Notes to Accounts of EL Forge Ltd.

Mar 31, 2025

Notes to the Ind-AS financial statements for the year ended March 31, 2025, forming an integral part thereof, forming an integral part thereof.

Notes No. 5.00, relating to other information, forming an integral part thereof

05.01. Denomination

All the figures are rounded off to nearest Lakh (Indian Rupees), with two decimals.

05.02. Re-Grouping of Amounts

Previous year''s figures have been regrouped, wherever necessary, to confirm to current year classification/ grouping.

05.03. Contingent Liabilities & Commitments

05.03.01. Claims against the company not acknowledged as debt (Amount in Rs. Lakh)

Sl. No.	Particulars	As at March 31, 2025	As at March 31, 2024
01	E.S.I under Appeal	0.77	0.77
02	Demand from Income Tax	132.74	132.74
03	Demand from Central Excise & service tax	4.79	13.38

05.03.02. The Company makes the assessment of likely outcome, based on the views of internal legal counsel and in consultation with external legal counsel representing the Company. The management is of the view that the outcome the aforesaid case shall be in favour of the company. Based on the above, the management of the view that no provision is required in the books of accounts, at this stage.

05.04. Realization of the amount due to the Company

In the opinion of the management the current assets and Loans and Advances will be recovered in full, in the normal course of business.

05.05. Disclosure of amount due to MSME

05.05.01. Our company has no dealings with MSME organizations (as per Micro, Small and Medium Enterprises Development Act, 2006); and hence we have not filed MSME returns with MCA.

05.05.02. As a matter of caution, we have written to all suppliers to confirm if they would come under the classification of MSME. None of them have confirmed the same and hence we can conclude that the trade payable is not to MSME’s.

05.05.03. Accordingly, disclosure of details of amount due to in respect of Micro, Small and Medium Enterprises, vide Notification dated 11th October, 2018, issued by Ministry of Corporate Affairs, are not applicable to the Company for the year under report.

05.06. Group Gratuity Fund

The Retirement Benefit Funds towards gratuity are administered by LIC under Group Gratuity Scheme.

05.08. Investor Education & Protection Fund

05.08.01. Whenever the company declares dividend [or acceptance, including renewal, of Public

Deposits or other nature covered thereof), it transfers the amount equivalent to an earmarked account, meant for the same, by opening an account with a bank. An unpaid amount, if any, lying in the aforesaid amount shall be transferred to Investor Education & Protection Fund, by taking Demand Draft, from the Bank.

05.09. Segment Reporting

The Company has two business segment (1) Manufacture and Sale of Steel Forgings; (2) Land and

Development described as "Other Operating Income" (Amount in Rs. Lakh)

The Company is engaged in the business of Manufacturing of Auto Ancillary parts (Manufacture and Sale of Steel Forgings). It is one of the reportable segments, as per IND AS 108, Operating Segments. As the exports are mainly to Developed Countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required, in respect of the aforesaid reportable segments.

05.11.02. Financial risk management

The Company has exposure to the following risks from its use of financial instruments, namely Credit risk and Market risk

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board of Directors has established a risk management policy to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management systems are reviewed periodically to reflect changes in market conditions and the Company’s activities. The Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the risk management framework. The Audit Committee is assisted the Finance Department Finance Department undertakes reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(01) Credit risk:

(a) Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s trade receivables, treasury operations and other activities that are in the nature of leases."

(02) Market risk:

Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables. The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), interest rate risk and the market value of its investments. Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

05.11.03. Capital management

The Company''s capital comprises equity share capital, share premium, retained earnings and other equity attributable to equity holders. The primary objective of Company''s capital management is to maximise shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The Company does so by adjusting dividend paid to shareholders. The total capital as on March 31, 2025 is ? 2477.75 Lakh (Previous Year: ? 2247.97 Lakh)

The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt comprises of long term and short-term borrowings less cash and bank balances. Equity includes equity share capital and reserves that are managed as capital. The gearing at the end of the reporting period was as follows: (Amount Rs. In lakhs)

05.12. Contribution towards Corporate Social Responsibility

Our company does not fall under the criteria laid for Corporate Social Responsibility under section 135 of the Companies Act, 2013 and hence the section is not applicable to the Company for the year under audit report.

Notes to the Ind-AS financial statements for the year ended March 31,2025, forming an integral part thereof, forming an integral part thereof.

Notes No. 5.00, relating to other information, forming an integral part thereof

05.13. Extraordinary item

During the financial year 2023/2024 the Company had written back an amount of Rs. 7056.02 Lakhs (Rupees Seven Thousand Fifty Six point Zero Two Lakh only ) towards the advance received against the slump sales of Appur unit .This was based on the legal opinion obtained by the Company.

While taking the aforesaid action, the Board has noted that the matter might be subject to the adjudication of any legal claims in future by the Buyer. In that eventuality, the Company may make a counter claim or a fresh negotiation.

The statutory auditor had relied upon the legal opinion, in this regard in respect of the above said financial year.

05.14. Deferral tax

The company has huge carried forward business loss or unabsorbed depreciation. Considering the profit level of the current year, only deferred tax asset has been arrived at. Pursuant to the principle of prudence (Fundamental accounting Principles),the Company has decided not to recognise the Deferred Tax Asset .Hence the Company has not considered the same in the Statement of Proft and Loss and Balance Sheet.

05.15. Corporate Social Responsibility

Since the business income for the financial year 2024-25 has been less than Rs. 500.00 Lakhs, the company is of the view that Corporate Social Responsibility is not applicable, in respect of the profit for the year 2024-25.

05.16. Non-Disclosure of the details under Employees Benefits, Ind AS-19

(01) The Company has opened a Gratuity Scheme with Life Insurance Corporation of India (LIC), for settling any amount due on account of Gratuity. Under the aforesaid Scheme, the company has to contribute annual premium, based on the amount arrived by LIC. The Company has made the payment of all the outstanding (as at March 31, 2025) Gratuity Premium to Life Insurance Corporation of India (LIC), during the current year.

(02) Due to aforesaid fact, the estimated return from the fund or scheme may not be ascertained or determined in respect of the previous year. Accordingly, no disclosure has been made, in terms of Ind AS-19. The Company is taking sincere steps of adopting Ind AS-19, any implications arising there from including the valuation of future liability on actual basis and determination of plan assets will be done during the next year.

05.17. Code on Social Security, 2020

The Code on Social Security, 2020 relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact of the Code and the associated rules when it comes into effect and will record any related impact in the period the Code becomes effective.

05.18. Security offered

05.18.01. The secured Loan, shown as liability in the Notes on Financial Statement under the grouping “Other Long-Term Liabilities”, amounting to Rs.468.98 Lakh (previous year Rs. 468.98 Lakh), is secured by first charges on Plant and Machineries of the Company.

05.18.02. The company has created charges against the assets and filed the relevant forms with MCA/ ROC

05.19. Additional Regulatory information/ details, as per the Companies Act 2013

05.19.01. Following Additional Regulatory Information, relating to disclosure in the Balance sheet

(01) Title deeds of Immovable Property not held in name of the Company

The Title Deed of the company is held in the name of the Company.

(02) Revaluation of the Property

During the Financial Year under report, the Company has not revalued its Property, Plant and Equipment. Disclosure relating to “whether the revaluation is based on the valuation by a registered valuer as defined under Rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017” is not applicable.

(03) Loans or Advances to Promoters

During the year, the company has not made (or granted) any Loans or Advances in the nature of loans to promoters, Directors, Key Managerial Personnel (KMP) and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person. Accordingly, no disclosure has been made.

(04) Intangible assets under development: Nil (Disclosure not applicable)

(05) Benami Property

The Company, for the current year as well as previous year, does not have any Benami property and no proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made there under. Accordingly, the company has not made any disclosure in the above regard.

(06) Willful defaulter

The Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India

(07) Relationship with Struck off Companies

The Company has not made, or entered into, any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956. No disclosure is required under this paragraph.

(08) Registration of charges or satisfaction with Registrar of Companies (ROC) : Not Applicable

(09) Compliance with number of layers of companies

The Company has made investments (Very nominal amount) in an other company or body corporate. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 for the financial years ended March 31, 2025 and March 31,2024 .

(10) Compliance with approved Scheme(s) of Arrangements During the financial year, neither the Company nor its Board of Directors has entered into any Arrangement or Agreement either to amalgamate or acquire any company. Accordingly, compliance with approved Scheme(s) of Arrangements does not applicable to the Company for the year under report

(11) Utilization of Borrowed funds and share premium

(a) The Company, for the current year as well as previous year, has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(b) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(12) Borrowings from banks against Current Assets of the company No disclosure required under this item is applicable to company, since no borrowings have been availed based on security of current assets of the Company.

(13) Borrowings against Current Assets of same group companies/ entities

No disclosure required under this item is applicable to company, since no borrowings have been availed based on security of current assets of other entities (The Company does not have any company as a group company) within the same Group 05.19.02. Additional regulatory information, relating to Statement of Profit and Loss (Not Applicable items, only)

(01) Transaction not recorded in the books:

The Company has not surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), relating to any transaction not recorded in the books of accounts. Accordingly, no disclosure is required to be given by the Company, in the above regard.

(02) Corporate Social Responsibility (CSR)

During the financial year the Company has not covered under section 135 of the Companies Act, 2013. Accordingly, no disclosure is required to be given by the Company, in the above regard.

(03) Investment Crypto Currency

The Company, for the current year as well as previous year, has not traded or invested in Crypto currency or Virtual Currency. Accordingly, no disclosure is required to be given by the Company, in the above regard.

05.19.03. Explanation to Accounting Ratios (01) Numerator and Denominator

Whenever two numbers are to be divided and the dividing symbol (¦Q is used; the numerical value left hand side of the symbol is numerator and the numerical value right hand side of the symbol is denominator; if slash (/) is used the numerical value left hand side of the symbol is numerator and the numerical value right hand side of the symbol is denominator; or if horizontal line (—) is used the numerical value above the line is numerator and the numerical value below the line is the denominator.

(02) Quotient

A quotient is the result obtained, while dividing divide one number (i.e., numerator) by another number (Denominator).

(03) Percentage (or Per Cent)

The word per cent means per 100. It is represented by the symbol “%”; percentage is obtained by multiplying the quotient by 100 (One Hundred)

(04) Change in Ratio in % (Based CY as basis)

The above implies difference is arrived taking CY figure (Quotient or percentage) reducing the FY Figure; aforesaid difference is divided by CY figure and multiplied by 100, to arrive the percentage

(05) All the above is relevant, wherever Ratio and its formula are referred;

(06) Earning for available for debt service is the sum of the followings

(a) Net Profit after taxes

(b) Non-cash operating expenses like depreciation and other amortizations

(c) Interest

(d) Other adjustments like loss on sale of Fixed assets etc.

(07) Debt service = Interest & Lease Payments Principal Repayments

(08) Average inventory = (Opening inventory balance Closing inventory balance) / 2

(09) Net credit sales = Net credit sales consist of gross credit sales minus sales return

Notes No. 5.00, relating to other information, forming an integral part thereof

(10) Average trade receivables = (Opening trade receivables balance Closing trade receivables balance) / 2

(11) Net credit purchases = Net credit purchases consist of gross credit purchases minus purchase return

(12) Average trade payables = (Opening trade payables balance Closing trade payables balance) / 2

(13) Working capital = Current assets - Current liabilities.

(14) Earnings before interest and taxes = Profit before exceptional items and tax Finance costs - Other Income

(15) Capital Employed = Tangible Net Worth Total Debt Deferred Tax Liability

(16) Return on Investment: various contains of the formula are as follows:

(i) T1 = End of time period

(ii) T0 = Beginning of time period

(iii) t = Specific date falling between T1 and T0

(iv) MV(T1) = Market Value at T1

(v) MV(T0) = Market Value at T0

(vi) C(t) = Cash inflow, cash outflow on specific date

(vii) W(t) = Weight of the net cash flow (i.e. either net inflow or net outflow) on day ‘t’, calculated as [T1 - t] / T1

05.19.04. Accounting Ratios

Accounting Ratios are given in the separate Note Number 06, enclosed herewith.

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Mar 31, 2024

05.01. Denomination

All the figures are rounded off to nearest Lakh (Indian Rupees)

05.02. Re-Grouping of Amounts

Previous year''s figures have been regrouped, wherever necessary, to confirm to current year classification/ grouping.

05.03. Contingent Liabilities & Commitments

05.03.01. Claims against the company not acknowledged as debt (Amount in Rs. Lakh)

Sl. No.	Particulars	As at 31-032024	As at 31-032023
01	E.S.I under Appeal	0.77	0.77
02	Demand from Income Tax	132.74	132.74
03	Demand from Central Excise & service tax	13.38	13.38

05.03.02. The Company makes the assessment of likely outcome, based on the views of internal legal counsel and in consultation with external legal counsel representing the Company. The management is of the view that the outcome the aforesaid case shall be in favour of the company. Based on the above, the management of the view that no provision is required in the books of accounts, at this stage.

05.04. Realization of the amount due to the Company

In the opinion of the management the current assets and Loans and Advances will be recovered in full, in the normal course of business.

05.05. Disclosure of amount due to MSME

05.05.01. Our company has no dealings with MSME organizations (as per Micro, Small and Medium Enterprises Development Act, 2006); and hence we have not filed MSME returns with MCA.

05.05.02. As a matter of caution, we have written to all suppliers to confirm if they would come under the classification of MSME. None of them have confirmed the same and hence we can conclude that the trade payable is not to MSME’s.

05.05.03. Accordingly, disclosure of details of amount due to in respect of Micro, Small and Medium Enterprises, vide Notification dated 11th October, 2018, issued by Ministry of Corporate Affairs, are not applicable to the Company for the year under report.

05.06. Group Gratuity Fund

The Retirement Benefit Funds towards gratuity are administered by LIC under Group Gratuity Scheme.

Notes No. 5.00, relating to other information, forming an integral part thereof

05.07. Related Party Disclosure, as per Ind AS-24

The related parties’ details are disclosed as follows:

05.08. Money due to statutory Authorities (Penalty and Interest)

Non-payment or delayed payment of statutory due (Relating to earlier years) has attracted interest and penalty. The amount of interest / late fees, has been arrived by the Management of the Company, based on the information available with them. The amount outstanding as at 31-03-2024 was Rs. Nil (Previous year Rs. 51.89 Lakh), has been provided in the books of account. The amount charged may be different from the amount, which may be demanded subsequently by the authorities concerned.

05.09. Investor Education & Protection Fund

05.09.01. Whenever the company declares dividend [or acceptance, including renewal, of Public Deposits or other nature covered thereof), it transfers the amount equivalent to an earmarked account, meant for the same, by opening an account with a bank. An unpaid amount, if any, lying in the aforesaid amount shall be transferred to Investor Education & Protection Fund, by taking Demand Draft, from the Bank.

05.09.02. In compliance of the above, the matured but unclaimed Public Deposits, relating to earlier Financial Year, amounting to Rs.3.81 Lakh, has been transferred to Investor Education & Protection Fund, during the year under report. No amount of public deposit is with the company as on the date.

05.10. Segment Reporting

The Company has two business segment (1) Manufacture and sale of steel forgings; (2) Land and Development described as "Other Operating Income" (Amount in Rs. Lakh)

The Company is engaged in the business of manufacturing of Auto Ancillary part (Manufacture and sale of steel forgings). It is one of the reportable segments, as per IND AS 108, Operating Segments. As the exports are mainly to Developed Countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required, in respect of the aforesaid reportable segments.

05.11. Redemption of Preference shares

(01) The company had issued 12,11,123 Number of 6% Preference Shares (Optionally convertible cumulative Redeemable preference shares-OCCRPS) of Rs 100/= each aggregating to Rs 12,11,12,300/= as a part of the Corporate Debt Restructure scheme approved by the lender banks in 2011. As per the Terms & Conditions of the issue the redemption was to be made in 3 equal instalments ending 31/3/2016, 31/3/2017 and 31/3/2018. During 2016 the company had started negotiations for one time settlement with the Bankers for settlement of all amounts including the OCCRPS. This process continued beyond 2018 and finally the company obtained no due letters from all lenders and hence the redemption was stretched beyond 2018. Later the company explored the possibility of redemption as no amount was payable on redemption. Based on legal opinion the company created the Capital Redemption Reserve by transfer of the preference share amount to Reserve as there was no repayment obligation on the preference shares. The same shall be treated at par with capital, as per the provisions of the Companies Act, 2013.

(02) The notes to the earlier years Financial Statements contain the details regarding the Preference Shares.

(03) The statutory auditor has relied upon the legal opinion, in this regard.

05.13.02. Financial risk management

The Company has exposure to the following risks from its use of financial instruments, namely Credit risk and Market risk

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board of Directors has established a risk management policy to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management systems are reviewed periodically to reflect changes in market conditions and the Company’s activities. The Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the risk management framework. The Audit Committee is assisted the Finance Department Finance Department undertakes reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(01) Credit risk:

(a) Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s trade receivables, treasury operations and other activities that are in the nature of leases."

(b) Exposure to credit risk

The gross carrying amount of financial assets, net of any impairment losses recognized represents the maximum credit exposure. The maximum exposure to credit risk as at 31-03-2024 and 31-03-2023 was as follows:( Amount Rs. In lakhs)

(c) Financial assets that are past due but not impaired

There is no other class of financial assets that is past due but not impaired other than trade receivables. The age analysis of trade receivables has been considered from the date of invoice. The ageing of trade receivables, net of allowances that are past due, is given below: (Amount Rs. In lakhs)

(d) Financial assets that are neither past due nor impaired

Cash and cash equivalents, other assets and other receivables are neither past due nor impaired. The total trade receivables that are not past due as at 31-03-2024 amounts to ? 544.23 Lakh (31-03-2023: ? 378.32 Lakh) and impairment has not been recorded on the same.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

(02) Market risk:

Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables. The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), interest rate risk and the market value of its investments. Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

05.13.03. Capital management

The Company''s capital comprises equity share capital, share premium, retained earnings and other equity attributable to equity holders. The primary objective of Company''s capital management is to maximise shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The Company does so by adjusting dividend paid to shareholders. The total capital as on 31-03-2024 is ? 2247.97 Lakh (Previous Year: ? -6080.44 Lakh)

The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt comprises of long term and short-term borrowings less cash and bank balances. Equity includes equity share capital and reserves that are managed as capital. The gearing at the end of the reporting period was as follows: (Amount Rs. In lakhs)

No changes were made in the objectives, policies or processes for managing capital of the Company during the current and previous year.

05.14. Contribution towards Corporate Social Responsibility

Our company does not fall under the criteria laid for Corporate Social Responsibility under section 135 of the Companies Act, 2013 and hence the section is not applicable to the Company for the year under audit report.

05.15. Extraordinary item

During the Financial Year, 2018-19 the company had entered into a Memorandum of Understanding (MOU) with a Domestic Company (Buyer), for Slump Sale of Apuur Unit of the Company, near Chennai. As per the terms of the MOU, the total consideration for the aforesaid the slump sale has been fixed, mutually, for an amount of Rs.9500.00 lakhs (Rupees Nine Thousand and Five Hundred Lakhs only) and such consideration should be fully paid or settled on or before 30th April,2018.

The Buyer has not honoured, in full, their commitment till 30th April, 2018, by paying the aforesaid consideration agreed upon between the Company and the Buyer. Hence, the Company has given further time, without prejudice to the company’s interest, till October, 2019. Despite an extended time of nearly One and Half year, the Buyer has paid or settled to the Company an amount to the extent of Rs. 7,056.02 Lakh (Rupees Seven Thousand Fifty Six point Zero Two Lakh only). The full consideration has not been received by the Company, despite the company’s efforts to receive the full consideration.

Considering the failure of the Buyer to honour their commitment, the Board had dropped the Slump sale and intimated the same to the buyer and BSE Ltd. There has been no response from the Buyer in respect of the aforesaid communication.

As there had been no developments in the matter, the company has analysed the legal implications and based on the legal opinion which clearly stated that there is has been no subsisting obligation under the MOU to return the amounts to the Buyer and it is would not be necessary to reflect these amounts as liabilities in the books of account of the Company. Hence the amount of Rs.7056.02 Lakhs (Rupees Seven Thousand Fifty Six point Zero Two Lakh only) was written back as this would be in the best interest of all stakeholders.

While taking the aforesaid action, the Board has noted that the matter might be subject to the adjudication of any legal claims in future by the Buyer. In that eventuality, the Company may make a counter claim or a fresh negotiation.

The notes to the earlier years Financial Statements contain the details regarding the Slump Sales

The statutory auditor has relied upon the legal opinion, in this regard.

05.16. Deferral tax

The company has no need to pay any tax under normal provision or under MAT (minimum Alternate Tax). Major part of the Income is due to exceptional Items. In view of the above, the company has not considered the deferral tax. The company shall consider the Deferral tax in the coming financial years, considering the operating results.

05.17. Corporate Social Responsibility

Since the business income for the financial year 2023-24 (excluding the Exceptional Items) has been less than Rs. 500.00 Lakhs, the company is of the view that Corporate Social Responsibility is not applicable, in respect of the profit for the year 2023-24.

05.18. Non-Disclosure of the details under Employees Benefits, Ind AS-19

(01) The Company has opened a Gratuity Scheme with Life Insurance Corporation of India (LIC), for settling any amount due on account of Gratuity. Under the aforesaid Scheme, the company has to contribute annual premium, based on the amount arrived by LIC. The Company has made the payment of all the outstanding (as at 31-03-2024) Gratuity Premium to Life Insurance Corporation of India (LIC), during the current year.

(02) Due to aforesaid fact, the estimated return from the fund or scheme may not be ascertained or determined in respect of the previous year. Accordingly, no disclosure has been made, in terms of Ind AS-19. The Company is taking sincere steps of adopting Ind AS-19, any implications arising there from including the valuation of future liability on actual basis and determination of plan assets will be done during the next year.

05.19. Re-Paying of liabilities Written off previously

During the earlier year, an amount of Rs. 517.19 Lakh payable to a creditor, has been written off and shown as income, since the same was not required to be payable. However, during the current year, the aforesaid creditor, demanded the payment and agreed to settle the same for an amount of Rs.200.00 Lakh, which is required to be paid on monthly installment with effect from November 2022. Accordingly, an amount of Rs.50.00 Lakhs has been charged in Statement of Profit & Loss, during the year, in respect of the period from Nov., 2022 to March, 2023.

05.20. Code on Social Security, 2020

The Code on Social Security, 2020 relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact of the Code and the associated rules when it comes into effect and will record any related impact in the period the Code becomes effective.

05.21. Security offered

05.21.01. The secured Loan, shown as liability in the Notes on Financial Statement under the grouping “Other Long-Term Liabilities”, amounting to Rs.468.98 Lakh (previous year Rs. 468.93 Lakh), is secured by first charges on Plant and Machineries of the Company.

05.21.02. The company has created charges against the assets and filed the relevant forms with MCA/ ROC

Notes No. 5.00, relating to other information, forming an integral part thereof

05.22. Additional Regulatory information/ details, as per the Companies Act 2013

05.22.01. Following Additional Regulatory Information, relating to disclosure in the Balance sheet

(01) Title deeds of Immovable Property not held in name of the Company The Title Deed of the company is held in the name of the Company.

(02) Revaluation of the Property

During the Financial Year under report, the Company has not revalued its Property, Plant and Equipment. Disclosure relating to “whether the revaluation is based on the valuation by a registered valuer as defined under Rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017” is not applicable.

(03) Loans or Advances to Promoters

During the year, the company has not made (or granted) any Loans or Advances in the nature of loans to promoters, Directors, Key Managerial Personnel (KMP) and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person. Accordingly, no disclosure has been made.

(04) Intangible assets under development: Nil (Disclosure not applicable)

(05) Benami Property

The Company, for the current year as well as previous year, does not have any Benami property and no proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made there under. Accordingly, the company has not made any disclosure in the above regard.

(06) Willful defaulter

The Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India

(07) Relationship with Struck off Companies

The Company has not made, or entered into, any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956. No disclosure is required under this paragraph.

(08) Registration of charges or satisfaction with Registrar of Companies (ROC) : Not Applicable

(09) Compliance with number of layers of companies

The Company has not made any investments in any other company or body corporate. Hence, the compliance of the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 for the financial years ended March 31, 2022 and March 31,2021 is not applicable to the company for the year under report.

Notes No. 5.00, relating to other information, forming an integral part thereof

(10) Compliance with approved Scheme(s) of Arrangements

During the financial year, neither the Company nor its Board of Directors has entered into any Arrangement or Agreement either to amalgamate or acquire any company. Accordingly, compliance with approved Scheme(s) of Arrangements does not applicable to the Company for the year under report

(11) Utilization of Borrowed funds and share premium

(a) The Company, for the current year as well as previous year, has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(b) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(12) Borrowings from banks against Current Assets of the company

No disclosure required under this item is applicable to company, since no borrowings have been availed based on security of current assets of the Company.

(13) Borrowings against Current Assets of same group companies/ entities

No disclosure required under this item is applicable to company, since no borrowings have been availed based on security of current assets of other entities (The Company does not have any company as a group company) within the same Group

05.22.02. Additional regulatory information, relating to Statement of Profit and Loss (Not Applicable items, only)

(01) Transaction not recorded in the books:

The Company has not surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), relating to any transaction not recorded in the books of accounts. Accordingly, no disclosure is required to be given by the Company, in the above regard.

Notes No. 5.00, relating to other information, forming an integral part thereof

(02) Corporate Social Responsibility (CSR)

During the financial year the Company has not covered under section 135 of the Companies Act, 2013. Accordingly, no disclosure is required to be given by the Company, in the above regard.

(03) Investment Crypto Currency

The Company, for the current year as well as previous year, has not traded or invested in Crypto currency or Virtual Currency. Accordingly, no disclosure is required to be given by the Company, in the above regard.

05.22.03. Explanation to Accounting Ratios

(01) Numerator and Denominator

Whenever two numbers are to be divided and the dividing symbol (Y) is used; the numerical value left hand side of the symbol is numerator and the numerical value right hand side of the symbol is denominator; if slash (/) is used the numerical value left hand side of the symbol is numerator and the numerical value right hand side of the symbol is denominator; or if horizontal line (—) is used the numerical value above the line is numerator and the numerical value below the line is the denominator.

(02) Quotient

A quotient is the result obtained, while dividing divide one number (i.e., numerator) by another number (Denominator).

(03) Percentage (or Per Cent)

The word per cent means per 100. It is represented by the symbol “%”; percentage is obtained by multiplying the quotient by 100 (One Hundred)

(04) Change in Ratio in % (Based CY as basis)

The above implies difference is arrived taking CY figure (Quient or percentage) reducing the FY Figure; aforesaid difference is divided by CY figure and multipied by 100, to arrive the percenrage

(05) All the above is relevant, wherever Ratio and its formula are referred;

(06) Earning for available for debt service is the sum of the followings

(a) Net Profit after taxes

(b) Non-cash operating expenses like depreciation and other amortizations

(c) Interest

(d) Other adjustments like loss on sale of Fixed assets etc.

(07) Debt service = Interest & Lease Payments Principal Repayments

(08) Average inventory = (Opening inventory balance Closing inventory balance) / 2

(09) Net credit sales = Net credit sales consist of gross credit sales minus sales return

(10) Average trade receivables = (Opening trade receivables balance Closing trade receivables balance) / 2

(11) Net credit purchases = Net credit purchases consist of gross credit purchases minus purchase return

(12) Average trade payables = (Opening trade payables balance Closing trade payables balance) / 2

(13) Working capital = Current assets - Current liabilities.

(14) Earnings before interest and taxes = Profit before exceptional items and tax Finance costs - Other Income

(15) Capital Employed = Tangible Net Worth Total Debt Deferred Tax Liability

(16) Return on Investment: various contains of the formula are as follows:

(i) T1 = End of time period

(ii) T0 = Beginning of time period

(iii) t = Specific date falling between T1 and T0

(iv) MV(T1) = Market Value at T1

(v) MV(T0) = Market Value at T0

(vi) C(t) = Cash inflow, cash outflow on specific date

(vii) W(t) = Weight of the net cash flow (i.e. either net inflow or net outflow) on day ‘t’, calculated as [T1 - t] / T1

05.22.04. Accounting Ratios

Accounting Ratios are given in the separate Note Number 06, enclosed herewith Signatories to all Notes on Financial Statements (Standalone)

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Mar 31, 2015

01. Denomination

All the figures are rounded off to nearest Lakh

02. Re-Grouping of Amounts

Previous year's figures have been regrouped wherever necessary to confirm to current year classification/ grouping.

03. Accounting Period

The current year figures may not be comparable with the previous year figures, since the current year comprises of a period of 12 (Twelve) months (01-04-2014 to 31-03-2015) as against 9 (Nine) months of previous year (01-07-2013 to 31-03-2014).relating to previous year, to comply with the requirement of Companies Act, 2013.

04. Confirmation of Balance

The Company has sent letters for confirmation of Balance as at 31.03.2015 but only some of the parties have responded. In the opinion of the management the current assets and Loans and Advances will be recovered in full , in the normal course of business.

05. Miscellaneous Expenditure

Due to the Loss during the year, the company has not written off any deferred revenue expenditure and deferral interest during the year. (Previous year Rs..Nil) and same is to be amortized from profit over the expected period of future benefit.

06. Non-Provision for diminution in the value of Investments

The company has not provided for decline in the market value of investment made in the shares of companies as the management is of the opinion that the decline in long term investment is only temporary in nature.

07. Excise duty on the finished goods pending clearance.

Excise duty on closing stock of finished goods has been provided in the accounts and corresponding increase in closing stock valuation has been given effect to.

08. Due to MSME

The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/ payable to these parties during the year has shown Nil

09. Netting off Interest Income

Interest Expenses is shown after setting off interest receipts (Income) amounting to Rs. 12.36 Lakh (Previous year Rs.2.99 Lakh).

10. Non-Payment of Group Gratuity Fund

The Retirement Benefit Funds towards gratuity are administered by LIC under Group Gratuity Scheme. There is a short fall of the amounts provided by the Company to Gratuity Scheme

11. Non-Disclosure of the details under Employees Benefits, AS-15 (Revised)

(01) The Company has opened a Gratuity Scheme with Life Insurance Corporation of India (LIC), for settling any amount due on account of Gratuity. Under the aforesaid Scheme, the company has to contribute annual premium, based on the amount arrived by LIC. Due to continuous operating loss during the earlier years, the Company has not made the payment of Gratuity premium to Life Insurance Corporation of India (LIC). However, required provision on this account has been made in the books of account, in consistent with mercantile method of accounting followed by the company. The management is of the view that liability provided for in the books of account up to the year end is sufficient.

(02) An amount of Rs.207.29 Lakh (Previous year Rs.96.30 Lakh) has been outstanding in respect of the above fund as on 31.03.2015, as per the books of the company. Due to non-payment of annual premium on account of gratuity, the estimated return from the fund or scheme may not be ascertained or determined. Accordingly, no disclosure has been made, in terms of AS-15. The Company is taking sincere steps to make the payment of the amount due and is in the process of adopting AS-15 (Revised), any implications arising there from including the valuation of future liability on actual basis and determination of plan assets will be done in due course.

12. Penalty and Interest

As said earlier, due to operating loss, the company has not been in a position to pay the statutory dues, in time and further statutory dues are still outstanding. Non-payment or delayed payment of such due shall attract interest and penalty. The management is of the view that the amount could not be ascertained. The same has not been provided in the books of account. The same shall be accounted, as and when the payment is made.

13. Change in the method of Accounting

The company has changed the method of accounting of interest on bank borrowings from mercantile to cash basis. The interest on bank borrowings amounting to Rs. 1590.99 Lakh not provided during the year (Previous year Rs.1050.83 Lakh)

14. Pending Litigation.

Some suppliers have filed suit before the Honourable Madras High Court against on the company for recovery of their respective dues. The company has addressed these cases and worked out a schedule of repayment over the following four year term. In some of the cases, winding up petition has been filed before the Honourable Madras High Court and the company has filed the counter requesting repayment over the next few years. The company is hopeful of reaching an understanding with those suppliers. The list of such cases and the amount (Rs. in lakh) involved are given below

15. Investor Education & Protection Fund

(01) Whenever the company declares dividend, it transfers the amount equivalent to an earmarked account, meant for the same, by opening an account with a bank. An unpaid amount, if any, lying in the aforesaid amount shall be transferred to Investor Education & Protection Fund, by taking Demand Draft, from the Bank.

(02) In compliance of the above, the dividend amount, relating to Financial Year 2007-08, has been transferred to an account lying with a nationalized bank. An amount of Rs.3.74 Lakh, remaining unpaid, in that account. The company has taken steps to obtain demand draft to transfer the same to Investor Education & Protection Fund. Since the bank has not issued Demand Draft, the company is not in a position to transfer the same to Investor Education & Protection Fund.

16. Asset Reconstruction Company

(01) The company has borrowed money, both Long Term and Short Term, from a few banks, under consortium. The total outstanding with the banks as at 31st March, 2015 is Rs.13924.54 Lakh (Previous year Rs. 13924.54Lakh). During the current financial year, some of the Banks has assigned (Assignor) their debts to various Asset Reconstruction Companies (ARC's). Export Import Bank of India had assigned their debts to Edelweiss Asset Reconstruction Co. Limited during the previous year. During the current financial year, Union Bank of India assigned its debts to Edelweiss Asset Reconstruction Co. Ltd and State Bank of India assigned its entire debts to Asset Reconstruction Company (India) Ltd, (Arcil). The borrowing, form IDBI Bank, Axis Bank Ltd and Royal Bank of Scotland still remains with the respective banks.

(02) The current liabilities of long term debts were classified as current liabilities in the previous year. Now the current maturities of IDBI Bank and Axis Bank alone are shown under current liability.

(03) Due the assignment of debts by banks to the ARC's, the exact due date for the repayment of the Long term Loan (Included in the debts assigned by the Assignor) is not known, since finalization of the terms and conditions between the company and ARC is under process. Accordingly, during the current financial year, the entire amount of long term loan with Edelweiss Asset Reconstruction Company Limited and Asset Reconstruction Company (Inida) Limited are classified as Long Term Borrowing. This has resulted in changing a short term classification (as per the previous year) into a long term classification (During the Current Financial Year) by an amount of Rs. 1671.50 Lakh (Previous year Rs.Nil);

(04) Exact classification of the debts assigned shall be done, in the year of finalisation of the terms and conditions with the ARC.

17. Wholly Owned Subsidiary an Associate Company

(01) There has been a change in the shareholding pattern of Shakespeare Forgings Ltd, the wholly owned subsidiary in UK. Due to market and environmental requirements, additional funds infusement had become obligatory at Shakespeare Forgings Ltd. As our Company was not in a position to accommodate this, the wholly owned subsidiary raised the necessary funds by issuing fresh equity on 02.02.2015. Without additional funds Shakespeare Forgings Ltd would have been forced to curtail its operations in a major way, which might have led to additional financial burden for your Company.

(02) By issuing further shares, the shareholding of the Company in SFL has been reduced to 37.50% from 100% with effect from 02.02.2015. Accordingly, SFL has been become Associate Company and ceased to be a WOS.

(03) For the year under report, the Audited Financial Statements of SFL is not yet ready. The initial investment made by the Company has been continued to be carried without adjusting for any loss or gain, due to aforesaid change. The same shall be considered, based on the Audited Financial Statements of SFL.

(04) The Company does not have any other subsidiary or Joint venture or Associate Company, within the meaning of the Companies Act, 2013.

(05) Relying on the Notification No. G.S.R. 723(E) dated the 14th October, 2014, issued by Ministry Of Corporate Affairs, by amending Rule 6 of the Companies (Accounts) Rules, 2014, [exempting company which does not have a subsidiary or subsidiaries but has one or more associate companies or joint ventures or both, for the consolidation of financial statement in respect of associate companies or joint ventures or both, as the case may be, for the financial year 2014-15], your company has not prepared the Consolidated Financial Statements for the year under report "

18. Segment Reporting

(01) The Company has two business segment (1) Manufacture and sale of steel forgings.(2) Land and Development described as "Other Operating Income" (Amount in Rs. Lakh)

(02) The Company is engaged in the business of manufacturing of Auto Ancillary part (Manufacture and sale of steel forgings). It is one of the reportable segments, as per AS 17. As the exports are mainly to Developed Countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required, in respect of the aforesaid reportable segments.

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Mar 31, 2014

1 DEPRECIATION

(a) Depreciation for the year on all Fixed assets of the company has been calculated on straight line method at the rates specified in schedule XIV of the Companies Act 1956 (Double shift rates for Plant & Machinery), on historical, book cost and has been charged to Profit & Loss Account.

(b) The depreciation amounting to Rs.Nil/- ( Previous Year Rs.Nil/- ) on account of difference between revalued cost and historical cost has also been provided at the rates specified in schedule XIV of the Companies Act 1956 and the same has been debited to

Revaluation of Fixed Assets Reserve account.

2 Sundry Debtors, Creditors, Loans & Advances

The Company has sent letters for confirmation of Balance as at 31.03.2014 but only some of the parties have responded. In the opinion of the management the current assets and Loans and Advances will be recovered in full in the normal course of business.

3 Miscellaneous Expenditure:-

Due to the Loss during the year the company has not Written off any deferred revenue expenditure during the year.(Previous year Rs.Nil) and same is to be amortized from profit over the expected period of future benefit.

4 The company has not provided for decline in the market value of investment made in t he shares of Companies as the management is of the opinion that the decline in long term investment is only temporary in nature.

5 Excise duty on closing stock of finished goods has been provided in the accounts and corresponding increase in closing stock valuation has been given effect to.

6 The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small and Medium Enterprises Development Act 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to these parties during the year is nil.

7 Interest Expenses is shown net of interest receipts(Income) - Rs in thousands. 299/-(previous year Rs in thousands.567/-).

8 The Retirement Benefit Funds towards gratuity are administered by LIC under Group Gratuity Scheme. There is a short fall of the amounts provided by the Company to Gratuity Scheme.

Rs.in thousands Rs.in thousands

9. Contingent Liabilities & Commitments 31.03.2014 30.06.2013

(01) Claims against the company not acknowledged as debt;

(a) E.S.I under Appeal 208 208

(b) Demands raised by SIPCOT for the Leasehold 1301 1301

(c.) Demand from Income Tax 7560 7560

(d) Demand from Central Excise & service tax 4710 4603

(02) Guarantees given to ;

(a) Foreign Bank (for credit limits of subsidiary company) 18363 18363

(b) Bank against the loan taken by a company 65000 65000

(03) Other money for which the company is contingently liable

(a) For factoring (SBI Global Factors Ltd) Nil Nil

(04) Whether Commitments are classified as:

(a) Pending contracts (on Account of capital Assets) 10000 10000

(b) Uncalled liability on shares & other investments partly paid - -

(05) Air Freight under negotiation: 11149 33858

10. Non-Disclosure of the details under Employee s Benefits AS-15 (Revised)

The Company has operates through the at Gratuity Scheme with Life Insurance Corporation of India (LIC) for settling any amount due on account of Gratuity. Under the aforesaid Scheme the company has to contribute annual premium based on the amount arrived by LIC. Due to continuous operating loss during the earlier years the Company has not made the payment of Gratuity premium to Life Insurance Corporation of India (LIC). However required provision on this account has been made in the books of account in consistent with mercantile method of accounting followed by the company. The management is of the view that liability provided for in the books of account up to the year end is sufficient. An amount of Rs.in thousands 9629/- has been outstanding as on 31.03.2014 as per the books of the company. Due to non-payment of annual premium on account of gratuity, the estimated return from the fund or scheme may not be ascertained or determined. Accordingly, no disclosure has been made in terms of AS-15. The Company is taking sincere steps to make the payment of the amount due and is in the process of adopting AS-15 (Revised) any implications arising there from including the valuation of future liability on actuarial basis and determination of plan assets will be done in due course.

OTHER NOTES ON FINANCIAL STATEMENT 21. Penalty and Interest

As said earlier due to operatin g loss the company has not been in a position to pay the statutory dues, in time and further statutory dues are still outstanding. Non-payment or delayed payment of such due shall attract interest and penalty. The management is of the view that the amount could not be ascertained. The same has not been provided in the books of account. The same shall be accounted, as and when the payment is made.

11 The company has changed the method of accounting of interest on bank borrowings from mercantile to cash basis. The interest on bank borrowings amounting to Rs. 105083 thousands not provided during the Nine Months Period.

12 a) Previous year''s figures have been regrouped wherever necessary to conform to current year classification/grouping.

b) All the figures have been rounded off to the nearest thousands.

13 The Company has changed its financial year from 30th June to 31st March, due to this change the current accounting period comprises a period of 9(Nine) Months from 01.07.2013 to 31.03.2014 as against 12(Twelve) Months relating to the immediately preceding financial year (01.07.2013 to 31.03.2014). Accordingly, the current year figures may not be comparable with the previous year figures. This change has been made to bring the accounting year in line with provision of the companies act 2013.

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Jun 30, 2013

01. Depreciation:

(a) Depreciation for the year, on ail Fixed assets of the company has been calculated on straight line method at the rates specified in Schedule XtV of the Companies Act, 1966,

(Double shift rates for Plant & Machinery), on historical book cost and has been charged to Profit & Loss Account.

(b) The depreciation amounting to Rs. Nil Thousands (Previous Period Rs.71 Thousands) on the difference between revalued cost and historical cost has also been provided at the rates specified in Schedule XIV of the Companies Act, 1956 and the same has been debited to Revaluation of Fixed Assets Reserve Account.

02. Sundry Debtors, Creditors, Loans and Advances:

The Company has sent Setters for Confirmation of Balance as on 30.06.2013, but only some of the parties have responded. In the opinion of the management the current assets and Loans and Advances will be recovered in full, in the normal course of business.

03. Miscellaneous Expenditure:

Due to the Loss during the Year the company has not written off any deferred revenue expense during the Year (Previous year Rs. Nil) and same is to be amortized from profit over the expected period of future benefit.

04. The company has not provided for decline in the market value of investment made in the shares of Companies as the management is of the opinion that the decline in long term investment is only temporary in nature.

05. Excise duty on closing stock of finished goods has been provided in the accounts and corresponding increase in closing stock valuation has been given effect to.

06. The Company has not received any memorandum {as required to be filed by the suppliers with the notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to these parties during the year is nil,

07. Interest expenses is shown net of interest (income) receipts - Rs. 567 Thousands /-(previous year Rs.3299/-Thousands).

08. The Retirement Benefit Funds towards gratuity are administered by LIC under Group Gratuity

(Rs. in Thousands)

09. Contingent Liabilities & Commitments 30.06.2013 30,06.2012

(01) Claims against the company not acknowledged as debt;

(a) E.S.i under Appeal 208 208

(b) Demands raised by Sip COT for the Leasehold 1301 1301

(c) Demand from Income Tax 7560 7560

(d) Demand from Central Excise & service tax 4603 5504

(02) Guarantees given to;

(a) Foreign Bank (for credit limits of subsidiary 18363 18363 company)

(b) Bank against the loan taken by a Domestic 65000 65000 company

(03) Other money for which the company is contingently liable

(a) For factoring (SBI Global Factors Ltd) Nil 7592

(04) Whether Commitments are classified as:

(a) Pending contracts (on Account of capital Assets) 10000 10000

(b) Uncalled liability on shares & other investments partly paid

(05) Airfreight under negotiation 33858 -

10. Penalty and interest

As said earlier, due to huge operating loss, the company has not been in a position to pay the statutory dues, in time and further statutory dues are still! outstanding. Non-payment or delayed payment of such due sheaf attract interest and penalty. The management is of the view that the amount could not be ascertained. The same has not been provided in the books of account. The same shall be accounted, as and when the payment is made.

11. a) Previous year''s figures have been regrouped wherever necessary to conform to current year classification/grouping.

b) All the figures have been rounded off to the nearest thousands.

---

Jun 30, 2012

01. Depreciation:

(a) Depreciation for the year, on all Fixed assets of the company has been calculated on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956.

(Double shift rates for Plant & Machinery), on historical book cost and has been charged to Profit & Loss Account.

(b) The depreciation amounting to Rs.71 Thousands (Previous year Rs.19 Thousands) on the difference between revalued cost and historical cost has also been provided at the rates specified in Schedule XIV of the Companies Act, 1956 and the same has been debited to Revaluation of Fixed Assets Reserve Account.

02. Sundry Debtors, Creditors, Loans and Advances:

The Company has sent letters for Confirmation of Balance as on 30.06.2012, but only some of the parties have responded. In the opinion of the management the current assets and Loans and Advances will be recovered in full, in the normal course of business.

03. Miscellaneous Expenditure:

Due to the Loss during the Year the company has not written off any deferred revenue expense during the Year (Previous year Rs. Nil) and same is to be amortised from profit over the expected period of future benefit.

04. The company has not provided for decline in the market value of investment made in the shares of Companies as the management is of the opinion that the decline in long term investment is only temporary in nature.

05. Excise duty on closing stock of finished goods has been provided in the accounts and corresponding increase in closing stock valuation has been given effect to.

06. The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to these parties during the year is nil.

07. Interest is shown net of interest receipts - Rs. 3298 Thousands /-(previous year Rs.924/- Thousands).

08. The Retirement Benefit Funds towards gratuity are administered by LIC under Group Gratuity Scheme. There is a short fall of the amounts provided by the Company to Grautity Scheme.



(Rs. in Thousands)

09. Contingent Liabilities & Commitments 30.06.2012 30.06.2011

(01) Claims against the company not acknowledged as debt;

(a) E.S.I under Appeal 208 208

(b) Demands raised by SIPCOT for the Leasehold 1301 1301

(c) Demand from Income Tax 7560 7560

(d) Demand from Central Excise & service tax 5504 4424

(02) Guarantees given to;

(a) Forign Bank (for credit limits of subsidiary 18363 18363 company)

(b) Bank against the loan taken by a Domestic 65000 65000 company

(03) Other money for which the company is contingently liable



10. a) Previous year's figures have been regrouped wherever necessary to conform to current year classification/grouping.

b) All the figures have been rounded off to the nearest thousands.

11. Current Year figures comprise a period of 12(Twelve) Months as against the previous year comprising of 15(Fifteen) Months. Hence, the result of the Current year may not be comparable with that of the previous year.

---

Mar 31, 2010

I. Financial statements are prepared on historical cost and on accrual basis.

ii. Fixed Assets are stated at their original cost (Except those assets which have been revalued) including taxes, duties, freight and other incidental expenses related to acquisition and installation. Wherever MODVAT/CENVAT Credit has been availed, Excise element is excluded from original cost.

Depreciation on fixed assets is calculated on straight-line basis on historical cost, commensurate with Section 205 read with Schedule XIV of the Companies Act, 1956. (Double shift rates for Plant & Machinery). The depreciation on the difference between revalued cost and historical cost has also been provided at the rates specified in Schedule XIV of the Companies Act, 1956, and the same has been debited to Revaluation of Fixed Assets Reserve Account. Freehold land is not depreciated.

iii. Raw Material, Stores and Spares and work in progresses are valued at cost. Finished Goods are valued at cost or Net realisable value, whichever is lower as per Accounting Standard (AS2) issued by the Institute of Chartered Accountants of India.

iv. Investments are stated at Cost. Earnings from Investments has been taken into account as accrued or on declaration or receipt basis, wherever appropriate and the tax deducted at source thereon is treated as advance tax.

v. Normal Retirement Benefits as per contract of employment are provided in the books of account and payments are made to the Trustees of the Companys respective Funds on the basis of accrued liability, where appropriate.

vi. Research and Development: a) Revenue expenditure is charged to Profit & Loss Account of the year during which it is incurred, (b) Capital expenditure is shown as addition to fixed assets or where Capital assets have been taken on lease, the lease rentals will be amortised from profits over the useful economic life of the asset.

vii. Miscellaneous Expenditure: Miscellaneous Expenditure incurred is amortised from profits over the expected period of future benefit.

viii. All transactions in foreign currency are entered in the books of accounts at the rates prevailing on the date of transaction.

ix. Deferred Tax Assets / Liability shall be recognized, as required by Accounting Standard (AS-22), issued by Institute of Chartered Accountants of India. However deferred Tax Assets shall be recognized only where there is a virtual certainity supported by convincing evidence.

x. Use of Estimates:

The preparation of the financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates.

Any revisions to financial estimates are recognised prospectively in the financial statements when revised xi Revenue Recognition:

Income is accounted on accrual basis.

4. Related Party Disclosures

Related party disclosures as required under Accounting Standard on "Related Party

Disclosures" (AS-18) issued by the Institute of Chartered Accountants of India are given

below:

a) Key Management Personnel

Mr. V.Srikanth, Chairman

Mr.K.V. Ramachandran, Vice Chairman & Managing Director.

Relative of Managerial Personal Relative(* *)

Mr. S.Venkatraman F/o Mr. V.Srikanth

Mrs. Chitra Venkatraman M/o.Mr.V.Srikanth

Mr. K.R.Srihari Son of Mr. K.V. Ramachandran

(**) Relative of Key Management Personnel with whom the Company had transactions

during the year.

Subsidiary:

5. Depreciation

a) Depreciation for the year on all assets of the company has been calculated on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956 (Double shift rates for Plant & Machinery), on historical book cost and has been charged to Profit & Loss Account.

b) The depreciation amounting to Rs. 19 Thousands (Previous year Rs. 19 Thousands) on account of difference between revalued cost and historical cost has also been provided at the rates specified in Schedule XIV of the Companies Act, 1956 and the same has been debited to Revaluation of Reserve Account.

6. Sundry Debtors, Creditors, Loans and Advances

The Company has sent letters for Confirmation of Balance as on 31.03.2010, but only some of the parties have responded. In the opinion of the management the current assets and Loans and Advances will be recovered in full, in the normal course of business.

7. Miscellaneous Expenditure

Due to the Loss during the year the company has not written off any deferred revenue expense during the year (Previous year Rs. Nil) and same is to be amortised from profit over a period of Succeeding Ten Years.

8. The Company has made Corporate Debt Restructure (CDR) arrangements with Companys Banks/Financial Institutions, during the year under report. The CDR scheme takes retrospective effect from 01-01-2009. Among other benefits, The Company enjoys concessional rate of interest, in terms of the CDR Schemes. Under the CDR Scheme, the interest on Term Loans is also funded; hence it does not involve any outflow of resources. Under the terms of the CDR Scheme, the interest on Term Loans will be treated as optionally convert able cumulative preference capital. In view of the above, the management is of the opinion that interest is not an expense for the year under report. Accordingly, interest amounting to Rs. 5,50,11,053/- has not been charged; but treated as deferred Interest, grouped under Loans & Advances. The Management is of the opinion to write off the deferred interest proportionately to amount converted, from the financial year during which the options is exercised by the Lenders.

9. The company has not provided for decline in the market value of investment made in the shares of Companies as the management is of the opinion that the decline in long term investment is only temporary in nature.

10. Hire Purchase:

Out of the total liability Rs. 1767 thousands (Previous Year Rs. 2678 thousands), towards fixed assets purchased under HP, the amount due within One Year Amount to Rs. 1125 thousands (Previous Year Rs. 1396 thousands).

11. Contingent Liabilities (Rs. in Thousands)

AS AT AS AT

31.03.2010 31.03.2009

Rs. Rs.

a) Claims not accepted by the Company: 286 286 E.S.I, under appeal

b) Guaranty given by Bank (Foreign Bank) for subsidiary 18363 18363 company

c) Demands raised by SIPCOT for the Leasehold land at 1301 1301

Gummidipundi not accepted by the company. A writ appeal is pending in Madras High Court.

d) Sales Bill Factoring with SBI Global Factors Ltd. This facility is secured by a charge on receivables factored 7248 92538

e) Estimated amount of contracts remaining to be executed on

capital account and not provided for 10000 10000

f) Demand from Income Tax under appeal 6602 6602

g) Demand from Central Excise and Service Tax under appeal 7285 5170

h) Guarantee given to a bank against the loan taken by a 65000 65000 company

13. Excise duty on closing stock of finished goods has been provided in the accounts and corresponding increase in closing stock valuation has been given effect to.

20. The Company has not received any memorandum (as required to be filed by the Suppliers with the notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/ payable to these parties during the year is nil.

21. Interest is shown net of interest receipts - Rs.503 thousands (Previous year Rs.584 thousands) TDS on interest receipts - Rs.89 thousands (Previous year Rs.72 thousands).

22. a. Previous years figures have been regrouped wherever necessary to conform to current year classification / grouping.

b. All the figures have been rounded off to the nearest Thousands.