Notes to Accounts of Vivid Global Industries Ltd.

Mar 31, 2018

Note 1

a) Captital Subsidy of Rs.11,00,000/- during the year under consideration received from Directorate of Industries, Palghar,Government of Maharashtra has been reduced from the Cost of the Plant & Machinery. Hence the depreciation on addition to Fixed Assets made during the year has been calculated at the cost of new assets less the subsidy received.

Note 2 a

Captital Subsidy of Rs.11,00,000/- during the year under consideration received from Directorate of Industries, Palghar,Government of Maharashtra has been reduced from the Cost of the Plant & Machinery. Hence the depreciation on addition to Fixed Assets made during the year has been calculated at the cost of new assets less the subsidy received.

Note 3 a (i) Quantitative details in respect of opening, closing stock and sale of finished goods :

In view of the complexities of the business, the details provided hereunder could not be verified by us during the course of our audit and hence the following information provided is as certified by the management.

Note 3 b (i) Quantitative details of principal items of raw materials and packing materials consumed:

In view of the complexities of the business, the details provided hereunder could not be verified by us during the course of our audit and hence the following information provided is as certified by the management.

While valueing Principal Raw material under note 14 b (i) Company has valued goods as mentioned below

Imported goods(@CIF Value)= (Foreign Currency * LC Opening rate ) custome duty Bank Charges Clearing & Forwarding expences Transportation

Local goods = Purchased Price Transportation

The Confirmation of the Trade Receivables have not been provided as at the time of completion of the Audit and hence the Debtors have been considered as certified by the Management.

Trade Receivable stated above include debts due by:

I) The following are the observations during the course of Audit under review and brought to the notice of the members of the Company :-

1) Due to the complexities of business the value of the Inventory has been considered as has been verified, valued and certified by the Management.

2) Balances of Sundry Debtors and Sundry Creditors as on 31/03/2018 are recorded at realisable value. The Management has been able to produce some confirmations of balances due from Debtors as well as the Balances Payable to the Creditors. However the value of these Debtors and Creditors for the Balance Sheet purpose has been taken as certified by the Management.

CIF Value of Exports have been reported based on the working submitted by the management and it has been explained that wherever the Insurance and Freight has been recovered from the customers, the same has been included in the value shown above and in absence of the same, the Insurance & Freight has been claimed as expenditure.

Installed capacity is as certified by the Management and not verified by the auditors. It denotes estimated production of a product, if the entire plant & machinery is operated on triple shift basis during the year and is exclusively utilised for its production. However, the plant and machinery is common for the production of various dye-intermediates and hence the installed capacity may vary depending upon the product mix adopted by the company.

During the year under consideration the Company has opted to major expansion of their Production Capacity and hence have installed new Plant & Machinery in their Factory Premises at Tarapur (Maharashtra). Due to this expansion the Installed Capacity of the Company has risen from 720 MT to 1,400 MT per annum.

4) Cash & Bank Balance

a) Till the complition of Audit Bank statement of following bank were not produced before the Auditor

b) As per the interest certificate produced before us the company has received interest of Rs.14,73,891/on deposits given to Banks on Account of LC Margins. However in the Financials of the Company only Rs.13,03,626/- has been recorded as Interest Income. The difference has not been reconciled by the Company and presented before us. However the Cummulative L/C Margin with the Banks as on 31/03/2018 is matching with the Bank Statements presented before us.

5) Income Recognition

a) The Company is eligible to get benefit under the Merchant Export from India Scheme against the Export of Goods. This benefit is in the form of a Licence which can be utilised to pay Custom Duty on Import of Goods for Manufacturing purpose. During the year under consideration, the Company has received this benefit of Rs.19,72,716/- the extent of which the Custom Duty has been paid by them by way of this Scheme. The Company has not recorded the benefit of this scheme in their financials and has directly debited the Custom Duty Paid amount to the Profit & Loss Account only to the extent of the net amount of Custom Duty paid. The balance of the un-utilised value of this Licence as on 31/03/2018 is ''7/- (Rupees Seven Only)

b) AS per the Advance Licence conditions, the Company had to Export 31,050 Kgs of N Methyl J Acid against the Import of 37,260 Kgs of J Acid during the year under consideration. However the Company has been able to Export only 30,963 Kgs of N Methyl J Acid and hence there is a shortfall of Export of 86.98 Kgs of N Methyl J Acid. The penalty payable by the Company on account of this short fall of Export will be ascertained by the Customs Department and intimated to the Company. The said liability has not been accounted for in the financials as the quantum of the same will be ascertained only on completion of the adjudication by the Custom Department.

6) Related Party transactions :

I Names of Related Parties and nature of relationship.

A. Associates

1 Vivid Intermediates Private limited

2 M/s Sumichem Corporation

B. Enterprises over which Key Management Persons Have significant influence and Enterprises having Key Management Person in common.

1 Vivid Chemical (FIRM)

C. Key Management Persons and Relatives

1 Mr. Sudhir Mody Father of the Directors Mr. Sumish Mody & Mr. Miten Mody

2 Mr. Sumish Sudhir Mody Director

3 Mr. Miten Sudhir Mody Director

4 Mrs. Asha Sudhir Mody Mother of the Directors Mr. Sumish Mody & Mr. Miten Mody

5 Mrs. Meena Sumish Mody Director & Wife of Mr.Sumish Mody

6 Mrs. Amisha Miten Mody Internal Auditor & Wife of Mr. Miten Mody

7 Mr. Dharmesh Chokshi Director

8 Mrs. Alka Parekh Director

a) In Segment Reporting of the Company the Unallocable Expenses & Capital Employed figure of each segment is calculated on the proportion of Export Sales to Total Sales for the corresponding period.

2 Secondary segment:

Since company deals in one line of product only ie. Chemicals , it does not satisfy the criteria of reportable Secondary Segments; hence the Secondary Segment is not reported.

7) Current Tax :

Provision for Tax has been made on the basis of the Income Tax Act 1961. However as the company is entitled to set off their Current Tax Liability against the Brought Forward Minimum Alternate Tax (MAT) of ''5,12,207/- the Provision of Current Tax has been ascertained at ''73,27,882/- (incl. of Surcharge & Cess). As on the date of this Balance Sheet there is no allowable brought forward losses or Depreciation which can be carried forward for the subsequent years.

Note a) The Face Value of Shares of Company has been split to ''5 from Rs.10 ( w.e.f 3rd December, 2015 ).

b) The Board of Directors have proposed to declare the Dividend @ 10% (P/Y 10%) on the Paid Up Equity Share Capital of the Company.

8) Deferred Tax Adjustment :

For the company, the deferred tax adjustment as required by AS-22 consists only on account of Difference in the Rate of Depreciation under the Income Tax Act and the Companies Act. The DTA/DTL of the earlier years was calculated @ of the Rate of Tax applicable in that particular year and for the current year @ Rate of Tax applicable for the year under consideration. Due to the change in the Rate of Tax in the year under consideration, the Opening balance of DTA/DTL has been revised accordingly

The Profit & Loss Account has been debited with the Deffered Tax Liability of Rs.14,88,858/-.

9) In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria.

Subject to this, the information relating to payment overdue to SSI units cannot be computed.

10) Previous years figures have been regrouped wherever necessary in order to confirm to current years presentation.

11) Company has defaulted in recognising Gratuity Liability in the Financials.

---

Mar 31, 2016

1. Particulars of Licensed Capacity, Installed Capacity and Actual Production : 2015-16 (Kgs) 2014-15 (Kgs) a. Installed Capacity:

Dye Intermediates equivalent 1,400,000 720,000

Installed capacity is as certified by the Management and not verified by the auditors. It denotes estimated production of a product, if the entire plant & machinery is operated on triple shift basis during the year and is exclusively utilized for its production. However, the plant and machinery is common for the production of various dye-intermediates and hence the installed capacity may vary depending upon the product mix adopted by the company.

During the year under consideration the Company has opted to major expansion of their Production Capacity and hence have installed new Plant & Machinery in their Factory Premises at Tarapur (Maharashtra). Due to this expansion the Installed Capacity of the Company has risen from 720 MT to 1,400 MT per annum

2. Related Party transactions :

3. Names of Related Parties and nature of relationship.

4. Associates

5. Vivid Intermediates Private limited

6. M/s Sumichem Corporation

7. Enterprises over which Key Management Persons Have significant influence and Enterprises having Key Management Person in common.

8. Vivid Chemical (FIRM)

9. Key Management Persons and Relatives

10. Mr. Sudhir Mody

11. Mr. Sumish S. Mody

12. Mr. Miten S. Mody

13. Mrs. Asha S. Mody

14. Mrs. Meena S.Mody

15. Mrs. Amisha M Mody

16. In Segment Reporting of the Company the Unallocable Expenses & Capital Employed figure of each segment is calculated on the proportion of Export Sales to Total Sales for the corresponding period.

17. Secondary segment:

Since company deals in one line of product only ie. Chemicals, it does not satisfy the criteria of reportable Secondary Segments; hence the Secondary Segment is not reported.

18. Current Tax :

Provision for Tax has been made on the basis of the Income Tax Act 1961. However as the company is entitled to set off their Current Tax Liability against the Brought Forward Minimum Alternate Tax (MAT) of Rs. 5,12,207/- the Provision of Current Tax has been ascertained at Rs. 45,04,828/- (incl. of Surcharge & Cess). As on the date of this Balance Sheet there is no allowable brought forward losses or Depreciation which can be carrier forward for the subsequent years.

19: The Face Value of Shares of Company has been split to Rs. 5 from Rs. 10 ( w.e.f 3^rd December, 2015 ). Hence the Earning Per Share figures of Previous year has been adjusted accordingly in the EPS Table.

20. The Board of Directors have proposed to declare the Dividend @ 7. 5% (P/Y 5%) on the Paid Up Equity Share Capital of the Company.

21. During the period under review the Company made a Preferential Issued 2,57,070 fully paid Equity Shares of Rs. 5/- Each at a Premium of Rs. 2.78/- per share to the Promoter group after obtaining all the necessary approvals from the Appropriate Authorities.

22. Deferred Tax Adjustment:

For the company, the deferred tax adjustment as required by AS-22 consists only on account of Difference in the Rate of Depreciation under the Income Tax Act and the Companies Act.

The Profit & Loss Account has been debited with the Differed Tax Liability of Rs. 5,67,747/-.

23. In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria.

Subject to this, the information relating to payment overdue to SSI units cannot be computed.

24. Previous year’s figures have been regrouped wherever necessary in order to confirm to current year’s presentation.

---

Mar 31, 2015

1. Disclosure pursuant to Note no. 6(A)(f) of Part I of Schedule VI to the Companies Act, 1956

Equity Shares (Previous year) are held by , the holding company.

Above disclosure is required for each class of Shares held by its holding company or its ultimate holding company including shares held by or by subsidiaries or associates of the holding company or the ultimate holding company in aggregate.

2. The following are the observations during the course of Audit under review and brought to the notice of the members of the Company :-

a. Due to the complexities of business the value of the Inventory has been considered as has been verified, valued and certified by the Management.

b. Balances of Sundry Debtors and Sundry Creditors as on 31/03/2015 are recorded at realisable value. The Management has been able to produce some confirmations of balances due from Debtors as well as the Balances Payable to the Creditors. However the value of these Debtors and Creditors for the Balance Sheet purpose has been take as certified by the Management.

Installed capacity is as certified by the Management and not verified by the auditors. It denotes estimated production of a product, if the entire plant & machinery is operated on triple shift basis during the year and is exclusively utilised for its production. However, the plant and machinery is common for the production of various dye-intermediates and hence the installed capacity may vary depending upon the product mix adopted by the company.

3. Related Party transactions :

I Names of Related Parties and nature of relationship.

A. Associates

1 Vivid Intermediates Private limited

2 M/s Sumichem Corporation

B. Enterprises over which Key Management Persons Have significant influence and Enterprises having Key

Management Person in common.

1 Vivid Chemical (FIRM)

C. Key Management Persons and Relatives

1 Shri. Sudhir Mody

2 Shri. Sumish S. Mody

3 Shri. Miten S. Mody

4 Smt. Asha S. Mody

Secondary segment:

Since company deals in one line of product only ie. Chemicals , it does not satisfy the criteria of reportable segments; hence not reported.

4. Current Tax :

Provision for Tax has been made on the basis of the Income Tax Act 1961 However as the company has utilised brought forward Depreciation loss of the earlier years under the normal provisions of the Income Tax Act. As on the date of this Balance Sheet there is no allowable brought forward losses or Depreciation which can be carrier forward for the subsequent years.

5. Deferred Tax Adjustment :

For the company, the deferred tax adjustment as required by AS-22 consists only on account of Difference in the Rate of Depreciation under the Income Tax Act and the Companies Act.

The Profit & Loss Account has been debited with the Deffered Tax Liability of Rs.2,26,175/-.

6. In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria.

Subject to this, the information relating to payment overdue to SSI units cannot be computed.

7. Previous years figures have been regrouped wherever necessary in order to confirm to current years presentation.

---

Mar 31, 2014

Note 1 Disclosure pursuant to Note no. 6(T) of Part I of Schedule VI to the Companies Act, 1956

As at 31 March As at 31 March

Contingent liabilities and commitments (to the extent not provided for) 2014 2013

(i) Contingent Liabilities

The company is facing court cases With Central Excise department in re- spect of Modvat credit claimed for F.Y. 1994-95 The company has preferred 64,000 64,000 an appeal against the said order and is confdent of succeeding in the said appeal.

(The liability disclosed above is net of predeposit of Rs. 50,000) Guarantee Given 269,675 -

333,675 64,000

(ii) Commitments

- -

333,675 64,000

2) Related Party transactions :

I Names of Related Parties and nature of relationship.

A. Associates

1 Vivid Intermediates Private limited

2 M/s Sumichem Corporation

B. Enterprises over which Key Management Persons Have significant infuence and Enterprises having Key Management Person in commom

1 Vivid Chemical (FIRM)

C. Key Management Persons and Relatives

1 Mr. Sudhir Mody

2 Mr. Sumish S. Mody

3 Mr. Miten S. Mody

Secondary segment:

Since company deals in one line of product only ie. Chemicals , it does not satisfy the criteria of reportable segments; hence not reported.

3) Current Tax :

Provision for Tax has been made on the basis of the Liability of the Company as ascertained under the Minimum Alternate Tax based on the Book profits. However as the company has accumulated losses of the earlier years under the normal provisions of the Income Tax Act, the Provision of Taxation Payable under this Act is not required for the year under review.

4) Deferred Tax Adjustment :

For the company, the deferred tax adjustment as required by AS-22 consists only of unabsorbed depreciation and losses.

Due to the Virtual Uncertainity of profits in the earlier years the Management had decided against providing for the Deffered Tax Liability. The Profit & Loss Account has been debited with the Deffered Tax Liability of Rs.24,18,440/-.The breakup of the Deffered Tax Liability pertaining to the earlier years and for the year under consideration is as follows:

5) In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria.

Subject to this, the information relating to payment overdue to SSI units cannot be computed.

6) Previous years figures have been regrouped wherever necessary in order to confirm to current years presentation.

---

Mar 31, 2013

1 Related Party transactions :

I Names of Related Parties and nature of relationship.

A. Associates

1 Vivid Intermediates Private limited

2 M/s Sumichem Corporation

B. Enterprises over which Key Management Persons Have signifcant infuence and Enterprises having Key Management Person in commom

1 Nil

C. Key Management Persons and Relatives

1 Mr. Sudhir Mody

2 Mr. Sumish S. Mody

3 Mr. Miten S. Mody

Secondary segment:

Since company deals in one line of product only ie. Chemicals , it does not satisfy the criteria of reportable segments; hence not reported.

Current Tax :

Provision for current income tax is made at the current tax rate based on assessable income. However as the company has accumulated losses of the earlier years, the Provision of Taxation as per Income Tax is not made is not required for the year under review. Provision for MAT liability has been made as per applicable rate defned u/s 115JB of the Income Tax Act 1961.

Deferred Tax Adjustment :

For the company, the deferred tax adjustment as required by AS-22 consists only of unabsorbed depreciation and losses. As the company has earned proft during the year under consideration and as the Company has accumulated Losses of the earlier years , it is estimated the same are not suffcient to cover the accumulated losses of the earlier years. In view of the same the deferred tax asset/liability has not been recognised.

In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria.

Subject to this, the information relating to payment overdue to SSI units cannot be computed.

Previous years fgures have been regrouped wherever necessary in order to confrm to current years presentation.

---

Mar 31, 2012

1 Related Party transactions :

Names of Related Parties and nature of relationship.

A. Associates

14 Related Party transactions :

1 Vivid Intermediates Private limited

1 Names of Related Parties and nature of relationship.

2 M/s Sumichem Corporation

A.Associates

B. Enterprises over which Key Management Persons Have significant influence and Enterprises having Key

1 Vivid Intermediates Private limited

Management Person in commom

2 M/s Sumichem Corporation

1 Nil

B. Enterprises over which Key Management Persons Have significant influence and Enterprises having Key

C. Key Management Persons and Relatives Management Person in commom

1 Mr. Sudhir Mody

2 Mr. Sumish S. Mody

1 Nil

3 Mr. Miten S. Mody

C.Key Management Persons and Relatives

Secondary segment:

Since company deals in one line of product only ie. Chemicals , it does not satisfy the criteria of reportable segments; hence not reported.

Current Tax :

Provision for current income tax is made at the current tax rate based on assessable income. However as the company has accumulated losses of the earlier years, the Provision of Taxation is not required for the year under review.

Deferred Tax Adjustment :

For the company, the deferred tax adjustment as required by AS 22 consists only of unabsorbed depreciation and losses. As the company has incurred a Loss during the year under consideration and as the Company has accumulated Losses of the earlier years , it is estimated the same are not sufficient to cover the accumulated losses of the earlier years. In view of the same the deferred tax asset/liability has not been recognised.

In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria.

Subject to this, the information relating to payment overdue to SSI units cannot be computed.

Previous years figures have been regrouped wherever necessary in order to confirm to current years presentation.

---

Mar 31, 2011

1 Contingent Liabilities :

2010-11 2009-10 Rupees Rupees

The company is facing following court cases:

i. With Central Excise department in respect of Modvat credit 64,000 64,000 claimed for F.Y. 1994-95 The company has preferred an appeal against the said order and is confident of succeeding in the said appeal.

(The liability disclosed above is net of predeposit of Rs. 50,000)

2 Particulars of Licensed Capacity, Installed Capacity and Actual Production :

Installed capacity is as certified by the Management and not verified by the auditors. It denotes estimated production of a product, if the entire plant & machinery is operated on triple shift basis during the year and is exclusively utilised for its production. However, the plant and machinery is common for the production of various dye-intermediates and hence the installed capacity may vary depending upon the product mix adopted by the company.

3 Segment Reporting :

B Secondary segment:

Since company deals in one line of product only ie. Chemicals , it does not satisfy the criteria of reportable segments; hence not reported.

4 Related Party transactions :

I Names of Related Parties and nature of relationship.

A. Associates

1 Vivid Intermediates Private limited

2 M/s Sumichem Corporation

B. Enterprises over which Key Management Persons Have significant influence and Enterprises having Key Management Person in commom

1 Nil

C. Key Management Persons and Relatives

1 Mr. Sudhir Mody

2 Mr. Sumish S. Mody

3 Mr. Miten S. Mody

5 Earnings per share :

Earnings per share is calculated as per AS-20 issued by the ICAI. The Net Profit After Tax considered for calculation of basic and diluted earnings per share is Rs. 45,09,008/-. There is no difference between basic and diluted earnings per share.

6 Current Tax :

i Provision for current income tax is made at the current tax rate based on assessable income. However as the company has accumulated losses of the earlier years, the Provision of Taxation is not required for the year under review.

ii Deferred Tax Adjustment : For the company, the deferred tax adjustment as required by AS-22 consists only of unabsorbed depreciation and losses. Though the company has made nominal profits during the year under consideration as well as the earlier year, the same are not sufficient to cover the accumulated losses of the earlier years. In view of the same the deferred tax asset/liability has not been recognised.

7 In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria. Subject to this, the information relating to payment overdue to SSI units cannot be computed.

8 Previous years figures have been regrouped wherever necessary in order to confirm to current years presentation.

---

Mar 31, 2010

1 Contingent Liabilities:

2009-10 2008-09

Rupees Rupees

The company is facing following court cases: With Central Excise department in respect of Modvat credit 64,000 64,000

claimed for F.Y. 1994-95 The company has preferred an appeal against the said order and is confident of succeeding in the said appeal.

(The liability disclosed above is net of predeposit of Rs. 50,000)

2. particulars of Licensed Capacity. Installed Capacity and Actual Production :

Installed capacity is as certified by the Management and not verified by the auditors. It denotes estimated production of a product, if the entire plant & machinery working on triple shift during the year is exclusively utilised for its production. However, the plant and machinery is common for the production of various dye-intermediates and hence the installed capacity may vary depending upon the product mix adopted by the company.

3 Segment Reporting :

B Secondary segment:

Since company deals in one line of product only fe. Chemicals , it does not satisfy the criteria of reportable segments; hence not reported.

4 Related Party transactions :

I Names of Related Parties and nature of relationship.

A. Associates

1 Vivid Intermediates Private limited

2 M/s Sumichem Corporation

B. Enterprises over which Key Management Persons have significant influence and Enterprises having Key Management Person in commom

1 Nil

C. Key Management Persons and Relatives

1 Mr. Sudhir Mody

2 Mr. Sumish S. Mody

3 Mr. Miten S. Mody

5 Earnings per share :

Earnings per share is calculated as per AS-20 issued by the ICAI. The Net Profit After Tax considered for calculation of basic and diluted earnings per share is Rs. 71,05,992/-. There is no difference between basic and diluted earnings per share.

6 Current Tax :

i Provision for current income tax is made at the current tax rate based on assessable income.

ii Deferred Tax Adjustment:

For the company, the deferred tax adjustment as required by AS-22 consists only of unabsorbed depreciation and losses. The company has a history of continuing losses. Though measures have been taken towards turning the company around, we do not have evidence claiming certainty of profits in the immediate future. In view of the same, the deferred tax asset/Liability is not recognised.

7 In accordance with the requirement for disclosure of amounts due to SSI units, the company has not compiled the list of its sundry creditors who satisfy this criteria.

Subject to this, the information relating to payment overdue to SSI units cannot be computed.

8 Previous years figures have been regrouped wherever necessary in order to confirm to current years presentation.