Notes to Accounts of Binny Mills Ltd.

Mar 31, 2016

1. The Company has a pending litigation in the court of City Civil Judge at Bengaluru, in the form of compensation payable by the Company and S V Global Mills Ltd to the legal successors of a victim who died in an electricity accident outside the premises of the Company’s showroom at Bengaluru.

2. In the opinion of the Management, all current assets, debtors and loans and advances would, in the ordinary course of business, realize at the value stated.

3. Acknowledgement of Balances: The Company has obtained confirmation of balances from all the banks. In respect of Debtors and Creditors, the confirmations of balances were sought for by the company or by the concerned parties, as the case may be. The reconciliation of discrepancies in balances, wherever applicable, is in progress.

4. There are no Obsolete/Damaged stocks with the company for the year ended 31^st March, 2016.

During the year, due to flood caused by heavy rains in the months of November 2015 and December 2015, the warehouses of the Company were flooded thereby causing damage to the textile material bales and packed materials that were kept ready for sale. The Company had made a claim amount of Rs. 24,94,344/- to the Insurance Company for the loss incurred and had received compensation amount of Rs. 24,25,000/- as against the claim made. The shortfall amount of Rs. 69,344/- between the amount of claim made and the amount of compensation received has been treated as loss on flood damaged goods.

During the year, the Company had sold the old and non-moving stock of textile materials that were received from the Kolkata and Bangalore showrooms of the Company worth Rs.7,36,663/- for an amount Rs.1,00,000/-. The difference amount of Rs.6,36,663/- between the cost of goods sold and the amount of consideration received, has been treated as Loss on sale of show room old stock.

5. Depreciation has been provided based on the useful life of asset as specified in Schedule II of the Companies Act, 2013.

6. Total outstanding dues of Creditors to Small Scale Industrial Undertakings - Rs. Nil (Rs. Nil as on 313-2015). Total outstanding dues of Creditors other than Small Scale Industrial Undertakings - Rs. 151.75 lakhs (Rs. 117.42 lakhs as on 31-3-2015).

7. All operating leases entered into by the company are cancellable on giving a notice of one to three months. The operating lease amount for the year is charged to revenue.

8. There are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days at the Balance Sheet Date, computed on unit wise basis. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

9. Employee Benefits:

10. The Company has determined the liability for employee benefits as at 31^st March 2016 in accordance with Accounting Standard - 15 (revised) “Employee Benefits” issued by the ICAI and as provided in the Companies (Accounting Standard) Rules, 2006.

11. Defined Benefit Plan - as per Actuarial Valuation as on 31^st March 2016 - Gratuity & Long Term Compensated Absence

All the transactions were made by the Company in the ordinary course of business and on arm’s length basis. Hence, these transactions will not attract the provisions of section 188(1) of the Companies Act, 2013.

No amounts have been written off, or provided for, or written back, during the year, in respect of debts due from, or to, the related parties.

12. The estimated amount of contracts, remaining to be executed on Capital account, as at 31^st March 2016: Rs. Nil (Rs. Nil as at 31^st March 2015).

13. Provision for Wealth tax is not made in the accounts as in the opinion of the management no Wealth tax is payable.

14. The Preference Dividend payable on the Cumulative Redeemable Preference Shares (CRPS) issued by the Company is as follows:

On the 5,88,000 (9.75% ) CRPS of Rs.5/- each aggregating to Rs.29,40,000/-, the preference dividend payable is Rs.27,94,838/- (Rs.25,08,188/- for 31-3-2015). The 9.75% CRPS issued on 2-6-2010 are due for redemption on or before 30^th June 2016.

On the 28,14,18,142 (9%) CRPS of Rs.5/- each aggregating to Rs. 140,70,90,710/-, the preference dividend payable is Rs.115,10,97,874/- (Rs. 102,44,59,710/- for 31-3-2015). The 9% CRPS issued on 2-6-2010 are due for redemption on or before 12^th May 2020.

The arrears of Preference Dividend are calculated from the date of original allotment of shares by Binny Ltd. Binny Ltd was demerged on 1^st January 2010 (i.e., the Appointed date) vide the Order of the Madras High Court dated 22^nd April 2010. The arrears of preference dividend are to be borne by the resulting companies, viz., Binny Mills Ltd and S V Global Mill Ltd, from the date of original allotment of shares by Binny Ltd.

15. The Company has pending litigations in case of ownership of its showrooms in Bangalore. At present provision for rent and damages payable are made as per the court order.

16. Figures for the previous year have been regrouped and reclassified, wherever necessary, to conform to the current year’s classification.

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Mar 31, 2015

1. Corporate Information

Binny Mills Ltd was incorporated as a Public Limited Company on 20th December, 2007. The company was issued Certificate for Commencement of Business on 6th February 2008. The CIN of the Company is L17120TN2007PLC065807.

The Company is engaged in the business activities of providing services and trading of goods. The company derives rental income by letting out on rent, its warehouses situated in Perambur, Chennai, to various tenants. Apart from this the Company buys and sells textile materials (trading in textile) including retail sales to customers, from its textile division at Chennai and from the showrooms in Bangalore and Kolkata.

2. In the opinion of the Management, all current assets, debtors and loans and advances would in the ordinary course of business realize at the value stated.

3. Depreciation has been provided based on useful life as specified in Schedule II of the Companies Act, 2013. Depreciation charge for the year has increased by Rs. 69,118/- on account of adoption of Schedule II in place of Schedule XIV to the Companies Act, 1956.

The company has adjusted an amount of Rs. 13,802/- from retained earnings on account of adoption of Schedule II.

4. Total outstanding dues of Creditors to Small Scale Industrial Undertakings - Rs. Nil (Rs. Nil as on 31.3.2014).Total outstanding dues of Creditors other than Small Scale Industrial Undertakings - Rs. 117.42 lakhs (Rs. 87.56 lakhs as on 31/03/2014).

5. All operating leases entered into by the company are cancellable on giving a notice of one to three months. The operating lease amount for the year is charged to revenue.

6 There are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days at the Balance Sheet Date, computed on unit wise basis. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. Employee Benefits :

A. The Company has determined the liability for employee benefits as at 31st March 2015 in accordance with Accounting Standard - 15 (revised) "Employee Benefits" issued by the ICAI and as provided in the Companies (Accounting Standard) Rules, 2006.

The present value of obligations has been calculated using Projected Unit Credit Method, as specified in Accounting Standard 15-Employee Benefits, which assumes that each period of service gives rise to an additional unit of obligation.

The company is a going concern with normal changes in the employees' profile.

8. There are no borrowing costs during the year.

9. Advances include a sum of Rs. 1,156.72 lakhs (Rs. 1,153.72 lakhs as on 31.3.2014) towards purchase of property due from a Company in which a director of the Company is also a director.

Figures in bracket relate to the previous year.

All the transactions were made by the Company in the ordinary course of business and on arm's length basis. Hence, these transactions will not attract the provisions of section 188 (1) of the Companies Act, 2013

No amounts have been written off or provided for or written back during the year in respect of debts due from or to the related parties.

10. The estimated amount of contracts remaining to be executed on account of Capital account as at 31st March 2015: Rs. Nil (Rs. Nil as at 31st March 2014).

11. Provision for Wealth Tax is not made in the books as in the opinion of the management, no wealth tax is payable.

12. The Preference Dividend payable on the Cumulative Redeemable Preference Shares (CRPS) issued by the Company is as follows:

On the 5,88,000 (9.75% ) CRPS of Rs.5/- each aggregating to Rs.29,40,000/-the preference dividend payable is Rs.25,08,188/- (Rs.22,21,538/- for 31-3-2014).

On the 28,14,18,142 (9%) CRPS of Rs.5/- each aggregating to Rs. 140,70,90,710/-, the preference dividend payable is Rs.102,44,59,710/- (Rs. 89,78,21,546/- for 31-3-2014).

The arrears of Preference Dividend are calculated from the date of original allotment of shares by Binny Ltd. Binny Ltd was demerged on 1st January 2010 (i.e., the Appointed date) vide the Order of the Madras High Court dated 22nd April 2010. The arrears of preference dividend are to be borne by the resulting companies, viz., Binny Mills Ltd and S V Global Mill Ltd, from the date of original allotment of shares by Binny Ltd.

13. Figures for the previous year have been regrouped wherever necessary to conform to the current year's classification.

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Mar 31, 2014

1. In the opinion of the Management, all current assets, debtors and loans and advances would in the ordinary course of business realize at the value stated.

2. Total Outstanding dues of Creditors to Small Scale Industrial Undertakings - Rs. Nil (Rs. Nil as on 31.3.2013). Total Outstanding dues of Creditors other than Small Scale Industrial Undertakings - Rs. 87.56 lakhs (Rs. 90.48 lakhs as on 31/03/2013).

3. All operating leases entered into by the company are cancellable on giving a notice of one to three months. The operating lease amount for the year is charged to revenue.

4. There are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days at the Balance Sheet Date, computed on unit wise basis. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

5. Employee Benefits :

A. The Company has determined the liability for employee benefits as at 31st March 2014 in accordance with Accounting Standard - 15 (revised) "Employee Benefits" issued by the ICAI and as provided in the Companies (Accounting Standard) Rules, 2006.

B. Defined Benefit Plan - as per Actuarial Valuation as on 31st March 2014 - Gratuity & Long Term Compensated Absence

6. There are no borrowing costs during the year.

7. Advances include a sum of Rs. 1153.72 lakhs (Rs.1324.03 lakhs as on 31.3.2013) towards purchase of property due from a Company in which directors are interested.

8. The estimated amount of contracts remaining to be executed on account of Capital account as at 31st March 2014 : Rs. Nil (Rs. Nil as at 31st March 2013).

9. Provision for Wealth Tax is not made in the books as in the opinion of the management, no wealth tax is payable.

10. The Preference Dividend payable on the Cumulative Redeemable Preference Shares (CRPS) issued by the Company is as follows:

On the 5,88,000 (9.75% ) CRPS of Rs.5/- each aggregating to Rs.29,40,000/-, the preference divi- dend payable is Rs.22,21,538/- (Rs.19,34,888/- for 31-3-2013). The Redemption date for 9.75% CRPS, which was due for redemption on or before 30th June 2011, has been extended by 5 five years, with the consent of the holders of the 9.75% CRPS.

On the 28,14,18,142 (9%) CRPS of Rs.5/- each aggregating to Rs. 140,70,90,710/-, the preference dividend payable is Rs.89,78,21,546/- (Rs. 77,11,83,382/- for 31-3-2013).

The arrears of Preference Dividend are calculated from the date of original allotment of shares by Binny Ltd. Binny Ltd was demerged on 1st January 2010 (i.e., the Appointed date) vide the Order of the Madras High Court dated 22nd April 2010. The arrears of preference dividend are to be borne by the resulting companies, viz., Binny Mills Ltd and S V Global Mill Ltd, from the date of original allotment of shares by Binny Ltd.

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Mar 31, 2013

1. Corporate Information

Binny Mills Ltd was incorporated as a Public Limited Company on 20th December, 2007. The company was issued Certificate for Commencement of Business on 6th February 2008. The CIN of the Company is U17120TN2007PLC065807.

The Company is engaged in the business activities of providing services and trading of goods. The company derives rental income by letting out on rent, its warehouses situated in Perambur, Chennai, to various tenants. Apart from this the Company buys and sells textile materials (trading in textile) including retail sales to customers, from its textile division at Chennai and from the showrooms in Bangalore and Kolkata .

2. Balances in sundry debtors, sundry creditors and other current assets are subject to confirmation. However, in the opinion of the Management, all current assets, debtors and loans and advances would in the ordinary course of business realize at the value stated.

3. Total Outstanding dues of Creditors to Small Scale Industrial Undertakings - Rs. Nil (Rs. Nil as on 31.3.2012).

Total Outstanding dues of Creditors other than Small Scale Industrial Undertakings - Rs. 90.48 lakhs (Rs. 81.55 lakhs as on 31/03/2012).

4. All operating leases entered into by the company are cancellable on giving a notice of one to three months. The operating lease amount for the year are charged to revenue.

5. There are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days at the Balance Sheet Date, computed on unit wise basis. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. Employee Benefits:

A. The Company has determined the liability for employee benefits as at 31st March 2013 in accordance with Accounting Standard - 15 (revised) "Employee Benefits" issued by the ICAI and as provided in the Companies (Accounting Standard) Rules, 2006.

B. Defined Benefit Plan - as per Actuarial Valuation as on 31st March 2013 - Gratuity & Long Term Compensated Absence

7. There are no borrowing costs during the year.

8. Advances include a sum of Rs. 1324.91 lakhs (Rs.1411.50 lakhs as on 31.3.2012) towards purchase of property due from a Company in which directors are interested.

9. The estimated amount of contracts remaining to be executed on account of Capital account as at 31st March 2013 : Rs. Nil (Rs. Nil as at 31st March 2012).

10. Provision for Wealth Tax is not made in the books as in the opinion of the management, no wealth tax is payable.

11. The Preference Dividend payable on the Cumulative Redeemable Preference Shares (CRPS) issued by the Company is as follows:

On the 5,88,000 (9.75% ) CRPS of Rs.5/- each aggregating to Rs.29,40,000/-, the preference dividend payable is Rs.19,34,888/- (Rs.16,48,238/- for 31-3-2012). The Redemption date for 9.75% CRPS, which was due for redemption on or before 30th June 2011, has been extended by 5 five years, with the consent of the holders of the 9.75% CRPS.

On the 28,14,18,142 (9%) CRPS of Rs.5/- each aggregating to Rs. 140,70,90,710/-, the preference dividend payable is Rs.77,11,83,382/- (Rs. 64,45,45,218/- for 31-3-2012).

The arrears of Preference Dividend are calculated from the date of original allotment of shares by Binny Ltd. Binny Ltd was demerged on 1st January 2010 (i.e., the Appointed date) vide the Order of The Madras High Court dated 22nd April 2010. The arrears of preference dividend are to be borne by the resulting companies, viz., Binny Mills Ltd and S V Global Mill Ltd, from the date of original allotment of shares by Binny Ltd.

12. The Company had obtained in-principle approval from the Bombay Stock Exchange for listing of its equity shares. Later the Company had approached the Securities Exchange Board of India (SEBI) for obtaining relaxation under Rule 19(2)(b) of Securities Contract Regulation Rules, 1957 and the same has been obtained vide order CFD/DIL/HB/PA/OW/6455/2013 dated 15th March, 2013.

13. Figures for the previous year have been regrouped wherever necessary to conform to the current year''s classification.

14. Cash Flow Statement and Balance Sheet abstract are enclosed.

15. The bank statements were not verified in respect of one bank account held with Indian Bank, Chennai having a book balance of Rs. 9925.00

16. The Revised Schedule has become effective from 1st April 2011 for preparation of Financial Statements. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

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Mar 31, 2012

1. Corporate Information

Binny Mills Ltd was incorporated as a Public Limited Company on 20th December 2007. The Company was issued Certificate for Commencement of Business on 6th February 2008. The CIN of the Company is U17120TN2007PLC065807.

The Company is engaged in the business activities of providing services and trading of goods. The company derives rental income by letting out on rent, its warehouses situated in Perambur, Chennai, to various tenants. Apart from this, the Company buys and sells textile materials (trading in textile) including retail sales to customers, from its textile division at Chennai and from the showrooms in Bangalore and Kolkata.

2. Balances in sundry debtors, sundry creditors and other current assets are subject to confirmation. However, in the opinion of the Management, all current assets, debtors and loans and advances would in the ordinary course of business realize at the value stated.

3. Total outstanding dues of Creditors to Small Scale Industrial Undertakings - Rs. Nil (Rs. Nil as on 31.3.2011).

Total Outstanding dues of Creditors other than Small Scale Industrial Undertakings - Rs. 81.55 lakhs (Rs.50.19 lakhs as on 31/03/2011).

4. All operating leases entered into by the company are cancellable on giving a notice of one to three months. The operating lease amount for the year is charged to revenue.

5. There are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days at the Balance Sheet Date, computed on unit wise basis. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. Employee Benefits:

A. The Company has determined the liability for employee benefits as at 31st March 2012 in accordance with Accounting Standard - 15 (revised) "Employee Benefits" issued by the ICAI and as provided in the Companies (Accounting Standard) Rules, 2006.

B. Defined Benefit Plan - as per Actuarial Valuation as on 31st March 2012 - Gratuity & Long Term Compensated Absence

The present value of obligations has been calculated using Projected Unit Credit Method, as specified in Accounting Standard 15-Employee Benefits, which assumes that each period of service gives rise to an additional unit of obligation.

The company is a going concern with normal changes in the employees'' profile.

7. There are no borrowing costs during the year.

8. Advances include a sum of Rs. 1411.50 lakhs (Rs.1320.50 lakhs as on 31.3.2011) towards purchase of property due from a Company in which directors are interested.

9. The estimated amount of contracts remaining to be executed on account of Capital account as at 31st March 2012: Rs. Nil (Rs. Nil as at 31st March 2011).

10. Provision for Wealth Tax is not made in the books as in the opinion of the management, no wealth tax is payable^

11. The Preference Dividend payable on the Cumulative Redeemable Preference Shares (CRPS) issued by the Company is as follows:

On the 5,88,000 (9.75%) CRPS of Rs.5/- each aggregating to Rs.29,40,000/-, the preference dividend , payable is Rs. 16,48,238/- (Rs.13,61,588/- for 31-3-2011). The Redemption date for 9.75% CRPS, which was due for redemption on or before 30th June 2011, has been extended by 5 five years, with the consent of the holders of the 9.75% CRPS.

On the 28,14,18,142 (9%) CRPS of Rs.5/- each aggregating to Rs. 140,70,90,710/-, the preference dividend payable is Rs.64,45,45,218/- (Rs. 51,79,07,054/- for 31-3-2011).

The arrears of Preference Dividend are calculated from the date of original allotment of shares by Binny Ltd. Binny Ltd was demerged on 1st January 2010 (i.e., the Appointed date) vide the Order of The Madras High Court dated 22nd April 2010. The arrears of preference dividend are to be borne by the resulting companies, viz., Binny Mills Ltd and S V Global Mill Ltd, from the date of original allotment of shares by Binny Ltd.

12. The Company had obtained in-principle approval from the Bombay Stock Exchange for listing of its equity shares. Later the Company had approached the Securities Exchange Board of India (SEBI) for obtaining relaxation under Rule 19(2)(b) of Securities Contract Regulation Rules, 1957 and the same is pending.

13. Cash Flow Statement and balance Sheet Abstract are enclosed.

14. The Confirmation of balance in respect of one bank account held with Indian Bank was not produced for our verification. The closing book balance in such bank account was Rs.9925 as on 31st March 2012

15. Short term provision for Gratuity and Leave encashment are not reported in respect of the previous year figures for want of details.

16. The Revised Schedule has become effective from 1 st April 2011 for preparation of Financial Statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with current year''s classification / disclosure.

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Mar 31, 2011

1. Balances in sundry debtors, sundry creditors and other current assets are subject to confirmation. However, in the opinion of the Management, all current assets, debtors and loans and advances would in the ordinary course of business realize at the value stated.

2. Total outstanding dues of Creditors to Small Scale Industrial Undertakings - Rs. Nil (Rs. Nil as on 31.3.2010).

Total Outstanding dues of Creditors other than Small Scale Industrial Undertakings - Rs. 111.29 lakhs (Rs. 114.18 lakhs as on 31/03/2010).

3. All operating leases entered into by the company are cancellable on giving a notice of one to three months. The operating lease amount for the year is charged to revenue.

4. There are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days at the Balance Sheet Date, computed on unit wise basis. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.

5. Employee Benefits:

A. The Company has determined the liability for employee benefits as at 31" March 2011 in accordance with Accounting Standard - 15 (revised) "Employee Benefits" issued by the ICAI and as provided in the Companies (Accounting Standard) Rules, 2006.

B. Defined Benefit Plan - as per Actuarial Valuation as on 31st March 2011 - Gratuity & Long Term Compensated Absence

6. The estimated amount of contracts remaining to be executed on account of Capital account as at 31st March 2011: Rs. Nil (Rs. Nil as at 31 * March 2010).

7. Provision for Wealth Tax is not made in the books as in the opinion of the management, no wealth tax is payable.

8. The Preference Dividend payable on the Cumulative Redeemable Preference Shares (CRPS) issued by the Company is as follows:

On the 5,88,000 (9.75% ) CRPS of Rs.5/- each aggregating to Rs.29,40,000/-, the preference dividend payable is Rs. 13,61,588/- (Rs. 10,74,938/- for 31-3-2010). The Redemption date for 9.75% CRPS, which was due for redemption on or before 30th June 2011, has been extended by 5 five years. with the consent of the holders of the 9.75% CRPS.

On the 28,14,18,142 (9%) CRPS of Rs.5/- each aggregating to Rs. 140,70,90,710/-, the preference dividend payable is Rs.51,79,07,054/- (Rs.39,33,69,799/- for 31-3-2010).

The arrears of Preference Dividend are calculated from the date of original allotment of shares by Binny Ltd. Binny Ltd was demerged on 1st January 2010 (i.e., the Appointed date) vide the Order of The Madras High Court dated 22nd April 2010. The arrears of preference dividend are to be borne by the resulting companies, viz., Binny Mills Ltd and S V Global Mill Ltd, from the date of original allotment of shares by Binny Ltd. Hence arrears of preference dividend is also shown for the year ended 315t March, 2010 even though the actual allotment of shares was made on 2"° June, 2010 by the resulting companies and on 12th May, 2010 by Binny Ltd.

9. The Company had obtained in-principle approval from the Bombay Stock Exchange for listing of its equity shares. Later the Company had approached the Securities Exchange Board of India !.SEBi)for obtaining relaxation under Rule 19(2)(b» of Securities Contract Regulation Rules. 1957 and the same is pending

10. Figures for the previous year have been regrouped wherever necessary to conform to the current year''s classification.

11. Cash Flow Statement and balance Sheet Abstract are enclosed.

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Mar 31, 2010

1. In the case of Binny Limited, BIFR''sanctioned a Rehabilitation Scheme on 22/10/2003. BIFR passed an order on 26/12/06 stating that Binny Limited is out of BIFR, which was challenged before Hon''ble High Court of Madras by employees union. The High Court (by order dated 07/08/2#008) "made it clear that the Binny Limited is ceased to be a sick industrial undertaking with effect from 30/09/2005" based on the jointmemo filed by company and employees union.

2. In terms of Scheme of arrangement under section 391 to 394 of the Companies Act, 1956 between Binny Limited and two other companies viz. S V Global Mill Ltd (Resulting Company 1) and Binny Mills Ltd (Resulting Company 2) the Hon''ble High Court of Judicature at Chennai, vide Order dated 22.04.2010, has reorganized and segregated byway of demerger The order of the Court was received by the Binny Limited on 07.05.2010. As per the Court direction the certified copy of the order was filed with ROC on 08.05.2010 which is the effective date of the Sanctioned Scheme of arrangement. As per the sanction Scheme of arrangement the Appointed date is 1st January 2010, i.e. date on which the demerger related entries have been given effect in the books of the companies.

3. In terms of the said scheme, in consideration of demerger, the shareholders in Binny Ltd shall get in the Binny Mills Limited, in the ratio of

a. 1 (one) equity share in Binny Mills Limited of face value of Rs. 10/- each credited as. fully paid up for every 7 (seven) equity shares of Rs.5/- (Rupees five) each fully paid-up.

b. 15 (Fifteeen) 9.75% Cumulative Redeemable Preference Share of face value of Rs.5/- (Rupeesfive) each credited as fully paid up for every 30 (Thirty) 9.75% Cumulative Redeemable Preference Shares of Rs.5/- (Rupees five),each fully paid-up.

c. 1,631 (One thousand six hundred and thirty one) 9% Cumulative Redeemable Preference Share of face value of Rs.5/- each credited as fully paid up for every 3,125 (Three thousand one hundred and twenty five) 9% Cumulative Redeemable Preference Shares of Rs.5/- each fully paid-up

4. In terms of the sanctioned scheme, the following are the Assets and Liabilities, relating to the Agencies and Services Undertakings were transferred from Binny Limited to Binny Mills Limited

The excess of the value of liabilities over the value of assets transferred pursuant to the Scheme of Arrangement amounting to Rs. 13167.54 lakhs has been debited to "Goodwill Account".

5. As per the sanctioned Scheme of Arrangement some of the Fixed Assets have been revalued to the Extent of Rs. 15517.75 lakhs which was utilized to write off the above Goodwill Account and the balance Rs.2350.21 lakhs is shown under Revaluation Reserve (on demerger).

6. In terms of the Scheme of Arrangement, the Equity Shares and Preference Share capital were issued at the Board Meeting held on 12-05-2010 and the Appointed Date being 01-01-2010, the entries relating to Issue of Equity and Preference Shares were shown under Pending Allocation in the Balance sheet as on 31" March, 2010.

7. In terms of the Scheme of Arrangement, the existing paid up equity shares of Rs.5,00,000/-shall be converted into 1,00,000/- 9% Cumulative redeemable preference shares of Rs.5/- each, with effect from the effective date. -''

8. In terms of the Scheme of Arrangement, the increase in Authorised share Capitals was done on the Board Meeting held on 12-05-2010 and the increase in authorized share capital expenses were met out by the Binny Limited as per the Scheme approved by the High Court.

9. In terms of the Scheme of Arrangement, the Land at B & C Mill measuring around 503.84 grounds, book value as on 01-01-2010 Rs.0.25 lakhs was revalued to the extent of Rs.15518.00 lakhs. Further there is no other activity carried under this division for the current period.

10. Balances in sundry debtors, sundry creditors, Loans and Advances and other current assets are subject to confirmation/ reconciliation. However, in the opinion of the Management, all current assets, debtors and loans and advances would in the ordinary course of business realize at the va^e stated.

11. Sundry creditors outstanding Rs.114.18 lakhs as on 31/03/2010 include dues to creditors other than Micro, Small and Medium Enterprise. There is no principal or interest due or unpaid thereon to any suppliers of Micro, Small and Medium Enterprises as at year end.

12. Provision for income taxis made as per the provisions of Income Tax Act. For the year the income tax is provided at the applicable Minimum Alternative Tax. Consequent to Demerger, the Losses of Binny Limited to be apportioned as per Section 72A of the Income Tax Act is in progress.

13. The companies are in the process of approaching the Income Tax Department for apportioning the. Brought Forward Depreciation and Business Loss as per the Income Tax Act and on a conservative basis the net deferred tax assets are not recognized in the balance sheet as on 31st March, 2010 as a measure of prudence.

14. All operating leases entered into by the company are cancelable on giving a notice of one to three months. The operating lease amount for the year are charged to revenue.

15. Provision for gratuity is made as per the provisions of Payment of Gratuity Act, 1972 and not funded. Since the provision contemplated under the Actuarial Valuation method is less than the provision made as per the Payment of Gratuity Act, 1972, the same is ignored.

The leave encashment benefit to the employees are provided for on accrual basis and not funded. Since the provision contemplated under the Actuarial Valuation method is less than the provision made on accrual basis, the same is ignored.

16. There are no borrowing costs during the year.

17. Advances include a sum of Rs. 391.81 lakhs towards purchase of property due from a company in which a director is interested. ,

18. By virtue of approved Scheme of the Demerger, by the High Court of Chennai, the Agencies and Services Division of the Binny Limited got demerged and stand transferred to and vested in this company on a going concern basis. The entire operation from the date of Appointed Date i.e. with effect from 01-01-2010, the Agencies and Services Division of Binny Limited is the main business of this Company and this is the only reportable segment.

19. The estimated amount of contracts remaining to be executed on account of Capital account as at 31" March 2010: NIL

20. Figures for the previous year have been regrouped wherever necessary to conform to the current year''s classification. The figures for current year includes the transaction relating to the business of the company after incorporating the demerger business with effect from 01-01-2010 and hence not strictly comparable with previous year.

21. Cash Flow Statement and balance Sheet Abstract are enclosed.