SIGNIFICANT ACCOUNTING POLICIES:

a) Basis of Preparation of Financial Statements: -

The accompanying financial statements for the fiscal period have been brpared under historical cost convention, in compliance with Indian Generally Accepted Accounting Principles ("GAAP") with mandatory and relevant Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI)and referred to Section 129 to 133 of the Companies Act 2013 of India. The accounting policies applied by the Company are consistent with those used in brvious year.

b) Revenue and Expenditure Recognition: -

Revenue is recognized and expenditure is accounted for on accrual basis.

c) Fixed Assets:-

Fixed Assets are stated at cost as increased by revaluation in case of land, building and Plant and Machinery less accumulated debrciation thereon in respect of assets acquired up to 31.03.1995. Fixed assets were revalued as on 31.03.1995.

d) Debrciation:-

Debrciation on fixed assets (including revalued assets) has been provided based on life assigned to each asset in accordance with Schedule II of the  Companies Act 2013. Debrciation on Residential Building, Furniture and Fittings, Motor vehicles, etc and addition to and deduction from such assets are provided for on pro-rata basis from/up to the month of addition/deduction.

Additional debrciation rebrsenting the difference between debrciation on revalued amount and original cost of the  assets like Land has been withdrawn from revaluation reserve.

e) Retirement benefits: -

Employer's Contributions to Provident Fund and gratuity are charged as expenditure.

f) Investments: -

Long Term Investments made by the Company in shares are valued as per the Accounting Standards issued by The Institute of Chartered Accountants of India. Provision has been made for permanent diminution in the value of Long Term investments.

g) Inventories: -

Inventories are valued at lower of cost or estimated net realizable value as certified by the Managing Director of the company. Cost of inventories is computed on a weighted average basis. The value of finished goods and work in progress include cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. Proceeds in respect of sale of raw materials or stores will be credited to the respective heads. The closing stock of scrap, waste products such as lime sludge are not valued and shown in the balance sheet as in the opinion of the  management these items do not have a ready market.

h) Treatment of contingent Liabilities: -

Contingent liabilities not provided for, are disclosed by way of Notes to accounts with particulars of the  nature and quantum, wherever possible, of such liabilities.

i) Segment Reporting:-

The Company has carried out no trading activity and hence there is no separate segment as per AS-17issuedbylCAI.

j) Earnings per Share:-

The Company reports basic earning per share in accordance with AS-20 for "Earnings per Share" issued by the ICAI. Basic earning per share has been computed by dividing net profit by the weighted average number of equity shares outstanding for the year,

k) Accounting fortaxes on Income: -

Income tax expense is recognized in accordance with AS-22- "Accounting for Taxes on Income" which includes current taxes and deferred taxes.

Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred Tax assets are not recognized in the absence of reasonable/virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

15. NOTES FORMING PART OF ACCOUNT:

1. Disputed liabilities not provided for: Central Excise Refund

As per the order of the Asst. Commissioner of Central Excise, Kottayam Division, Kottayam dated 23.12.1998 holding that Calcium Carbide manufactured and used captive consumption in the manufacture of acetylene black within the factory is not liable for levy of excise duty, the company is entitled to a refund of excise duty of Rs.82,89,691/- in respect of the period from April 1978 to July, 1983.

This was confirmed by the Hon'ble CEGAT, New Delhi as per the order No.A/1076/02 NB (D) dated 24.10.2002. Based on the above order the company filed a refund claim for Rs.82,86,691/- before the Deputy Commissioner of Central Excise, Kottayam Division on 30.01.2003. However the Deputy Commissioner allowed only Rs.37,99,198/- as refund and the same was recognized as income in the Profit & Loss account in the year 2002-2003. The claim for the balance amount of Rs.44,86,993/- was rejected by the Excise authorities for want of proof for payment of duty.

Against this order the company had filed an appeal before the Commissioner of Central Excise and Customs (Appeals) Cochin on 22-10-2003 and the appeal was disposed of in favour of the Company.

The Department has gone in Appeal. In view of the  above, the claim forthe refund of the  balance amount of Rs. 44,86,993/- has not been recognized in the accounts. Company has also filed appeal before CEGAT, New Delhi for release of balance amount, which is pending for disposal.

3. Contingent Liabilities:

The Company had acquired lease hold land and invested a sum of Rs. 1.76 Lakhs thereon. The Government has taken decision to resume to land vide G.0.117/2015 dated 20.3.2015.

4. Other matters:

A. InterCorporate Deposit:

The Company has given Inter-corporate Deposits to Rashtriya Metal Industries Ltd. Rs.225 Lakhs, Vindhyachal Hydro Power Ltd. Rs.50 Lakhs, Indian Energen Ltd Rs.62 Lakhs and D.S. Kulkarni Developers Ltd Rs.75 Lakhs. These Inter-corporate deposits have been made with the aforesaid Companies against security of Post dated Cheques. The Company is receiving interest on the deposits regularly.

B. Survey of freehold land of the  Company at Chingavanam:

The independent Directors of the Company had conducted physical survey of the freehold land at Chingavanam during the brvious year and no discrepancy has been found by them.

C. Advance given to parties:

The Company has given recoverable advance to Mr. Joseph Manual Rs.10 Lakhs. The company is expecting to recover the advances soon.

D. Sale of surplus land at Chingavanam:

The Company had entered into an agreement for sale of surplus land at Chingavanam with some parties who had paid a sum of Rs. 6 Crores as advance. However they defaulted in making the balance consideration as per agreement for sale dated 4.7.2012 in spite of extension of time granted to them. The said agreement was cancelled in terms of clause 8 thereof and the Company refunded Rs. 5 Crores by way of Cheques, after recovering Rs. 1 Crore towards opportunity loss, claim, etc. However the Cheques were returned with remark "REFUSED" on the envelope by Postal Department. The Company maintains that the amount of Rs. 5 Crores is still payable to the party.

E. Due to Small Scale Industrial undertakings.

There is no outstanding dues as defined under the Interest on Delayed Payments of Small Scale and Ancillary Industrial Undertaking Act, 1933 and section 3(i) of the Industrial (Development and Regulation) Act, 1951.

5. Current Assets

5.1. As the Company has been under Lockout since July 1999, dues under the heads Sundry Debtors, Loans and Advances and Current Liabilities including Sundry Creditors are subject to confirmation.

5.2. Sundry Debtors include an amount of Rs.36,18,754/- (Rs.95,73,047/-) due for a period exceeding three years. The Company has filed suits before judicial authorities for recovery of dues. During the current year, the Company has adjusted the balance of the receivable against the provision created earlier.

5.3. A sum of Rs.7,193/-was lying as balance in Central Bank of India for years. Since there was no transactions with them for many years, now it is understand that the Bank has written back it as their charges. Accordingly the balance is treated as bank charges.

6. Fundamental accounting assumption regarding Going Concern.

As pending issues inter-alia resumption of power supply, grant of Financial Assistance and other incentives from State Government and other concerned Authorities remain unresolved, the chances of early resumption of manufacturing activities of viable plants receded. The Company has disposed off its Factory Buildings, Plant & Machineries etc at Chingavanam during the year 2011-12. The above conditions indicate the existence of material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

16.The Sundry Debtors, Sundry Creditors and Loans and Advances are subject to confirmation, reconciliation, and adjustments. The Management is of the opinion that such reconciliation or adjustments if any will not materially affect the accounts. 17. Traveling Expenses of Directors, which are incurred for purposes other than business.

18 In view of the accumulated losses, the Management has not provided deferred tax assets as well as deferred tax liabilities.

19 Hence the disclosure in respect of accounting of taxes on income as required under Accounting Standard 22 issued by ICAI is not done. Figures are given in thousands unless otherwise stated  Figures of the brvious year have been regrouped / rearranged wherever necessary and are given in bracket unless otherwise specified.

20.The Company has completed the above accounts based on the revised / modified Schedule III applicable for the accounting period 2014-15. The disclosure requirements are made in the notes to accounts or by way of additional statements. The other disclosures as required by the Companies Act are made in the notes to accounts.

As per attached report of even date

For and behalf of Board of Directors

ForVMD&Co.

CHARTERED ACCOUNTANTS

FRN: 125002W

Sd/-S. B. SOMANI

CHAIRMAN & MANAGING DIRECTOR

Sd/- VIJAY KUMAR DESAI

Membership No. F/9219 No. A/01/0515

Sd/-G. K. JOSHI DIRECTOR

Place: Mumbai

Date: 29th May, 2015