of Chhattisgarh under its wholly owned subsidiary Modi Biotech Private Limited (MBPL). MBPL has received in principle approval for a 210 KLD distillery for the manufacture of ethanol from the Central Government, along with signing an MOU with the Chhattisgarh Government for the same. The company has also received environment clearance (EC) for the project from the Ministry of Environment, Forest and Climate change (MoEF & CC). The Company has invested in its wholly owned subsidiary Rs. 27,00,00,000/ (Previous Year : Rs. 15,00,00,000/) by way of 90,00,000 (Previous Year 20,00,000) fully paid up equity shares having a face value of Rs.10/ each aggregating Rs. 9,00,00,000/ (Previous Year : Rs. 2,00,00,000/) and 18,00,000 (Previous Year : 13,00,000) fully paid up optionally convertible debentures having face value of Rs. 100/ each aggregating Rs 18,00,00,000/ (Previous Year: Rs. 13,00,00,000/).

34. There was a fire in the Vegetable Oil Refinery in December 2021, resulting in complete closure of the plant for 13 days and thereafter running on reduced capacity for about one month. The company had filed an insurance claim for the losses sustained and the claim is still under process. The Company has adjusted the loss incurred on stock against the insurance claim filed. The loss incurred on fixed asset has been adjusted to the extent of written down value of the asset. The actual profit /loss due to fire would be adjusted at the time of settlement of the claim.

Sensitivities due to mortality and withdrawals are not material & hence impact of change not calculated.

Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

The estimates of future salary increase considered in actuarial valuation, take account of inflation, seniority, promotion, and other relevant factors. The above information is certified by the actuary and relied upon by the auditors.

The employer's best estimate of contribution expected to be paid during the next year is Rs. 53.52 lakhs.

B. Defined Benefit plans - Leave Encashment

Liability in respect of leave encashment is not applicable since the company pays leave encashment to employees every year.

C. Defined Contribution plans - Provident Fund and ESI

The Company has recognized Rs. 103.33 lakhs (As on 31 March, 2022: Rs. 95.70 lakhs) in statement of profit and loss as Company's contribution to provident fund and ESI.

36. RELATED PARTY DISCLOSURE

1. Names of the related parties with whom transactions have taken place during the year:

(A) Key Management Personnel

Mr. Anil Modi, Managing Director

Mr. Akshay Modi, Joint Managing Director

(B) Relatives of Key Management Personnel.

Mrs. Nita Modi Mrs. Aditi Gupta Mrs. Neha Agarwal

(C) Subsidiary.

Modi Biotech Private Limited

(D) Enterprises over which key Management personnel, or his relative, has significant influence. NA

Note: Related parties are as identified by the company and relied upon by the Auditors.

Valuation techniques used to determine fair value

Fair value of cash and cash equivalents, loans and advances, receivables, payables, and other current financial assets and liabilities measured at amortized cost is approximate to their carrying amounts largely due to the shortterm maturities of these instruments. The fair value of other noncurrent financial assets (Loans and advances) carried at amortized cost is approximately equal to fair value. Hence carrying value and fair value is taken same.

B. Financial risk management

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Board of directors is responsible for developing and monitoring the Company's risk management policies.

The Company's risk management policies are established to identify and analyze the risk faced by the Company, to set appropriate risks limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in the market condition and Company's Activities.

The Company‘s Board of Directors oversee how management monitors compliances with the company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to risks faced by the Company.

Financial risk factors

The Company's activities expose it to a variety of financial risks which includes market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company's focus is to ensure liquidity which is sufficient to meet the Company's operational requirements. The Company monitors and manages key financial risks so as to minimize potential adverse effects on its financial performance. The Company has a risk management policy which covers the risks associated with the financial assets and liabilities. The details for managing each of these risks are summarized ahead.

(i) Market Risk:

Market risk is the risk that the expected cash flows or fair value of a financial instrument could change owing to changes in market prices. The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and commodity prices. The objective of the market risk management is to manage and control market risk exposure within acceptable parameters, while optimizing the returns.

(ii) Credit risk management

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The Company's exposure to credit risk primary arises from trade receivables, which are typically unsecured. A part from this, the Company is exposed to credit risk from its financing activities including deposit with banks and security deposits.

The credit risk on bank balances is limited because the counter parties are banks with good credit ratings.

Financial assets are written off when there is no reasonable expectation of recovery. Where the loans and receivables were written off and subsequently recoveries are made, these are recognised as an income in the financial statements.

Trade Receivables

Credit risk is managed through credit approvals, establishing credit limits, continuous monitoring of creditworthiness of customers to which the company grants credit terms in the normal course of business. The Company also assesses the financial reliability of customers taking into account the financial condition, current economic trends and historical bad debts and ageing of accounts receivables.

Cash & Cash Equivalents

With respect to credit risk arising from financial assets which comprise of cash and cash equivalents, the Company s risk exposure arises from the default of the counter party, with a maximum exposure equal to the carrying amount of these financial assets at the reporting date. Since the counter party involved is a bank, Company considers the risks of nonperformance by the counter party as nonmaterial.

For financial assets (other than trade receivables), expected credit losses are measured at an amount equal to the 12month ECI, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECI. The Company does not have any expected credit loss on financial assets which are measured on 12 month ECI and also has not observed any significant increase in credit risk since initial recognition of the financial assets.

iii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.

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.

38. Capital Management

The company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the company consists of net debt and total equity.

The company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through longterm /shortterm borrowings. The company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio.

In order to achieve this overall objective, the Group's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to call loans and borrowings or charge some penal interest. There have been no breaches in the financial covenants of any interest bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the current years and previous year.

39. Operating Segment

The company's sole business segment is manufacturing and marketing of Oils & Deoiled Cakes and the geographical segment is India. Consequently, no separate disclosure, as required under Indian Accounting Standard 108 - Operating Segment, is considered relevant.

Explanation for variance exceeding 25%:

i. Debt Service ratio has decreased as the liability to pay long term borrowings is increased in current year.

ii. Return on Equity Ratio has decreased due to decrease in profits.

iii. Trade payables turnover ratio has decreased due to increase in average trade payables.

iv. Net Profit ratio has decreased due to decrease in profits.

v. Return on Capital employed ratio has decreased due to decrease in earnings and increase in shareholders' equity.

43. Additional Regulatory Information as required by Schedule III of Companies Act, 2013

(a) There are no proceedings which have been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988.

(b) Title deeds of immovable properties are held in the name of the company.

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

(d) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

(e) The company has used the borrowings from banks and financial institutions for the purpose for which it was taken at the balance sheet date.

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

(g) There are no Loans or Advances in the nature of Loans granted to promoters, directors, KMPs and the related parties, either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

(h) The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. The quarterly returns or statements filed by the Company with such banks for the quarter ended as on 31.12.2022 and 31.03.2023 are not in agreement with the books of account of the Company. Reconciliation and reason for the same as follows:

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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 company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

(i) 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

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(k) The Company does not have any transactions with companies struck off.

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

(m) The Company has complied with the number of layers for its holdings in downstream companies prescribed under clause 87 of section 1 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

44. Approval of financial statements

The financial statements for the year ended 31st March 2023 were approved by the Board of Directors and authorize for issue on 30th May 2023.