Notes to Accounts of Ashnoor Textile Mills Ltd.

Mar 31, 2024

* Represents Bank deposit with original maturity over three months from the date of balance sheet. it includes balance with banks to the extend heal as margin money or security against the borrowings, guarantees and other Commitments.

The Comparative figures for the previous years have been regrouped, recast and rearranged wherever necessary to conform to current year’s classification under Schedule-III of the Companies Act, 2013. Figures in parenthesis represent previous financial year’s figures unless stated otherwise. Amounts are mentioned in Rupees in Lakh.

11.2 Rights, preferences and restrictions attached to equity shares

The Company has only one class of Equity Shares having a par value of Rs. 10 per shares. Each holder of equity shares is entitled to one vote per share. Any shareholder whose name is entered in the Register of Members of the Company shall enjoy the same rights and be subject to the same liabilities as all other shareholders of the same class.

Dividend, if any, proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Company in general meeting can’t declare dividend in excess of the amount recommended by the Board. Dividend as declare in the ensuing Annual General Meeting shall be distributed within the period prescribed under the Companies Act, 2013.

In the event of winding up of the Company, Equity Shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. For the said purpose, the liquidator may set such value as he deems fair upon any property to be divided and may determine how such division shall be carried out between the members.

11.5 The Company has not issued any equity shares for consideration other than cash and has not issued any bonus shares nor any buy back of shares during five years immediately preceding March 31, 2024.

13.2 Two additional Term Loan are taken during the year from Bank of Baroda for purchase of Machinery, secured by charge against respective Machineries and are repayable in 34 monthly instalments. Outstanding loan amount as on March 31, 2024 is Rs. 710.13 Lakh.

13.3 Additional Working Capital Term Loan (AWCTL) of Rs. 750 Lakh and Rs. 550 Lakh are taken from Bank of Baroda to meet the liquidity mismatch due to COVID 19 pandemic in addition to existing facility under scheme of BGECLS 1.0 (extension).The term loan are repayable in 5 years from the date of disbursement, including moratorium period of two years for principal amount. The Principal shall be repaid in 36 equal instalments interest after moratorium period is over.

16.1 Interest on late payment of Rs. 2,684,738/- (2022-2023 - Rs. 2,684,738/-) and Rs. 18,725/- (2022-2023 - Rs. 18,725/-) has been levied under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. Appeal has been filed against this demand in the Court and provision has been created for this liability in the books of accounts. Out of this demand, Rs. 498,387/- has been deposited with the authorities under protest and adjusted with this provision amount.

17.1 Packing Credit, Foreign Bills Limits, Gold Card and Derivatives(Forward Contract) are availed from Bank of Baroda and are secured by hypothecation of present and future stock of raw materials, stock in progress, finished goods, stores and spares, books debts and outstanding receivables.

32 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (a) Capital Management

The Company’s financial strategy aims to support its strategic priorities and provide adequate capital to its businesses for growth and creation of sustainable stakeholder value. The Company funds its operations through internal accruals and aims at maintaining a strong capital base to support the future growth of its businesses.

( c) Financial risk management objectives

The Company’s management monitors and manages the financial risks relating to the operations of the Company by analysing exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest risk and other price risk), credit risk and liquidity risk. Accordingly, the Company’s risk management framework has the objective of ensuring that such risks are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation. It also seeks to drive accountability in this regard.

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES- Continue

(i) Liquidity Risk

The Company’s Current assets aggregate Rs. 11,382.54 Lakh (2023 - Rs. 9,321.41 Lakh) including Current Investments, Cash and cash equivalents and Other Bank Balances of Rs. 2986.93 Lakh (2023 -Rs.1,656.67 Lakh) against an aggregate Current liability of Rs. 6836.30 Lakh (2023 - Rs. 5027.14 Lakh).

Further, while the Company’s total equity stands at Rs. 6,406.16 Lakh (2023 - Rs.5,661.96 Lakh) , it has non-current borrowings of Rs. 1,903.48 Lakh (2023 - Rs. 2,657.48 Lakh). In such circumstances, liquidity risk or the risk that the Company may not be able to settle or meet its obligations as they become due does not exist.

(ii) Market Risk

The Company is not an active investor in equity markets; it continues to hold certain investments in equity for long term value accretion and also as current investments. The market value of investments in such equity instruments as at 31st March, 2024 is Rs.3248.75 Lakh (2023 - Rs. 1369.60 Lakh ). Market risk exposures are measured using sensitivity analysis. There has been no change to the Company’s exposure to market risks or the manner in which these risks are being managed and measured.

(iii) Foreign Currency Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss as the company is engaged in exports and realises its sales in US dollars. Considering the countries and economic environment in which the Company operates, its operation are subject to risk arising from fluctuations in exchange rates in the countries to which it exports. The company adopts suitable hedging policy to mitigate the impact of forex fluctuations on routine operations.

(iv) Interest Rate Risk

The Company is also exposed to interest rate risk, changes in interest rates will affect future cash flows or the fair values of its financial instruments, principally debt because it borrow funds at different interest rate

(v) Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Company’s bank balances are held with a reputed and creditworthy banking institution resulting to limited credit risk from the counterparties.

The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. Credit risk is actively managed through Buyerwise Exposer, Bank Guarantees, advance payments and forfaiting without recourse to the Company. The company restricts its fixed income investments in liquid securities carrying high credit rating.

The fair value of remaining financial assets and liabilities approximate with the carrying amount recognized in the financial statements. There was no transfer between Level 1. Level 2 and Level 3 in the year. The carrying amount of financial assets and financial liabilities measured at amortised cost in the Ind AS financial statements are a reasonable approximation of their fair value since the Company does not anticipate that carrying value would be significantly different from the values that would eventually be received or settled.

The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature.

37 There are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

38 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

39 The Company has not granted any Loans or Advances to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person.

42 Registration of charges or satisfaction with Registrar of Companies

All the charges or satisfaction of previous year yet to be registered with the Registrar of Companies beyond the statutory period, has been filed during the year.

43 The company has no holding or downstream companies as on the date of the Balance Sheet. So compliance with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 does not require

44 The Company has not any Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 as on the date of the Balance Sheet. So there are no requirements by the Company to disclose the effect of such Scheme of Arrangements which have been accounted for in the books of account of the Company ‘in accordance with the Scheme’ and ‘in accordance with accounting standards’.

45 The Company has taken borrowings from banks on the basis of current assets i.e. Inventory and Receivables. The company has filed quarterly returns of current assets with the bank which are agreed with books of accounts.

(c) No balance has been written off and written back of the related parties during the year

47 GST Demand for the tax period April 2018 to March 2019 has been demanded by Office of the Deputy Commissioner of State Tax, Gurugram for Rs, 45,98,225/- vide Order Number 159/ DTT/Dated April 29, 2024. This Contigent Liability has not been provided in books of accounts as the has to file Appeal Against this order.

48 Right Issue

Pursuant to provision Section 23, 62(1)(a) of Companies Act, 2013 and the Rules made there under, The Company has rise funds through Right Issue by issuing 31,86,462 number of shares to the existing share holders @20/- each. The issue will arised after the board meeting and Impact of share Holding will arises in the Next Financial Year.

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Mar 31, 2015

1. Rights, preferences and restrictions attached to equity shares

The company has only one class of Equity Shares having a par value of Rs.10 per shares. Each holder of equity shares is entitled to one vote per share. Any shareholder whose name is entered in the Register of Members of the company shall enjoy the same rights and be subject to the same liabilities as all other shareholders of the same class.

2. Dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The company in general meeting can't declare dividend in excess of the amount recommended by the Board. Dividend as declare in the ensuing Annual General Meeting shall be distributed within the period prescribed under the Companies Act, 2013.

3. In the event of winding up of the company, Equity Shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. For the said purpose, the liquidator may set such value as he deems fair upon any property to be divided and may determine how such division shall be carried out between the members.

4. Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II, except in respect of certain assets as disclosed in Accounting Policy on Depreciation, Amortisation and Depletion. Accordingly, the unamortised carrying value is being depreciated/amortised over the revised/remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted net of taxes, in the opening balance of Profit and Loss Account amounting to Rs. 397,375.84/-

5. Term Loan represents the loan taken from Bank of Baroda for purchase of Machinery, secured, by charge against repective Machinery and are repayable in 60 monthly instalments. Loan outstanding as on date is Rs. 265.00 Lacs.

6. Claim of interest by Bank of Maharastra is disputed by the Company as non payable.

7. Interest on late payment of Rs. 2,684,738/- (2013-2014 - Rs. 2,684,738/-) and Rs. 18,725/- (2013- 2014 Rs. 18,725/-) has been levied under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948 respectively by the authorities for the years 2000-2005. Appeal has been filed against this demand in the Court and provision has been created for this liability in the books of accounts. Out of this demand, Rs. 498,387/- has been deposited with the authorities under protest and adjusted with this provision amount.

8. Packing Credit loans and Foreign Bills Loans availed from Bank of Baroda, International Business Branch, Sansad Marg, New Delhi are secured by hypothecation of present and future stock of raw materials, stock in progress, finished goods, stores and spares, books debts and outstanding receivables.

9. Aggregate amount of quoted investments in Baroda Pioneer ELSS-96-Plan A Dividend (Market value of 4,734,225/- (2013-2014 Rs. 2,695,915/-)

PARTICULARS As at As at 31.03.2015 31.03.2014 Rupees Rupees 10. LONG TERM LOANS AND ADVANCES (Unsecured and Considered Good)

Security Deposits 1,874,888 1,674,888

Other Loans and Advances (Refer Note-13.1, 13.2, 13.3) 54,180,732 31,209,587

TOTAL 56,055,620 32,884,475

11. Excise demand of Rs. 10,000,000/- (2013-2014- Rs. 10,000,000/-) has been paid in protest to the Excise Department. Company has filed an appeal in Central Excise and Service Tax Appellate Tribunal against the order of Commission Adjudication - Excise Department.

12. Civil Court, Gurgaon has settled the claim of arrears of Rs. 21,41,830/- of Employees State Insurance Scheme for the years 1997 to 2001 levied by Regional Office of Employees State Insurance Corporation at Rs. 708,144/- along with interest Rs. 378,175/-. The arrears and interest aggregating to Rs. 10,86,319/- has been charged to Profit and Loss Account.

13. Following are the contingent liabilities, which has not been provided for:

a) Bank Guarantee of Rs. 4,700,000/- issued to Assistant Commissioner, Central Excise, for deboning of the Unit.

b) Excise Duty of Rs. 50,000,000/- out of which Rs. 10,000,000/- has been paid in protest for filing the appeal with the Tribunal.

c) Bank Guarantee of Rs. 60,000/- issued to Assistant Commissioner, Central Excise, Delhi-III

14. Speculative loss of Rs. 5,124,972.38 (2013-2014 Rs. 6,833,296.51) incurred on trading of foreign currency, as per accounting policy, has been amortized in five years in equal installments.

15. In the opinion of the management, the current assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are stated in the balance sheet.

16. Related Party Disclosures:

a. Following are related parties:

Key Management Personnel Mr. Suneel Gupta (Managing Director)

Mrs. Sangeeta Gupta (Whole time Director)

b. Related party transactions:

Transaction Key Management Personal

2014-2015 2013-2014

Director Salary 11,900,000 6,000,000

c. No balance has been written off and written back of the related parties during the year.

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Mar 31, 2014

General

(A) The voting period begins on 22nd September, 2014 (9:30 am) and ends on 24th Septemebr, 2014 (6:30 pm). During this period shareholders'' of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of 29th August 2014, may cast their vote electronically. The e- voting module shall be disabled by CDSL for voting thereafter.

(B) Mr. Deepak Bansal, Practising Company Secretary, (Membership Number FCS 3736), has been appointed as the Scrutinizer to scrutinize the e-voting process.

(C) The voting rights of shareholders shall be in proportion to their shares of the paid up equity share capital of the Company as on 29th August 2014.

(D) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions ("FAQs") and e-voting manual available at www.evotingindia.com under help section or write an email to [e-mail].

Re-issued of 45,849 forfeited equity shareon preferential allotment basis to the non promoters (45,849 equity shares) on September 13, 2013 at Rs. 10/- per share pursuant to the provision of Chapter VII of the SEBI (ICDR) Regulations, 2009, in principal approval of Bombay Stock Exchange under Clause 24(a) of the listing agreement and special resolution passed in the Extra Ordinary General Meeting on March 19, 2013. These shares were listed on November 11, 2013 in in BSE.

45,849 equity shares issued to non promoters on September 13, 2013 are under lock-in period upto September 12, 2014

1.2 Rights, preferences and restrictions attached to equity shares

The company has only one class of Equity Shares having a par value of Rs. 10 per shares. Each holder of equity shares is entitled to one vote per share. Any shareholder whose name is entered in the Register of Members of the company shall enjoy the same rights and be subject to the same liabilities as all other shareholders of the same class.

Dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The company in general meeting can''t declare dividend in excess of the amount recommended by the Board. Dividend as declare in the ensuing Annual General Meeting shall be distributed within the period prescribed under the companies Act, 1956.

In the event of winding up of the company, Equity Shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. For the said purpose, the liquidator may set such value as he deems fair upon any property to be divided and may determine how such division shall be carried out between the members.

The issue of additional equity shares has not resulted in any change in management or control of the company and holding of the promoters increased from 63.47% to 63.20%.

1.3 Details of Calls in Arrears

1.4 The Company has not issued any equity shares for consideration other than cash in last 5 years immediately preceding the reporting date.

1.5 The Company has not issued any bonus shares nor has there been any buy back of shares during five years immediately preceding March, 2014.

2.1 Interest on late payment of Rs. 2,684,738/- (2012-2013 - Rs. 2,684,738/-) and Rs. 18,725/- (2012-2013 Rs. 18,725/-) has been levied under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948 respectively by the authorities for the years 2000-2005. Appeal has been filed against this demand in the Court and provision has been considered in books of accounts . Out of this demand, Rs. 498,387/- has been deposited with the authorities under protest and adjusted with this provision amount.

3.1 Packing Credit loans and Foreign Bills Loans availed from Bank of Baroda, International Business Branch, Sansad Marg, New Delhi are secured by hypothecation of present and future stock of raw materials, stock in progress, finished goods, stores and spares, books debts and outstanding receivables.

4.1 There are no amount due to the suppliers covered under the Micro, Small and Medium Act, 2006. This information takes into account only those suppliers who have responded to the inquiries made by the company for this purpose.

5.1 Excise demand of Rs. 10,000,000/- (2012-2013- Rs. 10,000,000/-) has been paid in protest to the Excise Department. Company has filed an appeal in Central Excise and Service Tax Appellate Tribunal against the order of Commission Adjudication - Excise Department.

5.2 An Appeal is pending with the Civil Court, Gurgaon for the arrears of Employees State Insurance Scheme amounting to Rs. 2,141,830/- (2012-2013 - Rs. 2,141,830/-) for the years 1997 to 2001 levied by Regional Office of Employees State Insurance Corporation. Provision for this amount has not been created. For filing the appeal, Rs. 563,706/- (2012-2013 - Rs. 563,706/-) has been deposited with the Corporation Under Protest''

6.1 Confirmation from customers were not received and their balances are shown as appearing in the accounts.

7.1 Interest Free Margin Money of Rs. 104,70,000/- (2012-2013 Rs. 94,44,000/- issued to Bank of Baroda for Foreign Currency Transaction.

7.2 Following are the contingent liabilities, which has not been provided for:

a) Employees State Insurance Scheme dues of Rs. 2,141,830/- (2012-2013 - Rs. 2,141,830/-).

b) Excise Duty of Rs. 50,000,000/- out of which Rs. 10,000,000/- has been paid in protest for filing the appeal with the Tribunal.

c) Bank Guarantee of Rs. 60,000/- issued to Assistant Commissioner, Central Excise, Delhi-III

d) Bank Guarantee of Rs. 4,700,000/- issued to Assistant Commissioner, Central Excise, for deboning of the Unit.

8.1 Speculative loss of Rs. 6,833,296.51/- (2012-2013 Rs. 8,541,620.63) incurred on trading of foreign currency has been shown as current assets instead of charging to Profit and Loss Account. As per accounting policy of the company, this loss will be amortized in five years in equal installments.

8.2 In the opinion of the management, the current assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are stated in the balance sheet.

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Mar 31, 2013

Additional shares have been issued to promoters (1,892,239 equity shares) and non promoters (443,323 equity shares). Shares issued to promoters and non promoters are in lock in for three years and one year respectively from the date of allotment. Equity shares held by Mrs. Sangeeta Gupta, one of the promoters, before preferential allotment, are also in lock in for eight months from February 15,2013

The issue of additional equity shares has not resulted in any change in management or control of the company and holding of the promoters increased from 58.57% to 63.47%.

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

1.2 The Company has not issued any equity shares for consideration other than cash in last 5 years immediately preceding the reporting date.

2.1 Interest on late payment of Rs.2,684,738/- (2011-2012 - Rs.2,684,738/-) and Rs.18,725/- (2011-2012 - Rs.18,725/-) has been levied under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948 respectively by the authorities for the years 2000-2005. Appeal has been filed against this demand in the Court and provision has been consider in books of accounts. Out of this demand, Rs. 498,387/- has been deposited with the authorities under protest and adjusted with this provision amount.

3.1 Packing Credit loans and Foreign Bills Loans availed from Bank of Baroda, International Business Branch, Sansad Marg, New Delhi are secured by hypothecation of present and future stock of raw materials, stock in progress, finished goods, stores and spares, books debts and outstanding receivables.

4.1 There are no amount due to the suppliers covered under the Micro, Small and Medium Act, 2006. This information takes into account only those suppliers who have responded to the inquiries made by the company for this purpose.

5.1 Excise demand of Rs. 10,000,000/- (2011-2012-Rs. 10,000,000/-) has been paid in protest to the Excise Department and is shown under ''Excise Demand Paid Under Protest''. Company has filed an appeal in Central Excise and Service Tax Appellate Tribunal against the order of Commission Adjudication - Excise Department.

5.2 An Appeal is pending with the Civil Court, Gurgaon for the arrears of Employees State Insurance Scheme amounting to Rs. 2,141,830/- (2011-2012 - Rs. 2,141,830/-) for the years 1997 to 2001 levied by Regional Office of Employees State Insurance Corporation. Provision for this amount has not been created. For filing the appeal, Rs. 563,706/- (2011-2012 - Rs. 563,706/-) has been deposited with the Corporation Under Protest''

6.1 Confirmation from customers were not received and their balances are shown as appearing in the accounts.

7.1 Interest Free Margin Money of Rs. 6,287,000/- (2011-2012 Rs. 10,160,000/- issued to Bank of Baroda for Foreign Currency Transaction.

7.2 Following are the contingent liabilities, which has not been provided for:

a) Employees State Insurance Scheme dues of Rs. 2,141,830/- (2011-2012 - Rs. 2,141,830/-).

b) Excise Duty of Rs. 50,000,000/- out of which Rs. 10,000,000/- has been paid in protest for filing the appeal with the Tribunal.

c) Bank Guarantee of Rs. 60,000/- issued to Assistant Commissioner, Central Excise, Delhi-Ill

d) Bank Guarantee of Rs. 4,700,000/- issued to Assistant Commissioner, Central Excise, for deboning of the Unit.

8.1 In the opinion of the management, the current assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are stated in the balance sheet.

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Mar 31, 2012

1.1 Term Loan from Bank of Baroda for purpose of Plant and Machinery is against security of Immovable and Movable Properties and Assets, and personal guarantees of two Directors and relatives of directors. Repayable in 48 monthly installments of Rs. 10,93,750/- from May 2008.

2.1 Interest on late payment of Rs.2,684,738/- (2010-2011 — Rs.2,684,738/-) and Rs. 18,725/- (2010-2011 - Rs.18,725/-) has been levied under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948 respectively by the authorities for the years 2000-2005. Appeal has been filed against this demand in the Court and provision has been consider in books of accounts . Out of this demand, Rs. 498,387/-has been deposited with the authorities under protest and adjusted with this provision amount and showing under other provision.

3.1 Packing Credit loans and Foreign Bills Loans are secured by hypothecation of present and future stock of raw materials, stock in progress, finished goods, stores and spares, books debts and outstanding receivables.

4.1 There are no amount due to the suppliers covered under the Micro, Small and Medium Act, 2006. This information takes into account only those suppliers who have responded to the inquiries made by the company for this purpose.

5.1 Excise demand of Rs. 10,000,000/-(2010-2011-Rs. 10,000,000/-) has been paid in protest to the Excise Department and is shown under ''Excise Demand Paid Under Protest'' under ''Other Receivables'' in Schedule-I of ''Loans and Advances''. Company has filed an appeal in Central Excise and Service Tax Appellate Tribunal against the order of Commission Adjudication - Excise Department.

6.1 Confirmation from Debtors and advances to and from various parties were not received and their balances are shown as appearing in the accounts.

7.1 Companies has given Interest Free Margin Money of Rs. 6,287,000/- (2010-2011 Rs. 10,160,000/- to Bank of Baroda for Foreign Currency Transaction.

7.2 Following are the contingent liabilities, which has not been provided for:

a) Excise Duty of Rs. 50,000,000/- out of which Rs. 10,000,000/- has been paid in protest for filing the appeal with the Tribunal.

b) Bank Guarantee of Rs. 60,000/- issued to Assistant Commissioner, Central Excise, Delhi-Ill

c) Bank Guarantee of Rs. 4,000,000/- issued to Assistant Commissioner, Central Excise, for deboning of the Unit.

d) Bank Guarantee of Rs. 750,000/- issued to Assistant Commissioner, Central Excise, for deboning of the Unit.

e) Bank Guarantee of Rs. 175,00,000/- issued Globe Capital for trading with foreign currency.

8.1 Speculative loss of Rs.21,453,563.91 (2010-2011 Rs.8,541,620.63) incurred on trading of foreign currency has been shown as current assets instead of charging to Profit and Loss Account. As per accounting policy of the company, this loss will be amortized in five years in equal installments.

8.2 In the opinion of the management, the current assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are stated in the balance sheet.

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Mar 31, 2010

1. Comparative figures for the previous years have been regrouped, recast and rearranged wherever necessary to conform to current years classification. Figures in parenthesis represent previous financial years figures unless stated otherwise. Amounts are mentioned in Rupees and quantity in Kilograms unless stated otherwise.

2. Excise demand of Rs. 10,000,000/- (2008-2009- Rs. 10,000,000/-) has been paid in protest to the Excise Department and is shown under Excise Demand Paid Under Protest under Other Receivables in Schedule- I of Loans and Advances. Company has filed an appeal in Central Excise and Service Tax Appellate Tribunal against the order of Commission Adjudication - Excise Department.

3. An Appeal is pending with the Civil Court, Gurgaon for the arrears of Employees State Insurance Scheme amounting to Rs. 2,141,830/- (2008-2009 - Rs. 2,141,830/-) for the years 1997 to 2001 levied by Regional Office of Employees State Insurance Corporation. Provision for this amount has not been created. For filing the appeal, Rs. 563,706/- (2008-2009 - Rs. 563,706/-) has been deposited with the Corporation, which is shown as ESI Demand Paid Under Protest under Other Receivables in Schedule-I ofLoans and Advances.

4. Interest on late payment of Rs. 2,684,738/- (2008-2009 - Rs. 2,684,738/-) and Rs. 18,725/- (2008-2009 - Rs. 18,725/-) has been levied under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948 respectively by the authorities for the years 2000-2005. Appeal has been filed against this demand in the Court. Out of this demand, Rs. 498,387/- has been deposited with the authorities under protest.

5. Following are the contingent liabilities, which has not been provided for:

a) Employees State Insurance Scheme dues of Rs. 2,141,830/- (2008-2009 - Rs. 2,141,830/-).

b) Excise Duty of Rs. 50,000,000/- out of which Rs. 10,000,000/- has been paid in protest for filing the appeal with the Tribunal (CEST AT).

c) Bank Guarantee of Rs. 60,000/- issued to Assistant Commissioner, Central Excise, Delhi-Ill

d) Bank Guarantee of Rs. 4,000,000/- issued to Assistant Commissioner, Central Excise, for deboning of the Unit.

e) Bank Guarantee of Rs. 7,50,000/- issued to Assistant Commissioner, Central Excise, for deboning of the Unit.

f) One overseas supplier has filed legal suit for recovery of balance payment of JPY 11,340,000/- along with interest in Japan.

g) Wages of Mr. Sukhdev of Rs. 38,000/- out of which Rs. 1,227.07 has been provided for. The case is pending in Labour Court, Gurgaon.

h) Foreign Bills of Rs. 48,930,000/- discounted with Bank of Barada

6. Secured Loan

a) Outstanding balance amount of Term Loan is Rs. 21,198,741/- (2008-2009- Rs. 35,940,833/-). This term loan was availed from Bank of Baroda, International Business Branch, Sansad Marg, New Delhi for acquiring plant and machinery to increase production capacity, against security of immovable proprieties and assets, and personal guarantee of two Directors and relation of directors. Term loan is repayable in 48 equal monthly installments of Rs. 10.93 Lakh beginning from May 2008.

b) Packing Credit Limit of Rs. 49,982,665/- (2008-2009 Rs. 45,999,141/-) availed from Bank of Baroda, International Business Branch, Sansad Marg, New Delhi.

c) Foreign Bill Discounting Limit of Rs. 48,930,000/- (2008-2009 Rs. 38,453,000/-) availed from Bank of Baroda, International Business Branch, Sansad Marg, New Delhi

d) Vehicle loans are secured by hypothecation of respective vehicles. Amount due is Rs. 1,974,958/- (2008-2009- Rs. 5,045,635.76)

7. Rs. 545,232/- deposited with Central Excise Department towards duty payable on inputs on debonding of its 100% Export Oriented Unit Status.

8. Service tax receivable of Rs. 556,440/- has been written off being non receivable on debonding of its 100% Export Oriented Unit Status.

9. Companys contribution to Provident Fund and Employees State Insurance include amount contributed and borne by the Company towards share of contractors is Rs. Nil (2008-2009 - Rs. 12,581/-) and Rs. Nil (2008-2009 - Rs. 3,202/-) respectively.

10. The Profit and Loss Account includes Rs. 4,860,000/- (2008-2009 - Rs. 4,680,000/-) for remuneration to Managing Director and Whole Time Director. For the year ended March 31, 2010 no commission has been paid hence, computation of profit under section 349 of the Companies Act, 1956 is not given.

11. As per the information available with the Company, there are no creditors pertaining to Small Scale Industries, whom the Company owes a sum exceeding Rs. 1 Lakh to, which is outstanding for more than thirty days at the Balance Sheet date.

12. There are no amount due to the suppliers covered under the Micro, Small and Medium Act, 2006. This information takes into account only those suppliers who have responded to the inquiries made by the company for this purpose.

13. Creditors for goods and expense of Rs. 435,878.33 (2008-2009 - Rs. 9,792,655.16) have been written back being not payable.

14. Confirmation from Debtors, Creditors and advances to and from various parties were not received and their balances are shown as appearing in the accounts.

15. In the opinion of the management, the current assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are stated in the balance sheet.

16. Balance Sheet Abstract and Companys General Business Profile (in terms of amendment of part IV of Schedule VI to the companies Act, 1956) is annexed herewith.

17. Schedules A to T form an integral part of the Balance Sheet and the Profit and Loss Account and have been duly authenticated.