4 PROPERTY, PLANT AND EQUIPMENT (Contd.)

4.1 Property, Plant and Equipment are subject to charge to secure the Company's borrowings as mentioned in Note 21.1.

4.2 The amount of borrowing cost capitalised during the year ended March 31, 2022 was Rs. 18 Lakhs {Including Rs. 7 Lakhs for Green Field Project at Chennai} (for the year March 31, 2021: Rs. 52 Lakhs) on account of capacity expansion of plant .

4.3 The rate used to determine the amount of borrowing costs eligble for capitalisation was 8.25%, which is the effective interest rate of the borrowing.

4.4 The amount of expenditures recognised in the carrying amount of Property, Plant and Equipment in the course of its construction is Rs.110 Lakhs {including Rs. 43 Lakhs for Green Field Project at Chennai} (Previous Year Rs. 70 Lakhs).

4.5 The amount of contractual commitments for acquisition of Property, Plant and Equipment is Rs. 9,920 Lakhs {Including Rs. 8,819 Lakhs for Green Field Project at Chennai} (Previous Year Rs.382 Lakhs).

4.6 The aggregate deprciation and amortisation has been included under Depreciation and Amortisation Expenses in the Statement of Profit and Loss.

4.7 Freehold land located at Survey no.124/5;126;149/1;150;151/2; Dhannad, Dist:Dhar, Madhya Pradesh, admeasuring 27,890 Sq. Mtr. (Cost Rs. 21 Lakhs) was revalued to Rs. 433 Lakhs on the date of transition i.e. 01.04.2016 and has been considered as the deemed cost in accordance with Para D5 of Ind AS 101- First-time Adoption.

(d) Pursuant to the approval of the shareholders accorded on 3rd March, 2022 vide postal ballot conducted by the Company, each equity share of face value of Rs. 10/- per share was sub-divided into five equity shares of face value of Rs. 2/- per share, with effect from 16th March, 2022.

(e) Mr. Sunil Chordia and his family along with family trusts and two Companies namely Rajratan Investments Private Limited (Formerly Rajratan Investment Limited) and Rajratan Resources Private Limited hold 65.00% (Previous Year 65.00%) of the paid up share capital and have control over the reporting entity.

(g) Agreegate number and class of shares alloted as fully paidup by way of bonus shares

The Company has issued 5,802,400 equity shares as fully paid bonus shares in the ratio of 4:3 (i.e. four bonus shares of Rs. 10/- each for three equity shares of Rs. 10/- each) to every sharehoder holding equity share on 14.09.2019.

(h) Terms / Rights to Shareholders

Equity Shares

(i) Voting

The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each holder of equity shares is entitled to one vote per share.

(ii) Dividends

The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval by the shareholders of the company in the ensuing Annual General Meeting. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iii) The Board of Directors have proposed Dividend of Rs. 2/- per share for the financial year 2021-22.

(iv) Liquidation

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

20.2General Reserve

The General Reserves have been created out of retained earnings of the Company and are available for any purpose.

20.3 Retained Earnings

The balance in the Retained Earings represents the accumalted profit after payment of dividens, transrfer to General Reseve and adjustments of acturial gains/(losses) on Defined Benfit Plans.

20.4 Other Reserves (Revaluation Surplus as on the date of transation to IndAS)

Revaluation Reserve is the amount ascertained due to revaluation of land carried out on the date of transition to Ind AS and has been recognised as a separate category of the equity and not as part of retained earnings.

Purpose of Each Reserve within Equity

20.1Securities Premium

Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares is transferred to “Securities Premium Account” and the utilisation thereof is in accordance with the provisions of Section 52 of the Companies Act, 2013.

21.1 SECURITY:

On the Property, Plant and Equipment at Pithampur the following charges have been created:

A) STATE BANK OF INDIA

1st Charge for its term loans and working capital of Rs. 5,766 Lakhs.

B) HDFC Bank Limited

2nd pari-passu charge over fixed assets of the Company for Rs. 5,700 Lakhs for its working capital facilities.

2nd pari-passu charge over entire fixed asset (immovable and movable) and 2nd pari-passu charge over current asset of the Company for term Loan of Rs. 1,674 Lakhs.

1st charge over fixed asset (movable and immovable) of the Company and 2nd pari-passu charge over current asset of the Company for Term Loan of Rs. 1,718 Lakhs for ongoing capex at Pithampur.

2nd pari-passu charge over entire fixed asset (immovable and movable) and 2nd pari-passu charge over current asset of the Company for ECLGS Term Loan of Rs. 1,050 Lakhs on reciprocal Basis.

C) Citi Bank NA

2nd pari-passu charge over immovable property and fixed assets of the Company for Rs. 1,000 Lakhs for its working capital facilities on reciprocal basis.

2nd pari-passu charge over immovable property and fixed assets of the Company for Rs. 1,500 Lakhs for its SBLC facilities.

D) ICICI Bank Ltd.

2nd pari-passu charge over immovable property and fixed assets of the Company for Rs. 5,000 Lakhs for its working capital facilities on reciprocal basis.

E) Facilities were also secured by way of personal guarantee of the Chairman and Managing Director upto 31st March 2021.

On the Property, Plant and Equipment at Chennai following charges have been created:

21 BORROWINGS (NON CURRENT) Contd.)

F) Kotak Mahindra Bank Ltd.

First pari-passu hypothecation charge to be shared with HDFC Bank on all existing and future Moveable Fixed Assets of the Company at Chennai Unit for Term Loan of Rs. 2,500 Lakhs.

First pari-passu Equitable/ Registered mortgage charge with HDFC Bank on immoveable properties being land and building situated at Plot no. D-1/2, SIPCOT industrial Park, Vallam Vadagal (phase II), (underdeveloped) Kanchipuram District, Tamil Nadu belonging to the Company for Term Loan of Rs. 2,500 Lakhs.

Second pari-passu hypothecation charge to be shared with HDFC Bank on all existing and future Moveable Fixed Assets of the Company at Chennai Unit for working capital limits of Rs. 1,500 Lakhs .

Second pari-passu Equitable/ Registered mortgage charge with HDFC Bank on immoveable properties being land and building situated at Plot no. D-1/2, SIPCOT industrial Park, Vallam Vadagal (phase II), (underdeveloped) Kanchipuram District, Tamil Nadu belonging to the Company for working Capital limits of Rs. 1,500 Lakhs.

G) HDFC Bank Ltd.

First charge of HDFC Bank on pari pasu basis with Kotak Bank by way of equitable mortgage on industrial factory land and building proposed to be set up at lease hold Plot No. D-1/2, SIPCOT industrial Park, Vallam Vadagal (phase II), (underdeveloped) Kanchipuram District, Tamil Nadu for Term Loan of Rs. 7,500 Lakhs.

First charge of HDFC Bank on pari pasu basis with Kotak Bank by way of hypothecation on plant and machinery proposed to be installed at factory and land and building to be set up at lease hold Plot No. D-1/2, SIPCOT industrial Park, Vallam Vadagal (phase II), (underdeveloped) Kanchipuram District, Tamil Nadu for Term Loan of Rs. 7,500 Lakhs.

Foreign Currency Loan disclosure

21.2 Part of Term Loan from State Bank of India was converted into a foreign currency loan of USD 15.74 Lakhs. The said foreign currency loan was coverted into Indian Currency on 18.06.2021. The said loan was hedged and premium paid for the year is charged to Statement of Profit & Loss.

23.1 Security

1) State Bank of India

1st Charge for its term loans and working capital of Rs. 5,766 Lakhs for its working captial facilities.

2) HDFC Bank Limited

1st pari-passu charge over entire current assets of the Company for Rs. 5,700 Lakhs for its working capital facilites.

2nd pari-passu charge over current asset of the Company for Term Loan of Rs. 1,674 Lakhs.

2nd pari-passu charge over current asset of the Company for Term Loan of Rs. 1,718 Lakhs for ongoing capex at Pithampur on reciprocal Basis.

2nd pari-passu charge over current asset of the Company for ECLGS term Loan of Rs. 1,050 Lakhs.

3) Citi Bank NA

1st pari-passu charge over entire current asset (present & future) of the Company for Rs. 1,000 Lakhs for its working capital facilities

4) ICICI Bank Ltd

1st pari-passu charge over entire current asset (present & future) of the Company for Rs. 5,000 Lakhs for its working capital facilities on reciprocal basis.

On stocks, receivables and other current assets of Chennai the following charges have been created:

5) Kotak Mahindra Bank Limited

Second pari-passu hypothecation charge to be shared with HDFC Bank on all existing and future current assets of the Company at Chennai Unit for Term Loan of Rs. 2,500 Lakhs.

First pari-passu hypothecation charge to be shared with HDFC Bank on all existing and future current assets of the Company at Chennai Unit for Working Capital Limites of Rs. 1,500 Lakhs.

28 CONTINGENT LIABILITIES AND COMMITMENTS (To the extent not provided for)

28.1 Contingent Liabilities

(A) Claims against the Company/disputed liabilities not acknowledged as debts

(i) Madhya Pradesh Paschim Khestra Vidhyut Vitran Company Ltd. (MPPKVVCL) raised a supplementary bill on the Company for Rs. 226 Lakhs for non-adjustment of solar units in Time Of Day (TOD) manner. The Company has not accepted the demand and is contesting the same. The case is sub-judice before Division Bench of MP High Court, Indore. During the year, a sum of Rs. 66 Lakhs (Previous Year Rs. 160Lakhs) was deposited with MPPKVVCL. Out of the aforesaid total demand raised, the Company has agreements with the suppliers of the solar power to reimburse Rs. 190Lakhs. Accordingly. the sum of Rs. 190 Lakhs is classified as current asset. The balance amount of Rs. 36 Lakhs was charged to Statement of Profit & Loss in the previous year itself.

31 ADDITIONAL REGULATORY INFORMATION:-

31.1 Title deeds of immovable properties not held in the name of Company. Details of all the immovable properties (other than properties where the Company is the leesee of and the lease agreements are duly executed in favour of the leesee) whose deeds are held in the name of the Company.

NIL

31.2 There are no investment in properties

31.3 The Company has not revalued its Property,Plant and Equipment during the year.

31.4 The Company has not revalued its intangible assets during the year.

31.5 The Company had granted salary advance of Rs. 10 Lakhs repayable within a period of 3 months to the Managing Director in accordance with scheme of loans to employees as approved by its Board of Directors. The loan was repaid within one month and there is no outstanding as on the Balance Sheet date.

31.6 No procedings have been initiated or pending against Company for holding any Benami Property under Prohibitions of Benami Transactions Act,1988(Earliers titled as Benami transactions (Prohibitions) Act,1988.

31.7 The quarterly returns/statement of current assets filed by Company with Banks for Borrowings are in agreement with the books of accounts.

31.8 The Company is not declared a wilfull defaulter by any Bank or Financial Institution or any other lender.

31.9 The Company has no transaction with Companies which are stuck off under section 248 of the Companies Act,2013 or under section 530 of Companies Act,1956.

28.3 During the year ended 31st March, 2022, on account of the final dividend for FY 20-21, the Company has incurred a net cash outflow of Rs. 812 Lakhs.

The Board of Directors have proposed dividen of Rs. 2/- per equity share subject to approval by the shareholders in the general meeting. If approved, this will result in payment of dividend Rs. 1,015 Lakhs.

29 During the year, the Company has not issued any securitites.

30 The amount borrowed from Banks and Financial Institution have been used for the specific purpose it was taken.

49 CAPITAL MANAGEMENT

The Company adheres to a robust Capital Management framework which is underpinned by the following guiding principles;

a) Maintain financial strength to attain AAA ratings domestically and investment grade ratings internationally.

b) Ensure financial flexibility and diversify sources of financing and their maturities to minimise liquidity risk while meeting investment requirements.

c) Proactively manage group exposure in forex, interest and commodities to mitigate risk to earnings.

d) Leverage optimally in order to maximise shareholder returns while maintaining strength and flexibility of the Balance sheet.

This framework is adjusted based on underlying macro-economic factors affecting business environment, financial market conditions and interest rates environment.

50.5 Commodity Price Risk

Commodity price risk arises due to fluctuation in prices of raw material. The company has a risk management framework aimed at prudently managing the risk arising from the volatility in raw material prices and freight costs.

The company's commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company carefully caliberates the timing and the quantity of purchase.

50.6 Credit Risk

Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. Credit risk arises mainly from the outstanding receivables from customers.

The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. The credit ratings/market standing of the customers are evaluated on a regular basis.

50.7 Liquidity Risk

Liquidity risk arises from the Company's inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and marketable securities . The Company maintains adequate cash and cash equivalents alongwith the need based credit limits to meet the liquidity needs.

53 The research and development expenditure for the year ended March 2022 is Rs. 90 Lakhs (Previous year Rs. 73 Lakhs), which is charged to Statement of Profit & Loss.

54 GOODWILL

The erstwhile Wholly Owned Subsidiary M/s Cee Cee Engineering Industries Private Limited was merged vide order dated 16th January 2018 of the Hon'ble National Company Law Tribunal, Ahmedabad Bench with 1st April 2017 as the Appointed Date. As per the approved scheme all the assets and liabilities of the Wholly Owned Subsidiary appearing in the Balance Sheet as at 31st March 2017, drawn up as per IND AS, have been merged with the Holding Company as on 1st April 2017. The Goodwill on amalgamation is carried in the financial statements and is tested for impairment at each reporting date. No impairment has been recognised till date.

55 SUBSIDY

Madhya Pradesh Industrial Development Corporation Limited, a Government of Madhya Pradesh Undertaking, has approved a sum of Rs. 1,974 Lakhs (Rs. One Thousand Nine Hundred Seventy Four Lakhs Only) as Investment Promotion Assistance against eligible investment of Rs. 5,235 Lakhs (Rs. Five Thousand Two Hundred Thirty Five Lakhs Only). The total assistance is to be spread over a period of seven years, subject to compliance with the terms and conditions. During the year, a sum of Rs. 318 Lakhs (Rs. Three Hundred Eighteen Lakhs Only) has further being sanctioned on additional investment of Rs. 1,790 Lakhs (Rs. One Thousand Seven Hundred Ninety Lakhs Only) made within one year from the date of start of commercial production. Accordingly a sum of Rs. 699 Lakhs (Rs. Six Hundred Ninety Nine Lakhs Only) was sanctioned and received by the Company during the year. The same has been reduced from the carrying cost of the eligible assets (Plant & Machinery and Factory Building on prorata basis) and such reduced cost of the assets are depreciated over their useful life.

Madhya Pradesh Industrial Development Corporation Limited, a Government of Madhya Pradesh Undertaking, has sanctioned Capital Subsidy of 50% of Investment Rs. 275 Lakhs (Rs. Two Hundred Seventy Five Lakhs) (restricted to Rs. 100 Lakhs (Rs. One Hundred Lakhs Only) for setting up of Effluent Treatment Plant (ETP) by the Company. The Capital Subsidy of Rs. 100 Lakhs (Rs. One Hundred Lakhs Only) has been reduced from the carrying cost of the ETP and such reduced cost of the assets is depreciated over it's useful life.

56 ESTIMATION OF UNCERTAINTIES RELATING TO THE GLOBAL HEALTH PANDEMIC COVID-19

(I) The Company has been regularly assessing the market conditions as most of its customers being primarily into manufacturing tyres for two wheelers, passenger cars and other transport vehicles and being vulnerable to a disruption in supply chain and demand erosion. The Company has considered such impact to the extent known and available. However, the impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration.

(II) The leases that the Company entered with lessors towards properties used as industrial land are long-term in nature and no significant changes in the terms of those leases are expected due to the COVID-19. Other leases for office premises are for the short-term and not involving any material amounts.

57 ROUNDING OFF

The figures appearing in financial statements have been rounded off to the nearest Lakhs, as required by General Instructions for

preparation of Financial Statements in Divisiona II Schedule III to the Companies Act, 2013.

58 APPROVAL OF FINANCIAL STATEMENTS

The financial statements are approved for issue by the Board of Directors in their meeting held on 21st April , 2022.

The accompanying notes are an integral part of the standalone financial statements.