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