Notes to Accounts of Elantas Beck India Ltd.

Dec 31, 2024

(l) Provisions and contingent liabilities

Provisions are recognized when the Company has a present legal or constructive obligation as
a result of a past events, it is probable that an outflow of resources will be required to settle
the obligations, and a reliable estimate of the amount of the obligation can be made.

Provisions are determined based on the best estimate required to settle the obligation at the
Balance Sheet date. Provisions are reviewed at each Balance Sheet date and adjusted to
reflect current best estimates. Provisions are not recognized for future operating losses. If the
effect of the time value of money is material, provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as interest
expense.

Contingent liabilities are disclosed by way of a note to the financial statements when there is
a possible obligation arising from past events, the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the Company or a present obligation that arises from past events where
it is either not probable that an outflow of resources will be required to settle or a reliable
estimate of the amount cannot be made.

(m) Employee Benefits

Liabilities for wages and salaries, including non-monetary benefits that are expected to be
settled wholly within 12 months after the end of the period in which the employees render
the related service are recognized in respect of employees'' services up to the end of the
reporting period and are measured at the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.

Company has liabilities for earned and sick leaves that are not expected to be settled wholly
within 12 months after the end of the period in which the employees render the related
services. But the Company does not have an unconditional right to defer settlement for any of
these obligations, hence the entire amount of provision is presented as short-term
obligation.

The liabilities for service awards are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service. They are therefore
measured as the present value of expected future payments to be made in respect of services
provided by employees up to the end of the reporting period using the projected unit credit
method. The benefits are discounted using the market yields at the end of the reporting
period that have terms approximating to the terms of the related obligation.
Remeasurements as a result of experience adjustments and changes in actuarial
assumptions are recognized in profit or loss.

Other Post-employment obligations

The Company operates the following post-employment schemes:

(a) Defined benefit plan - gratuity and cash rewards at retirement

(b) Defined contribution plans - superannuation fund and provident fund
(a) Defined benefit plans - Gratuity and cash rewards at retirement

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity

plans is the present value of the defined benefit obligafion at the end of the reporfing period
less the fair value of plan assets. The defined benefit obligafion is calculated annually by
actuaries using the projected unit credit method.

The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering
eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan
provides a lump sum payment to vested employees at refirement, death or terminafion of
employment, of an amount based on the respecfive employee''s salary and the tenure of
employment. This plan is funded.

The Company also has ''Cash reward at refirement'' plan which provides a payment of Rs.
2,500 for each year of service rendered at the fime of normal refirement. This plan is
unfunded.

The liability or asset recognized in the balance sheet in respect of defined benefit plans is the
present value of the defined benefit obligafion at the end of the reporfing period less the fair
value of plan assets (as applicable). The defined benefit obligafion is calculated annually by
actuaries using the projected unit credit method.

The present value of the defined benefit obligafion is determined by discounfing the
esfimated future cash outflows by reference to market yields at the end of the reporfing
period on government bonds that have terms approximating to the terms of the related
obligafion.

The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligafion and the fair value of plan assets. This cost is included in employee
benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in
actuarial assumpfions are recognized in the period in which they occur, directly in other
comprehensive income. They are included in retained earnings in the statement of changes in
equity and in the balance sheet.

Changes in the present value of the defined benefit obligafion resulfing from plan
amendments or curtailments are recognized immediately in profit or loss as past service cost.

(b) Defined contribution Plans - Superannuation Fund, Provident Fund and National Pension
Scheme (NPS)

The Company contributes on a defined contribution basis to Employees'' Provident Fund,
National Pension Scheme and Superannuation Fund. The contribution towards Provident
Fund is made to regulatory authorities and contribution towards Superannuation Fund and
National Pension Scheme is made to Life Insurance Corporation of India. Such benefits are
classified as defined contribution plans as the Company does not carry any further
obligations, apart from the contributions made on a monthly basis. Contributions are
recognized as employee benefit expense when they are due.

Termination benefits

Termination benefits are payable when employment is terminated by the company before
the normal retirement date, or when an employer accepts voluntary redundancy in exchange

for these benefits. The company recognizes termrnafion benefits in the Statement of Profit
and Loss in the year as an expense as and when incurred.

Other accounting policies:

(a) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision maker. The chief operating decision maker is the Company''s
Managing Director. Refer note 36 for segment information presented.

(b) Rental Income

Rental income arising from operating leases on properties is accounted for on a straight-line
basis over the lease terms and is included in other income in the statement of profit and loss.

(c) Interest income

Interest income is accrued on time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that asset''s net carrying
amount on initial recognition.

(d) Sale of Raw materials and scrap (Other operating Revenue)

Revenue from sale of raw material and scrap is recognised at point in time when control is
transferred to the customer - based on delivery terms, payment terms, customer acceptance.

(e) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of the Company are measured using the
currency of the primary economic environment in which the entity operates (''the
functional currency''). The financial statements are presented in Indian rupee (INR),
which is the Company''s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the
exchange rates at the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at year end exchange rates are
recognized in profit or loss.

Non-monetary items that are measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined. Translation
differences on assets and liabilities carried at fair value are reported as part of the fair
value gain or loss. For example, translation differences on non-monetary assets and
liabilities such as equity instruments held at fair value through profit or loss are
recognised in profit or loss as part of the fair value gain or loss and translation differences
on non-monetary assets such as equity investments classified as FVOCI are recognised in
other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates at the dates of the initial transactions.

(f) Other Financial Liabilities

Other Financial liabilities are measured at amortised cost using effective interest rate
method.

(g) Leases

As a Lessee:

Leases are recognised as a Right of use asset and a corresponding liability at the date at which
the leased asset is available for use by the Company. Each lease payment is allocated between
the principal (liability) and finance cost. The finance cost is charged to the Statement of Profit
and Loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the fixed payments (including in-substance fixed
payments), less any lease incentives receivable.

Lease payments to be made under reasonably certain extension options are also included in
the measurement of the liability. The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined, the lessee''s incremental
borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar
terms and conditions.

Right of use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability

• any lease payments made at or before the commencement date less any lease incentives
received

• any initial direct costs, and

• restoration costs.

Right of use asset is depreciated over the shorter of the asset''s useful life and the lease term
on a straight-line basis. If the Company is reasonably certain to exercise a purchase option,
the Right of use asset is depreciated over the underlying asset''s useful life.

Extension and termination options are included in a number of property and equipment
leases across the company. These terms are used to maximise operational flexibility in terms
of managing contracts. The majority of extension and termination options held are
exercisable only by the company and not by the respective lessor.

Payments associated with short-term leases and leases of low-value assets are recognised on
a straight-line basis as an expense in the Statement of Profit and Loss. Short-term leases are
leases with a lease term of 12 months or less. Low value assets mainly comprise small items of
office equipment.

As a lessor

Lease income from operating leases where the company is a lessor is recognized in income on
a straight-line basis over the lease term unless the receipts are structured to increase in line
with expected general inflation to compensate for the expected inflationary cost increases.
The respective leased assets are included in the balance sheet on their nature.

(h) Impairment of assets

Goodwill is not subject to amortization and is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that they might be impaired.
Property, Plant and Equipment and Intangible assets are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by which the asset''s carrying
amounts exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair
value less costs of disposal and value in use. For the purpose of assessing impairment, assets
are grouped at the lowest levels for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets or group of assets (cash¬
generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.

(i) Offseffing financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet
where there is a legally enforceable right to offset the recognized amounts and there is an
intention to settle on a net basis or realize the asset and settle the liability simultaneously. The
legally enforceable right must not be contingent on future events and must be enforceable in
the normal course of business and in the event of default, insolvency or bankruptcy of the
Company or the counterparty.

(j) Contributed equity

Equity shares are classified as equity. Incremental costs directly attributable to the issue of
new shares are shown in equity as a deduction, net of tax, from the proceeds.

(k) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorized
and no longer at the discretion of the entity, on or before the end of the reporting period but
not distributed at the end of the reporting period. As per the corporate laws in India, a
distribution is authorised when it is approved by the shareholders. A corresponding amount
is recognised directly in equity.

(l) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to owners of the
Company by the weighted average number of equity shares outstanding during the
financial year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determinafion of basic
earnings per share to take into account:

• the after income tax effect of interest and other financing costs associated with dilufive
potential equity shares, and

• the weighted average number of addifional equity shares that would have been
outstanding assuming the conversion of all dilufive potenfial equity shares.

(m) Exceptional items:

When the items of income and expense within profit or loss from ordinary activities are of
such size, nature or incidence that their disclosure is relevant to explain the performance of
the Company for the period, the nature and amount of such items are disclosed separately as
exceptional item by the Company.

(n) Rounding off of amounts:

All amounts disclosed in the financial statements and notes have been rounded off to the
nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

2. Critical estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by
definition, will seldom equal the actual results. Management also needs to exercise judgement in
applying the Company''s accounting policies. This note provides an overview of the areas that
involved a higher degree of judgement or complexity, and of items which are more likely to be
materially adjusted due to estimates and assumptions turning out to be different than those
originally assessed.

In the process of applying the Company''s accounting policies, management has made the
following critical estimates and judgements, which have the most significant effect on the amounts
recognized in the financial statements:

i. Useful lives of property, plant and equipment and intangible assets

The Company reviews the useful lives of property, plant and equipment and intangible assets
at the end of each reporting period. This reassessment may result in change in depreciation
and amortisation expense in future periods.

ii. Defined benefit obligations

The cost of the defined benefit gratuity plan and the present value of the gratuity obligations
are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases and mortality rates. Due to the
complexities involved in the valuation and its long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date. The parameter which is most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated in India, the management

considers the interest rates of government bonds. The mortality rate is based on Indian
Assured Lives Mortality (IALM) (2006-08) (modified) Ulfimate. Those mortality tables tend to
change only at interval in response to demographic changes. Future salary increases and
gratuity increases are based on expected future inflation rates. For further details about
gratuity obligafions are given in notes 21 and 22.

iii. Expected Credit Loss:

Trade receivables do not carry interest and are stated at their normal value as reduced by
appropriate allowances for esfimated irrecoverable amounts. Individual trade receivables
are written off when management deems them not collectable. Impairment is made on the
expected credit loss model, which is the present value of the cash shortfall over the expected
life of the financial assets. The impairment provisions for financial assets are based on
assumption about the risk of default and expected loss rates. Judgement in making these
assumption and selecfing the inputs to the impairment calculafion are based on past history,
exisfing market condifion as well as forward looking esfimates at the end of each reporfing
period.

iv. Deferred tax assets:

A deferred tax asset is recognised to the extent that it is probable that future taxable profit will
be available against which the deductible temporary differences and tax losses can be
ufilised. Accordingly, the company exercises its judgement to reassess the carrying amount of
deferred tax assets at the end of each reporfing period. Refer note 15 for details of deferred
taxas atyearend.

v. Legal contingencies

The Company has received various orders and notices from tax and regulatory authorities.
The outcome of these matters may have a material effect on financial position and results of
operations of cash flows. Management regularly analyzes current information about these
matters and provides provisions for probable contingent losses including the estimate of legal
expenses to resolve the matters. In making the decisions regarding the need for loss
provisions, management considers the degree of probability of an unfavorable outcome and
the ability to make a sufficiency reliable estimate of the amount of loss. The filing of suit or
formal assertion of a claim against the Company or the disclosure of any such suit or
assertions, does not automatically indicate that a provision of a loss may be appropriate.
Refer note 35 for details of contingent liabilities as at year end.

vi. Segment reporting

Ind-AS 108 Operating Segments requires management to determine the reportable
segments for the purpose of disclosure in financial statements based on the internal
reporting reviewed by Chief Operating Decision Maker (CODM) to assess performance and
allocate resources. The standard also requires management to make judgements with
respect to aggregation of certain operating segments into one or more reportable segment.

The Company has determined that the Chief Operating Decision Maker (CODM) is the
Company''s Managing Director, based on its internal reporting structure and functions.
Operating segments used to present segment information are identified based on the

internal reports used and reviewed by the Managing Director to assess performance and
allocate resources. Refer note 36 for further details of the operating segments identified.

vii. Fair value of Investment Properties

The fair value of land and building recognized under investment property is appraised each
year by independent external valuer. The best evidence of fair value are current prices in an
active market for similar investment property. In the absence of such information, the
company determines the amount within a range of reasonable fair value estimates. The
underlying assumptions of these estimates are explained in more detail in note 4.

viii. Recent accounting pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
For the year ended December 31, 2024, MCA has notified amendments to the leases standard
(IND AS 116) for sale-and-leaseback transactions. The amendments impact how a seller-
lessee accounts for variable lease payments that arise in a sale-and-leaseback transaction, in
situations, where some or all the lease payments are variable lease payments, in particular,
where the variability does not relate to an index or a rate. This amendment does not have any
material impact on the amounts recognized in the prior periods and are not expected to
significantly affect the current or future periods.

(v) Presenting Cashflows

The Company classifies cash outflows to acquire or construct investment property as investing and
rental inflows as operating cashflow.

Estimation of fair value

The Company obtains independent valuation for its investment properties at least annually. The best
evidence of fair value is current prices in an active market for similar properties. Where such
information is not available, the Company considers information from a variety of sources including:

• current prices in an active market for properties of different nature or recent prices of similar
properties in less active markets, adjusted to reflect those differences

• discounted cash flow projections based on reliable estimates of future cash flows

• capitalized income projections based upon a property''s estimated net market income, and a
capitalization rate derived from an analysis of market evidence

The fair value of investment properties have been determined by an independent valuer who is a
registered valuer. The fair value is measured using external expert appraisals and by applying input
factors for comparable assets not traded on active markets. All resulting fair value estimates for
investment properties are included in level 2.

A Defined contribution plan

Provident and superannuation fund

The Company has certain defined contribution plans. Contributions are made to provident fund for employees at the
rate of 12% of basic salary as per regulations as well as to superannuation fund. The contributions are made to registered
provident fund administered by the Government and superannuation trust administered through Life Insurance
Corporation of India (LIC). The obligation of the Company is limited to the amount contributed and it has no further
contractual nor any constructive obligation. The expense recognised during the year towards provident fund (defined
contribution plan) is INR 173.90 lakhs (December 31, 2023 - INR 172.98 lakhs) and other defined contribution plan
(superannuation fund and National Pension scheme) is INR 142.91 lakhs (December 31, 2023 - INR 129.70 lakhs).

B Defined benefit plan

I Compensated absences

Company has liabilities for earned and sick leave that are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the related services. These obligations are therefore
measured as the present value of expected future payments to be made in respect of services provided by
employees up to the end of the reporting period using the projected unit credit method. The benefits are
discounted using the appropriate market yields at the end of the reporting period that have terms approximating
to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in
actuarial assumptions are recognised in profit or loss.

The Company does not have an unconditional right to defer settlement for any of these obligations, hence the
entire amount of provision is presented as current. However, based on past experience, the Company does not
expect all employees to take the full amount of accrued leave or require payment within the next 12 months."
Provision for Compensated absences (Unfunded) is INR 548.66 lakhs (December 31.2023 - INR 463.58 lakhs).

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed
below:

Asset volatility:

The plan liabilifies are calculated using a discount rate set with reference to bond yields; if plan assets underperform this
yield, this will create a deficit. All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of
India. LIC has a sovereign guarantee and has been providing consistent and compefifive returns over the years. The
Company has opted for a tradifional fund wherein all assets are invested primarily in risk averse markets. The Company
has no control over the management of funds but this opfion provides a high level of safety for the total corpus. A single
account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest
rate and inflafion risks are taken care of.

Changes in bond yields:

A decrease in bond yields will increase plan liabilifies, although this will be parfially offset by an yield increase in the value
of the plans'' bond holdings.

Future salary escalation and inflation risk:

Since price inflafion and salary growth are linked economically, they are combined for disclosure purposes. Rising
salaries will often result in higher future defined benefit payments resulfing in higher present value of liabilifies. Further,
unexpected salary increases provided at the discrefion of the management may lead to uncertainfies in esfimafing this
increasing risk.

Asset-Liability mismatch risk:

Risk which arises if there is a mismatch in the durafion of the assets relafive to the liabilifies. By matching durafion with
the defined benefit liabilifies, the Company is successfully able to neutralize valuafion swings caused by interest rate
movements. Hence, companies are encouraged to adopt asset-liability management.

Life expectancy risk:

Increases in life expectancy of employee will result in an increase in the plan liabilifies. This is parficularly significant
where inflafionary increases result in higher sensifivity to changes in life expectancy.

III Cash rewards at retirement

The Company has a defined benefit plan of cash rewards whereby at the time of normal retirement, INR 2,500 is payable
to employees for each year of service rendered. The scheme is unfunded.

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which is detailed
below:

Changes in bond yields:

A decrease in bond yields will increase plan liabilifies.

IV Long service awards

Long Service Awards are payable to employees on complefion of specified years of service wherein a cash amount as a
percentage of monthly basic salary is paid at the fime of refirement/resignafion/terminafion (ranging from 75% to 300%
of basic monthly salary basis number of years served). There are no changes in acturial assumpfions used compared to
previous year and are aligned with the other defined benifit plans menfioned above.

The expense recognised during the year towards Long service awards is INR 5.14 lakhs (December 31, 2023 - INR 10.09
lakhs)

The Company''s pending litigations comprise of proceedings pending with service tax authorities. The Company has
reviewed all its pending litigations and proceedings and has adequately provided for cases where provisions are required
and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the
outcome of these proceedings to have a materially adverse effect on its financial results. In respect of the claims against the
Company not acknowledged as debts as above, the management does not expect these claims to succeed. It is not practical
to indicate the uncertainty which may affect the future outcome and estimate the financial effects of the above liabilities.

The Supreme Court had issued a Judgement in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident
Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284)
dated March 20, 2019 was issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain
allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to
provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the
management, the aforesaid matter is not likely to have a significant impact.

The Code on Social Security, 2020 (''Code'') relating to employee benefits received Presidential assent in September 2020.
However, the date on which the Code will come into effect has not yet been notified. The Company will assess the impact of
the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

b) Capital commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is
INR 1306.28 lakhs (December 31, 2023 : INR 956.98 lakhs).

c) Lease commitments

There were no non-cancellable operating leases as on December 31, 2024 and December 31, 2023.

Level 1: The fair value of financial instruments traded in acfive markets (such as publicly traded derivafives and equity
securifies) is based on quoted market prices at the end of the reporfing period. The mutual funds are valued using the
closing NAV. The quoted market price used for financial assets held by the company is the NAV of these mutual funds as at
year end. These instruments are included in level 1.

Level 2: The fair value of financial instruments that are not traded in an acfive market is determined using valuafion
techniques which maximise the use of observable market data and rely as little as possible on enfity-specific esfimates. If
all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in
level 3.

ii) Valuation technique used to determine fair value

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.

Specific valuation techniques used to value financial instruments include:

The use of quoted market prices for same or similar instruments as on the reporting date.

iii) Valuation process

The Finance department of the Company includes a team that oversees the valuations of financial assets and liabilities
required for financial reporting purposes, including level 3 fair values.

External valuers are involved for valuation of significant assets, such as unquoted financials assets. Involvement of
external valuers is decided by the finance team. Selection criteria includes market knowledge, reputation,
independence and whether professional standards are maintained. The Finance team decides, after discussions with
the Company''s external valuers, which valuation techniques and inputs to use for each case.

Changes in level 3 fair values are analysed at the end of each reporting period during the valuation discussion between
the valuation team and external valuer. As part of this discussion the team presents a report that explains the reason for
the fair value movements.

iv) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade and other receivables, security deposits, fixed deposits with banks, interest accrued on
deposits, cash and cash equivalents, other bank balances, trade payables, security deposits taken, capital creditors,
employee benefits payable, unpaid dividend and other payables are considered to be reasonable approximation of their
fair values.

38 Financial risk management

The Company''s activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk
which the entity is exposed to and how the entity manages the risk. The Company''s risk management is carried out by
the Company''s finance department under policies approved by the Board of Directors. The Finance department
identifies, evaluates and manages financial risk. This note explains the Company''s exposure to financial risks and how
these risks could affect the Company''s future financial performance.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks
and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions
are accepted. The balances with banks, security deposits are subject to low credit risk and the risk of default is negligible
or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The
Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in the credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant
increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the
risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking
information, for e.g. external credit rating (to the extent available), actual or expected significant adverse changes in
business, financial or economic conditions that are expected to cause a significant change to borrower''s ability to meet
its obligations.

Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To
manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial
condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking
information. Individual credit limits are set accordingly. General payment terms include advances and payments with a
credit period ranging from 30 to 60 days. The Company has a detailed review mechanism of overdue customer
receivables at various levels within the organisation. The company has used a practical expedient by computing the
expected credit loss allowance for trade receivables based on provision matrix. The provision matrix takes into account
historical credit loss experience and adjusted for forward looking information.

(C) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price risk. Financial
instruments affected by market risk include loans give, deposits, trade receivables, trade payables, derivative financial
instruments and other financial assest and liabilities.

I) Foreign currency risk

The company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign
currency transactions, primarily with respect to the USD and EUR. Foreign exchange risk arises from recognised assets
and liabilities denominated in a currency that is not the Company''s functional currency (INR). The Company''s
exposure to foreign currency arises from short term receivables and payables where fluctuations in the foreign
exchange rates are generally not significant and consequently limiting the Company''s exposure.

II) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. Generally, the Company''s exposure to the risk of changes in the market interest rates
primarily relate to the Company''s short term debt obligations with the floating interest rates. The Company does not
have any borrowings in the current year as well as previous year.

III) Price risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in
the Balance sheet either as fair value through OCI or fair value through profit and loss. The Company invests into
mutual funds which are subject to price risk changes. These investments are generally for short duration and
therefore impact of price changes is generally not significant. Investment in these funds are made as a part of Treasury
management activities.

39 Capital Management

a) Risk management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that
they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal
capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes
issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary
objective of the Company''s capital management is to maximise the shareholders value. The Company manages its
capital structure and makes adjustments in the light of changes in the economic conditions and the requirements of
the financial covenants, if any. The total equity as at December 31, 2024 is INR 86,711.94 lakhs (December 31, 2023:
INR 73,199.41 lakhs).

No changes were made in the objectives, policies or processes for managing capital during the years ended December
31, 2024 and December 31, 2023. The Company has no borrowings during the years under consideration and hence
there has been no breach in the financial covenants of any borrowings.

b) Dividends

As a part of Company''s capital management policy, dividend distribution is also considered as a key element and
management ensures that dividend distribution is in accordance with defined policy. Below mentioned are the details
of dividend distributed and proposed during the year.

42 a. Data center for the ERP used by the management is hosted in a place outside India. Considering the above

requirement, the Company has developed a mechanism to take daily backup of the books of account in India.

However, for the backup of Audit trail logs, the Company was able to take backup from October 09, 2024 for
database layer and from December 26, 2024 for application layer.

b. The company has used two accounting software systems: SAP as the core accounting software and Microsoft

Excel for certain other information, including payroll.

i. SAP Application Level:

SAP has a feature for recording audit trail logs. However, due to technical complexities, this feature was
not fully operational at the application level for certain tables and documents and certain users with
specific access from January 1, 2024 to September 26, 2024.

Management has taken appropriate steps to comply with the given requirements from September 27,
2024 onwards with respect to this.

ii. SAP Database Level:

On account of technical complexities, for activities related to ""Data Query and Manipulation,"" audit trail
feature was fully enabled from October 8, 2024. Also It should be noted that due to inherent limitations of
SAP, database logs do not capture pre-modified values for any changes performed.

Microsoft Excel:

iii. The Microsoft Excel used by the company does not have an audit trail (edit log) feature.

43 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 any benami property
under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) and Rules made
thereunder."

(ii) Willful defaulter

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

(iii) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act,
1956.

(iv) Compliance with number of layers of companies

The Company doesn''t have any investment in associate or joint venture or subsidiary, hence this disclosure is not
applicable.

(v) 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.

(vi) Utilisation of borrowed funds and share premium

a. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any
other sources or kind of funds) to any other person or entity, including foreign entities (Intermediaries) with the
understanding (whether recorded in writing or otherwise) that the Intermediary shall:

i. 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

ii. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries:

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

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Funding Party (Ultimate Beneficiaries); or

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

(vii) 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.

(viii) 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.

(ix) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets), investment
properties or intangible assets during the current or previous year.

(x) There are no charges or satisfaction which are yet to be registered with the Registrar of the Companies beyond
the statutory period.

(xi) Payment to political parties

There were no payments made by the Company to political parties during current or previous year.

(xii) Borrowing secured against current assets

The Company does not have any borrowings from banks or financial institutions or government or government
authorities or any other lender.

(xiii) No loans or advances are given to Key Managerial Persons during the year ended December 31, 2024.

44 Previous year figures

Previous year figures have been reclassified to conform to current year''s classification.

For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors

Firm Registration Number: 012754N/ N500016 of ELANTAS Beck India Limited

Sarah George Anurag Roy Usha Rajeev Sanjay Kulkarni Ashutosh Kulkarni

Partner Managing Director Director Chief Financial Officer Company Secretary

Membership No.: 045255 DIN: 07444595 DIN: 05018645 M. No.: A18549

Place : Mumbai Place : Mumbai Place : Mumbai Place : Mumbai Place : Mumbai

Date : Feb. 18, 2025 Date : Feb. 18, 2025 Date : Feb. 18, 2025 Date : Feb. 18, 2025 Date : Feb. 18, 2025

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Dec 31, 2023

Estimation of fair value

The Company obtains independent valuation for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:

• current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences

• discounted cash flow projections based on reliable estimates of future cash flows

• capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence

The fair value of investment properties have been determined by an independent valuer who is a registered valuer. The fair value is measured using external expert appraisals and by applying input factors for comparable assets not traded on active markets. All resulting fair value estimates for investment properties are included in level 2.

The goods in transit pertaining to raw materials during the year ended December 31, 2023 were INR 634.20 lakhs (December 31, 2022 : INR 485.22 lakhs).

Amounts recognized in profit or loss

Provision for excess and obsolete inventory amounted to INR 216.41 lakhs (December 31, 2022 : INR 107 lakhs). Increase/(decrease) in provisions were recognized in the respective years in the Statement of Profit and Loss and included in ''Cost of materials consumed''.

15 Right-of-use assets

The note provides information for leases where the Company is a lessee. The Company has taken on lease various land parcels. Rental contracts are typically made for fixed period of 99 years, but have extension options.

Lease Liabilities:

The Company does not possess any material leased assets other than leasehold land rights for which the total lease payment for the period of lease has been made. Therefore, the Company is not required to create any corresponding liability.

*The total lease payment for the period of the lease has already been paid off. Refer note above.

The total cash outflow for leases for the year ended 31 December 2023 is INR Nil (31 December 2022: INR Nil). Extension and Termination option :

Extension and termination options are included in lease agreements. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor.

(ii) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of INR 10 per share. Each Shareholder is eligible for one vote per share held. 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. The dividend, if any proposed by the Board of Directors is subject to approval of the Shareholders in the ensuing annual general meeting, except in case of interim dividend.

A Defined contribution plan

Provident and superannuation fund

The Company has certain defined contribution plans. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations as well as to superannuation fund. The contributions are made to registered provident fund administered by the Government and superannuation trust administered through Life Insurance Corporation of India (LIC). The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plan (provident fund) is INR 130.81 lakhs (December 31, 2022 - INR 124.76 lakhs) and defined contribution plan (superannuation fund) is INR 129.70 lakhs (December 31, 2022 - INR 107.16 lakhs).

B Defined benefit plan

I Compensated absences

Company has liabilities for earned and sick leaves that are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related services. These obligations are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the appropriate market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.

The Company does not have an unconditional right to defer settlement for any of these obligations, hence the entire amount of provision is presented as current. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months."

II Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972 (amended). Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employee''s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contribution to fund managed by Life Insurance Corporation of India.

The above sensitivity analysis is based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(vi) Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility:

The plan liabilifies are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of India. LIC has a sovereign guarantee and has been providing consistent and compefifive returns over the years. The Company has opted for a tradifional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this opfion provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest rate and inflafion risk are taken care of.

Changes in bond yields:

A decrease in bond yields will increase plan liabilifies, although this will be parfially offset by an yields increase in the value of the plans'' bond holdings.

Future salary escalation and inflation risk:

Since price inflafion and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulfing in higher present value of liabilifies. Further, unexpected salary increases provided at the discrefion of the management may lead to uncertainfies in esfimafing this increasing risk.

Asset-Liability mismatch risk:

Risk which arises if there is a mismatch in the durafion of the assets relafive to the liabilifies. By matching durafion with the defined benefit liabilifies, the Company is successfully able to neutralize valuafion swings caused by interest rate movements. Hence, companies are encouraged to adopt asset-liability management.

Life expectancy risk:

Increases in life expectancy of employee will result in an increase in the plan liabilifies. This is parficularly significant where inflafionary increases result in higher sensifivity to changes in life expectancy.

III Cash rewards at retirement

The Company has a defined benefit plan of cash rewards whereby at the time of normal retirement, INR 2,500 is payable to employees for each year of service rendered. The scheme is unfunded.

Movement in balances - Cash rewards at retirement

The above sensitivity analysis are based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

The weighted duration of the defined benefit obligation is 7 years (December 31, 2022 : 7 years).

(iv) Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which is detailed below:

Changes in bond yields:

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.

IV Long service awards

Long Service Awards are payable to employees on completion of specified years of service wherein a cash amount as a percentage of monthly basic salary is paid at the time of retirement/resignation/termination (ranging from 75% to 300% of basic monthly salary basis number of years served). There are no changes in acturial assumptions used compared to previous year and are aligned with the other defined benifit plans mentioned above.

35 Contingencies and commitments a) Contingent liabilities
Particulars	As at December 31, 2023	As at December 31, 2022
Claims against the Company not acknowledged as debts
(i) Excise and service tax matters	280.02	320.55
(ii) Income Tax matters	88.07	88.07
Total	368.09	408.62

(iii) On March 6, 2019, the Company was directed for closure of its operations in Ankleshwar by the Gujarat Pollution Control Board (GPCB) due to a suspected ground water contamination issue. The GPCB through its subsequent orders had granted temporary revocation of the closure order. The Company has represented to the GPCB for a permanent revocation of the closure order and is expecting a favourable response.

Note:

The Company''s pending litigations comprise of proceedings pending with Excise and Income tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for cases where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of the claims against the Company not acknowledged as debts as above, the management does not expect these claims to succeed. It is not practical to indicate the uncertainity which may affect the future outcome and estimate the financial effects of the above liabilities.

The Supreme Court had issued a Judgement in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 was issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management, the aforesaid matter is not likely to have a significant impact.

The Code on Social Security, 2020 (''Code'') relating to employee benefits received Presidential assent in September 2020. However, the date on which the Code will come into effect has not yet been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

b) Capital commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is INR 956.98 lakhs (December 31, 2022 : INR 223.29 lakhs).

c) Lease commitments

There were no non-cancellable operating leases as on December 31, 2023 and December 31, 2022.

Notes:

(1) Key Managerial Personnel who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognised as per Ind AS 19 - ''Employee Benefits'' in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not presented above.

(2) Transactions during the year reported above include impact of increase/(decrease) in provision for expenses accounted for as on year end.

(3) In case of transactions with related parties during the year, the amounts are exclusive of applicable taxes.

III Terms and conditions for outstanding balances

Transactions with related parties were made on normal commercial terms and conditions. All outstanding balances are unsecured and payable in cash.

37 Segment reporting

(a) Description of segments and principal activities

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).

The Managing Director of the Company have been identified as the chief operating decision maker.

The CODM evaluates the performance based on the revenues and operating profit for the two segments, the composition of which is explained below:

Segment Products covered

Electrical Insulations The Electrical Insulation System business line comprises three product groups: wire

enamels, insulating varnishes and resins, and casting and poffing compounds. These products are used in the light and heavy electrical industries.

Engineering & Electronic Resins This comprises of complete solutions for printed circuit boards (PCBs), PCB and Materials protection solutions, construction chemicals used for post-construction coating

applications and flexible electrical insulations.

Level 1: The fair value of financial instruments traded in acfive markets (such as publicly traded derivafives and equity securifies) is based on quoted market prices at the end of the reporfing period. The mutual funds are valued using the closing NAV. The quoted market price used for financial assets held by the Company is the NAV of these mutual funds as at year end. These instruments are included in level 1.

Level 2: The fair value of financial instruments that are not traded in an acfive market is determined using valuafion

techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

ii) Valuation technique used to determine fair value

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Specific valuation techniques used to value financial instruments include:

The use of quoted market prices for same or similar instruments as on the reporting date.

iii) Valuation process

The finance department of the Company includes a team that oversees the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

External valuers are involved for valuation of significant assets, such as unquoted financials assets. Involvement of external valuers is decided by the finance team. Selection criteria includes market knowledge, reputation, independence and whether professional standards are maintained. The Finance team decides, after discussions with the Company''s external valuers, which valuation techniques and inputs to use for each case.

Changes in level 3 fair values are analysed at the end of each reporting period during the valuation discussion between the valuation team and external valuer. As part of this discussion the team presents a report that explains the reason for the fair value movements.

iv) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade and other receivables, security deposits, loans and advances to employees, fixed deposits with banks, interest accrued on deposits, cash and cash equivalents, other bank balances, trade payables, security deposits from customers, capital creditors, employee benefits payable, unpaid dividend and other payables are considered to be reasonable approximation of their fair values.

39 Financial risk management

The Company''s activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk. The Company''s risk management is carried out by the Company''s finance department under policies approved by the Board of Directors. The Finance department identifies, evaluates and manages financial risk. This note explains the Company''s exposure to financial risks and how these risks could affect the Company''s future financial performance.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to related parties, loans given to employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in the credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information, for eg, external credit rating (to the extent available), actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to borrower''s ability to meet its obligations.

Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set accordingly. General payment terms include advances and payments with a credit period ranging from 30 to 60 days. The Company has a detailed review mechanism of overdue customer receivables at various levels within the organisation. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix.The provision matrix takes into accout historical credit loss experience and adjusted for forward looking information.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk , being the total of the carrying amount of balances with bank, short term deposits with banks, trade receivables and other financial assets is disclosed at the end of the each reporting period. Refer relevant notes for details. At the reporting date, there were no significant arrangements which reduced the maximum credit risk.

(B) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s finance department is responsible for liquidity, funding as well as settlement management. In addition, processes and polices related to such risks are overseen by Senior Management.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. To assure the solvency and financial flexibility, the Company retains a liquidity reserve through cash and cash equivalents. The tables below analyse the Company''s financial liabilities into relevant maturity group based on their contractual maturities for:

(C) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and price risk. Financial instruments affected by market risk include loans give, deposits, trade receivables, trade payables, derivative financial instruments and other financial assest and liabilities.

I) Foreign currency risk

The Company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and EUR. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The Company''s exposure to foreign currency arises from short term receivables and payables where fluctuations in the foreign exchange rates are generally not significant and consequently limiting the Company''s exposure.

II) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Generally, the Company''s exposure to the risk of changes in the market interest rates primarily relate to the Company''s short term debt obligations with the floating interest rates. The Company does not have any borrowings in the current year as well as previous year.

III) Price risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the Balance sheet either as fair value through OCI or fair value through profit and loss. The Company invests into mutual funds which are subject to price risk changes. These investments are generally for short duration and therefore impact of price changes is generally not significant. Investment in these funds are made as a part of Treasury management activities.

40 Capital Management

a) Risk management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for Shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the Shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in the economic conditions and the requirements of the financial covenants, if any. The total equity as at December 31, 2023 is INR 73,199.41 lakhs (December 31, 2022: INR 59,860.02 lakhs).

No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2023 and December 31, 2022. The Company has no borrowings during the years under consideration and hence there has been no breach in the financial covenants of any borrowings.

b) Dividends

As a part of Company''s capital management policy, dividend distribution is also considered as a key element and management ensures that dividend distribution is in accordance with defined policy. Below mentioned are the details of dividend distributed and proposed during the year.

41 At the year end, the Company has long term contracts for which there were no material foreseeable losses. The Company does not have any derivative contracts as at year end.

43 Pursuant to the amendments in the rule 3 of the Companies (Accounts) Rules, 2014, the back-up of the books of account and other books and papers of the Company maintained in electronic mode, including at a place outside India, if any, shall be kept in servers physically located in India on a daily basis. Data center for the ERP used by the management is hosted in a place outside India. Considering the requirement of the amendments, the Company developed a mechanism to take daily backup of the books of account in India which has been implemented in the current year from February 18, 2023. As a part of the mechanism, management saved auto generated logs for successful completion of backup from June 22, 2023 onwards. For the period of February 18, 2023 to June 21, 2023, the Company maintained manual logs to monitor the completion of backup on daily basis.

Further on account of a technical issue the daily backup could not be completed on 12 days during the year. However, the Company has taken appropriate remedial actions with respect to this technical issue.

44 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 any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) and Rules made thereunder."

(ii) Willful defaulter

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

(iii) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(iv) Compliance with number of layers of companies

The Company doesn''t have any investment in associate or joint venture or subsidiary, hence this disclosure is not applicable.

(v) 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.

(vi) Utilisation of borrowed funds and share premium

a. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

i. 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

ii. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries:

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

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or

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

(vii) 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.

(viii) 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.

(ix) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets), investment properties or intangible assets during the current or previous year.

(x) There are no charges or satisfaction which are yet to be registered with the Registrar of the Companies beyond the statutory period.

(xi) Payment to political parties

There were no payments made by the Company to political parties during current or previous year.

(xii) Borrowing secured against current assets

The Company does not have any borrowings from banks or financial institutions or government or government authorities or any other lender.

45 Previous year figures

Previous year figures have been reclassified to conform to current year''s classification.

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Dec 31, 2022

Estimation of fair value

The company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company consider information from a variety of sources including:

• current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.

• discounted cash flow projections based on reliable estimates of future cash flows

• capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.

The fair values of investment properties have been determined by an independent valuer. The fair value is measured using external expert appraisals, by applying input factors for comparable assets not traded on active markets (fair value hierarchy level 2).

A Defined contribution plan

Provident and superannuation fund

The Company has certain defined contribution plans. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations as well as to superannuation fund. The contributions are made to registered provident fund administered by the government and superannuation trust administered through Life Insurance Corporation of India (LIC). The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan (provident fund) is Rs. 124.76 lakhs (December 31, 2021 - Rs. 113.45 lakhs) and defined contribution plan (superannuation fund) is Rs. 107.16 lakhs (December 31, 2021 - Rs. 123.44 lakhs).

B Defined benefit plan

I Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and is administered through group gratuity scheme with Life Insurance Corporation of India.

II Cash rewards at retirement

The Company has a defined benefit plan of cash rewards whereby at the time of normal retirement, Rs. 2,500 is payable to employees for each year of service rendered. The scheme is unfunded.

(vi) Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest rate and inflation risk are taken care of.

Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.

Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in higher present value of liabilities. Further, unexpected salary increases provided at the discretion of the management may lead to uncertainties in estimating this increasing risk.

Asset-Liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements. Hence, companies are encouraged to adopt asset-liability management.

The above sensitivity analyses are based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(iv) Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which is detailed below:

Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.

a. During the year, the Company has sold a portion of land situated in Ankleshwar for a total consideration of Rs.2265.00 lakhs which has resulted in a profit of Rs.1072.04 lakhs.

b. On September 16, 2021, The Company sold the office space ("EDP Building") at Pimpri for a consideration of Rs. 2132.45 lakhs which resulted in a profit of Rs.1918.72 lakhs.

c. The Company terminated the Memorandum of Understanding (MoU) which was entered with Talegaon industrial Parks Private Limited (TIPPL) for acquisition of land situated at Navlakhumbre, Tal. Maval, Pune. The Company has made a provision of Rs 960 lakhs for expenditure incurred so far in relation to this project.

d. A fire incident occurred at the Company''s factory situated at Pimpri, Pune. The Company accounted for a loss of Rs.44.44 Lakhs on account of destruction of machinery and inventory in this fire.

35 Contingencies and commitments a) Contingent liabilities
	As at	As at
	December 31, 2022	December 31, 2021
(i) Excise and service tax matters	320.55	311.76
(ii) Income Tax matters	88.07	-
Total	408.62	311.76

(iii) On March 6, 2019, the Company was directed for closure of its operations in Ankleshwar by the Gujarat Pollution Control Board (GPCB) due to a suspected ground water contamination issue. The GPCB through its subsequent orders had granted temporary revocation of the closure order. The Company has represented to the GPCB for a permanent revocation of the closure order and is expecting a favourable response

Note:

The Company''s pending litigations comprise of proceedings pending with Excise and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for cases where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

The Supreme Court had issued a Judgment in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 was issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management, the aforesaid matter is not likely to have a significant impact.

The Code on Social Security, 2020 (''Code'') relating to employee benefits received Presidential assent in September 2020. However, the date on which the Code will come into effect has not yet been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

b) Capital commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 223.29 lakhs (December 31, 2021 : Rs. 580.46 lakhs)

c) Lease commitments

There were no non-cancellable operating leases as on December 31, 2022 and December 31, 2021.

37 Segment reporting

(a) Description of segments and principal activities

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).

The Managing Director of the Company have been identified as the chief operating decision maker.

The CODM evaluates the performance based on the revenues and operating profit for the two segments, the composition of which is explained below:

Segment Products covered

Electrical Insulations The Electrical Insulation System business line comprises three product groups: wire

enamels, insulating varnishes and resins, and casting and poffing compounds. These products are used in the light and heavy electrical industries.

Engineering & Electronic Resins This comprises of complete solutions for printed circuit boards (PCBs), PCB and Materials protection solutions, construction chemicals used for post-construction coating

applications and flexible electrical insulations.

i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments. The fair value of all equity instruments which are traded in the stock exchange is valued using the closing price as at the end of the reporting period.

Level 2: Level 2 valuations are determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. This includes mutual funds whose closing NAV is

provided by Asset Management Company (AMC) and is also available on Association of Mutual Funds in India (AMFI) website.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

The use of quoted market prices or dealer quotes for similar instruments

iii) Valuation process

The finance department of the company performs the valuation of financial assets and liabilities required for financial reporting purposes including level 3 fair values. Changes in fair values are analyzed at the end of each reporting period and an explanation for the reason for fair values are discussed.

iv) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade receivables, security deposits, loans and advances to employees, fixed deposits with banks, interest accrued on fixed deposits, cash and cash equivalents, other bank balances, trade payables, security deposits received, capital creditors, payable to employees, unpaid dividend and others are considered to be reasonable approximation of their fair values.

39 Financial risk management

The Company''s activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to related parties, loans given to employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in the credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information, for eg, external credit rating (to the extent available), actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to borrower''s ability to meet its obligations.

Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set accordingly.

The ageing of trade receivable as on balance sheet date is given below. The age analysis has been considered from the date when the invoices were due for payment.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk , being the total of the carrying amount of balances with bank, short term deposits with banks, trade receivables and other financial assets is disclosed at the end of the each reporting period. Refer relevant notes for details. At the reporting date, there were no significant arrangements which reduced the maximum credit risk.

(C) Market risk

I) Foreign currency risk

The company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The Company''s exposure to foreign currency arises from short term receivables and payables where fluctuations in the foreign exchange rates are generally not significant and consequently limiting the company''s exposure.

II) Interest rate risk

The Company''s main interest rate risk arises from deposits placed over a period of time on frequent basis thereby exposing the Company to interest rate risk. The Company''s policy is to have fixed interest rate at the time of deal execution.

The loan to related party is carried at amortised cost. The Company recovers interest as per the terms of the agreement. The interest rate approximates the market rate of interest and hence the interest risk for loan given to related party is not considered to be substantial.

40 Capital Management a) Risk management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholders value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.

No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2022 and December 31, 2021.

43 Pursuant to the amendments in the rule 3 of the Companies (Accounts) Rules, 2014 , the back-up of the books of account and other books and papers of the company maintained in electronic mode, including at a place outside India, if any, shall be kept in servers physically located in India on a daily basis .Data centre for the ERP used by the management is hosted in a place outside India. Considering the requirement of the amendments , the Company planned and developed a mechanism to take daily backup of the books of accounts in India which has been implemented subsequent to the year end.

44 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) Wilful defaulter

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

(iii) Relationship with struck off companies

The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(iv) Compliance with number of layers of companies

The company doesn''t have any investment in associate or subsidiary, hence this disclosure is not applicable.

(v) 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.

(vi) Utilisation of borrowed funds and share premium

The company has not advanced or loaned or invested funds to any other person(s) or enti''ty(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

The company has not received any fund from any person(s) or enti''ty(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

(vii) 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.

(viii) 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.

(ix) 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.

---

Dec 31, 2018

(ii) Contractual Obligations

There are no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

(iii) Leasing arrangements

Certain investment properties are leased to related parties under long-term operating lease with rentals payable monthly. Minimum lease payments receivable under non-cancellable operating leases of investment properties are as follows:

Estimation of fair value

The company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company consider information from a variety of sources including:

- current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.

- discounted cash flow projections based on reliable estimates of future cash flows

- capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.

The fair values of investment properties have been determined by an independent valuer. The fair value is measured using external expert appraisals, by applying input factors for comparable assets not traded on active markets (fair value hierarchy level 2).

Notes:

1 Intangible assets under development included cost incurred towards SAP implementation project.

2 Net book value of Intangible assets as on January 1, 2017, has been taken as deemed cost on the date of adoption of "Ind AS" w.e.f. January 1, 2017.

The disclosure relating to Specified Bank Notes* (SBNs) is not applicable to the Company for the year ending December 31, 2018 and December 31, 2017.

* Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.O. 3407(E), dated 8th November, 2016.

Amounts recognized in profit or loss

Provision for excess and obsolete inventory amounted to Rs. 43.16 lakhs (December 31, 2017 : Rs. 55.52 lakhs, January 1, 2017 : Rs. 67.32 lakhs).

Increase/(decrease) in provisions were recognized in respective years in statement of profit or loss and included in ''Cost of materials consumed''.

Non-recurring fair value measurements

Pursuant to the Board of Directors'' in principle approval in the year ended December 31, 2016, for the sale of the surplus office space ("Beck House"), at Pune, the Company had classified the written down value of the property amounting to Rs. 521.08 lakhs as ''Assets held for sale''. The Company has executed sale deed for the said property on January 5, 2018 for a consideration of Rs. 2,500 lakhs which is the fair value. This is a level 2 measurement as per the fair value hierarchy set out in the fair value measurement disclosure (Note 38). The key inputs under this approach are price per square metre of comparable lots of building in the area of similar location and size. The resultant profit on sale of the property has been treated as an exceptional item.

(b) Terms/ rights attached to equity shares

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. 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.

(e) The Company has not issued any bonus shares in 5 years immediately preceding year ended December 31, 2018.

(f) There were no shares bought back nor allotted either as fully paid-up bonus shares or under any contract without payment being received in cash during five years immediately preceding December 31, 2018.

Nature and purpose of reserves Securities premium account

Securities premium account is used to record the premium on issue of shares. The reserve is to be utilised in accordance with the provisions of the Companies Act, 2013.

General reserve

"General reserve represents amounts transferred from retained earnings in earlier years as per the requirements of the erstwhile Companies Act 1956.

Note:

Retained earnings include balance of government grants amortised in accordance with requirement of Ind AS 20. These grants were received between 1982 to 2002 for setting up manufacturing units in specified areas under various incentive schemes. There are no unfulfilled conditions or other contingencies attached to these grants. Under Companies Act, grants of such nature are treated as capital reserve and cannot be distributed as dividend. Also refer note 42 of the financial statement for impact of government grant on financial statement on transition date.

Notes:

(i) There is no amount due and outstanding as on December 31, 2018 to be credited to Investor Education and Protection Fund u/s 125 of the Companies Act, 2013.

(ii) Other payables include commission payable to directors, retention money payable, etc. Also refer note 36 for other balances payable to related parties which are included above.

A Defined contribution plan

Provident and superannuation fund

The Company has certain defined contribution plans. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations as well as to superannuation fund. The contributions are made to registered provident administered by the government and superannuation trust administered through Life Insurance Corporation of India (LIC). The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan (provident fund) is Rs. 95.56 lakhs (December 31, 2017 - Rs. 88.96 lakhs) and defined contribution plan (superannuation fund) is Rs. 104.69 lakhs (December 31, 2017 - Rs. 97.87 lakhs).

B Defined benefit plan

I Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and is administered through group gratuity scheme with Life Insurance Corporation of India.

The Payment of Gratuity (Amendment) Act, 2018 was notified by the Central Government on March 29, 2018. The amendment increases the existing ceiling limit of the amount of gratuity payable to employees who have completed five years of continuous service from rupees 10 lakhs to rupees 20 lakhs. The amendment has also increased the maximum maternity leave from 12 weeks to 26 weeks in the Payment of Gratuity Act 1972 consistent with the requirement in the Maternity Benefit Act, 1961. Maternity leave to the extent specified in the act shall be excluded while determining the period of continuous service for women employees. Due to the change, the Company has recognized past service cost of Rs. 167 lakhs for the year ended December 31, 2018.

II Cash rewards at retirement

The Company has a defined benefit plan of cash rewards whereby at the time of normal retirement, Rs. 2,500 is payable to employees for each year of service rendered. The scheme is unfunded.

The above sensitivity analyses are based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(vi) Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest rate and inflation risk are taken care of.

Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.

Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in higher present value of liabilities. Further, unexpected salary increases provided at the discretion of the management may lead to uncertainties in estimating this increasing risk.

Asset-Liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements. Hence, companies are encouraged to adopt asset-liability management.

The above sensitivity analyses are based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(iv) Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:

Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.

Note : Goods and Service Tax (GST) has been effective from July 1, 2017. Consequently, excise duty, value added tax (VAT), service tax, etc. have been replaced with GST with effect from July 1, 2017. Until June 30, 2017, ''Sale of products'' included the amount of excise duty recovered on sales. ''Sale of products'' excludes the amount of GST recovered. Accordingly, revenue from ''Sale of products'' and ''Revenue from operations'' for the year ended December 31, 2018 are not comparable with those of the previous year.

Note : Government grants are in the form of export incentives available to the Company. There are no unfulfilled conditions or other contingencies attached to these grants. The Company did not benefit directly from any other forms of government assistance.

Note:

1. During the year ended December 31, 2017, the Company had received two show cause notices from the Collector Office, Bharuch in respect of its two raw materials (Solvents), which are covered under the Essential Commodities Act, covering the period from January 2009 to December 2017. The management made the required submissions in respect of the same and a final order was received on February 27, 2018 where the Collector has rejected the application for renewal of licenses. During the current year, the Company filed appeal with Bharuch District Court against the said order and is awaiting next date of hearing. The Company does not expect a significant impact on the financial statements on account of the matter.

2. During the current year, the Company received order from Labour Court for termination of four employees in December 2014. Against the said order, the Company has filed appeal with Labour Court, Pune and is awaiting next date of hearing. The management had terminated those employees in the best interest of the Company. The Company does not expect a significant impact on the financial statements on account of the matter.

3. The Company''s pending litigations comprise of proceedings pending with Excise, Sales/VAT tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for cases where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

b) Capital commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 211.84 lakhs (December 31, 2017 : Rs. 890.03 lakhs, January 1, 2017 : Rs. 297.36 lakhs)

c) Lease commitments

There were no non-cancellable operating leases as on December 31, 2018, December 31, 2017 and January 1, 2017.

Notes:

(1) Key Managerial Personnel who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognised as per Ind AS 19 - ''Employee Benefits'' in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not presented above.

(2) Transactions during the year reported above include impact of increase/(decrease) in provision for expenses accounted for as on year end.

III Terms and conditions for outstanding balances

Transactions with related parties were made on normal commercial terms and conditions. All outstanding balances are unsecured and payable in cash.

1 Segment reporting

(a) Description of segments and principal activities

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).

The Managing Director of the Company have been identified as the chief operating decision maker.

The CODM evaluates the performance based on the revenues and operating profit for the two segments, the composition of which is explained below:

Segment

Electrical Insulations

Products covered

The Electrical Insulation System business line comprises three product groups: wire enamels, insulating varnishes and resins, and casting and potting compounds. These products are used in the light and heavy electrical industries.

Engineering & Electronic Resins and Materials

This comprises of complete solutions for printed circuit boards (PCBs), PCB protection solutions, construction chemicals used for post construction coating applications and flexible electrical insulations.

i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments. The fair value of all equity instruments which are traded in the stock exchange is valued using the closing price as at the end of the reporting period.

Level 2: Level 2 valuations are determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. This includes mutual funds whose closing NAV is provided by Asset Management Company (AMC) and is also available on Association of Mutual Funds in India (AMFI) website.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

The use of quoted market prices or dealer quotes for similar instruments

iii) Valuation process

The finance department of the company performs the valuation of financial assets and liabilities required for financial reporting purposes including level 3 fair values. Changes in fair values are analyzed at the end of each reporting period and an explanation for the reason for fair values are discussed.

iv) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade receivables, security deposits, loans and advances to employees, fixed deposits with banks, interest accrued on fixed deposits, cash and cash equivalents, other bank balances, trade payables, security deposits received, capital creditors, payable to employees, unpaid dividend and others are considered to be reasonable approximation of their fair values.

2 Financial risk management

The Company''s activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to related parties, loans given to employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in the credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information, for eg, external credit rating (to the extent available), actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to borrower''s ability to meet its obligations.

Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set accordingly.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk , being the total of the carrying amount of balances with bank, short term deposits with banks, trade receivables and other financial assets is disclosed at the end of the each reporting period. Refer relevant notes for details. At the reporting date, there were no significant arrangements which reduced the maximum credit risk.

(B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. To assure the solvency and financial flexibility, the Company retains a liquidity reserve through cash and cash equivalents and lines of credit. The tables below analyse the Company''s financial liabilities into relevant maturity group based on their contractual maturities for :

(C) Market risk

I) Foreign currency risk

The company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The Company''s exposure to foreign currency arises from short term receivables and payables where fluctuations in the foreign exchange rates are generally not significant and consequently limiting the company''s exposure.

ii) Sensitivity

The sensitivity of profit and loss to changes in the exchange rates arises mainly from foreign currency denominated financials instruments:

II) Interest rate risk

The Company''s main interest rate risk arises from deposits placed over a period of time on frequent basis thereby exposing the Company to interest rate risk. The Company''s policy is to have fixed interest rate at the time of deal execution.

The loan to related party is carried at amortised cost. The Company recovers interest as per the terms of the agreement. The interest rate approximates the market rate of interest and hence the interest risk for loan given to related party is not considered to be substantial.

The exposure of Company''s loans to interest rate change at the end of the reporting period is described below

3 Capital Management

a) Risk management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholders value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.

No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2018 and December 31, 2017.

4 At the year end, the Company has long term contracts for which there were no material foreseeable losses. The Company does not have any derivative contracts.

5 First-time adoption

Transition to Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended December 31, 2018, the comparative information presented in these financial statements for the year ended December 31, 2017 and in the preparation of an opening Ind AS balance sheet at January 1, 2017 (the Company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

I Exemptions availed

a) Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

b) Deemed cost - Property, plant and equipment (PPE), intangible assets and investment properties

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

II Exceptions applied Estimates

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at January 1, 2017 are consistent with the estimates as at the same date made in conformity with previous GAAP.

Note:

(i) The Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.

(ii) There is no change in cash and cash equivalents on account of adoption of Ind AS. Also, there is no impact of Ind AS on the Statement of Cash Flows.

Notes to first-time adoption

1 Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as a part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 December 2017 by Rs. 2,344 lakhs. There is no impact on the total equity and profit.

2 Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended December 31, 2017 decreased by Rs. 37.88 lakhs. There is no impact on the total equity as at 31 December 2017.

3 Fair valuation of investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended December 31, 2017. This increased the retained earnings by Rs. 70.88 lakhs as at December 31, 2017 (January 1, 2017 : Rs. 70.20 lakhs)

4 Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by shareholders in the general meeting. Accordingly, the liability for proposed dividend (including tax thereon) of Rs. 429.37 lakhs as at January 1, 2017 included under short term provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

5 Other Comprehensive Income

Under Ind AS, all items of income and expenses recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expenses that are not recognized in profit or loss but are shown in statement of profit or loss as ''Other Comprehensive Income'' includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

6 Deferred tax

Deferred tax have been recognised on the adjustments made on transition to Ind AS.

7 Government Grants

Under previous GAAP, government grants in the nature of promoters'' contribution were treated as capital reserve which can be neither distributed as dividend nor considered as deferred income. Under Ind AS, in accordance with requirement of Ind AS 20, such grants are treated as deferred income and are amortised to profit or loss on a systematic basis over the useful life of the asset. As on January 1, 2017, grants amounting to Rs. 40 lakhs have been disclosed as part of retained earnings since these would be completely amortised as on transition date. There is no impact on the total equity and profit.

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Dec 31, 2016

1. Employee benefits:

2. Defined contribution plans

Amount of 7 81.03 lakhs (previous year: 76.68 lakhs) is recognized as an expense towards provident fund & 7 89.95 lakhs (previous year : 88.01 lakhs) is recognized as an expense towards superannuation and included in the ''Contributions to provident and other funds'' under note no 24.

3. Defined benefit plan (Gratuity)

The Company operates a gratuity plan wherein every employee is entitled to the benefit based on last drawn salary for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The same is funded with the Life Insurance Corporation of India.

4. Defined benefit plan (Cash rewards at retirement)

As per the plan, at the time of normal retirement, 7 2,500 (previous year 7 2,500) is payable to employees for each year of service rendered. The scheme is unfunded.

5. Segment reporting

The Company has disclosed business segments as the primary segment. Segments have been identified by the management taking into account the nature of products, manufacturing process, customer profiles, risk and reward parameters and other relevant factors.

The Company''s operations have been classified into two primary segments," Electrical Insulations" and "Engineering and Electronic Resins and Materials". Segment assets include all operating assets used by the business segment and consist primarily of fixed assets, debtors and inventories. Segment liabilities primarily include creditors and other liabilities. Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocable assets and liabilities. Secondary segments have been identified with reference to geographical location of the customers. The Company has identified India and outside India as the two geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable geographical segments, as these are used interchangeably between geographical segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets in India.

6. At the year end, the Company did not have any long term contracts for which there were any material foreseeable losses. The Company does not have any derivative contracts.

7. Operating Lease as lessor

The Company has leased out its surplus office space. The lease term is 5 years. There is an escalation and renewal clause in the lease agreement and sub-letting is not permitted. The carrying amount of the building given on operating lease and depreciation thereon for the period is: ......

8. The Board of Directors of the Company vide its resolution dated October 4,2016 has granted in principle approval for the sale of the Company''s property ("Beck House") at Pune admeasuring approximately 2,238.25 square meters, subject to the terms and conditions as mentioned in the Memorandum of Understanding executed between the Company and the buyer. Consequently, the written down value of the said property amounting to Rs. 521.08 lakhs has been classified as ''Assets held for sale'' under ''Other current assets''.

9. Previous year''s figures have been regrouped/reclassified, wherever necessary, to conform to current year''s classification.

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Dec 31, 2014

1. Contingent liabilities not provided for

(Currency : Rs. in lacs)

2014 2013

a) Claims against the Company not acknowledged as debts 182.63 185.74

b) Excise duty matters 233.14 226.96

c) Income tax matters 23.93 23.93

d) Sales tax matters 448.56 334.23

e) Guarantee in favour of Gujarat Industrial Development Corporation 12.24 12.24

2. Employee benefits :

a) Defined contribution plans

Amount of Rs. 163.63 (previous year : Rs. 154.68) is recognised as an expense towards superannuation & provident fund and included in the ''Contributions to provident and other funds'' under note no 24.

b) Defined benefit plan (Gratuity)

The Company operates a gratuity plan wherein every employee is entitled to the benefit based on last drawn salary for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The same is funded with the Life Insurance Corporation of India.

c) Defined benefit plan (Cash rewards at retirement)

As per the plan, at the time of normal retirement, Rs. .025 (previous year .025) is payable to employees for each year of service rendered. The scheme is unfunded.

3. Segment reporting

The Company has disclosed business segments as the primary segment. Segments have been identified by the management taking into account the nature of products, manufacturing process, customer profiles, risk and reward parameters and other relevant factors.

The Company''s operations have been classified into two primary segments, "Electrical Insulations" and "Engineering and Electronic Resins and Materials". Segment assets include all operating assets used by the business segment and consist primarily of fixed assets, debtors and inventories. Segment liabilities primarily include creditors and other liabilities. Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocable assets and liabilities.

Secondary segments have been identified with reference to geographical location of the customers. The Company has identified India and outside India as the two geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable geographical segments, as these are used interchangeably between geographical segments. All assets other than receivables are located in India. Similiarly, capital expenditure is incurred towards fixed assets in India.

4. A. Key management personnel and relatives of key management personnel Key management personnel :

Mr Ravindra Kumar (with effect from 1 January 2014)

Mr. Rajeev Bhide (upto 31 December 2013)

Mr. Sharadkumar Shetye (Upto 27 May 2014)

Relatives of key management personnel :

Mrs. M. R. Shetye (Upto 27 May 2014)

5. Management believes that the Company''s international transactions with related parties post 31 March 2014 (last period upto which an Accountants'' report has been submitted as required under the Income tax Act, 1961) continue to be at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on the amount of tax expense and that of provision for taxation.

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Dec 31, 2013

1. Contingent liabilities not provided for (Currency : Rs. in lacs)

2013 2012

a) Claims against the Company not acknowledged as debts 185.74 185.74

b) Excise duty matters 226.96 127.15

c) Income tax matters 23.93 23.93

d) Sales tax matters 334.23 304.40

e) Guarantee in favour of Gujarat Industrial Development Corporation 12.24 12.24

d) Notes :

1) The plan assets comprises entirely of "Insurer Managed Funds".

2) The expected return on plan assets is based on market expectations, at the beginning of the year, for returns over the entire life of related obligations.

3) The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors on a long term basis.

4) Changes enacted before the Balance Sheet date are considered while determining the obligation.

5) Expected Employer''s contribution in next year ` 18.00 (Previous year ` 30.00) .

6) Salary escalation rate is 12 % for first 2 years and 10.50% thereafter.

2. Segment reporting

The Company has disclosed business segments as the primary segment. Segments have been identified by the Management taking into account the nature of products, manufacturing process, customer profiles, risk and reward parameters and other relevant factors.

The Company''s operations have been classified into two primary segments, "Electrical Insulations" and "Engineering and Electronic Resins and Materials". Segment assets include all operating assets used by the business segment and consist primarily of fixed assets, debtors and inventories. Segment liabilities primarily include creditors and other liabilities. Assets and liabilities that cannot be allocated between the segments are shown as a part of unallowable assets and liabilities.

Secondary segments have been identified with reference to geographical location of the customers. The Company has identified India and outside India as the two geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable geographical segments, as these are used interchangeably between geographical segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets in India.

3. Management believes that the Company''s international transactions with related parties post 31 March 2013 (last period upto which an Accountants'' report has been submitted as required under the Income tax Act, 1961) continue to be at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on the amount of tax expense and that of provision for taxation.

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Dec 31, 2012

1. Segment reporting

The Company has disclosed business segments as the primary segment. Segments have been identified by the Management taking into account the nature of products, manufacturing process, customer profiles, risk and reward parameters and other relevant factors.

The Company''s operations have been classified into two primary segments, "Electrical Insulations" and "Engineering and Electronic Resins and Materials". Segment assets include all operating assets used by the business segment and consist primarily of fixed assets, debtors and inventories. Segment liabilities primarily include creditors and other liabilities. Assets and liabilities that cannot be allocated between the segments are shown as a part of unallowable assets and liabilities.

Secondary segments have been identified with reference to geographical location of the customers. The Company has identified India and outside India as the two geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable geographical segments, as these are used interchangeably between geographical segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets in India.

2.1 A. Key management personnel and relatives of key management personnel Key management personnel:

Mr. RajeevBhide

Mr. Prashant Deshpande (upto9July2012)

Mr. Sharad kumar Shetye

Relatives of key management personnel:

Mrs. M.R.Shetye

3. Management believes that the Company''s international transactions with related parties post 31 March 2012 (last period up to which an Accountants'' report has been submitted as required under the Income tax Act, 1961) continue to beat arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on the amount of tax expense and that of provision for taxation.

4. The financial statements for the year ended 31 December 2011 had been prepared as per the then applicable pre revised Schedule VI of the Companies Act 1956. Consequent to the notification of revised Schedule VI under Company''s Act 1956, the financial statements for the year ended 31 December 2012 are prepared as per revised Schedule VI. Accordingly, the previous year''s figures have also been reclassified to conform to this year''s classification.

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Dec 31, 2011

1. Employee benefits:

a) Defined benefit plan (Gratuity)

The Company operates a gratuity plan wherein every employee is entitled to the benefit based on last drawn salary for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The same is funded with the Life Insurance Corporation of India.

b) Defined benefit plan (Cash rewards at retirement)

As per the plan, at the time of normal retirement, Rs. 1 is payable to employees for each year of service rendered. The scheme is unfunded.

c) Defined contribution plans

Amount of Rs. 12,785 (previous year: Rs. 11,667) is recognised as an expense and included in the 'Contributions to provident and other funds' under note no 14.

d) Notes:

1) The plan assets comprises entirely of "Insurer Managed Funds".

2) The expected return on plan assets is based on market expectations, at the beginning of the year, for returns over the entire life of related obligations.

3) The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors on a long term basis.

4) Expected Employer's contribution in next year Rs. 1,800 (Previous year Rs. 2,000).

5) Salary escalation rate is 12 % for first 3 years and 10.50% There after.

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Dec 31, 2009

(Currency : Indian Rupees, OOP) 2009 2008

1. Contingent liabilities not provided for

a) Claims against the Company not acknowledged as debts 19,278 1,015

b) Excise duty matters 8,606 6,057

c) Income tax matters 8,234 8,076

d) Sales tax matters 37,905 32,384

e) Guarantee in favour of Gujarat Industrial Development Corporation 1,224 1,224

2. Employee benefits :

a) Defined benefit plan (Gratuity)

The Company operates a gratuity plan wherein every employee is entitled to the benefit based on last drawn salary for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The same is funded with the Life Insurance Corporation of India.

b) Defined benefit plan (Cash rewards at retirement)

As per the plan, at the time of normal retirement, Rs. 1 is payable to employees for each year of service rendered. The scheme is unfunded.

c) Defined contribution plans

Amount of Rs 10,634 (previous year: Rs. 9,797) is recognised as an expense and included in the Contributions to provident and other fundsunder note no 14

3. Segment reporting

The Company has disclosed business segments as the primary segment. Segments have been identified by the management taking into account the nature of products, manufacturing process, customer profiles, risk and reward parametersand other relevant factors.

The Companys operations have been classified into two primary segments, "Electrical Insulations" and "Engineering and Electronic Resins and Materials". Segment assets include all operating assets used by the business segment and consist primarily of fixed assets, debtors and inventories. Segment liabilities primarily include creditors and other liabilities. Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocable assets and liabilities.

Secondary segments have been identified with reference to geographical location of the customers. The Company has identified India and outside India as the two geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced. Assets other than receivables used in the Companys business or liabilities contracted have not been identified to any of the reportable geographical segments, as these are used interchangeably between geographical segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets in India.

4. Related party disclosures

4.1 A. List of related parties & relationship

SKion GmbH Holding company of ALTANA AG

ALTANA AG Holding company of Altana Chemie GmbH

ALTANA Chemie GmbH Holding company of ELANTAS GmBH

ELANTAS GmbH Holding company (88.55%)

BYK-Chemie GmbH Fellow Subsidiary

ELANTAS Beck GmbH Fellow Subsidiary

ELANTAS UK Ltd. Fellow Subsidiary

ELANTAS PDG Inc. Fellow Subsidiary

ELANTAS Deatech Sri Fellow Subsidiary

ELANTAS Tongling Co Ltd Fellow Subsidiary

ELANTAS Zhuhai Co., Ltd. Fellow Subsidiary

ELANTAS Isolantes Electricos Do Brasil LTDA Fellow Subsidiary

BYK Chemie Asia Pacific PTE Ltd Fellow Subsidiary

5. Management believes that the Companys international transactions with related parties post March 2009 (last period upto which an Accountants report has been submitted as required under the Income tax Act, 1961) continue to be at arms length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on the amount of tax expense and that of provision for taxation.

6. The previous years figures have been regrouped / reclassified wherever necessary to conform to the current years classification.