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Notes to Accounts of Kama Holdings Ltd.

Mar 31, 2023

i. Terms/rights attached to Non-Cumulative Redeemable Preference Shares

8% Non-Cumulative Redeemable Preference Shares were redeemed on 30.04.2022 as decided by Board of Directors of the company vide Board Meeting held on 28.03.2022.

ii. During the year ended March 31, 2023, the Company has paid a dividend of INR 8.49 lakhs on preference shares of INR 10 each fully paid (previous year March 31, 2022 INR 103.36 lakhs).

b) Terms/ rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Board may from time to time pay to the members such interim dividends as appear to it to be justified by the profits of the Company.

During the year ended March 31,2023, the amount of interim dividend recognised as distributions to equity shareholders was Rs. 166 per share (March 31, 2022: Rs. 162 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d) There are no shares reserved for issue under options and contracts/commitments for the sale of shares or disinvestment, including the terms and amounts.

e) In the period of immediately preceding five years,the Company has not allotted any bonus shares.

f) Equity Shares Extinguished on Buy-Back

The Board of Directors of the Company, at its meeting held on 12 December 2022 had approved a proposal to buyback upto 34,500 equity shares of the Company being 0.53% of the total number of equity shares in the paid up equity share capital of the Company at a price of Rs. 14,500 per equity share for an aggregate amount not exceeding Rs. 50,02,50,000. A Letter of Offer was made to all eligible shareholders. The Company bought back 34,500 equity shares out of the shares that were tendered by eligible shareholders and extinguished the equity shares bought back on 24 February 2023. The Company has utilised its Retained Earnings (Rs. 4,999.05 Lakhs) and General Reserve (Rs.

3.45 Lakhs) for the buyback of its equity shares and tax of Rs. 1,164.58 Lakhs was offset from retained earnings. In accordance with Section 69 of the Companies Act 2013, the Company has created Capital Redemption Reserve of Rs.

3.45 Lakhs equal to the nominal value of the shares bought back as an appropriation from the General Reserve.

24. Post-Employment Benefit Plans:

The Company sponsors funded defined benefit plans for qualifying employees. The defined benefit plans are administered by separate funds which are legally separate from the Company. These plans are:

Provident fund for certain category of employees administered through a recognised provident fund trust.

(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the planâs liability.

Interest Risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in value of the liability. Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plans liability.

Defined Contribution Plans:

Contributions paid / payable to defined contribution plans comprising of provident fund, pension fund, superannuation fund etc., in accordance with the applicable laws and regulations are recognised as expenses during the period when the contributions to the respective funds are due.

27. The company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2016 and does not require registration with Reserve Bank of India under the said directions.

28. The company operates mainly in the business segment of investment activity. As such there are no reportable segments as per IND As 108 on operating segment.

29. Financial Instruments & Risk management29.1 Capital management

The Company is cash surplus and has only equity capital and preference shares. The Company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2016 and does not require registration with Reserve Bank of India under the said directions.

The cash surpluses are currently invested in equity instruments and inter -corporate loan depending on economic conditions in line with investment policy set by the Management. Safety of capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds.

The Company does not have any borrowings.

29.2 Financial Risk Management

The Company being a Core Investment Company as per the Core Investment Companies (RBI) Directions, 2016 is required to invest or lend majority of itâs fund to subsidiaries. The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support Companyâs operations. The Companyâs principal financial assets include inter corporate deposits, loans, cash and cash equivalents and other receivables. The Company is exposed to market risk, credit risk, liquidity risk and operational and business risk. The Companyâs management oversees the management of these risks. The Companyâs senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The major risks are summarised below:

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. In the case of the Company, market risk primarily impacts financial instruments measured at fair value through profit or loss.

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. The Company does not have exposure to the risk of changes in market interest rate as it does not have debt obligations.

Credit risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer contract, leading to a financial loss. The Company is exposed to credit risk from its financing activities towards inter corporate deposits to subsidiaries, where no significant impact on credit risk has been identified.

Equity price risk:

The Companyâs investment in subsidiaries are accounted at cost in the financial statement net of impairment. The expected cash flow from these entities are regularly monitored to identify impairment indicators.

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 Companyâs corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Company manages its liquidity requirement by analysing the maturity pattern of the Companyâs cash flow of financial assets and financial liabilities . The Companyâs objective is to maintain a balance between continuity of funding and flexibility through issuance of equity shares etc. The Company invests its surplus funds in subsidiary companies.

Mar 31, 2022

Terms/ rights attached to equity shares:

During the year ended March 31,2022, the amount of interim dividend recognised as distributions to equity shareholders was Rs. 162 per share (March 31, 2021 : Rs. 108 per share).

24. Post-Employment Benefit Plans:

The Company sponsors funded defined benefit plans for qualifying employees. The defined benefit plans are administered by separate funds which are legally separate from the Company. These plans are:

(a) Gratuity

(b) Provident fund for certain category of employees administered through a recognised provident fund trust

(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment. Salary Risk.

Interest Risk

Longevity Risk

(a) Defined Contribution Plans:

A sum of Rs. 3.74 lakhs (Previous Year Rs. 4.53 lakhs) has been charged to the Statement of Profit & Loss in this respect.

27. Tax on distributed profits :

Amendment made by the finance act 2020 has introduced abolition of DDT as per section 115-O for the companies. Now the dividends are taxed in the hands of the investors.

28. The company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2011 and does not require registration with Reserve Bank of India under the said directions.

29. The company operates mainly in the business segment of investment activity. As such there are no reportable segments as per IND AS 108 on operating segment.

30. Financial Instruments & Risk management30.1 Capital management

The Company is cash surplus and has only equity capital and preference shares. The Company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2011 and does not require registration with Reserve Bank of India under the said directions.

The Company does not have any borrowings.

30.2 Financial Risk Management

The Company is exposed to market risk, credit risk, liquidity risk and operational and business risk. The Companyâs management oversees the management of these risks. The Companyâs senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The major risks are summarised below:

Market Risk

Credit risk

Equity price risk:

Liquidity risk

Mar 31, 2018

1. POST-EMPLOYMENT BENEFIT PLANS:

(a) Defined Contribution Plans:

Contributions paid / payable to defined contribution plans comprising of provident fund, pension fund, superannuation fund etc., in accordance with the applicable laws and regulations are recognized as expenses during the period when the contributions to the respective funds are due.

A sum of Rs. 3.22 lakhs (Previous Year Rs. 2.75 lakhs) has been charged to the Statement of Profit & Loss in this respect

(b) Defined Benefit Plans:

The Company has defined benefit plan, namely gratuity. As per scheme, an employee who has completed five years or more of service gets gratuity equivalents to 15 days salary (last drawn salary) for each completed year of service.

The following table summarizes the components of net expense recognized in the income statement and amounts recognized in the balance sheet for gratuity.

Company estimated contribution for next year is Rs. 1.83 lakhs (previous year Rs.1.53 lakhs)

2. RELATED PARTY TRANSACTIONS

(i) List of related parties and relationships :

(a) Enterprises that directly, or indirectly through (i) KAMA Realty (Delhi) Limited one or more intermediaries are controlled by the

(ii) Shri Educare Limited reporting enterprise

(iii) SRF Limited

(iv) SRF Transnational Holdings Limited

(b) Individuals owning, directly or indirectly, an (v) Arun Bharat Ram interest in the voting power of the reporting (vi) Ashish Bharat Ram enterprise that gives them control or significant influence over the enterprise, and relatives of any (vii) Kartik Bharat Ram such individual

(viii) Vasvi Bharat Ram

Officer& Company Secretary

3. TAX ON DISTRIBUTED PROFITS

The interim dividend to equity shareholders (Rs.967.89 lakhs) as well as proposed dividend to preference shareholders (NIL) is paid out of dividend received from the subsidiary (Rs.3605.88 lakhs). No tax is payable under section 115-O of the Income Tax Act, 1961 and hence no provision has been made for dividend distribution tax.

4. The company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2011 and does not require registration with Reserve Bank of India under the said directions.

5. The company has only one segment i.e. Core Investments.

6. Previous year figures have been regrouped/ rearranged to accord with current year classification.

Mar 31, 2017

81 EARNING PER SHARE

The earnings considered in ascertaining the Companyâs Earnings Per Share (âEPSâ) comprise the net profit after tax after reckoning of dividend to equity and preference shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

1.2 Guarantees provided on behalf of wholly-owned subsidiary KAMA Realty (Delhi) Limited for repayment of loans and interest thereon amount to Rs 19.25 crores (Previous Year Rs 28.59 crores) which is a related party.

The contribution to provident and superannuation funds is made to M/s SRF Limited which maintains separate funds administered by trusts.

Apart from being covered under the Gratuity Plan described above, the employees of the Company also participate in a defined contribution superannuation plan maintained by the Company. The Company has no further obligations under the plan except making annual contributions based on a specified percentage of each covered employeeâs salary. The Company provided an option to the employees to receive the said benefit as cash compensation along with salary in lieu of the superannuation benefit. Thus, no contribution is required to be made for the category of employees who opted to receive the benefit in cash.

Provident Fund - Defined Contribution Plan

All employees are entitled to Provident Fund benefits as per the law. For certain category of employees the Company administers the benefits through a recognized Provident fund trust. For other employees contributions are made to the regional Provident Fund Commissioners as per law. The Government mandates the annual yield to be provided to the employees on their corpus. For the first category of employees (covered by the Trust), the Company has an obligation to make good the shortfall, if any, between the yield on the investments of the trust and the yield mandated by the Government.

2. Related Party Transactions

(i) List of related parties and relationships:

(a) Enterprises that directly, or indirectly through one or (i) KAMA Realty (Delhi) Limited more intermediaries, control or are controlled by, or are (ii) Shri Educare Limited under common control with, the reporting enterprise (iii) SRF Limited

(iv) SRF Transnational Holdings Limited

(b) Individuals owning, directly or indirectly, an interest in the (v) Arun Bharat Ram voting power of the reporting enterprise that gives them (vi) Ashish Bharat Ram control or significant influence over the enterprise, and (vii) Kartik Bharat Ram relatives of any such individual (viii) Vasvi Bharat Ram

(c) Key Management Personnel (ix) Rajat Lakhanpal, Whole Time Director, Chief

Financial Officer, & Company Secretary

3. Tax on distributed profits: The interim dividend to equity shareholders (Rs.9.68 crores) as well as proposed dividend to preference shareholders (Rs.1.03 crores) is paid out of dividend received from the subsidiary (Rs.36.06 crores). No tax is payable under section 115-O of the Income Tax Act, 1961 and hence no provision has been made for dividend distribution tax.

5. The company has only one segment i.e. Core Investments.

6. In terms of notification dated 30^th March 2017 issued by Ministry of Corporate Affairs, The company is require to disclose the details of ¹Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016. The said information is provided in the table below:

Mar 31, 2016

*out of the above amount a sum of Rs. 1.05 crores has been deposited under protest.

There are no dues of Income-tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on March 31, 2016 on account of disputes.

1. Guarantees provided on behalf of wholly-owned subsidiary KAMA Realty (Delhi) Limited for repayment of loans and interest thereon amount to Rs 28.59 crores (Previous Year Rs 25.73 crores) which is a related party.

The contribution to provident and superannuation funds is made to M/s SRF Limited which maintains separate funds administered by trusts.

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards.

Reconciliation of opening and closing balances of Defined Benefit Obligations

Superannuation - Defined Contribution Plan

Provident Fund - Defined Contribution Plan

5. Related Party Transactions

(i) List of related parties and relationships:

(a)

Enterprises that directly, or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, the reporting enterprise

(i) KAMA Realty (Delhi) Limited

(ii) Shri Educare Limited

(iii) SRF Limited

(iv) SRF Transnational Holdings Limited

(b)

Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual

(v) Arun Bharat Ram

(vi) Ashish Bharat Ram

(vii) Kartik Bharat Ram

(viii) Vasvi Bharat Ram

(c)

Key Management Personnel

(ix) Rajat Lakhanpal, Whole Time Director ,Chief Financial Officer, &

*Includes investment of Rs. 6.82 crores (pr. Yr. Rs.Nil) in equity shares of SRF Limited acquired from open market.

2. Tax on distributed profits: The interim dividend to equity shareholders (Rs.9.68 crores) as well as proposed dividend to preference shareholders (Rs.1.03 crores) is paid out of dividend received from the subsidiary (Rs.30.05 crores). No tax is payable under section 115-O of the Income Tax Act, 1961 and hence no provision has been made for dividend distribution tax.

3. The company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2011 and does not require registration with Reserve Bank of India under the said directions.

4. The company has only one segment i.e. Core Investments.

5. Previous year figures have been regrouped/ rearranged to accord with current year classification.

Mar 31, 2015

1. Contingent Liabilities

Claims against the Company not acknowledged as debts on account of:

As at As at March 31, 2015 March 31, 2014 Rs./lakhs Rs./lakhs

Income Tax* 340.32 122.23

Under Business Transfer Agreement with SRF Limited for Excise Duty/Sales Tax 2,102.30 2,102.30

*out of the above amount a sum of Rs. 104.83 lakhs has been deposited under protest.

2. The details of dues of Income-tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on March 31, 2015 on account of disputes are given below:

Name of Nature of Forum where dispute is the Statute the dues pending

Income Tax Laws Income Tax Upto Commissioner (Appeals)

Name of Period to which the Amount** the Statute amount relates (Rs. in lakhs) (various years covering the period)

Income Tax Laws 2010-2011 5.82

**amount as per demand orders including interest and penalty wherever quantified in the Order.

3. The following matters, which have been excluded from the above table, have been decided in favour of the Company but the department has preferred appeals at higher levels. The details are given below:

Name of Nature of Forum where dispute is the Statute the dues pending

Income Tax Laws Income Tax Supreme Court

High Court

Income Tax Appellate Tribunal (ITAT)

Name of Period to which the Amount** the Statute amount relates (Rs. in lakhs) (various years covering the period)

Income Tax Laws 2007-08 37.43

2003-04 5.57

2003-2010 186.68

Guarantees provided on behalf of wholly-owned subsidiary KAMA Realty (Delhi) Limited for repayment of loans and interest thereon amount to Rs 2,573.19 lakhs (Previous Year Rs 2,086.83 lakhs) which is a related party.

4. Provident Fund - Defined Contribution Plan

All employees are entitled to Provident Fund benefits as per the law. For certain category of employees the Company administers the benefits through a recognized Provident fund trust. For other employees contributions are made to the regional Provident Fund Commissioners as per law. The Government mandates the annual yield to be provided to the employees on their corpus. For the first category of employees (covered by the Trust), the Company has an obligation to make good the shortfall, if any, between the yield on the investments of the trust and the yield mandated by the Government.

5. Related Party Transactions

(i) List of related parties and (i) KAMA Realty (Delhi) Limited relationships:

(a) Enterprises that directly, (ii) Shri Educare Limited or indirectly through one or more intermediaries, control (iii) SRF Limited or are controlled by, or are under common control with, the (iv) KHL Investments Limited reporting enterprise (v) SRF Transnational Holdings Limited

(b) Individuals owning, directly (vi) Arun Bharat Ram or indirectly, an interest in the voting power of the reporting (vii) Ashish Bharat Ram enterprise that gives them control or significant influence over the (viii) Kartik Bharat Ram enterprise, and relatives of any such individual

(c) Key Management Personnel (ix) Rajat Lakhanpal, Whole Time Director, Chief Financial Officer & Company Secretary

6. Tax on distributed profits: The interim dividend to equity shareholders (Rs.967.89 lakhs) as well as proposed dividend to preference shareholders (Rs.103.35 lakhs) is paid out of dividend received from the subsidiary (Rs.3,000.00 lakhs). No tax is payable under section 115-O of the Income Tax Act, 1961 and hence no provision has been made for dividend distribution tax.

7. The company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2011 and does not require registration with Reserve Bank of India under said directions.

8. The company has only one segment i.e. Core Investments.

9. Previous year figures have been regrouped/ rearranged to accord with current year classification.

Mar 31, 2014

1. Contingent Liabilities

1.1 Claims against the Company not acknowledged as debts on account.

Mar 31, 2013

1. Contingent Liabilities

1.1 Claims against the Company not acknowledged as debts on account of:

As at March 31, 2013 As at March 31, 2012 Rs./lakhs Rs./lakhs

Income Tax 308.87 540.33

Under Business Transfer Agreement with SRF Limited for Excise Duty/Sales Tax 2,102.30 1,831.81

1.2 Guarantees provided on behalf of wholly-owned subsidiary for repayment of loans and interest thereon amount to Rs 2,382.34 lakhs (Previous Year Rs 2,617.28 lakhs) which is a related party.

2. The Company had entered into Non-Compete Agreements whereby the Company had inter-alia agreed not to engage, directly or indirectly, in the manufacturing and selling thereof as would compete with SRF Ltd in respect of Engineering Plastics and Industrial Yarn, in any country of the world for a period of 5 years from the date of the Business Transfer Agreement, i.e., 1st January 2009.

3. SRF Limited has become subsidiary of the company during the year w.e.f. 03rd August 2012.

4. The company has incorporated a subsidiary namely KHL Investments Limited on 06th August 2012. KHL Investments Limited intends to apply for registration as Non-Banking Finance Company as per regulations/guidelines notified from Reserve Bank of India.

5. Capital Commitment

The company has got capital commitment to pay a sum of Rs.187.50 lakhs (Previous Year Rs.200.00 lakhs) on the units held by it in Asian Healthcare Fund Investment Trust on the basis of as and when further calls are made. Presently units of Rs.100 each are paid up to the extent of Rs.25 each (Previous Year Rs.20 each).

6. Tax on distributed profits

The interim dividend to equity shareholders (Rs.64.53 lakhs) as well as proposed dividend to preference shareholders (Rs.103.35 lakhs) is paid out of dividend received from the subsidiary (Rs.2,904.31 lakhs), no tax is payable under section 115-O of the Income Tax Act, 1961 and hence no provision has been made for dividend distribution tax.

7. Earning Per Equity Share

Annualized earnings per equity share has been calculated based on the net profit after taxation of Rs 3,007.29 lakhs (previous year Rs 3,845.29 lakhs) less dividend to preference shareholders Rs.103.35 lakhs (previous year Rs.103.35 lakhs) and dividend tax thereon Rs.Nil (previous year Rs. 16.77 lakhs) and the average number of equity shares of 6,452,615 (previous year 6,452,615).

Basic earnings per share for the year is Rs. 45.00 (Previous Year Rs. 57.73).

The Company has not issued any financial instruments which have an effect of diluting the earning of equity. Hence diluted earning does not arise.

8. The company is a Core Investment Company (CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2011 and does not require registration with Reserve Bank of India under said directions.

9. The company does not have any other segment.

10. Previous year figures have been regrouped/ rearranged to accord with current year classification

Mar 31, 2012

1. Contingent Liabilities

1.1 Claims against the Company not acknowledged as debts on account of: Rs./lakhs

March 31, 2012 March 31, 2011

Income Tax 540.33 238.27

Under Business Transfer Agreement with SRF Limited for Excise Duty/Sales Tax 1,831.81 1,831.81

1.2 Guarantees provided on behalf of wholly-owned subsidiary for repayment of loans and interest thereon amount to Rs 2,617.28 lakhs (PrYrRs 2,884.42 lakhs).

2. The Company had entered into Non-Compete Agreements whereby the Company had inter-alia agreed not to engage, directly or indirectly, in the manufacturing and selling thereof as would compete with SRF Ltd in respect of Engineering Plastics and Industrial Yarn, in any country of the world for a period of 5 years from the date of the Business Transfer Agreement, i.e., January 1, 2009.

3. Capital Commitment

Kama Holdings Limited has capital commitment for purchase of units of Rs. 200 Lakhs in Asian Healthcare Fund Investment Trust.

4. The Company, being a Systemically Important Core Investment Company under the Core Investment Companies (Reserve Bank) Directions, 2011 issued by Reserve Bank of India, intends to apply for registration during the current year as a Core Investment Company.

The contribution to provident and superannuation funds is made to M/s SRF Limited which maintains separate funds administered by trusts. *The director is entitled to a fixed remuneration irrespective of the profits or losses in accordance with Part II Section II of Schedule XIII to the Companies Act, 1956.

5. Earning Per Equity Share

Annualized earnings per equity share have been calculated based on the net profit after taxation of Rs 3,845.29 lakhs (Pr Yr Rs 5,512.95 lakhs) less dividend to preference shareholders and dividend tax thereon Rs 120.12 lakhs (Pr Yr 120.12 lakhs) and the average number of equity shares of 6,452,615 (Pr Yr 6,452,615).

Basic earnings per share for the year is Rs 57.73 (Pr Yr Rs 83.58).

The Company has not issued any financial instruments which have an effect of diluting the earning of equity. Hence diluted earning does not arise.

6. Previous year figures have been regrouped/rearranged to accord with the Revised Schedule VI.

Mar 31, 2011

1. Contingent Liabilities

1.1 Claims against the Company not acknowledged as debts on account of:

Rs/lakhs 31-Mar-2011 31-Mar-2010

Income Tax 238.27 277.03

Under Business Transfer Agreement with SRF Limited for Excise Duty/Sales Tax 1,831.81 1,841.31

1.2 Guarantees provided on behalf of wholly-owned subsidiary for repayment of loans and interest thereon amount to Rs 2,884.42 lakhs (Pr Yr Rs 6,220 lakhs).

2. The Company had entered into Non-Compete Agreements whereby the Company had inter-alia agreed not to engage, directly or indirectly, in the manufacturing and selling thereof as would compete with SRF Ltd in respect of Engineering Plastics and Industrial Yarn, in any country of the world for a period of 5 years from the date of the Business Transfer Agreement, i.e., 1st January 2009.

3. The Company, being a Systemically Important Core Investment Company under the Core Investment Companies (Reserve Bank) Directions, 2011 issued by Reserve Bank of India, intends to apply for registration as a Core Investment Company.

4. Directors' Remuneration* The contribution to provident and superannuation funds is made to M/s SRF Limited which maintains separate funds administered by trusts.

*The director is entitled to a fixed remuneration irrespective of the profits or losses in accordance with Part II Section II of Schedule XIII to the Companies Act, 1956.

5. Related Party Transactions

(i) List of related parties and relationships:

(a) Enterprises that directly, or - KAMA Realty (Delhi) Ltd. indirectly through one or more - Shri Educare Ltd. intermediaries, control or are - SRF Polymers Investments Ltd. controlled by, or are under common (since dissolved pursuant to control with,the reporting Scheme of Arrangement) enterprise

(b) Associates - - SRF Ltd. - SRF Properties Ltd.

(c) Individuals owning, directly - Manju Bharat Ram or indirectly, an interest in the - Ashish Bharat Ram voting power of the reporting - Kartikeya Bharat Ram enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual

(d) Key Management Personnel - Rajat Lakhanpal, Whole Time Director

(e) Enterprises over which any - Karm Farms Pvt. Ltd. person described in (c) or (d) - Srishti Westend Greens Farms is able to exercise significant Pvt. Ltd influence - Bharat Ram Associates Pvt. Ltd. - Karmav Holdings Pvt. Ltd. - Narmada Farms Pvt. Ltd. (since dissolved pursuant to Scheme of Arrangement) - Bhairav Farms Pvt. Ltd.(since dissolved pursuant to Scheme of Arrangement)

6. Earning Per Equity Share

Annualised earnings per equity share have been calculated based on the net profit after taxation of Rs 5,512.95 lakhs (Pr Yr Rs 973.61 lakhs) less dividend to preference shareholders and dividend tax thereon Rs 120.12 lakhs (Pr Yr Nil) and the average number of equity shares of 6,452,615 (Pr Yr 6,452,615).

Basic and diluted earning per share for the year is Rs 83.58 (Pr Yr Rs 15.09).

7. The Composite Scheme of Arrangement approved by the Hon'ble Delhi High Court vide order dated 24th February 2011 consists of:

a. Demergerof Real Estate Division of Narmada Farms Private Limited (NFPL), Bhairav Farms Private Limited (BFPL) and SRF Polymers Investments Limited (SRFPIL) to Srishti Westend Greens Farms Private Limited, Karm Farms Private Limited and KAMA Realty (Delhi) Limited respectively; and

b. Amalgamation of Investment Division of NFPL, BFPL and SRFPIL into KAMA Holdings Limited

c. Issue of 12,919,412 - 8% Non-cumulative Redeemable Preference Shares of Rs 10 each fully paid up and 4,838,249 equity shares of Rs 10 each fully paid up simultaneous to cancellation of 4,838,249 equity shares of Rs 10 each fully paid up pursuant to Scheme of Arrangement.

with effect from the appointed date, i.e., 01st April 2010 on scheme becoming effective, i.e., 31st March 2011 when a certified copy of the order dated 24th February 2011 was filed with the Registrar of Companies.

d. The amalgamation of Investment Divisions of NFPL, BFPLand SRFPIL into the Company has been done as 'amalgamation in the nature of purchase'. This has given rise to capital reserve of Rs 20,345.06 lakhs.

e. As per conditions imposed by Bombay Stock Exchange Limited (BSE) while granting its 'No Objection' to the Scheme of Arrangement, 1,209,563 equity shares issued to the promoters [out of equity shares allotted in (c) above] have been put under lock-in for a period of three years from the date of listing of new shares on the BSE. The new equity shares issued by the company pursuant to Scheme of Arrangement have been listed on BSE.

8. Previous year figures have been regrouped/recast/rearranged, wherever necessary, to conform to current year classifications.

Mar 31, 2010

1. Contingent Liabilities

1.1 Claims against the Company not acknowledged as debts on account of:

Rs/lakhs

31-Mar-2010 31-Mar-2009

Income Tax 277.03 279.98

1.2 As per Business Transfer Agreement (BTA) with SRF Ltd, the Company has given representations and warranties for the liabilities of Rs 1,813.21 lakhs (Pr Yr Rs 1,821.93 lakhs) and Rs 28.10 lakhs (Pr Yr Rs 28.10 lakhs) respectively towards Excise Duty and Sales Tax.

1.3 Guarantees provided on behalf of wholly-owned subsidiary SRF Polymers Investment Ltd for repayment of loans and interest thereon amount to Rs 6,220 lakhs (Pr Yr Rs 8,401 lakhs). The Company has also pledged Nil (Pr Yr 66,70,795 shares) of SRF Ltd for loan facilities provided to the said wholly-owned subsidiary.

1.4 The Company has given a surety of Rs 5.00 lakhs (Pr Yr Rs 5.00 lakhs) on behalf of SRF Ltd to Delhi Sales Tax Authorities.

2. The Company had entered into Non-Compete Agreements whereby the Company had inter-alia agreed not to engage, directly or indirectly, in the manufacturing and selling thereof as would compete with SRF Ltd in respect of Engineering Plastics and Industrial Yarn, in any country of the world for a period of 5 years from the date of the Business Transfer Agreement, i.e., 1st January 2009. Also refer to the note no. 2.2 regarding contingent liabilities.

3. The Company intends to apply for exemption from registration under section 45-IA of the Reserve Bank of India Act, 1934 after repayment of all public deposits.

4. No provision for taxation is made during the current year as no tax is payable either under the normal provisions of the Act or under provisions of Minimum Alternate Tax.

5. Prior Period Item

The current year profit and loss account includes prior period expenditure of Rs 13.39 lakhs (Pr Yr Rs 388.11 lakhs).

Having regard to the fact that there is a global contribution to gratuity fund and towards leave encashment the amount applicable to an individual employee is not ascertainable and accordingly contribution to gratuity fund and leave encashment have not been considered in above computation.

*The director is entitled to a fixed remuneration irrespective of the profits or losses in accordance with Schedule XIII to the Com- panies Act, 1956.

6. Earning Per Equity Share

Annualised earnings per equity share have been calculated based on the net profit after taxation of Rs 973.61 lakhs (Pr Yr Rs 2,040.38 lakhs) and the average number of equity shares of 6452615 (Pr Yr 6452615). Basic and diluted earning per share for the year is Rs 15.09 (Pr Yr Rs 31.62).

7. The Company has no forex exposure as on 31st March 2010.

8. The Board has approved a Scheme of Arrangement under Section 391 to 394 of the Companies Act, 1956 to segregate real estate division and residual undertaking comprising of investment division in different companies resulting in, inter-alia, better investor focus, realize the growth and profitability of these businesses and provide better value to the shareholders of the companies concerned. The Scheme involves: -

a. Demerger of real estate division of SRF Polymers Investments Limited, a wholly owned subsidiary of the Company, to KAMA Realty (Delhi) Limited, another wholly owned subsidiary of the Company.

b. Merger of residual SRF Polymers Investments Limited, a wholly owned subsidiary of the Company into the Company.

c. Demerger of real estate division of Narmada Farms Private Limited and Bhairav Farms Private Limited into Srishti Westend Greens Farms Private Limited and Karm Farms Private Limited respectively.

d. Merger of residual Narmada Farms Private Limited and residual Bhairav Farms Private Limited into the Company.

*Net of sales returns and damaged stocks, etc.

**Includes goods bought out Nil (Pr Yr 412.88 MT)

9. Previous year figures have been regrouped/recast/rearranged, wherever necessary, to conform to current year classifications. The figures for the previous year includes operations of the company in Engineering Plastics and Industrial Yarn Businesses from 01-Apr-2008 to 31-Dec-2008 since these businesses were sold off to SRF Ltd with effect from 01-Jan-2009.

@ Becomes subsidiary of the Company by virtue of wholly owned subsidiary of SRF Polymers Investments Limited.

# Becomes subsidiary of the Company by virtue of wholly owned subsidiary of Shri Educare Limited.

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