Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of ' 10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time, and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

(i) During the year, the company has acquired various commercial vehicles through financing from HDFC, Kotak & Mahindra Finance to the tune of ' 1,478.76 lakhs ranging with a tenure period from 12 months to 36 months.

(ii) The company has acquired term loan for the acquisition of Orchid Towers through financing from HDFC to the tune of ' 4,662 lakhs repayable in a period of 7 years.

(iii) The company has also taken a working capital demand loan from HDFC Bank repayable in 90 days for an amount of ' 2,500 lakhs. This is secured by hypothecation of present and future stock of raw materials, work-in-progress, finished goods, book debts and materials in transit.

NOTE 31 - CONTINGENT LIABILITIES LITIGATIONS INVOLVING OUR COMPANY

Our Company is involved in certain legal proceedings, which are pending at varying levels of adjudication at different forum. The outstanding matters set out below includes details of criminal proceedings, tax proceedings, statutory and regulatory actions and other material pending litigation involving our Company.

We cannot assure you that these legal proceedings will be decided in favour of our Company, or that no further liability will arise out of these proceedings. Further, such legal proceedings could divert management time and attention and consume financial resources. Any adverse outcome in any of these proceedings may adversely affect our profitability and reputation and may have an adverse effect on our results of operations and financial condition.

1. AGAINST OUR COMPANY

(a) Pending matters, which, if they result in an adverse outcome, would materially and adversely affect the operations or the financial position of our Company:

(i) M/s Hindustan Fluoro Carbon Limited (the “Petitioner”) has filed a writ petition (19504/2009) before the Hon’ble High Court of Telangana at Hyderabad (the “Court”) under Article 226 of Constitution of India in the year 2009 against State Bank of India, Chennai and Ors. (Collectively, the “Respondents”).

Our Company is one of the Respondents in the matter. Petitioner has filed the writ before the Court in the nature of Mandamus to declare the act of State Bank of India, one of the Respondents, rejecting Petitioner’s letter of credit issued by SBI-Commercial Brach Chennai, as illegal and consequentially seeking an order directing State Bank of India to honour its commitment to realize the payment of ^132.06 Lakhs along with interest on the same to the Petitioner towards goods supplied by the Petitioner to our Company. Our Company has filed counter reply with the Hon’ble High Court in the year 2016 to dismiss the writ petition. Presently, the matter is pending before the Hon’ble High Court.

(ii) Writ has been filed to quash impugned order in DIN No: ITBA/AST/M/147/2023 24/1053369453(1) dated 31.05.2023 for the assessment year 2016-17 passed by the Deputy Commissioner of Income Tax, as the same has been completed adhering to the provisions of section 144A of the Income Tax Act.

(b) Litigation involving material violations of statutory regulations which are currently pending or have arisen in the preceding last ten years:

NONE.

2. FILED BY OUR COMPANY

(a) Pending matters, which, if they result in an adverse outcome, would materially and adversely affect the operations or the financial position of our Company:

(i) The Company has filed a suit (STC/PC/0003658/2022) before the Hon’ble V FTC MM Court, Saidapet, Chennai and the case is taken on file U/s 138 r/w 142 Negotiable Instruments Act against RM Enterprises (the “Respondent”) for recovery of principal and interest amount to the tune of ' 1,22,232/- (Rupees One Lakh Twenty-Two Thousand, Two Hundred and Thirty-Two Only) along with the cylinders that haven’t been released by them. Bailable warrants have been issued to the respondent with regard to this suit.

(ii) The company has filed a suit before the CESTAT, Chennai against the Commissioner of Customs (II) Chennai in relation to the two containers with Bills of Entry, 4926248 & 4925897 which are held in the CFS and are to be re-exported. The containers are incurring huge demurrage charges, and the High Court vide order dated 27.11.2019 passed in W.P. 20939 of 2017 held that containers shall be released forthwith upon payment of duty. The order is yet to be complied with despite making the payment and since the goods are live and pending clearance, it is necessary in the interest of justice that the appeal is taken up for hearing on an early date. The matter has been admitted and has been listed on 13.09.2023.

(iii) The company has filed a writ petition (WP(C)/27/2022) with Delhi High Court for rectification of the name of Refex Hotels Private Limited (R2) and praying for issuance of appropriate directions to R2 to change its name. Counter affidavits on behalf of both the Respondents are taken on record. Any pleadings which are under objections be placed on record. Delay, if any, is condoned. Rejoinder be filed to both the counter affidavits within six weeks.

(iv) The company has filed a writ petition (WP/5074/2023, WP/5077/2023, WP/5096/2023) in the Madras High Court against The Commissioner of customs and 2 others directing the 1st and 2nd Respondent to ensure that the Demurrage Waiver Certificate dated 08.12.2020 issued by the 2nd Respondent is compiled by the 3rd Respondent and the subject containers nos. ZFLU2013012 and ZFLU2013080 are released to the Petitioner without requirement to pay any demurrage and storage charges including the charges from 03.09.2020 to the date of actual release of the goods. Currently, the petition has been posted before the Division Bench along with W.A. 2235 of 2021.

(v) The company has filed a suit (Crl MP No.6 of 2023) before the Hon’ble V FTC MM Court, Saidapet, Chennai against Best Engineering (Respondent). The Respondent had placed a purchase order for the products (Chlorodifluromethane (R-22), Difluromethane Pentafluromethane (R410A),

and Difluromethane (R32) for which they had failed to make payments for the invoices raised. Therefore, the cheques issued were encashed and consequently were dishonoured. Due to non-receipt of payment, the case has been admitted and is yet to be heard.

(b) Litigation involving issues of moral turpitude or criminal liability, which are currently pending or have arisen in the preceding last ten years:

NIL.

(c) Litigation involving material violations of statutory regulations which are currently pending or have arisen in the preceding last ten years:

(i) Company has filed an appeal before the Hon’ble Commissioner of Income Tax Appeals at Chennai (the “appellate authority”) as aggrieved by an order of Assessing officer, Chennai under Section 143(3) r.w.s 147 of Income Tax Act 1961 which was passed against our Company. This matter relates to issue of Long-Term capital gains on sale of land and excess depreciation claimed during the Financial Year 2013-14 which is having the tax demand to the tune of ' 821.13 Lakhs for the assessment year 2014-15 which was raised by an assessing officer by way of issue of an assessment order dated March 31, 2022 under Section 143(3) r.w.s 147 of Income Tax Act, 1961. Further, the company has filed an application for rectification and by processing the rectification application, the demand is reduced to ' 751.16 Lakhs. However, the matter is pending before CIT(A) and is expected to come up for hearing in due course.

(ii) Company has filed an appeal before the Hon’ble Commissioner of Income Tax (Appeals) at Chennai (the “appellate authority”) as aggrieved by an order of Assessing officer, Chennai under Section 143(3) of Income Tax Act 1961 which was passed against our Company. This matter pertains to the Bogus purchases and cash credits during the Financial Year 2019-20 which resulted in a tax demand amounting to ' 4,086.66 lakhs for the assessment year 2020-21 which was raised by an assessing officer by way of issue of an assessment order dated September 30, 2022 under Section 143(3) of Income Tax Act, 1961. The matter is pending before CIT(A) and is expected to come up for hearing in due course.

(iii) Company has filed an appeal before the Hon’ble Commissioner of Income Tax Appeals at Chennai (the “appellate authority”) as aggrieved by an order of Assessing officer, Chennai under Section 143(3) of Income Tax Act 1961 which was passed against our Company. This matter pertains to the bogus purchases and cash credits during the Financial Year 2020-21 and disallowance u/s 14A which resulted in a tax demand amounting to ' 1,154.35 Lakhs for the assessment year 2021-22 which was raised by an assessing officer by way of issue of an assessment order dated December 31, 2022 under Section 143(3) of Income Tax Act, 1961. The matter is pending before CIT(A) and is expected to come up for hearing in due course

(b) Fair Value Hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

(c) Valuation Technique used to determine Fair Value:

Specific valuation techniques used to value financial instruments include:

• Use of DCF for Unquoted instruments

NOTE 33 - FINANCIAL RISK MANAGEMENT

The Company’s activities expose to limited financial risks: market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

Market risk

Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), Interest rate risk and the market value of its investments.

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. It principally arises from the Company’s Trade Receivables, Retention Receivables, Advances and deposit(s) made.

Trade receivables

The company has outstanding trade receivables amounting to'253,27,59,828 as at March 31,2023 and'121,05,84,692 as at March 31, 2022 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers. Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The company is not exposed to concentration of credit risk to any one single customer. Default on account of Trade Receivables happens when the counterparty fails to make contractual payment when they fall due.

Trade receivables are impaired in the year when recoverability is considered doubtful based on the recovery analysis performed by the company for individual trade receivables. The company considers that all the above financial assets that are not impaired and past due for each reporting dates under review are of good credit quality.

Liquidity Risk

Our liquidity needs are monitored based on the monthly and yearly projections. The company’s principal sources of liquidity are cash and cash equivalents, cash generated from operations, Term loan from Banks, and Contribution in the form of share capital.

We manage our liquidity needs by continuously monitoring cash inflows and by maintaining adequate cash and cash equivalents. Net cash requirements are compared to available cash in order to determine any shortfalls.

Short term liquidity requirements consist mainly of sundry creditors, expense payable, employee dues, repayment of loans and retention & deposits arising during the normal course of business as of each reporting date. We maintain a sufficient balance in cash and cash equivalents to meet our short-term liquidity requirements.

We assess long term liquidity requirements on a periodical basis and manage them through internal accruals. Our non-current liabilities include Unsecured Loans from Promoters, Term Loans from Banks, Retentions & deposits.

The table below provides details regarding the contractual maturities of non-derivative financial liabilities. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

Foreign currency exchange rate risk

The fluctuation in foreign currency exchange rates does not have material impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. The company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks and the impact of which is found to be immaterial.

The period end balances are not necessarily representative of the average debt outstanding during the period. Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure.

In order to maintain or adjust the capital structure, the Company may adjust the number of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets or by adequate funding by the shareholders to absorb the losses of the Company.

The Company’s capital comprises of equity share capital, retained earnings and other equity attributable to equity holders. The primary objective of Company’s capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it considering the changes in economic and market conditions. The total share capital as on March 31, 2023 is '22,10,70,240 (Previous Year: '21,00,20,240)

(i) General description of various defined employee benefit schemes is as under:

a) Provident Fund:

The company’s Provident Fund is managed by Regional Provident Fund Commissioner. The company pays fixed contribution to provident fund at pre-determined rate.

b) Gratuity:

Gratuity is a defined benefit plan, provided in respect of past services based on the actuarial valuation carried out by LIC of India and corresponding contribution to the fund is expensed in the year of such contribution.

The scheme is funded by the company and the liability is recognized on the basis of contribution payable to the insurer, i.e., the Life Insurance Corporation of India. However, the disclosure of information as required under Ind AS-19 have been made in accordance with the actuarial valuation.

For the year ended 31st March, 2023

The company has recognised a diminution in the value of investments of ' 24.73 lakhs in the statement of profit & loss as an exceptional item pursuant to IND AS 107 - Financial Instruments which requires to measure the investment at fair value through P&L.

For the year ended 31st March, 2022

There is an exceptional income item of ' 1,342.61 lakhs during the current quarter which is pertaining to the Income Tax demand provision created for the IT case pending with ITAT for the AY 11-12. However, ITAT has passed the order on 07/02/2022 in favour of the company. Hence, the company has reversed the income tax demand provision of ' 1,342.61 lakhs. Also there is an exceptional expense item of ' 5 lakhs pertaining to write off of the investment made in the subsidiary during the year (i.e., Vituza solar energy limited) which is under the process of striking off. In view of the same consolidation of the Financial Statements of the Company is not required as there is no other subsidiary in place as on March 31, 2022.

NOTE 42 - ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III

(i) Details of Benami Property held

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) Borrowing secured against current assets

The company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(iii) Wilful defaulter

The company have not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(v) Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) Utilisation of borrowed funds and share premium

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 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(s) or entity(ies), 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

(viii) 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 account.

(ix) 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.

(x) 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.

NOTE 43 - The figures for the corresponding previous year have been regrouped / reclassified wherever necessary, to make them comparable.

NOTE 44 - APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved for issue by the Board of Directors on 18/05/2023