Notes to Accounts of Venlon Enterprises Ltd.

Mar 31, 2025

(b) Terms/ rights attached to equity shares

i. The Company has only one class of equity shares having a par value of Rs. 5/- per share. Each holder of equity share is entitled to one vote per share.

ii. No dividend was proposed for the current or the previous financial year

iii. In event of liquidation of the Company, the holders of equity shares would 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.

iv. Of the above, 3,04,32,390 equity shares of Rs.5/- each fully paid up has been allotted to non-residents on non-repatriation basis.

v. There have been no shares allotted as fully paid up by way of bonus shares or shares allotted as fully paid up pursuant to contract without payment being received in cash during five years immediately preceding March 31, 2025

vi. There are no shares bought back during 5 years immediately preceding March 31,2025

*Note: The Company had received an interest-free loan (ECB) of USD 13.85 million in various tranches starting from FY 2002-03 from a shareholder holding a 29% stake in the company. Partial repayments of USD 0.50 million and USD 1.23 million were made in 2009 and 2016, respectively. The repayment terms were extended multiple times, each without any interest or enforcement by the shareholder.

During the year, the Company has negotiated and entered into an MOU with the lender for currency swap from USD to INR of the outstanding amount. These matters are also subject to approval of the statutory and regulatory authorities. Additionally, the lenders have agreed for a moratorium period and have extended the repayment schedule starting from April 2030. These loans do not carry any interest.

In view of the long-standing non-recourse nature of the arrangement and absence of any repayment demand from the lender, and the fact that the amount is now settled or otherwise dealt with solely at the discretion of the Company, the loan has been reclassified as Other Equity as at March 31, 2025

i) Contingent Liability & Commitments not provided for:

The Company is a defendant in certain pending court cases filed by suppliers and employees. These cases, initiated suppliers and former employees, relate to disputed payments for goods supplied and services provided. The company has contested these claims and, based on legal advice, believes it has strong grounds for a favorable outcome. The estimated aggregate amount of these claims is Rs 32 lakhs. As the outflow of resources to settle these disputes is considered not probable, no provision has been recognized in the financial statements as of the reporting date. The final outcome of these legal proceedings may differ from this assessment, and the company will continue to monitor the developments closely.

ii) There are no contracts that are yet to be executed that would have a significant impact on the financial position of the company

iii) No dividend was proposed for the current or the previous financial year

iv) There is no amount due and outstanding to be credited to Investor Education and Protection Fund.

v) The Company has not entered into any forward contracts

The Company has a net Deferred Tax Asset (DTA) of Rs. 2844.98 Lacs (Previous Year: Rs. 2049.67 Lacs) arising from temporary differences related to depreciation and other components. In accordance with Ind AS 12: Income Taxes, the DTA has not been recognized in the financial statements. This is based on a detailed assessment of the Company’s business plan and financial projections, which indicate that it is not probable that sufficient future taxable profits will be available against which the deferred tax asset can be utilized

vii) The Company has stopped operations in all the segments including the windmill. Hence segment results are not applicable for the company.

xi) Confirmation from certain parties for amounts due to them/amount due from them as per accounts of the Company has not been received. Necessary adjustment, if any will be made when the accounts are reconciled/settled.

x) The company has filed Income Tax Returns upto the Assessment Year 2024-25. There are no demands outstanding. In view of loss for assessment year 2024-25, the company has been advised that there is no liability to income tax and accordingly no provision has been made.

Note No. 26

xiv Financial instrument - Accounting, Classification and Fair Values

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments. The details of significant accounting policies, including the criteria for recognition, basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in notes forming the part of the financial statements.

xiv Financial instrument - Accounting, Classification and Fair Values (Cont''d)

(b) Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. The Company does not have any financial instrument which have been measured using the valuation techniques as per level 1.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using 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). The Company does not have any financial instrument which have been measured using the valuation techniques as per level 2.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair value is determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The Company does not have any financial instrument which have been measured using the valuation techniques as per level 3.

(i) Other financial assets, cash and cash equivalents, trade receivables, trade payables and other financial liabilities are stated at carrying value which is approximates their fair value.

(ii) All borrowings except one have variable interest rate which gets adjusted yearly based on the change in interest rate. The borrowing which is at fixed rate approximates the market interest rate. Hence the carrying value approximates the fair value.

(iv) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(v) There have been no transfers between Level 1 and Level 2 during the reporting year. xv Capital management

The capital structure of the Company consists of share capital comprising of equity share capital, debt, cash and cash equivalents accumulated reserves like general reserve, retained earnings, capital reserve and securities premium, other comprehensive income as disclosed in the statement of changes in equity.

The Company’s capital management objective is to achieve an optimal weighted average cost of capital while continuing to safeguard the Company’s ability to meet its liquidity requirements and repay loans as they fall due.

xvi Financial risk management objectives and policies

The Company’s principal financial liabilities comprises of borrowings, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade and other receivables, and cash that derive directly from its operations.

The Company is exposed to the following risks from its use of financial instruments:

(a) Credit risk

(b) Liquidity risk

(c) Market risk

The Company’s Board of Directors has the overall responsibility for the establishment and oversight of the Company''s risk management framework. This note presents information about the risks associated with its financial instruments, the Company’s objectives, policies and processes for measuring and managing risk.

(a) Credit risk

The Company is exposed to credit risk as a result of the risk of counterparties defaulting on their obligations. The Company’s exposure to credit risk primarily relates to trade receivables. The Company monitors and limits its exposure to credit risk on a continuous basis. The Company’s credit risk associated with trade receivable is primarily related to customers not able to settle their obligation as agreed upon. To manage this, the Company yearly reviews the financial reliability of its customers, taking into account their financial condition, current economic trends and analysis of historical bad debts and ageing of trade receivables.

Financial instruments that are subject to such risk, principally consist of investments, trade receivables, loans, other financial assets and cash. None of the financial instruments of the Company results in material concentration of credit risks Maximum exposure to credit risk of the Company has been listed below:

The Company applies the simplified approach to provide for expected credit losses prescribed by Ind AS 109, Financial Instruments which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected credit losses based on a provision matrix which uses historical credit loss experience of the Company. Forward-looking information (including macroeconomic information) has been incorporated into the determination of expected credit losses.

(b) Liquidity risk

The Company is exposed to liquidity risk related to its ability to fund its obligations as and when they become due. The Company monitors and manages its liquidity risk to ensure access to sufficient funds to meet operational and financial requirements. The Company has access to credit facilities and monitors cash and bank balances on a regular basis. In relation to the Company’s liquidity risk, the Company’s policy is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses.

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(c) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

xvii Additional Notes

a) The Company had not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

b) The Company was not holding any benami property and no proceedings were initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

c) The Company had not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

d) The Company did not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

e) The Company has not traded or invested in Crypto currency or Virtual Currency during year ended 31 March, 2025.

f) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) any funds to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g) The Company has not received any funds from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

h) The Company did not have any transaction which had not been recorded in the books of account that had been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

i) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period read with Point xi

xviii Subsequent events

No material events have occurred between the balance sheet date to the date of issue of these financial statements that could affect the values stated in the financial statements as at 31 March 2025.

xix Prior year comparatives

Prior year amounts have been regrouped/reclassified wherever necessary, to conform to the current years’ presentation. The impact of such reclassification/regrouping is not material to the financial statements.

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Mar 31, 2024

XIX Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risk specified to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as finance cost.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.

Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.

Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.

Exemptions from retrospective application of IND-AS

(i) Fair value as deemed cost

The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the transition date.

(ii) Cumulative translation difference

(iii) Long Term Foreign Currency Monetary Items

The Company continues the policy of amortizing capitalised exchange differences arising on translation of long term foreign currency monetary items upto the period ending immediately before the beginning of the first Ind AS financial reporting period i.e. 31st March 2017 as per the previous

GAAP.

xx) The company has accumulated losses mainly on account of depreciation , impairment loss on account of reclassification of asset and foreign exchange fluctuation loss as per Ind AS which are non-cash flow expenditure, and its net worth has been fully eroded. company''s current liabilities exceeded its current assets as at the balance sheet date. The financial statements of the company have been prepared on a going concern basis during the next one year for the reasons stated below:

a) The Company has started trading in formaldhyde and para formaldhyede and is expected to continue which will help the compay meet its operating expenses.

b) The Company has negiotated with other lenders for restructuring the intercorporate loans and External Commercial Borrowings, The lenders of ECB has agreed for a moratruim period upto April 2025. The loan will be repayble in 10 annual installments starting from April 2025. These loans do not carry any interest

c) Certain related parties who had given loans to the Company has agrred to purchase lands from the company and has agreed to adjust these loans against these consideration for purchase of land. Pending registration this is accounted as advance for purchase of land. This transaction is carried out in pursuant to shareholders approval

xxi Discontinued operations

a) Description:

In Septemebr 2018 the Company announced the discountinuation of its operation in Film Segment due to adverse market conditions. During the year Company has also disposed of its windmill and stopped operations in that segment. The non-current assets of these segments are classified as assets held to sale. Company has leased its

entire facility of Formaldhye and Paraformaldhye plant to Dechem Resins Limited. Consequent to this copmany has stopped production of formaldhyde and Paraformaldhye

b) Financial performance

Sales from Discountined operation during the year is Nil Lakhs (Previous year 304.68 Lakhs), Expenses related to Discountinued operations Rs Nil Lakhs (Previous year Rs 3619.21 lakhs). Theses Sales and expenses are included in the respective heads of account in the Profit and loss statement in the financial statements. Loss from Discountinued operations during the year is Rs Nil Lakhs (Previous year Profit 3314.52 Lakhs) Value of NonCurrent assets classified as assets held for sale is Rs Nil lakhs. (Previous year Rs 200 lakhs)

xxii All the current assets and current liabilites are subject to reconcilliations and Confirmations

xxiii Consequent to discontinuance of operations of film plant, plant and machinery relating to film is written down to 5% of the original cost, being the scrap value as estimated by the management of the Company. The management based on its judgement expected to sell these assets at this value during 2022-23. Company has received firm commitments to buy these assets and Company expectes to sell the same during 2022-23. Company has also received firm commitments from certain parties for purchase of land of the Company. Hence they are classified as assets held for sale valued at Rs 1119.40 lacs

xxiv Other Comprehensive income includes Rs 328.07 (loss) (PY 312.39 (Profit)) lacs being exchange flucation loss on loans demomiated in foreign currency recognised as per IND AS 21.

Per our Report of Even Date For Laxminiwas & Co Chartered Accountants

ICAI Firm registration number: 011168S sd/- sd/-

C. D. DATWANI SAROJ. C. DATWANI

sd/- Managing Director Director/ CFO

Gaurav Jashwanth Shah DIN: 00355181 DIN: 00355148

Partner

Membership No. 229420 sd/-

Place: Mysore G.D. Rama Rao

Date: August 14, 2024 Company Secretary

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Mar 31, 2015

1. TERMS/RIGHTS ATTACHED TO EQUITY SHARES

I The Company has only one class of equity shares having a par value ofRs 5 f- per share IHach holder of equity -share 1% emilled to one vale per share li During 1hc current year, the aroounT of dividend p« yhare rnrogn ized as distnhuiion IP equity shareholders was Ks N) L < Previous year Rs NIL)

2. In evenlof liquidation uf*C Ctimpeny, the holden qf equity shares would be entitled to reteive remain inf aseds of 6* Company, iiflti distribution of all pre leTential amounls Tlsc d isfrihutinn will he m proportion lo ihc number of equity shares held by the Shareholders

3. Of the slmt. 3jM.3Z.39G equity shares of Hs.V- each fully paid up has hetfl alknied lo non-residenls cm iwn-repaJrial inn basis

(i) fish credit From banks are seen red:

(a) by way of first Paripeeau charge cut hypothecation of Company's entire stock-in-trade consisting of raw materials, uod-mpKSSS, finished goods, consumables stores and spares and Teceivables/book debts, both present and future,

(b) by way of first pari passu charge on hypothecation of all existing and future movable assets and Other fixed assets i e. . the plant and machinery at the company's existing plan* at Belavadi Industrial Area. Mysuru,

(c) by way of first pan passu charge by Equitable mortgage of factory Land and Building belonging to the company at Bdavadi Industrial Area. Mysuru. and

(dl funher secured by personal guarantee of the Chairman & Managing Director and the Executive Director (c) Cash credit from hanks cam interest rate -Si; 15 .35% p.a

4. The I,nans from other parties are received from Chairman &. Managing Director. Executive Director of the Company and other entities in which the directors are interested at the interest rate of 13 5% p a. and is repayable on demand.

5. There is no amount due and outstanding lo he [mined to Investor Fduralion and PtntecHim F und E

6. The Comftany lias, nut entered into any forward contracts to miligalc its risks associated with toreian currency fluctuations having undcrly mg transactions and relating 10 firm commitments nr highly- pruhahle forecast trail saci uui.s The company does not emcr inm anv- torn aid contract which is intended for Hading or specula! iv e purposes

6. FAS required by I'ara-tbA of Hie Accounting .klandard AS 1 i issued by The Institute of (.'haltered Aecmimanis of India " Thy FFTeeiy (if Changes m Foteign Exchange tales", during ihu cuncnt financial year translation loss ansing cm account of variation in external commercial borrowing outstanding at the year end has been capitalized to I he extent of Rs 7.1.34.44m utilized in acquit mg capital assets I-urt her 1he Foreign Exchange translation Loss ol'Fts 2,43115 S31 arising there on lues been accounlcd under "Foreign Currency Monetary Hem Translation Difference Account" Accordingly, the balance in ihc said accoum will be amortized over ihe balance lenur ol" loan (uplo 3i" March 2u2ii i Due to ihe change in accounting practice, m accordance with Accounting Standard AS-l I of The Institute of Chartered Accountanis ot'lndu. ihe loss js lower by Ks 3.12.14.iNS after current year amort izuLron of Rs 5,16,1 S2.

7) The company has taken steps to receive cnnsi stoutly quality power tram the power grid, resulting in cconomicallv dahle production if (is ily Further, ihe Company has incurred capital expenditure [hat will increase the capacity of the formaldehyde and Para Formaldehyde plants totwice ils ptosem capacity. Accordingly, the management is of the view- tli.it virtue I certa inly exists regarding sufliriem future mcomci'laxablc income accruing lo the eompany and consequently the past lu-wes are expected to be wiped off Therefore Ihe eompany has recognized the Deterred Tax Asset in the books of Account Ftorrowrngcosts capMahscd during the v ear is Rs 72,87.741/- (PY NJ!.) H I ore on currency translation difference capitalised during 1he year is Rs 73,34,449/- 1 There are no employees who are in receipt of remuneration in tbe aggregate al Ihe rate of not Fess 1han R s '-.(Xin.fifyV- per annum or 500 OOOi- |ier month in respect of part of the year during ihe year

8. Inter-dmsion transfers of goods aggregating to a value of Rx 11 ,-BS ,7S. I OB/- for iniemal use as captive consumption ate disclosed as conn a-, items m Profit and Loss Statement to reflect the into economic value of Production rnter-ve the divisions. This treatment of i.ntra-dmsion transfers differs from the Ircatmenl recommended by Accounting Standard -9 1 Revenue EievugpiLion) presenbed by the Companies iAccnuntmg SundardsJ Rales. 2fKl6 AcMinJingjy. the sales and raw material consumption figures are higher by Rsl I SS "H I -OS/- accounting neaimenl has nn impact on the results of the company

9 Confinnstion Ifom ccnam parlies tinr amounts due to Lhemruinoutil due Irom lliem as pet uccormis of the Cumpuns Han mu hceit received Necessarx adjustment. ifsnv uill be mode when [he iccuunla are i rainn led/KSI led

Excise Dun- approximately Its 20 97 tacs (hwkws yea# Rs.29 76 lacs I on slock assailing clearance has been considered in vuluidiurt of finished

10. he Income lax assessments of (he company have been completed upto the Assessment year 2012-13 There are no demands Outstanding. In vie* of loss lot assessment year 2015-16, the company has been advised that there is JIO liability to income to* and accordingly no provision has been made.

RELATED PARTY Disclosure

A. Relaship:

1. subsidaries NILL

2. Key management person (kmp) and their relatives

Mr. C D Datwani

Mrs. Saroj c dATWANI

3. OTHER RELAT PARTIES (IN WHICH EITHER OF THE DIRECTORS OR THERI)

Ahha Finance Pvt l.rd

C iftd Rftd Fsliihf Pvi

Divine PdIy Hylic IM Ltd

Father H Son bivcstiimts Pvt. Lid

Father £ Son Oven ms Pit Ltd

Kamadhcnti Residency Pvt. Ltd.

MhJipmti Realtors Pvt. Ltd

Sanchay Kes idency Pvt. I .td.

Sanchit Rvaltnrs IM ltd

Sangjxl Residency Pn. Ltd

Sinjo Residency Pvt Ltd.

Sotoj Rrsidenry Pu Lid.

Venlom Investments Pvt I.1d

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Mar 31, 2014

1. Terms/ rights attached to equity shares

i. The Company has only one class of equity shares having a par value of Rs. 5/- per share. Each holder of equity share is entitled to one vote per share ii. During the current year, the amount of dividend per share recognized as distribution to equity shareholders was Rs.NIL. (Previous year Rs. NIL)

iii. in event of liquidation of the Company, the holders of equity shares would be entitled 10 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

2. (i) Cash credit from bank* are secured:

(a) by way of first paripassu charge, on hypothecation of Company''s entire stock-in-trade consisting of raw materials. stock-m process, finished goods.

consumables stores and. spores and receivables/book. debts, both present and future,

(b) by way of first paripassu charge, on hypothecation of all existing and future movable assets and other fixed assets i.e..., the plant and machinery at The company''s existing plant at Belavadi industrial .Area, Mysore.

c) by way of first paripassu charge, or Equitable mortgage of factory land and Building belonging in the company at Belavadi Industrial Area. Mysore,, and

(d) further secured by personal guarantee of the Chairman & Managing Director and the Executive Director e) Cash credit from banks carry interest rate @ 13.75% p.a.

(ii) The Loans from other parties are received from Chairman & Managing Director . Executive Director of the Company and other entities in which the directors arc interested at the interest rate of 13.5% p.a is repayable on demand.

3. The Aggregate Market Value of Investments in Equity Shares as at 11.03.2014 is Rs 13,19,302/- ( PY Rs. 11,79,900 )

(a) Net Asset Value of SBI Capital Protection Oriented Fund Series !f as at 31.01.2014 is Rs 31,32,025

(b) In view of the Company''s long term investment strategy no provision is considered necessary in respect of diminution, if any, in the Market value of securities field by the Company

4. A Contingent Liability & Commitments not provided for:

A Bank Guarantee furnished to court in respect of pending legal matter Rs 28 lakhs.

B Estimated amount of contracts remaining to be executed on Capital Account (net of advances) and not provided for is Nil

C Proposed Dividends; Figures in Rs

The amount of dividends proposed to he distributed to; 31st March, 2014 31st March, 2013

Equity Shareholders Nil Nil D There IS no amount due and outstanding to he credited to Investor Education and Protection Fund.

E (i) The Company has not entered into any forward contracts to mitigate its risk associated with foreign currency fluctuation having underlying transactions and relating firm commitments Or highly probable forecast transactions The company does not enter into any forward contract which is intended for trading or speculative purpose.

(ii) As required by Para 46A of the Accounting Standard AS 11 issued by The Institute of Chartered Accountants. of India " The Effects of "Changes in Foreign Exchages rates", during the current financial year the company has changed the accounting practice because of which translation loss arising on account of variation in external commercial borrowing outstanding at the year end has been capitalized to the extent of Rs. 173,84,448 utilized in acquiring capital assets. Further the Foreign Exchage translation loss of Rs 5,33,75.723 arising there on has been accounted under "Foreign Currency Monetary Item Translation Difference Account" Accordingly, the balance in the said account will be amortized over the balance tenor of loan (upto 31st March 2026). Due to the change in accounting practice, in accordance with AccountingSiandurd AS-11 of The Institute of Chartered Accountants of India, the loss is lower by, Rs 7,07,60,171.

F i) The company has Steps to receive consistently quality power from the power grid, resulting in economically viable Production activity. Further, the company has incurred capital expenditure that will increase the capacity of the Formaldehyde and Para Formaldehyde plants to twice its present capacity. Accordingly, the management is of the view that virtual certainty exists regarding sufficient future income/taxable income accruiing to the company and consequently the past losses are expected to be wiped off Therefore the company has recognized the Deferred Tax Asset in the books of Account

G. Borrowing Cost capitalised used during the year is Rs. 1,73,84,448

H There are no employees who are in receipt of'' remuneration in the aggregate at the rate of not less than Rs. 6,000,000/- pet annum or 500,000/- per month in respect of pan of the year during the year

I Inter-division transfers of goods aggregatng to a value of Rs. 14,11,58,013 for internal use as captive consumption are disclosed as contra-items Profit and Loss Statement to reflect the true economic value of production inter-se the divisions. This treatment of intra-division transfers differs from thee treatment recommended by Accounting Standard - 9 (Revenue Recognition'') prescribed by the Companies (Accounting Standards) Rides, 2006. Accordingly, the sales and raw material consumption figures are higher by Rs. 14,11,58,013/- This accounting treatment has no impact on the results of the company.

J Confirmation from certain paties for amounts due to them/amount due from them as per accounts of the Company has not been received. Necessary adjustment if any will be made when the accounts are reconciled/settled

K Excise Duty approximately Rs.29.76 lacs (Previous year Rs 13.16 lacs) on stock awaiting clearance has been considered in valuation of finished goods

L The Income tax assessments of the company have been completed upto the Assessment year 2011-12 There are no demands outstanding. In view of loss for assessment year 2014-15, the company has been advised that there is no liability to income tax and accordingly no provision has been made

M Previous Years figures have been regrouped, rearranged, reclassified and restated wherever necessary.

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Mar 31, 2013

(A) Terms/ rights attached to equity shares

i. The Company has only one class of eqjily shares having a par value of Rs 5/- per share. Each holder ofequity share is entitled to one vote per share

ii. During the current year, the amount of dividend per share recognized as distribution to equity shareholders was Rs NIL (Previous year Rs.NIL)

iii In event of liquidation of the Company, the holders of equity shares would 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

iv Of the above, 3,04,32,390 equity shares of Rs.5/- cach fully paid up has been allotted to non-residents on non-repatriation basis

The Aggregate Market Value of Investments in Equity Shares as at 31.03.2013 is Rs. 11,79,900 (I*Y Rs 9,28,132 )

(b) Net Asset Value of SB1 Capital Protection Oriented Fund Series II as at 3) .03.2013 is Rs. 11.88 Market Value oflnvestments in Mutual fund as ai 31.03.2013 is Rs.29,70,000

(c) In view of the Company''s long term investment strategy no provision is considered necessary in rcspcct of diminution, if any. in the Market value of securities held by the Company

A Contingent Liability & Commitments not provided for

a Guarantee to Banks against security furnished to court in respect of pending legal matter Rs.28 lakhs

B Estimated amount of contracts remaining to be executed on Capital Account (net of advances) and not provided for is Nil.

C There is no amount due and outstanding to be credited to Investor Education and Protection Fund The Company has rot entered into any forward contracts to mitigate its risks associated with foreign currency fluctuations having underlying transactions and relating to firm commitments or highly probable forecast transactions The company does not enter into any forward contract which is intended for trading or speculative purposes

Deferred Tax Asset (net) on account of the timing differences, (depreciation and other components) has been computed at Rs. 128.05 lacs, which are considered adequate Deferred Tax Asset has not been recognised in the books as a matter of prudcncc Consequently the deferred tax liability of Rs 150 36 Lacs has been credited to the statement of profit and loss This is in accordance with the Accounting Standard AS-22 issued by the Institute of Chattered Accountants of India and as prescribed by the Companies (Accounting Standards) Rules,2006. Major components of deferred tax asset arising on account of timing differences is Depreciation Rs. 1886.22 lacs & unabsorbed business loss Rs.20l4.271acs)

D Borrowing Cost capitalised during the year is Nil.

E There are no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs.6,000,000/- per annum or 500,000/- per month in respect of part of the year during the year.

F Inter-division transfers of goods aggregating to a value of Rs 45.993,233/* for internal use as captivc consumption arc disclosed as contra-itcms in Profit and Loss Statement to reflect the true economic value of Production inter-se the divisions. This treatment of inlra-division transfers differs from the treatment recommended by Accounting Standard - 9 (Revenue Recognition) prescribed by the Companies (Accounting Standards) Rules, 2006 Accordingly, the sales and raw material consumption figures are higher by Rs.45,993,233/- This accounting treatment has nc impact on the results of the company.

G Confirmation from certain parties for amounts due to them/amount due from them as per accounts of the Company has not been received. Necessary adjustment, if any will he made when the accounts are reconciled/settled.

H Excise Duty approximately Rs. 13.16 lacs (Previous year Rs 28.01 lacs) on stock awaiting clearance has been considered in valuation of finished goods

I The Income tax assessments of Lhe company have been completed upto the Assessment year 2011-12. There arc no demands outstanding. In view of loss for assessment year 2013-14, the company has been advised that there is no liability to income tax and accordingly no provision has been made.

* Includes scrap sales amounting to Rs 0.59 Lacs (P.Y Rs.O 86 Lacs)

* * Includes scrap sales amounting to Rs.04 lacs(P. Y. Rs.7 69 Lacs) -

*-* includes scrap sales amounting to Rs 12.76 Lacs(P.Y. Rs 17.72 Lacs)

J Polyester film turnover for the current year does not include films which arc capttvely consumed, whereas Polyester film turnover for the previous year includes 240 Tonnes of films valued at Rs.266.94 Lacs which were captivcly consumed.

K $ Formaldehyde includes 3,538 Tonnes (P.Y 4,135 Tonnes) of Formaldehyde valued Rs.459 93 Lacs (P.Y. Rs 511 95 Lacs) '' which are captively consumed

L Related Party Disclosure:

A. Relations hire:

1. Subsidiaries

2. Key Management Personnel (KMP) and their Relatives Directors:

Mr Cbantt D Datwam

Mrs. Saroj C Datwani

Mr. SV Jain 1 .

Relatives of Directors :

Ms. Abh a Datwani

3. Other Related Parties (in which either of the directors or their relatives have significant influence)

Abha Finance Pvt. Ltd C and A Real Estate Pvt. Ltd.

Divine Poly Plastic Pvt, Ltd, .

Father & Son Investments Pvt. Ltd.

Father & Son Overseas Pvt. Ltd.

Kamadhenu Residency Pvt. Ltd.

Mid town Realtors Pvt. Ltd

Sanchay Residency Pvt. Ltd.

Sanchit Realtors Pvt. Ltd.

Sangeet Residency Pvt. Ltd

Saroj Residency Pvt. Lid.

Venion Investments Pvt. Ltd,

M Previous years figures have been regrouped, rearranged, reclassified and reslated wherever necessary.

---

Mar 31, 2012

(a) Terms/ rights attached to equity shares

i. The Company has only one class of equity shares having a par value of Rs. 5/- per share. Each holder of equity share is entitled to one vote per share

ii. During the current year, the amount of dividend per share recognized as distribution to equity shareholders was Rs.NIL (Previous year Rs.NIL)

iii. In event of liquidation of the Company, the holders of equity' shares would be entitled to receive remaining assets of the Company, after distribution of all preferennal

iv. Of the above, 3,04,32,390 equity' shares of Rs.5/- each fully paid up has been allotted to non-residents pursuant to EGM approval on 20th October 2009 on non-repatriation basis and is non-transferrable until 23rd October 2012.

(a) Term loan from ICICI bank is secured by hypothecation of vehicle. The loan carries an interest rate of 10.92% p.a. and repayable in 59 Equated Monthly Installments beginning from 10th February 2008

(b) Term loan from Tata Capital Limited is secured by hypothecation of vehicle and carries an interest rate of 12.27% p.a. and is repayable in 60 Equated Monthly Installments beginning from 31st May 2008

(c) The interest free unsecured term loan from other parties is repayable in 10 equated annual installments commencing from 31st March 2017

(i) Cash credit from banks are secured:

(a) by way of first Paripassu charge, on hypothecation of Company's entire stock-in-trade consisting of raw materials, stock-in-process, finished goods, consumables stores and spares and receivables/book debts, both present and future,

(b) by way of first paripassu charge, on hypothecation of all existing and future movable assets and other fixed assets i.e.., the plant and machinery at the company’s existing plant at Belavadi Industrial Area, Mysore.

(c) by way of first paripassu charge, on Equitable mortgage of factory Land and Building belonging to the company at Belavadi Industrial Area, Mysore, and

(d) further secured by personal guarantee of the Chairman & Managing Director and the Executive Director.

(e) Cash credit from banks carry interest rate @ 14.25% - 15.25% p.a.

(ii) The Loans from other parties are received from Chairman & Managing Director, Executive Director of the Company and other entities in which the directors are interested at the interest rate of 13.5% p.a.& is repayable on demand.

The Aggregate Market Value of Investments in Equity Shares as at 31.03.2012 is Rs.9.28,132 ( PY Rs. 3,48,858 )

(b) Net Asset Value of SBI Capital Protection Oriented Fund Series II as at 31.03.2012 is Rs. 10.7426 Market Value of Investments in Mutual fund as at 31.03.2012 is Rs.2,685,650

(c) In view of the Company's long term investment strategy no provision is considered necessary in respect of diminution, if any. in the Market value of securities held by the Company

(a) Fixed Deposits of Rs Rs. 15,000,000 ( P Y Rs. 15,000.000 ) with bank represents security deposits against borrowings

(b) Fixed Deposits of Rs Rs. 5,00,000 ( P Y Rs.5,00.000) with bank represents margin money against guarantee issued.

(c) The balance in operative bank accounts have been reconciled, while the balance in non-operative bank accounts are subject to reconciliation.

NOTE 1: OTHER ADDITIONAL NOTES / INFORMATION

A Contingent Liability & Commitments not provided for:

a Guarantee to Banks against security furnished to court in respect of pending legal matter Rs.28 lakhs, b. Others

i) Commercial tax (Entry tax) Rs. 35,56,435/- B Estimated amount of contracts remaining to be executed on Capital Account (net of adv ances) and not provided for is Nil.

C Proposed Dividends; Figures in Rs

The amount of dividends proposed to be distributed to: 31st March. 2012 31st March. 2011

Equity Shareholders - -

D There is no amount due and outstanding to be credited to Investor Education and Protection Fund.

E The Company has not entered into any forward contracts to mitigate its risks associated with foreign currency fluctuations having underlying transactions and relating to firm commitments or highly probable forecast transactions. The company does not enter into any forward contract which is intended for trading or speculative purposes.

The timing differences, (depreciation and other components) on account of the Deferred Tax Liability has been computed at Rs.150.36 lacs, which are considered adequate. Consequently the excess deferred tax liability of Rs. 325.72 Lacs has been credited to the statement of profit and loss. This is in accordance with the Accounting Standard AS-22 as prescribed by the Companies (Accounting Standards) Rules,2006. Major components of deferred tax liabilities arising on account of timing differences is Depreciation Rs. 1909.88 lacs.

F Borrowing Cost capitalised during the year is Nil.

G The Company's leasing arrangements are mainly in respect of office premises, w hich has been determined on 31st December, 2011. The aggregate lease rental payable on these leasing arrangements is charged as rent under "Administrative expenses" in Note-29 (iv). The company has placed a refundable security deposit of Rs NIL (Previous year Rs.34,76.160/-) in respect of these leasing arrangements.

H There are no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs.6,000.000/- per annum or 500.000/- per month in respect of part of the year during the year.

Inter-division transfers of goods aggregating to a value of Rs 77.933,751/- for internal use as captive consumption are disclosed as contra-items in Profit and Loss Statement to reflect the true economic value of Production inter-se the divisions. This treatment of intra-division transfers differs from the treatment recommended by Accounting Standard - 9 (Revenue Recognition) prescribed by the Companies (Accounting Standards) Rules. 2006. Accordingly, the sales and raw material consumption figures are higher by Rs.77,933,751/-. This accounting treatment has no impact on the results of the company.

I Confirmation from certain parties for amounts due to them/amount due from them as per accounts of the Company has not been received. Necessary adjustment, if any will be made when the accounts are reconciled/settled.

J Excise Duty approximately Rs.28.01 lacs (Previous year Rs.20.17 lacs) on stock awaiting clearance has been considered in valuation of finished goods.

K The Income tax assessments of the company have been completed upto the Assessment year 2010-11. There are no demands outstanding. In view of loss for assessment year 2012-13. the company has been advised that there is no liability' to income tax and accordingly no provision has been made

* Includes scrap sales amounting to Rs.0.86 Lacs. (P.Y. Nil)

** Includes scrap sales amounting to Rs.7.69 Lacs (P.Y. Nil)

*** Includes scrap sales amounting to Rs. 17.72 Lacs (P.Y. Nil)

$ Polyster film includes 240 Tonnes (P.Y.2046 Tonnes) of Films valued Rs.266.94 Lacs (P.Y.Rs. 1848 Lacs) which are captively produced and consumed.

$$ PET Chips includes 2 Tonnes of Opening Stock (P.Y. 17 Tonnes) of Chips valued Rs.0.44 Lacs (P.Y.Rs. 13 Lacs) Which are captively produced and consumed.

$$$ Formaldehyde includes 4,135 Tonnes (P.Y. 4562 Tonnes ) of Formaldehyde valued Rs.511.95 Lacs (P.Y. Rs. 357 Lacs) ' which are captively produced and consumed.

* PET Chips includes 2 Tonnes of Opening stock (P.Y. 17 Tonnes) of Chips Valued at Rs.0.44 Lacs (P.Y. Rs.13 Lacs) Which are captively produced and consumed.

$ Methonal includes NIL Tonnes (P.Y. NIL Tonnes) of Methonal valued at Rs. NIL (P.Y.Rs. NIL Lacs), which ate captive produced and consumed.

L Related Party Disclosure:

A. Relationships:

1. Subsidiaries

2. Key Management Personnel (KMP) and their Relatives Directors :

Mr. Chand D Datwani

Mrs. Saroj C Datwani

Relatives of Directors:

Ms. Abha Datwani

3. Other Related Parties (in which either of the directors or their relatives have significant influence)

Divine Poly Plastic Pvt. Ltd.

Venlon Investments Pvt. Ltd.

Father & Son Investments Pvt. Ltd.

C and A Real Estate Pvt. Ltd.

Saroj Residency Pvt. Ltd.

Father & Son Overseas Pvt. Ltd.

Abha Finance Pvt. Ltd.

Sanchit Realtors Pvt. Ltd.

- Previous years figures have been regrouped, rearranged, reclassified and restated wherever necessary, followed for the presentation of the Financial Statements.

---

Mar 31, 2010

1 Contingent liability not provided for in Accounts: (As certified by the Management) - Nil

Aggregate Market Value of Investments Rs. 16,07,393/- (P.Y Rs. 18,30,430 /-)

2. Confirmation from certain parties for amounts due to them/amount due from them as per accounts of the Company has not been received Necessary adjustment, if any will be made when the accounts are reconciled/ settled

3. Inter division transfers of goods aggregating to a value of Rs.4224 17 Lacs for internal use as captive consumption are disclosed as contra-items in the Profit and Loss Account to reflect the true economic value of Production inter-se the divisions This treatment of intra-division transfers differs from the treatment recommended by Accounting Standard -9 (Revenue Recognition) prescribed by the Institute of Chartered Accountants of India Accordingly the sales and Raw material consumption figures are higher by Rs.4224.17 Lacs. This accounting treatment has no impact on the results of the Company

4 Excise Duty approximately Rs 26.41 Lacs (P.Y Rs 21 38 Ucs) on stock awaiting clearance have been considered in valuation of finished goods

5. The timing differences, (depreciation and other components) on account of the Deferred Tax Liability has been computed at Rs 281 lacs, which is considered adequate During the current year, although the Deferred Tax Asset has arisen on account of timing differences it has not been recognised keeping in view the angle of prudence as prescribed in Accounting Standard AS-22 issued by the Institute of Chartered Accountants of India

(b) Major components of deferred tax liabilities arising on account of timing differences is Depreciation Rs.281 lacs.

6 Advance recoverable in Cash or in kind or for value to be received (Schedule 10 - Loans & Advances) includes Rs 168 70 Lacs recoverable/to be adjusted over the period of contract with the supplier of Windmill The management has certified that the amount is considered good

7 The Companys leasing arrangements are mainly in respect of office premises The aggregate lease rental payable on these leasing arrangements is charged as rent under " Administrative expenses " in schedule 17. These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms The company has placed a refundable security deposit of Rs. 34.76 lacs in respect of these leasing arrangements

8 Payments to Suppliers as defined under the Micro, Small & Medium Enterprise Development Act, 2006, (The Act) are generally made in accordance with agreed credit terms The amount, if any, overdue as on 31.03.2010 has not been ascertained, and hence no disclosure has been made

9 In view of the Companys long term investment strategy no Provision is considered necessary in respect of diminution in the Market value of shares held by the Company,

10 Previous years figures have been regrouped, rearranged, reclassified and restated wherever necessary.

11 There are no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs. 24,00,000/- per annum or Rs. 2,00,000/- per month in respect of part of the year during the year.

12 The Company is mainly engaged in following segments

a) Film

b) Formaldehyde

c) Wind Mill

d) Paraformaldehyde

13 Disclosure on related party transactions:

a. Description of relationship and Names of related parties: Key Management Personnel: Mr Chand D Datwani

Chairman & Managing Director

14 Schedule 1 to 20 form an integral part of the Balance Sheet and Profit & Loss Account

* Includes samples/wastage of NIL Kgs (P.Y. nil Kgs) ** Includes samples/wastage of NIL Kgs (P.Y. nil Kgs)

# PET Chips includes 2759 Tonnes (P Y 2446 Tonnes) of Chips valued Rs 2249 Lacs (P.Y. RS 1870 Lacs) which are captively produced and consumed

$ Polyester film includes 1471 Tonnes (P.Y.770 Tonnes) of Film valued Rs. 1478 Lacs (P.Y. RS 872 Lacs) which are captively produced and consumed

*** Formaldehyde includes 6394 Tonnes (P.Y. 6429 Tonnes) of Formaldehyde valued Rs.497 Lacs (P.Y Rs.670 Lacs) which are captively produced and consumed ^Cntg^s.

* PET Chips includes 2759 Tonnes (P Y 2446 Tonnes) of Chips valued at Rs 2249 Lacs (P.Y. Rs 1870 Lacs) which are captively produced and consumed.

# Polyester Film includes 1451 Tonnes (P Y.770 Tonnes) of Film valued at Rs 1478 lacs (P Y Rs 872 Lacs) which are captively produced and consumed.

$ Methanol includes NIL Tonnes (P.Y. NIL tonnes) of Methanol valued at Rs NIL (P.Y. Rs. NIL Lacs), which are captively produced and consumed.

G. Expenditure in foreign currency by way of Foreign Travel Rs.9.37 lacs(P.Y. Rs.6.48 Lacs)