Notes to Accounts of Euro Multivision Ltd.

Mar 31, 2015

1. Share Capital

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. No dividends were proposed by the Board of Directors for the financial year 2014-2015. In the event of liquidation of the company, equity shareholders will be entitled to receive remaining assets in proportion to the number of shares held by them.

Terms / Rights attached to Preference Shares

The Company has only one class of preference shares having a par value of Rs. 100/- per share. No preference shares have been issued by the Company.

2. Related Party Transactions

Related parties during the year March 31, 2015 :

(a) Directors

(1) Rajababu Kalla

[2] Mr.Anish Shah

[3] Mr.Hansraj Gala

[4] Mr.Sanjay Nandu

[5] Mrs.Forum Shah

(b) Key Managerial Personnel

(1) Rajababu Kalla

[2] Hitesh Shah (CFO)

(c) Relatives of Directors/ Key Managerial Personnel

(1) Shantilal L Shah (5) Dhaval Shah - HUF

(2) Sonalben S Shah (6) Dhaval S Shah

(3) Manjari H Shah (7) Forum D Shah

(4) Hitesh S Shah - HUF (8) Sushila H. Gala

(d) Enterprise Having common Key Management Personnel and/or their relatives as the Reporting Enterprises

[1] Neelam Metal & Hardware

[2] Gurukul Enterprises Private Limited

[3] Euro Decor Private Limited

[4] Kanch Ghar

[5] Disti Multimedia & Communications Pvt Ltd

[6] Zenith Corporation

[7] Monex Stationers

3. During the years 2011-2012 and 2012-2013, the Company had incurred significant losses which had resulted in erosion of its net worth. The severe fall in the prices of Solar Photovoltaic cells globally is on account of reduced demand which resulted in large inventory at reduced prices, leading to necessity for booking losses and thereby depleting working capital. During the year 2011-2012, there was default in the repayment obligations to banks and the relevant loan accounts viz. Term Loans, Cash Credit Accounts and revolvement of letters of credit.

Consequently, the Company received summons/ notice from the office of Debt Recovery Tribunal-II, Ahmedabad, Gujarat in response to the application filed by State Bank of India Baroda, Gujarat vide O.A. No. 56/2012 for the recovery of their loan under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The hearings of the said case is in process.

The Company has received notices u/s 13(2) of Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 from the Cosmos Co-op Bank Ltd and the State Bank of India for recovery of its outstanding dues towards various credit facilities extended to the Company from time to time. Further, State Bank of India has taken symbolic possession of immovable property of Optical Disc and Solar Photovoltaic Cells Unit under the Securitization & Reconstruction of Financial Assets & Enforcement of Security (Second) Interest Act, 2002 and in exercise of the powers under Section 13(4) of the said Act read with rule 8 of the security Interest (Enforcement) Rules 2002.

Further, vide an order dated 4th March 2014, issued by Zilla Magistrate (Kutch-Bhuj) directing local Mamlatdar to take physical possesion of the said factory premises and to handover the same to State Bank of India. In response to the said order the Company has filed a writ petition with the Supreme Court of India and obtained a stay order stating that the respondent bank shall be restrained from proceeding further under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

In the financial year 2012-2013, the Company on the basis of the audited accounts for the financial year ended March 31, 2012, and being mandatory, filed the reference u/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 before the Hon'ble Board for Industrial & Financial Reconstruction (BIFR). The above reference has duly been registered by the learned Registrar of Hon'ble BIFR and hearings of which are in the process for determination of sickness.

4. Going Concern

The years 2011-2012 to 2014-2015 have been challenging for the global solar cell manufacturers as well as the Indian manufacturers; which on the one hand witnessed steep fall in solar cell prices and on the other hand market flooded with products from Chinese and Taiwanese manufacturers which led to the growth of large Chinese manufacturers.

The Governments in India and other countries are eager to increase the overall share of solar energy by concurrently improving infrastructural conditions, especially through solar parks and schemes like 'development of solar cities', energy efficient green buildings', generation-based incentives, and subsidies and promotion for solar PV devices that are also encouraging PV installation. Recently, in India, it was made mandatory to have domestic content requirement for cell and module for crystalline silicon based plant in all the projects granted under JNNSM Phase1, batch II. Individual states in India, are also adopting policies and programs to promote the expansion of solar power. Further, the Indian Government is considering safeguarding its own industry by some regulation such as anti-dumping for Solar Cells.

In the present situation, the Company is now considering sustainable business model with the various options to restructure the capital base including but not limited to approaching the lender banks for arbitraging the partial debt with equity, concessions and / or waiver in the interest along with haircuts in certain debt portion with an objective to bring it at a serviceable level. Considering the changed and new developments taking place in the Solar Industry and as detailed in the management discussion analysis, the financial statements have been prepared on the basis that the Company is a going concern.

5. Figures of previous year have been regrouped / reclassified wherever necessary.

6. Contingent Liabilities not provided for

(a) The Company for its Optical Disc's manufacturing unit, has imported various Capital Goods under the Export Promotion Capital goods Scheme (EPCG), of the Government of India, through various licenses, at concessional rates of Custom Duty on an undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. The custom Duties so saved amounts to Rs. 25,38,56,218/- and the corresponding Export obligation as on 31st March 2015 to be fulfilled is Rs. 191,21,59,657/-. If the said Export is not made within the stipulated time period; the company is required to pay the said saved Custom Duty together with interest @ 15% p.a.The Company has filled a reference with hon'ble BIFR petitioning a relief from export obligation of the Company.Furthet the Company has provided in the past bank guarantees in favor of custom authorities amounting cumulatively to Rs. 508,76,000 towards payment of custom duty on account of failure to satisfy such an export obligation.

(b) The Company's Solar Photovoltaic Cells manufacturing unit is located in self owned sector specific Special Economic Zone. According to the SEZ Act, the units should have positive Net Foreign Exchange Earning (NFE), which shall be calculated as per applicable rules in cumulative blocks of five years, starting from the commencement of production. In case the unit does not achieve positive Net Foreign Exchange, the SEZ shall be subject to penalty, that may be imposed by the adjudicating authority.

* Note:- The Company falls under 1st Schedule to Central Excise Tariff Act, 1985 (5 of 1985). The unit was set up after 31-07-2001 and hence eligible for Excise Refund benefit envisaged in Notification No:39/2001-CE dated 31- 07-2001 as amended. The Company also duly applied to Central Excise Department for availing benefit under the said notification and the Department approved the same. The Company commenced commercial production of its first phase on 04-04-2005 with five manufacturing lines and doubled its capacity in January 2007 by adding five more manufacturing lines. The Department took the stand that the eligibility is only for the first phase and will not be applicable for the expansion phase. The Company was duly in receipt of Excise Refund on the first five lines till the financial year 2007-2008, however from financial year 2008-2009 onwards the Department rejected the Excise Refund claim even for the first five lines.

The company, while taking stand that the excise benefit should be made available for the second phase as well, provided for excise refund on the first phase on proportionate basis. Currently the matter is pending with CESTAT (Ahmedabad). The Company had recognised Excise Refund amount of Rs. 63,41,853/- in the year 2008-2009 and Rs. 86,67,688/- in the year 2009-201* on this account, of which the company had received Rs. 1,14,31,016/- as excise refund from the Central Excise Department and Rs. 16,42,522/- were declared as non refundable by the Central Excise Department. Thus for the balance amount of excise refund recognised during the year 2009-1* of Rs. 19,36,003/- will not materialise if the appeal is not disposed of in favour of the company and the same amount continues for the current financial year also.

(d) Claims against the Company not Acknowledged as Debts as on 31st March 2015 amounting to Rs. Nil.

7. Secured loans from the banks are subject to confirmation.

8. The following bank loan and cash credit accounts are subject to confirmation:-

Bank Name & Address Account No.

State Bank of India, Stressed Assets Term Loan A/c No. Management Branch, ''Paramsiddhi Complex, 30081317216 2nd Floor, Opp. V.S. Hospital, Ellisbridge, Ahmedabad 380 006, Gujarat

State Bank of India, Stressed Assets Term Loan A/c No. Management Branch, "Paramsiddhi Complex, 31083458260 2nd Floor, Opp. V.S. Hospital, Ellisbridge, Ahmedabad 380 006, Gujarat

State Bank of India, Stressed Assets Cash Credit A/c No. Management Branch, "Paramsiddhi Complex, 30105861083 2nd Floor, Opp. V.S. Hospital, Ellisbridge, Ahmedabad 380 006, Gujarat



9. The Company has given fixed deposit receipts to the Cosmos & SBI bank as LC margin and bank gaurantee amounting to Rs. 2,77,36,000/- which are subject to confirmation.

10. Sundry Debtors and Creditors balances are subject to confirmation.

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Mar 31, 2014

1. During the years 2011-2012 and 2012-2013, the Company had incurred significant losses which had resulted in erosion of its net worth. The severe fall in the prices of Solar Photovoltaic cells globally is on account of reduced demand which resulted in large inventory at reduced prices, leading to necessity for booking losses and thereby depleting working capital. During the year 2011-2012, there was default in the repayment obligations to banks and the relevant loan accounts viz. Term Loans, Cash Credit Accounts and devolvement of letters of credit.

Consequently, the Company received summons/ notice from the office of Debt Recovery Tribunal-II, Ahmedabad, Gujarat in response to the application filed by State Bank of India Baroda, Gujarat vide O.A. No. 56/2012 for the recovery of their loan under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The hearings of the said case is in process.

The Company has received notices u/s 13(2) of Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 from the Cosmos Co-op Bank Ltd and the State Bank of India for recovery of its outstanding dues towards various credit facilities extended to the Company from time to time. Further, State Bank of India has taken symbolic possession of immovable property of Optical Disc and Solar Photovoltaic Cells Unit under the Securitization & Reconstruction of Financial Assets & Enforcement of Security (Second) Interest Act, 2002 and in exercise of the powers under Section 13(4) of the said Act read with rule 8 of the security Interest (Enforcement) Rules 2002.

Further, vide an order dated 4th March 2014, issued by Zilla Magistrate (Kutch-Bhuj) directing local Mamlatdar to take physical possesion of the said factory premises and to handover the same to State Bank of India. In response to the said order the Company has filed a writ petition with the Supreme Court of India and obtained a stay order stating that the respondent bank shall be restrained from proceeding further under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

In the financial year 2012-2013, the Company on the basis of the audited accounts for the financial year ended March 31, 2012, and being mandatory, filed the reference u/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 before the Hon''ble Board for Industrial & Financial Reconstruction (BIFR). The above reference has duly been registered by the learned Registrar of Hon''ble BIFR and hearings of which are in the process for determination of sickness.

2. Going Concern

The years 2011-2012, 2012-2013 and 2013-2014 have been challenging for the global solar cell manufacturers as well as the Indian manufacturers; which on the one hand witnessed steep fall in solar cell prices and on the other hand market flooded with products from Chinese and Taiwanese manufacturers which led to the growth of large Chinese manufacturers.

The Governments in India and other countries are eager to increase the overall share of solar energy by concurrently improving infrastructural conditions, especially through solar parks and schemes like ''development of solar cities'', energy efficient green buildings'', generation-based incentives, and subsidies and promotion for solar PV devices that are also encouraging PV installation. Recently, in India, it was made mandatory to have domestic content requirement for cell and module for crystalline silicon based plant in all the projects granted under JNNSM Phase1, batch II. Individual states in India, are also adopting policies and programs to promote the expansion of solar power. Further, the Indian Government is considering safeguarding its own industry by some regulation such as anti-dumping for Solar Cells.

In the present situation, the Company is now considering sustainable business model with the various options to restructure the capital base including but not limited to approaching the lender banks for arbitraging the partial debt with equity, concessions and / or waiver in the interest along with haircuts in certain debt portion with an objective to bring it at a serviceable level. Considering the changed and new developments taking place in the Solar Industry and as detailed in the management discussion analysis, the financial statements have been prepared on the basis that the Company is a going concern.

Contingent Liabilities not provided for

3. (a) The Company for its Optical Disc''s manufacturing unit, has imported various Capital Goods under the Export Promotion Capital goods Scheme (EPCG), of the Government of India, through various licenses, at concessional rates of Custom Duty on an undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. The custom Duties so saved amounts to ` 25,38,56,218/- and the corresponding Export obligation as on 31st March 14 to be fulfilled is ` 191,21,59,657/-. If the said Export is not made within the stipulated time period; the company is required to pay the said saved Custom Duty together with interest @ 15% p.a.The Company has filled a reference with hon''ble BIFR petitioning a relief from export obligation of the Company.Furthet the Company has provided in the past bank guarantees in favor of custom authorities amounting cumulatively to ` 508,76,000 towards payment of custom duty on account of failure to satisfy such an export obligation.

(b) The Company''s Solar Photovoltaic Cells manufacturing unit is located in self owned sector specific Special Economic Zone. According to the SEZ Act, the units should have positive Net Foreign Exchange Earning (NFE), which shall be calculated as per applicable rules in cumulative blocks of five years, starting from the commencement of production. In case the unit does not achieve positive Net Foreign Exchange, the SEZ shall be subject to penalty, that may be imposed by the adjudicating authority.

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Mar 31, 2013

1 During the year 2011-2012 and 2012-2013, the Company had incurred significant losses which had resulted in erosion of its net worth. The severe fall in the prices of Solar Photovoltaic cells globally on account of reduced demand resulted the company leaving with large inventory at reduced prices, leading to necessity for booking losses and thereby depleting working capital. In the course of time in 2011-2012, there became default in the repayment obligations of banks and the relevant loan accounts – Term Loans, Cash Credit Accounts and devolvement of letters of credit.

Consequently the Company had received summons/notice from the office of Debt Recovery Tribunal-II, Ahmedabad Gujarat in response of the application filed by State Bank of India Baroda Gujarat vide O.A. No. 56/2012 for the recovery of their loan under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The hearings of the said case is in process.

The Company has received notices u/s 13(2) of Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 from ''The Cosmos Co-op Bank Ltd'' and State Bank of India for recovery of its outstanding dues towards various credit facilities extended to the Company from time to time. Further, State Bank of India has taken symbolic possession of the immovable property of Optical Disc and Solar Photovoltaic Cells Unit under the Securitization & Reconstruction of Financial Assets & Enforcement of Security (Second) Interest Act, 2002 and in exercise of the powers under Section 13(4) of the said Act read with rule 8 of the security Interest (Enforcement) rules 2002.

In the financial year 2012-2013, the Company on the basis of the audited accounts for the financial year ended as on March 31, 2012, and being mandatory, filed the reference U/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 before the Hon''ble Board for Industrial & Financial Reconstruction (BIFR). The above reference has duly been registered by the learned Registrar of Hon''ble BIFR and hearings of which are in the process for determination of sickness.

2 Going Concern

The years 2011-2012 and 2012-2013 has been a challenging year for the global solar cell manufacturers as well as the Indian manufacturers; which on the one hand witnessed steep fall in solar cell prices and on the other hand market flooded with products from Chinese and Taiwanese manufacturers which led to the growth of large Chinese manufacturers.

The Governments in India and other countries are eager to increase the overall share of solar energy by concurrently improving infrastructural conditions, especially through solar parks and schemes like ''development of solar cities'', energy efficient green buildings'', generation-based incentives, and subsidies and promotion for solar PV devices that are also encouraging PV installation. Recently, in India, it was made mandatory to have domestic content requirement for cell and module for crystalline silicon based plant in all the projects granted under JNNSM Phase1, batch II. Individual states in India, are also adopting policies and programs to promote the expansion of solar power. Further, the Indian Government is considering safeguarding its own industry by some regulation such as anti-dumping for Solar Cells.

In the present situation, the Company is now considering sustainable business model with the various options to restructure the capital base including but not limited to approaching the lender banks for arbitraging the partial debt with equity, concessions and / or waiver in the interest along with haircuts in certain debt portion with an objective to bring it at a serviceable level. Considering the changed and new developments taking place in the Solar Industry and as detailed in the management discussion analysis, the financial statements have been prepared on the basis that the Company is a going concern.

3 The Company has issued as well as deposited a cheque of Rs.2,60,00,000 on 30-03-2013. These cheques are dishonoured after 31-03-2013 the effect of the same has not been given in the financial statement as it is a non adjusting event.

4 Secured loans from the banks are subject to confirmation.

5 Sundry Debtors and Creditors balances are subject to Confirmation.

6 As it is our first year of audit the opening balances as on 1st April, 2012 are taken from the audited closing balances of 31st March, 2012.

7 Figures of previous year have been regrouped / reclassified wherever necessary.

8 Contingent Liabilities not provided for

(a) The Company for its Optical Disc''s manufacturing unit, has imported various Capital Goods under the Export Promotion Capital goods Scheme (EPCG), of the Government of India, through various licenses, at concessional rates of Custom Duty on an undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. The custom Duties so saved amounts to Rs. 25,38,56,218/- and the corresponding Export obligation as on 31st March 13 to be fulfilled is Rs.191,21,59,657/-. If the said Export is not made within the stipulated time period; the company is required to pay the said saved Custom Duty together with interest @ 15% p.a.The Company has filled a reference with hon''ble BIFR petitioning a relief from export obligation of the Company.Furthet the Company has provided in the past bank guarantees in favor of custom authorities amounting cumulatively to Rs.508,76,000/- towards payment of custom duty on account of failure to satisfy such an export obligation.

(b) The Company''s Solar Photovoltaic Cells manufacturing unit is located in self owned sector specific Special Economic Zone. According to the SEZ Act, the units should have positive Net Foreign Exchange Earning (NFE), which shall be calculated as per applicable rules in cumulative blocks of five years, starting from the commencement of production. In case the unit does not achieve positive Net Foreign Exchange, the SEZ shall be subject to penalty, that may be imposed by the adjudicating authority.

(Amount in Rs.)

(c) Particulars March 31, 2013 March 31, 2012 Bank Guarantees 50,876,000 50,876,000 Excise Refund Receivable (Refer Note Below *) 1,936,003 1,936,003

*Note:- The Company falls under 1st Schedule to Central Excise Tariff Act, 1985 (5 of 1985). The unit was set up after 31-07-2001 and hence eligible for Excise Refund benefit envisaged in Notification No:39/2001-CE dated 31- 07-2001 as amended. The Company also duly applied to Central Excise Department for availing benefit under the said notification and the Department approved the same. The Company commenced commercial production of its first phase on 04-04-2005 with five manufacturing lines and doubled its capacity in January 2007 by adding five more manufacturing lines. The Department took the stand that the eligibility is only for the first phase and will not be applicable for the expansion phase. The Company was duly in receipt of Excise Refund on the first five lines till the financial year 2007-2008, however from financial year 2008-2009 onwards the Department rejected the Excise Refund claim even for the first five lines.

The company, while taking stand that the excise benefit should be made available for the second phase as well, provided for excise refund on the first phase on proportionate basis. Currently the matter is pending with CESTAT (Ahmedabad). The Company had recognised Excise Refund amount of Rs.6341853/- in the year 2008-2009 and Rs.8667688/- in the year 2009-2010 on this account, of which the company had received Rs.11431016/- as excise refund from the Central Excise Department and Rs.1642522/- were declared as non refundable by the Central Excise Department. Thus for the balance amount of excise refund recognised during the year 2009-10 of Rs.1936003/- will not materialise if the appeal is not disposed of in favour of the company and the same amount continues for the current financial year also.

(d) Claims against the Company not Acknowledged as Debts as on 31st March 2013 amounting to Rs. Nil.

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Mar 31, 2012

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. No Dividends were proposed by the Board of Directors for the financial year 2011-2012. In the event of liquidation ofthe company, equity shareholders will be entitled to receive remaining assets in proportion to the number of shares held by them.

- Term Loan from Banks are secured by hypothecation and mortgage of fixed assets of the company situated at its Optical Disc Unit and Solar Cells Unit (in Special Economic Zone) at Bhachau, Kutch, Gujarat, and guaranteed by the Director Mr.Hitesh Shah and erstwhile Directors, Mr.Nenshi Shah, Mr.Rayshi Shah, Mr.Suresh Shah and Mr.Chirag Shah of the Company in their personal capacity.

- The sanctioned Term Loan of Rs.337500000/- from The Cosmos Co-op Bank Ltd, carrying interest @ 13.00% p.a., subject to revision at the bank's discretion based on the changes in base rate, is repayable in 60 monthly instalments of Rs.7680000/- each alongwith interest. The prinicpal outstanding is due since January 2011 and interest is outstanding since March 2011. '

- The sanctioned Term Loan of Rs. 105000000/- from The Cosmos Co-op Bank Ltd, carrying interest @ 13.00% p.a, subject to revision at the bank's discretion based on the changes in base rate, is repayable in 60 monthly instalments of Rs.2389073/- each alongwith interest. The prinicpal outstanding is due since January 2011 and interest outstanding is due since April 2011.

- The sanctioned Term Loan of Rs.29400000/-from The Cosmos Co-op Bank Ltd, carrying interest @ 13.00% p.a, subject to revision at the bank's discretion based on the changes in base rate, is repayable in 60 monthly instalments of Rs.668940/- each alongwith interest. The prinicpal outstanding is due since January 2011 and interest outstanding is due since April 2011.

- The sanctioned Term Loan of Rs.800000000/- from State Bank of India, carrying interest (subject to revision at the bank's discretion based on the changes in base rate)@ 12.25% p.a. with monthly rest and biennial reset clause, is repayable in 20 equal quarterly installments of Rs.40000000/- each.The prinicpal outstanding is due since April 2011 and interest is outstanding since June 2011.

- The sanctioned Term Loan of Rs.360000000/- from State Bank of India, carrying interest of minimum (subject to revision at the bank's discretion based on the changes in SBAR)@ 10.00% p.a. is repayable in monthly installments of Rs. 12781000/- each.The prinicpal outstanding is due since June 2011 and interest is outstanding since July 2011.

- The sanctioned vehicle Loan of Rs.653600/- from Kotak Mahindra Prime Ltd, carrying interest @ 9.50% p.a. is repayable in 35 monthly installments of Rs.21400/- each alongwith interest and is secured by hypothecation of respective vehicle-Ford Fiesta Car. ,

- The sanctioned vehicle Loan of Rs.914500/- from Reliance Capital Limited carrying interest @ 10.54% p.a. is repayable in 35 monthly installments of Rs.30463/- each alongwith interest and is secured by hypothecation of respective vehide- Mahindra Tourister Bus.

- The sanctioned unsecured business Loan of Rs.2000000/- from HDFC Bank Limited is repayable in 36 monthly installments of Rs.71300/- each alongwith interest.

- Unsecured Loans classified as loans from related parties and other loans and advances carries interest not exceeding 12% p.a.

- Secured on pari-passu basis, by hypothecation and mortgage of current assets of the company i.e stocks of raw materials, stocks in process, finished goods, stores, spares, book debts etc. towards its Optical Disc Unit and Solar Cells Unit (in Special Economic Zone) at Bhachau, Kutch, Gujarat and guaranteed by the Director Mr. Hitesh Shah and erstwhile Directors, Mr.Nenshi Shah, Mr.Rayshi Shah, Mr.Suresh Shah and Mr.Chirag Shah of the Company in their personal capacity.

- The sanctioned cash credit facility of Rs. 166500000/- from The Cosmos Co-op Bank Ltd, carrying interest (subject to revision at the bank's discretion based on the changes in base rate) @ 13.00% p.a., is repayable on demand, and the account is overdrawn by Rs. 162856199/-.

- The sanctioned cash credit facility of Rs. 185000000/- from State Bank of India, carrying interest (subject to revision at the bank's discretion based on the changes in base rate) @ 13.25% p.a., with monthly rest is repayable on demand, and the account is overdrawn by Rs.134736306/-.

* The Company has imported various Capital Goods under the Export Promotion Capital goods Scheme (EPCG), ofthe Government of India, through various licenses, at concessional rates of Custom Duty on an undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. Bank Guarantees have been issued by the banks for the same and the same are due for maturity, on various dates in 2014,2015and 2016.

Note:

* The Company had entered into an arrangement with Euro Ceramics Ltd in 2006-2007, one of its group companies having its unit adjacent to the company's unit at Bhachau, whereby Euro Ceramics Ltd recovered one-fifth ofthe capital investment cost incurred on its Power Plant Machinery and Building for sharing of power generated by the Power Plant. Euro Ceramics Ltd also recovers the operating expenses of running the Power Plant from the company on a monthly basis based on actual units of power consumed by the company. Out of the above amount of Rs.22800569/- towards receiving of services, amount of Rs.19414054/-, is towards the recovery of the operating expenses of power plant.

1 Deferred tax

Provision for Deferred Tax Assets / Liabilities is made as per Accounting Standard 22 issued by the Institute of Chartered Accountants of India. No provision is made in books of account for future assets, being unascertainable for Optical Disc Unit. Since the Company's Solar Photovoltaic unit is situated in a sector specific notified Special Economic Zone entitled for tax exemption under section 10AAof Income Tax Act, no deferred tax has been recognized for the year._

2 Contingent liabilities not provided for :

(a) The Company for its Optical Disc's manufacturing unit, has imported various Capital Goods under the Export Promotion Capital goods Scheme (EPCG), of the Government of India, through various licenses, at confessional rates of Custom Duty on an undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. The custom Duties so saved amounts to Rs. 253856218/- and the corresponding Export obligation as on 31 st March 12 to be fulfilled is Rs. 1917084993/-. If the said Export is not made within the stipulated time period; the company is required to pay the said saved Custom Duty together with interest @ 15% p.a.

The Company's Solar Photovoltaic Cells manufacturing unit is located in self owned sector specific Special Economic Zone. According to the SEZ Act, the units should have positive Net Foreign Exchange Earning (NFE), which shall be calculated as per applicable rules in cumulative blocks of five years, starting from the commencement of production. In case the unit does not achieve positive Net Foreign Exchange, the SEZ shall be subject to penalty, that may be imposed by the adjudicating authority.

*Note:- The Company falls under 1 st Schedule to Central Excise Tariff Act, 1985 (5 of 1985). The unit was set up after 31 - 07-2001 and hence eligible for Excise Refund benefit envisaged in Notification No:39/2001-CE dated 31-07-2001 as amended. The Company also duly applied to Central Excise Department for availing benefit under the said notification and the Department approved the same. The Company commenced commercial production of its first phase on 04-04- 2005 with five manufacturing lines and doubled its capacity in January 2007 by adding five more manufacturing lines. The Department took the stand that the eligibility is only for the first phase and will not be applicable for the expansion phase. The Company was duly in receipt of Excise Refund on the first five lines till the financial year 2007-2008, however from financial year 2008-2009 onwards the Department rejected the Excise Refund claim even for the first five lines.

The company, while taking stand that the excise benefit should be made available for the second phase as well, provided for excise refund on the first phase on proportionate basis. Currently the matter is pending with CESTAT (Ahmedabad). The Company had recognised Excise Refund amount of Rs.6341853/- in the year 2008-2009 and Rs.8667688/- in the year 2009-2010 on this account, of which the company had received Rs. 11431016/- as excise refund from the Central Excise Department and Rs. 1642522/- were declared as non refundable by the Central Excise Department. Thus for the balance amount of excise refund recognised during the year 2009-2010 of Rs. 1936003/- will not materialise if the appeal is not disposed of in favour ofthe company and the same amount continues for the current financial year also.

(d) Claims against the Company not Acknowledged as Debts as on 31 st March 2012 amounting to Rs. Nil.

The Company had entered into an arrangement with Euro Ceramics Ltd in 2006-2007, one of its group companies having its factory adjacent to the company's factory at Bhachau, whereby Euro Ceramics Ltd recovered one-fifth of the capital investment cost incurred on its Power Plant Machinery and Building for sharing of power generated by the Power Plant. Euro Ceramics Ltd also recovers the operating expenses of running the Power Plant from the company on a monthly basis based on actual units of power consumed by the company. The same is also disclosed (in note 22) under related party transactions.

(e) During the year 2011 -2012, the Company has incurred significant losses which have resulted in erosion of its net worth. The severe fall in the prices of Solar Photovoltaic cells globally on account of reduced demand resulted the company leaving with large inventory at reduced prices, leading to necessity for booking losses and thereby depleting working capital. As a result, the Company has been unable to utilize its capacity and the cost of production of solar cells continues to be higherthan the prevailing market prices.'

In the course of time there became default in the repayment obligations of banks and the relevant loan accounts - Term Loans, Cash Credit Accounts and devolvement of letters of credit. -

Consequently the Company has received summons/notice from the office of Debt Recovery Tribunal-ll, Ahmedabad Gujarat in response of the application filed by State Bank of India Baroda Gujarat vide O.A. No. 56/2012 for the recovery of their loan under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993.

The Company had received an order of temporary injunction under Section 19 of the Recovery of debts due to Banks and Financial Institutions Act, 1993 read with rule 18 of the Debts Recovery Tribunal (Procedure) Rule, 1993. As perthe order the Company was restrained from transferring, alienating, selling, removing, conveying or parting with the possession or dealing with in any manner with the hypothecated & mortgaged properties, and the matter was in the process of hearings at the Debts Recovery Tribunal-ll, Ahmedabad. Subsequently, vide order dated June 22, 2012 the initial order was modified by the honorable tribunal for allowing continuance of business activities.

(f) Going Concern

It has been a challenging year for the global solar cell manufacturers as well as the Indian manufacturers; which on the one hand witnessed steep fall in solar cell prices and on the other hand market flooded with products from Chinese and Taiwanese manufacturers which led to the growth of large Chinese manufacturers.

The Governments in India and other countries are eager to increase the overall share of solar energy by concurrently improving infrastructural conditions, especially through solar parks and schemes like 'development of solar cities', energy efficient green buildings', generation-based incentives, and subsidies and promotion for solar PV devices that are also encouraging PV installation. Recently, in India, it was made mandatory to have domestic content requirement for cell and module for crystalline silicon based plant in all the projects granted under JNNSM Phasel, batch II. Individual states in India, are also adopting policies and programs to promote the expansion of solar power. Further, the Indian Government is considering safeguarding its own industry by some regulation such as anti-dumping for Solar Cells.

In the present situation, the Company is now considering sustainable business model with the various options to restructure the capital base including but not limited to approaching the lender banks for arbitraging the partial debt with equity, concessions and / or waiver in the interest along with haircuts in certain debt portion with an objective to bring it at a serviceable level. The Company as a measure of abundant caution is also approaching the BIFR to meet any eventuality which may arise due to non acceptance of the Restructure and Revival Program by the Banks. Considering the changed and new developments taking place in the Solar Industry and as detailed in the management discussion analysis, the financial statements have been prepared on the basis that the Company is a going concern.

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Mar 31, 2010

1 Related Party Transactions: The company has transactions with the following related parties:

(a) Promoters/Directors (1) Nenshi L Shah (2) Rayshi L Shah (3) Suresh L Shah

(4) Hitesh S Shah (5) Chirag R Shah

(b) Key Managerial Personnel (1) Chirag R Shah (2) Hitesh S Shah (3) Suresh Shah

(c) Relatives of Promoters (1) Manjari H Shah(2) Ladhabhai S Shah -HUF (3) Dhaval S Shah

(4) Gunvantiben L Shah (5) Shantilal L Shah (6)Sonalbem S Shah (7) Shantaben L Shah (8) Hitesh Shah - HUF (9) Nenshi L Shah - HUF

(10) Megiben L Shah (11) Rekha J Nishar

(d) Associate Concerns (1) Euro Ceramics Limited (2) Euro Solo Energy Systems Pvt Ltd

(3) Euro Bond Industries Pvt Limited (4) Euro Developers Pvt Ltd

(5) Euro Flooring Pvt Ltd (6) Euro Pratik Ispat Pvt Ltd (7) Euro Merchandise (India) Ltd (8) Euro Décor Pvt Ltd (9) Subhnen Ply Pvt Ltd (10) Tangent Furniture Pvt Ltd

(11) Gurukul Enterprises Pvt Ltd (12) NLS Enterprise Pvt Ltd (13) Canbara Constructions Pvt Ltd (14) Paras Polyplast (Manufacturing) Pvt Ltd (15) Euro Glass Ltd (16) Euro Aluminium Industries Ltd

(17) EuroSolarPower Pvt Ltd (18) Euro Minerals Corporation

(19) Euro Agro (20) Euro Pratik Sales Corporations

(21) Jainy Glass and Veneers (22) Kanchghar

(23) Laxmi Ply Agency (24) National Ply and Laminates

(25) Neelam Metals (26) Aar Pee Reprotechnic

(27) Rangoli (28) Neelam Ply and Laminates

(29) Paras Plastic (30) Rangoli Annexe

(31) Euro Foundation (32) Disti Multimedia & Communication Pvt Ltd (33) Ladhabhai Sanganbhai Gala Charitable Trust

Note : Related party relationship have been identified by the management and relied upon by the auditors.

2 Segment Information - Activitywise and Geographical

Activitywise

The Company has been in the business of manufacturing of Optical Storage Media that includes CDRs and DVDRs, since its incorporation and now has diversified in manufacture of Solar PV Cells, the project of which is under implementation. Thus in the current year, the Company has opearted only in one product category of Optical Storage Media. Hence segment reporting activitywise is not applicable for current year.

Geographical

3 Contingent liabilities not provided for

The Company has imported various Capital Goods under the Export Promotion Capital Goods (EPCG) Scheme, of the Government of India, through various licenses, at concessional rates of Custom Duty on an undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. The custom duties so saved amounts to Rs. 253856218/- and the corresponding Export obligation as on March 31, 2010 to be fulfilled is Rs. 1888678522/-. If the said Export is not made within the stipulated time period; the company is required to pay the said saved Custom Duty together with interest @ 15% p.a.

Particulars March 31, 2010 March 31, 2009

(i) Bank Guarantees Rs. 5,00,76,000 Rs. 5,00,76,000

(ii) Excise Refund Recognised as Income (Refer Note Below * ) Rs. 19,36,003 Rs. 63,41,853

(iii) Disputed Income Tax Assessment dues Nil Rs. 13,69,643

-Note:- The Company falls under 1st Schedule to Central Excise Tariff Act, 1985 (5 of 1985). The unit was set up after July 31, 2001 and hence eligible for Excise Refund benefit envisaged in Notification No:39/2001-CE dated July 31, 2001 as amended. The Company also duly applied to Central Excise Department for availing benefit under the said notification and the Department approved the same. The Company commenced commercial production of its first phase on April 04, 2005 with five manufacturing lines and doubled its capacity in January 2007 by adding five more manufacturing lines. The Department took the stand that the eligibility is only for the first phase and will not be applicable for the expansion phase.The Company was duly in receipt of Excise Refund on the first five lines till the financial year 2007-2008, however from financial year 2008-2009 onwards the Department rejected the Excise Refund claim even for the first five lines.

The company, while taking stand that the excise benefit should be made available for the second phase as well, provided for excise refund on the first phase on proportionate basis. Currently the matter is pending with CESTAT (Ahmedabad). The Company has recognised Excise Refund amount of Rs. 6341853/- in the year 2008-2009 and Rs. 8667688/- in the current year 2009-10 on this account, of which the company has received Rs. 11431016/- as exice refund from the Central Excise Department and Rs. 1642522/- are declared as non refundable by the Central Excise Department. Thus for the balance amount of excise refund recognised during the year 2009-10 of Rs. 1936003/- will not materialise if the appeal is not disposed of in favour of the company.

Claims against the Company not Acknowledged as Debts as on March 31, 2010 amounting to Rs. Nil.

4 The Company had entered into an arrangement with Euro Ceramics Ltd in 2006-2007, one of its group Companies having its factory adjacent to the Companys factory at Bhachau, whereby Euro Ceramics Ltd recovered one-fifth of the capital investment cost incurred on its Power Plant Machinery and Building for sharing of power generated by the Power Plant. Euro Ceramics Ltd also recovers the operating expenses of running the Power Plant from the company on a monthly basis based on actual units of power consumed by the Company.

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Mar 31, 2009

Sr.No.

(1) Related Party Transactions:

The company has transactions with the following related parties:

(a) Promoters/Directors (a) Nenshi L Shah (b) Rayshi L Shah (c) Suresh Shah

(d) Hitesh S Shah (e) Chirag R Shah

(b) Key Managerial Personnel (a) Chirag R Shah (b) Hitesh S Shah (c) Suresh Shah

(c) Relatives of Promoters (a) Manjari H Shah (b) Ladhabhai S Shah - HUF

(d) Associate Concerns (a) Euro Ceramics Ltd (b) Subhnen D6cor Pvt Ltd (c) Lyons Technologies Ltd

(d) Euro Solo Energy Systems Ltd (e) Neelam Metals (f) Subhnen Ply Pvt. Ltd

(g) Ladhabhai Sanganbhai Gala Charitable Trust (h) Euro Floorings Pvt Ltd (i) Subhnen Veneers Pvt Ltd

(j)Gurukul Enterprises Pvt Ltd (k) Euro Glass (I) Paras Plastic

(m) Subhnen Finanace & Investments Pvt Ltd (n) Euro Foundation (o) Kanchghar

(p)Disti Multimedia & Communication Pvt Ltd

(3) In the line with notification of Companies (Accounting Standard) Amendment Rules 2006 issued by Ministry of Corporate Affairs on March 31, 2009 amending Accounting Standard -11 (AS -11) The Effects of Changes in Foreign Exchange Rates (revised 2003), the Company has chosen to exercise the option under para 46 inserted in the standard by the notification. Accordingly, the company has changed its accounting policy on exchange differences on all long term monitory items, with retrospective effect from April 01; 2007, are

(a) To the extent such items are used for acquisition of a depreciable capital asset, added to / deducted from cost of asset and depreciated over balance life of the asset. As a result, an amount of Rs.94.73 lacs for F.Y.2007-2008 (Net of Depreciation Rs.11.36 lacs and tax of Rs.Nil) (Previous year Nil) and Rs.379.02 lacs for F.Y. 2008-2009(Previous year Nil) have been added to Fixed assets, being the exchange difference on long term monitory items related to the acquisition of a depreciable capital assets.

(b) As a result of point (a) Rs.94.73 lacs (Net of Depreciation Rs. 11.36 lacs and tax of Nil) is credited to Opening Reserves and; Surplus which was recognised as loss in the profit and loss account in the previous year ended March 31,2008:

(c) As a result of change in accounting policy, the net profit before tax for the year is higher by Rs.379.02 .

(4) Contingent liabilities not provided for:

a)The Company has imported various Goods under the Export Promotion Capital goods Scheme (EPCG),, of the Government ofIndia,-through.various:licenses, at concessional.rates of Custom Duty.on an.undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. The custom Duties so saved amounts to Rs. 253856218/-and the corresponding Export obligation as on 31st March 09 to be fulfilled is Rs. 1893348442/-. If the said Export is not made within the stipulated time period; the company is required to pay the said saved Custom Duty together with interest @ 15% p.a.

(b)Particulars March 31 , 2009 March 31, 2008

(i) Bank Guarantees Rs.50076000 Rs. 50076000

(ii) Excise Refund Recognised as Income (Refer Note Below *) Rs. 6341853 Nil

(iii) Disputed Income Tax Assessment dues (Refer Note Below **) Rs. 1369643 Nil

•Note:- The Company falls under 1st Schedule to Central Excise Tariff Act, 1985 (5 of 1985). The unit was set up after 31-07-2001 and hence eligible for Excise Refund benefit envisaged in Notification No:39/2001-CE dated 31-07-2001 as - amended. The Company also duly applied to Central Excise Department for availing benefit under the said notification. and the Department approved the same. The Company commenced commercial production of its first phase on 04-04- 2005 with five manufacturing lines and doubled Its capacity in January 2007 by adding five more manufacturing lines: -•The Department took the stand that the eligibility is only for the first phase and will not be applicable for the : expansion phase.The Company was duly in receipt of Excise Refund on the first five lines till the financial year 2007- 2008, however from financial year 2008-2009 onwards the Department rejected the Excise Refund claim even for the first five lines.

The company, while taking stand that the excise benefit should be made available for the second phase as well, provided for excise refund on the first phase on proportionate basis. Currently the matter is pending with CESTAT (Ahmedabad). During the year the Company has recognised Excise Refund amount of Rs.63,41,853/- on this account, If the appeal is;.not disposed of in favour of the company; the refund provided forin the accounts will not materialize.

Note:

Name of the Statute Amount (Rs.) Period to which the Forum where dispute is pending amount relates

Income Tax Act, 1961 13,28,911/- F.Y. 2006-2007 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 40732/- F.Y. 2004-2005 Commissioner of Income Tax (Appeals)

(c) Claims against the Company not Acknowledged as Debts as on 31st March 2009 amounting to Rs. Nil.

(5) The Company had entered into an arrangement with Euro Ceramics Ltd in 2006-2007, one of its group companies having its factory adjacent to the companys factory at Bhachau, whereby Euro Ceramics Ltd recovered one-fifth of the capital investment cost incurred on its Power Plant Machinery and Building for sharing of power generated by the Power Plant. Euro Ceramics Ltd also recovers the operating expenses of running the Power Plant from the company on a monthly basis based on actual units of power consumed by the company.

(6) Figures of the previous year have been regrouped/rearranged wherever necessary.