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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Federal-Mogul Goetze (India) Ltd.

Mar 31, 2025

s) Provision, contingent liabilities and contingent assets

Provisions are recognised when an enterprise has a present obligation as a result of past event; it is probable that on outflow
of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are
discounted to their present values, where ths time value of money is material. These are reviewed a! each balance sheet
date and adjusted to reflect the current best estimates.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable
evidence available ot the reporting date, including the risks and uncertainties associated with the present obligation.
Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

In cases where the outflow of economic resources as a result of present obligations is considered improbable or remote, no
provision is recognised.

Contingent liability is disclosed for:

Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

Present obligations arising from past events where it is not probable that an outflow of resources will be required to
settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognised. However, when inflow of economic benefits is probable, related asset is disclosed.

t) Cash and cash equivalents

Cash and cash equivalent comprise cash at banks and on hand and short-term deposits with original maturities of three
months or less that arÂ© readily convertible to known amounts of cosh and which are subject to an insignificant risk of
changes in value.

u) Statement of Cash Flows

Standalone Statement of Cash Flows is prepared segregating the cash flows from operating, investing and financing
activities. Cosh flow from operating activities is reported using indirect method. Under the indirect method, the net
profit/!loss) is adjusted for the effects of:

(a) transactions of a non-cash nature;

(b) any deferrals or accruals of past or future operating cash receipts or payments a nd,

(c) all other items of income or expense associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated based on the available information. Cash and cash
equivalents are reflected as such in the Standalone Statement of Cash Flows and excludes balances which are not available
for general use as on the date of Standalone Balance Sheet are also included under this category with a specific disclosure.
The interest received has been considered as investing activity for the purpose of Standalone Statement of Cash Flows.

v) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The board of directors assess the financial performance and position of the Company, and makes strategic decisions
and therefore the board would be the chief operating decision maker or ''CODM, within the meaning of Ind AS 108. The
CODM evaluates the Company''s performance and allocates resources based on the dominant source, nature of product
and nature of risks and returns.

w) Significant management judgement in applying accounting policies and estimation uncertainty

In the application of the Company''s accounting policies, which are described above, the Management of the Company are
required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates ond associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from these estimates.

Significant management judgements

Classification of leases The Company enters into leasing arrangements for certain assets. The classification of the leasing
arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to,
transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of
such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to
fair value of leased asset and extent of specialized nature of the leased asset.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period, that may
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are discussed below:

Impairment of financial assets - At each balance sheet date, based on historical default rates observed over expected
life, the management assesses the expected credit loss on outstanding financial assets.

Provisions and Contingencies - ThÂ© Company is the subject of certain legal, tax (direct and indirect taxes) and other
regulatory matters which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to
predict the final outcome of such matters. The cases and claims against the Company often raise difficult and complex
factual and logoi issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of
each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business,
management consults with legal counsel and certain other experts on matters related to litigation and taxes. The Company
accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably
estimated.

At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the
requirement of provisions against the outstanding regulatory and tax matters referred above. However, the actual future
outcome may be different from this judgement.

Useful lives of depreciable/amortisable assets - Management reviews its estimate of the useful lives of
depreciable/omortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these
estimates relate to technical and economic obsolescence that may change the utility of these assets.

Defined benefit obligation (DBO)-Management''s estimate of the DBO is based on a number of underlying assumptions
such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these
assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

31 Fair value disclosures

(i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the balance sheet are classified into three levels of a
fair valve hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as
follows:

Level 1; quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.

(ii) Investment in equity shares are being carried at fair value through profit and loss except for investment in subsidiary
which is carried at cost. The fair values of the unquoted investment in shares of Vyshali Energy Private Limited
approximates the cost of the shores.

(iii) Fair value of Instruments measured at amortised cost

Cash and cash equivalents, loans, trade receivables, investments in compulsorily convertible debentures, other current
financial assets, trade payables and other current financial liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments. The fair value of the financial assets and liabilities is the amount ot which the
instrument could be exchanged in a current transaction between witling parties, other than in a forced or liquidation
saie.The following methods and assumptions were used to estimate the fair values:

â¢ The fair values of investments are determined by using discounted cash flow method using the appropriate discount rote.

The discount rate is determined using other similar instruments incorporating the risk associated.

â¢ Security deposits given to government authorities are shown at cost as the same are given till perpetuity.

1. Investment in equity instrument of subsidiary of ?510.00 lacs (previous year ?510.00 lacs) has been accounted at cost in

accordancewith Ind AS 27, therefore not within scope of Ind AS 109, hence, not included here.

2, Financial instruments carried at FVTPL has been valued using level 3 hierarchy.
ii) Risk management

The Companyâs activities expose it to credit risk, liquidity risk and market risk. The Companyâs board of directors has overall
responsibility for the establishment and oversight of the Companyâs risk management framework. This note explains the
sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the standalone
financial statements.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company The Company is exposed to this risk
for various financial instruments, for example receivables from customers, placing deposits, etc. The Companyâs maximum
exposure to credit riskis limited to the carrying amount of following types of financial assets.

- cash and cash equivalents,

- trade receivables,

- margin money kept with banks, and

- other financial assets.

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring defaults of
customers and other counterparties, identified either individually or by the Company, and incorporates this information into
its credit risk controls. Internal credit rating is performed for each class of financial instruments with different characteristics.
The Company assigns the following credit risks to each class of financial assets based on the assumptions, inputs and factors
specific to the class of financial assets.

A: Low
B: Medium
C: High

Assets under credit risk _-

b) Expected credit losses

The Company provides for expected credit losses based on the following:

The Company recognizes expected credit tosses on trade receivables using a simplified approach, wherein Company has defined
percentage of provision by analysing historical trend of default and adjusted for forward-looking information. Allowance for
expected credit loss has been created based on the past experience of the Company. Wherever required, past trend is adjusted
to reflect the effects of the current conditions and forecasts of future conditions that did not affect the period on which the
historical data is based., and to remove effects of the conditions in the historical period that are not relevant to the future
contractual cash flows.

Considering ongoing Russia-Ukraine crisis, during the current year the Company has provided for doubtful recovery of 195.58
lacs in respect of amount recoverable from the related party though confident of ultimate recovery in due course. In respect of
trade receivable balances from other related parties, there are no indicators at the period end for default in receipt of payments.
Accordingly, the Company does not anticipate risk of recovery and expected credit loss in respect thereof.

Reconciliation of loss allowance - expected credit losses

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the
Company maintains flexibility in funding by maintaining liquidity under committed facilities.

Management monitors roiling forecasts of the Companyâs liquidity position and cosh and cash equivalents on the basis of
expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the
Companyâs liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid
assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements
and maintaining debt financing plans.

Maturities of f inancial liabilities

The tables below analyses the Companyâs financial liabilities into relevant maturity classification based on their contractual
maturities for all non-derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. For balances due within 12 months amounts
equal their carrying values as the impact of discounting is not significant.

g Satisfaction of performance obligations

Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the
buyer takes possession of the goods, depending on the delivery terms. Revenue is measured at the transaction price of the
consideration received or receivable, the amount the Company expects to be entitled to.
h Payment terms

The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 30-60
days {excluding transit period).

I Variable considerations associated with such sales

Periodically, the Company announces various volume ond other rebate programs, where once o certain volume or other
conditions are met, it refunds the customer some portion of the. amounts previously billed or paid. For such arrangements, the
Company only recognizes revenue for the amounts it ultimately expects to realize from thÂ® customer. The Company estimates the
variable consideration for these programs using the most likely amount method or the expected value method, whichever
approach best predicts the amount of the consideration based on the terms of the contract and available information and
updates its estimates each reporting period.

41 Details of dues to micro enterprises and small enterprises as defined under the MSMED Act, 2006

On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small and Medium
Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, thÂ® following
are the details:

42 Provision ioi contingencies

The Company is involved in certain legal, tax (direct and indirect taxes) and other regulator/ matters (TitigationsX the outcome of
which may not be favourable to the Company. The Company is actively seeking to resolve these actual and potential statutory,
taxation and regulatory matters. Management is in consultation with the legal, tax and other advisers to assess the likelihood
that a pending claim will succeed. The Company has applied its judgement and has recognised liabilities based on whether
additional amounts will be payable and has included contingent liabilities where economic outflows are considered possible but
not probable.

Based on management assessment on likelihood, timing ofcash outflows (current/non-current), interpretation of local laws,
pending disposal of these matters and consultations obtained from the management experts, where considered necessary
in respect of these matters, the management has recognised for provision for contingencies towards legal, tax and other
regulatory matters amounting to ? 557.53 lacs as at 31 March 2025 (Previous year: 982.80 lacs).

43 Management support charges

During the financial year 2024-25, the Company has paid the management support charges and trade mark royalty under the
networking fee model to Federal-Mogul Powertrain LLC amounting ? 3,026.06 lacs where as in previous year the Company has
paid management support charges under cost allocation agreement with Federal Mogul Holding Deutschland Gmbh)
amounting T 3,456,76 lacs.These charges are paid to availment of centralised services pertaining to all the products of the
Company and, inter-alia, include Technical Support, Operations Management, Applications Engineering, Global Executive
Management Services, Purchasing, Key Ac counts Sales Management.

44 As per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use
certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain
adequate documentation in this respect. Since lav/ requires existence of such information and documentation to be
contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the
''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms
length basis". Management is of the opinion that thÂ® Company''s international transactions are at arm''s length and that the
results of the on-going study will not have any impact on the standalone financial statements and the independent consultants
appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

45 During the earlier years, Tenneco Inc. (USA) (the Ultimate Holding Company till 16 November 2022 and intermediate
holding company w.e.f. 1 7 November 2022) had granted certain share-settled restricted stock units (RSUs) to an eligible
employee of the Company which vest on the grant date.

RSUs are time-bosed service awards and generally vest according to a three-year graded vesting schedule. One-third of the
award will vest on the first anniversary of the grant date, one-third of the award will vest on the second anniversary, and one-
third of the award will vest on the third anniversary.

During the earlier years, all the common stock of Tenneco Inc. (USA) got delisted from New York Stock Exchange effective 17
November 2022 and each of the Tenneco''s outstanding awards of RSUs which were subject solely to service-based vesting
conditions at such date have become fully vested and stood cancelled in exchange for the right to receive an equivalent amount
in cash (subject to lax deducted at source). All thÂ® outstanding RSUs al such effective date have been settled in cash by Tenneco
Inc. at price of USD 20 per RSUs. In terms of understanding reached, the Company had paid ?302.18 lacs to the eligible
employee of the Company and recovered the same from group company.

Further, in the earlier years, the Company had recognized share-based payment amounting ?4l 9.52 lacs (including amount of
?252.85 lacs pertaining to period prior io 31 March 2022 determined by the management on the basis of graded vesting
schedule) as an expense under employee benefit expense with a corresponding credit to Other equity as Deemed capital
contribution (refer note 12).

48. Additional Disclosures

a) The title deeds of immovable properties (other than immovable properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee) disclosed in the standalone financial statements are held in the name
of the Company.

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

c} The Company has not revalued its property, plant and equipment (including right-of-use assets) or Intangible assets or both
during the year.

d) The Company has been sanctioned working capital amounts from banks on the basis of security of Inventories Trade
Receivables and Trade Payables. The returns being filed by the Company with bonks are in line with the books of account.

e) The Company has not been declared willful defaulter by any bank or financial institution or other lender during the year.

f) The Company does not have any material transactions with companies which were struck off under section 248 of the
Companies Act, 2013.

g) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

h) The Company did not have any transaction which is not recorded in the books of accounts that has been 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).

I) As per the MCA notification dated 05 August 2022, the Central Government has notified the Companies (Accounts) Fourth
Amendment Rules, 2022. As per the amended rules, the Companies are resquired to maintain back-up on daily basis of such
books of account and other relevant books and papers maintained in electronic mode that should be accessible in India at
all the time. Also, the Companies are required to create backup of accounts on servers physically located in India on a daily
basis. The books of account along with other relevant records and papers of the Company are maintained in electronic
mode on servers physically located out of India. These books of account are readily accessible in India at all times however
the backup of such books of account is not maintained in India .

j) The Code on Social Security,2020 (''Code'') 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 comÂ© into effect has not been notified. Company will assess the impact of the Code when it comes info
effect and will record any related impact in the period the Code becomes effective.

k) There were no amounts which were required to be transferred to the investor Education and Protection Fund by the
Company.

l) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entityfies), including foreign entities ("Intermediaries"), with
the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

m) The Company has not received any fund from any perso n(s) or entityfies), including foreign entities ("Funding Parties"), with
the understanding, whether recorded in writing or otherwise, that the Company shall, 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 provide any guarantee, security ortho like on behalf of the Ultimate Beneficiaries.

n) The Company did not have any long term contracts including derivative contracts for which there were any material
foreseeable losses.

o) As per records maintained by the Company, there are no charges which are pending to be registered with Registrar Of
Companies (ROC), Further, in respect of credit facilities availed and settled in earlier years to the extent of 9,538.07 lacs
(previous year ? 9,988.07 lacs), satisfaction of charges are yet to be registered with ROC beyond the statutory period. The
Company is taking necessary steps for rectifying of ROC records in respect of the same.

p) As per the proviso to Rule 3(1) of Companies (Accounts) Rules, 2014, for the financial year commencing on or after the 1 st

day of April 2023, every company which uses accounting software for maintaining its books of account, shall use only such
accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each
change made in the books of account along with the date when such changes were made and ensuring that the audit trail
cannot bo disabled.The Company uses SAP as its primary accounting softwares for recording all the accounting transactions
viz., sales, purchases, production/costing, fixed assets, other expenses, payroll, cash and bank transactions, journal entries
and all other genoral ledger accounting transactions for the year ended 31 March 2025. The Company has used accounting
softwares for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has
operated throughout the year for all relevant transactions recorded in the software except that: (a) audit trail feature is not
enabled for certain changes made using privileged/administrative access rights, and (b) the feature of recording audit trail
(edit log) facility was not enabled at the database level to log any direct data changes. Additionally, the audit trail that was
enabled and operated for the year ended 31 March 2024, has been preserved by the Company as per the statutory
requirements for record retention.

49. During the year, the Company has reclassified the accruals relating to employees'' salaries and wages from "Trade
payables" to "Other financial liabilities" in view of the opinion of Expert Advisory Committee of the Institute of Chartered
Accountants of India considering the said disclosure could be more relevant to the users of the financial statements. This
change doesn''t result in any impact on the total current liabilities.

50. The figures of previous year have been regrouped/redassified, wherever necessary, to conform to the current year
classification.

For and on behalf of the Board of Directors of

Federal-Mogul Goetze (India) Limited

Thiagarajan Kannan Manish Chadha Dr. Khalid Iqbal Khan

Managing Director Chief Financial Officer Whole Time Director- Legal &

Sr Finance Director Company Secretory

DIN :10486912 DIN :07195652 DIN :05253556

Place: Gurugram Place; Gurugrom Place; Gurugram

Date: 28 May 2025 Date: 28 May 2025 Date: 28 May 2025

Mar 31, 2024

s) Provision, contingent liabilities and contingent assets

Provisions are recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are discounted to their present values, where the time value of money is material. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

In cases where the outflow of economic resources as a result of present obligations is considered improbable or remote, no provision is recognised.

Contingent liability is disclosed for:

- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognised. However, when inflow of economic benefits is probable, related asset is disclosed.

t) Cash and cash equivalents

Cash and cash equivalent comprise cash at banks and on hand and short-term deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

u) Statement of Cash Flows

Standalone Statement of Cash Flows is prepared segregating the cash flows from operating, investing and financing

activities. Cash flow from operating activities is reported using indirect method. Under the indirect method, the net profit/(loss) is adjusted for the effects of:

(a) transactions of a non-cash nature;

(b) any deferrals or accruals of past or future operating cash receipts or payments and,

(c) all other items of income or expense associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash and cash equivalents are reflected as such in the Standalone Statement of Cash Flows and excludes balances which are not available for general use as on the date of Standalone Balance Sheet are also included under this category with a specific disclosure. The interest received has been considered as investing activity for the purpose of Standalone Statement of Cash Flows.

v) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors assess the financial performance and position of the Company, and makes strategic decisions and therefore the board would be the chief operating decision maker or ''CODM, within the meaning of Ind AS 108. The CODM evaluates the Company''s performance and allocates resources based on the dominant source, nature of product and nature of risks and returns.

w) Significant management judgement in applying accounting policies and estimation uncertainty

n the application of the Company''s accounting policies, which are described above, the Management of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Significant management judgements

Classification of leases - The Company enters into leasing arrangements for certain assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Impairment of financial assets - At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.

Provisions and Contingencies - The Company is the subject of certain legal, tax (direct and indirect taxes) and other regulatory matters which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against the Company often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to litigation and taxes. The Company accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated.

At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding regulatory and tax matters referred above. However, the actual future outcome may be different from this judgement.

Useful lives of depreciable/amortisable assets - Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of these assets.

Defined benefit obligation (DBO) - Management''s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

31 Fair value disclosures

(i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the balance sheet are classified into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Investment in equity shares are being carried at fair value through profit and loss except for investment in subsidiary which is carried at cost. The fair value of investment in GI Power Corporation Limited is determined to be zero. The fair values of the unquoted investment in shares of Vyshali Energy Private Limited approximates the cost of the shares.

(iii) Fair value of instruments measured at amortised cost

Cash and cash equivalents, loans, trade receivables, investments in compulsorily convertible debentures, other current financial assets, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.The following methods and assumptions were used to estimate the fair values:

â¢ The fair values of investments are determined by using discounted cash flow method using the appropriate discount rate.

The discount rate is determined using other similar instruments incorporating the risk associated.

â¢ Security deposits given to government authorities are shown at cost as the same are given till perpetuity.

1. Investment in equity instrument of subsidiary of ?510.00 lacs (previous year ?510.00 lacs) has been accounted at cost in accordance with Ind AS 27, therefore not within scope of Ind AS 109, hence, not included here.

2. The Company has an investment in GI Power Corporation Limited which is carried at fair value which is determined to be zero.

3. Financial instruments carried at FVTPL has been valued using level 3 hierarchy,

ii) Risk management

The Company''s activities expose it to credit risk, liquidity risk and market risk. The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the standalone financial statements.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments, for example receivables from customers, placing deposits, etc. The Company''s maximum exposure to credit risk is limited to the carrying amount of following types of financial assets.

- cash and cash equivalents,

- trade receivables,

- margin money kept with banks, and

- other financial assets.

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit risks to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Trade receivables

The Company closely monitors the credit-worthiness of the customers through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts receivable become six months past due.

Other financial assets measured at amortised cost

Other financial assets measured at amortised cost includes security deposits, export incentive receivables and others (including advances to employees). Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

The Company provides for expected credit losses based on the following:

The Company recognizes expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by analysing historical trend of default and adjusted for forward-looking information. Allowance for expected credit loss has been created based on the past experience of the Company. Wherever required, past trend is adjusted to reflect the effects of the current conditions and forecasts of future conditions that did not affect the period on which the historical data is based, and to remove effects of the conditions in the historical period that are not relevant to the future contractual cash flows.

Considering ongoing Russia-Ukraine crisis, during the current year the Company has provided for doubtful recovery of ''195.58 lacs in respect of amount recoverable from the related party though confident of ultimate recovery in due course. In respect of trade receivable balances from other related parties, there are no indicators at the period end for default in receipt of payments. Accordingly, the Company does not anticipate risk of recovery and expected credit loss in respect thereof.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining liquidity under committed facilities.

Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyses the Company''s financial liabilities into relevant maturity classification based on their contractual maturities for all non-derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. For balances due within 12 months amounts equal their carrying values as the impact of discounting is not significant.

f Satisfaction of performance obligations

The Company''s revenue is derived from the single performance obligation to transfer primarily its products under arrangements in which the transfer of control of the products and the fulfilment of the Company''s performance obligation occur at the same time. Revenue from the sale of goods is recognized when the Company has transferred control of the goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue (the transaction price) can be measured reliably, and it is probable that the Company will collect the consideration to which it is entitled to in exchange for the goods.Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms. Revenue is measured at the transaction price of the consideration received or receivable, the amount the Company expects to be entitled to.

g Payment terms

The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 30-60 days (excluding transit period).

h Variable considerations associated with such sales

Periodically, the Company announces various volume and other rebate programs, where once a certain volume or other conditions are met, it refunds the customer some portion of the amounts previously billed or paid. For such arrangements, the Company only recognizes revenue for the amounts it ultimately expects to realize from the customer. The Company estimates the variable consideration for these programs using the most likely amount method or the expected value method, whichever approach best predicts the amount of the consideration based on the terms of the contract and available information and updates its estimates each reporting period.

42 Details of dues to micro enterprises and small enterprises as defined under the MSMED Act, 2006

On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, the following are the details:

43 Provision for contingencies

The Company is involved in certain legal, tax (direct and indirect taxes) and other regulatory matters (''litigations''), the outcome of which may not be favourable to the Company. The Company is actively seeking to resolve these actual and potential statutory, taxation and regulatory matters. Management is in consultation with the legal, tax and other advisers to assess the likelihood that a pending claim will succeed. The Company has applied its judgement and has recognised liabilities based on whether additional amounts will be payable and has included contingent liabilities where economic outflows are considered possible but not probable.

necessary in respect of these matters, the management has recognised for provision for contingencies towards legal, tax and other regulatory matters amounting to ? 982.80 lacs as at 31 March 2024 (Previous year: ? 1,122.79 lacs).

44 Management support charges

During the financial year 2023-24, the Company has paid the management support charges under cost allocation agreement with Federal Mogul Holding Deutschland Gmbh amounting ? 3,456.76 lacs (previous year ? 3,414.99 lacs).These charges are paid to availment of centralised services pertaining to all the products of the Company and, inter-alia, include Technical Support, Operations Management, Applications Engineering, Global Executive Management Services, Purchasing, Key Accounts Sales Management.

45 As per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the ''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the standalone financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

46 During the earlier years, Tenneco Inc. (USA) (the Ultimate Holding Company till 16 November 2022 and intermediate holding company w.e.f. 17 November 2022) had granted certain share-settled restricted stock units (RSUs) to an eligible employee of the Company which vest on the grant date.

RSUs are time-based service awards and generally vest according to a three-year graded vesting schedule. One-third of the award will vest on the first anniversary of the grant date, one-third of the award will vest on the second anniversary, and one-third of the award will vest on the third anniversary.

During the previous year, all the common stock of Tenneco Inc. (USA) got delisted from New York Stock Exchange effective 17 November 2022 and each of the Tenneco''s outstanding awards of RSUs which were subject solely to service-based vesting conditions at such date have become fully vested and stood cancelled in exchange for the right to receive an equivalent amount in cash (subject to tax deducted at source). All the outstanding RSUs at such effective date have been settled in cash by Tenneco Inc. at price of USD 20 per RSUs. In terms of understanding reached, the Company had paid ?302.18 lacs to the eligible employee of the Company and recovered the same from group company (Refer note 37).

Further, in the previous year, the Company had recognized share-based payment amounting ?419.52 lacs (including amount of ?252.85 lacs pertaining to period prior to 31 March 2022 determined by the management on the basis of graded vesting schedule) as an expense under employee benefit expense (refer note 25) with a corresponding credit to Other equity as Deemed capital contribution (refer note 12).

49. Additional Disclosures

a) The title deeds of immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the standalone financial statements are held in the name of the Company.

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

c) The Company has not revalued its property, plant and equipment (including right-of-use assets) or Intangible assets or both during the year.

d) The Company has been sanctioned working capital amounts from banks on the basis of security of Inventories Trade Receivables and Trade Payables. The returns being filed by the Company with banks are in line with the books of account.

e) The Company has not been declared willful defaulter by any bank or financial institution or other lender during the year.

f) The Company does not have any material transactions with companies which were struck off under section 248 of the Companies Act, 2013.

g) The Company has not traded or invested in Crypto curreny or virtual currency during the financial year.

h) The Company have not any such transaction which is not recorded in the books of accounts that has been 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.

i) As per the MCA notification dated 05 August 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain back-up on daily basis of such books of account and other relevant books and papers maintained in electronic mode that should be accessible in India at all the time. Also, the Companies are required to create backup of accounts on servers physically located in India on a daily basis. The books of account along with other relevant records and papers of the Company are maintained in electronic mode on servers physically located out of India. These books of account are readily accessible in India at all times however the backup of such books of account is not maintained in India .

j) The Code on Social Security,2020 (''Code'') 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. Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

k) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

l) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

m) The Company has not received any fund from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

n) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

o) As per records maintained by the Company, there are no charges which are pending to be registered with Registrar Of Companies (ROC). Further, in respect of credit facilities availed and settled in earlier years to the extent of ? 9,988.07 lacs (previous year ? 12,560.00 lacs), satisfaction of charges are yet to be registered with ROC beyond the statutory period. The Company is taking necessary steps for rectifying of ROC records in respect of the same.

p) As per the proviso to Rule 3(1) of Companies (Accounts) Rules, 2014, for the financial year commencing on or after the 1st day of April 2023, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Company uses SAP as its primary accounting softwares for recording all the accounting transactions viz., sales, purchases, production/costing, fixed assets, other expenses, payroll, cash and bank transactions, journal entries and all other general ledger accounting transactions for the year ended March 31, 2024. The Company has used accounting softwares for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that: (a) audit trail feature is not enabled for certain changes made using privileged/administrative access rights, and (b) the feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes.

For and on behalf of the Board of Directors of Federal-Mogul Goetze (India) Limited

Thiagarajan Kannan Manish Chadha Dr. Khalid Iqbal Khan

Managing Director Chief Financial Officer Whole Time Director- Legal &

& Finance Director Company Secretary

DIN : 10486912 DIN : 07195652 DIN : 05253556

Place: Coimbatore Place: Gurugram Place: Gurugram

Date: 29 May 2024 Date: 29 May 2024 Date: 29 May 2024

Mar 31, 2023

r) Provisions, contingent liabilities and contingent assets

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

In cases where the outflow of economic resources as a result of present obligations is considered improbable or remote, no provision is recognised.

Contingent liability is disclosed for:

- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

Contingent assets are not recognised. However, when inflow of economic benefits is probable, related asset is disclosed.

s) Cash and cash equivalents

t) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors assess the financial performance and position of the Company, and makes strategic decisions and therefore the board would be the chief operating decision maker or ''CODM, within the meaning of Ind AS 108. The CODM evaluates the Company''s performance and allocates resources based on the dominant source, nature of product and nature of risks and returns. The Company''s primary business segment is manufacturing and trading of auto components. Considering the nature of Company''s business and operations, there is only one reportable business segment.

u) Significant management judgement in applying accounting policies

In the application of the Company''s accounting policies, which are described above, the Management of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Significant management judgements

Classification of leases - The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Impairment of financial assets - At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.

Provisions and Contingencies - The Company is the subject of certain legal proceedings which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against the Company often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to litigation and taxes. The Company accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated.

At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding litigations referred above. However, the actual future outcome may be different from this judgement.

Defined benefit obligation (DBO) - Management''s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

31. Fair value disclosures

(i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are classified into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Company has only one investment carried at fair value through profit and loss account. The fair value of investment in GI Power Corporation Limited is determined to be zero. There are no other financial assets or liabilities carried at fair value.

The fair values of the unquoted investment in shares of Vyshali Energy private Limited approximates the cost of the shares.

(iii) Fair value of instruments measured at amortised cost

Cash and cash equivalents, loans, trade receivables, investments in compulsorily convertible debentures, other current financial assets, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

â¢ The fair values of investments are determined by using discounted cash flow method using the appropriate discount rate. The discount rate is determined using other similar instruments incorporating the risk associated.

â¢ Security deposits given to government authorities are shown at cost as the same are given till perpetuity.

1. Investment in equity instrument of subsidiary of Rs. 510 lacs (previous year Rs. 510 lacs) has been accounted at cost in accordance with Ind AS 27, therefore not within scope of Ind AS 109, hence, not included here.

2. The Company has an investment in GI Power Corporation Limited which is carried at fair value which is equivalent to zero. ii) Risk management

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the company. The Company is exposed to this risk for various financial instruments, for example by granting loans to group company and receivables from customers, placing deposits, etc. The Company''s maximum exposure to credit risk is limited to the carrying amount of following types of financial assets.

- cash and cash equivalents,

- trade receivables,

- loans and receivables measured at amortised cost,

- deposits with banks, and

- other financial assets.

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring defaults of customers and other counterparties, identified either individually or by the company, and incorporates this information into its credit risk controls. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit risks to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

A: Low B: Medium C: High

Other financial assets measured at amortised cost

Other financial assets measured at amortised cost includes loans and advances to employees, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

The Company provides for expected credit losses based on the following:

The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by analysing historical trend of default based on the criteria defined above. And such provision percentage determined have been considered to recognise life time expected credit losses on trade receivables.

B) Liquidity risk

"Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining liquidity under committed facilities.

Maturities of financial liabilities

The tables below analyses the Company''s financial liabilities into relevant maturity classification based on their contractual maturities for all non-derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. For balances due within 12 months amounts equal their carrying values as the impact of discounting is not significant.

b) Interest rate risk

i) Liabilities

The Company does not have any outstanding borrowings amount and hence there is no interest rate risk.

ii) Assets

The Company''s fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

)) Price risk

The Company does not have any investments in equity instruments which create an exposure to price risk.

33. Capital management

The Company'' s capital management objectives are

- to ensure the Company''s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

37. Related party disclosures

i) Ultimate Holding Company

- Pegasus Holdings One, LLC (with effect from 17 November 2022)

- Tenneco Inc, USA (upto 16 November 2022 and Intermediate holding company with effect from 17 November 2022)

ii) Holding Company

- Federal Mogul Holdings Limited (Mauritius)

iii) Subsidiary

- Federal-Mogul TPR (india) Limited

Below are the list of other related parties with whom there have been transactions with the Company (a) Key managerial personnel

- Vinod Kumar Hans, Whole-Time Managing Director

- Manish Chadha, Whole-time Director-Finance & Chief Financial Officer

- Rajesh Sinha, Whole-time Director

- Dr. Khalid Iqbal Khan, Whole-time Director-Legal & Company Secretary

- Krishnamurthy Naga Subramaniam, Chairman & Independent Director

- Sundareshan Kanakku Chembakaraman Pillai, Independent Director

- Nalini Jolly, Independent Director (b) Fellow subsidiaries

- Federal Mogul Burscheid GmbH, (Germany)

- Federal Mogul Nurnberg, GmbH (Germany)

- Federal Mogul Holding Deutschland GmbH (Germany)

- Federal Mogul Limited (UK)

- Federal-Mogul Gorzyce Sp. z o.o. (Poland)

- Federal Mogul Friedberg, GMBH (Germany)

- Federal Mogul Coventry Limited. (UK)

- Federal-Mogul (Thailand) Ltd. (Thailand)

- Federal Mogul Garennes SAS (France)

- Federal Mogul Sistemas Automotivos Ltda (Brazil)

- Federal Mogul Japan KK (Japan)

- Federal Mogul Motorparts LLC (USA)

- Federal Mogul Naberezhnye Chelny (Russia)

- Federal Mogul de Mexico, S. de R.L. de C.V. (Mexico)

- Federal Mogul Bearings India Limited (India) (formerly known as Federal-Mogul Anand Bearing India Limited)

- Federal-Mogul Ignition Products India Limited (India)

- Federal-Mogul Powertrain Solutions India Private Limited (India)

- Federal Mogul Sealing India Limited (India) (formerly known as Federal-Mogul Anand Sealings India Limited)

- Motocare India Private Limited (India)

- Tenneco Clean Air India Private Limited (India)

- Federal Mogul Global Aftermarket EMEA, B.V. (Belgium)

- Federal Mogul Powertrain Otomotiv A.S. (Turkey)

- Federal Mogul Powertrain LLC (USA)

- Piston Rings UK Limited (UK)

- Tenneco Automotive Operating Co. Inc. (USA)

- Federal Mogul TP Europe GmbH & Co. KG (Germany)

- Federal Mogul Weston (USA)

- Federal Mogul Aftermarket Southern Africa (Pty) Ltd. (South Africa)

- Federal-Mogul ARN (Anqing) Powder Limited (China)

- Federal Mogul Corporation (Southbend, USA)

- VTD Vakuumtechnik Dresden GmbH (Germany)

f Satisfaction of performance obligations

Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms. Revenue is measured at the transaction price of the consideration received or receivable, the amount the Company expects to be entitled to."

g Payment terms

The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 30-60 days (excluding transit period).

h Variable considerations associated with such sales

43. Provision for regulatory matters

The Company is involved in various legal, tax (direct and indirect taxes) and certain regulatory matters (''litigations), the outcome of which may not be favourable to the Company. The Company is actively seeking to resolve these actual and potential statutory, taxation and regulatory matters. Management is in consultation with the legal, tax and other advisers to assess the likelihood that a pending claim will succeed. The Company has applied its judgement and has recognised liabilities based on whether additional amounts will be payable and has included contingent liabilities where economic outflows are considered possible but not probable.

Based on management assessment on likelihood, timing of cash outflows (current/non-current), interpretation of local laws, pending disposal of these matters and consultations obtained from the management experts, where considered necessary in respect of these matters, the management has recognised for provision for legal, tax and other regulatory matters amounting to Rs 1,122.79 lacs as at

44. Management support charges

During the financial year 2022-23, the Company has paid the management support charges under cost allocation agreement with Federal Mogul Holding Deutschland Gmbh to ? 3,414.99 lacs (previous year ? 3,241.28 lacs).

These charges are availment of centralised services pertaining to all the products of the Company and, inter-alia, include Technical Support, Operations Management, Applications Engineering, Global Executive Management Services, Purchasing, Key Accounts Sales Management.

45. As per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the ''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the standalone financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

46. During the earlier years, Tenneco Inc. (the Ultimate Holding Company till 16 November 2022 and intermediate holding company w.e.f. 17 November 2022) had granted certain share-settled restricted stock units (RSUs) to an eligible employee of the Company which vest on the grant date.

During the year, all the common stock of Tenneco Inc. got delisted from New York Stock Exchange effective 17 November 2022 and each of the Tenneco''s outstanding awards of RSUs which were subject solely to service-based vesting conditions at such date have become fully vested and stood cancelled in exchange for the right to receive an equivalent amount in cash (subject to tax deducted at source). All the outstanding RSUs at such effective date have been settled in cash by Tenneco Inc. at price of USD 20 per RSUs. In terms of understanding reached, the Company has paid Rs. 302.18 lacs to the eligible employee of the Company and recovered the same from group company (Refer note 37).

Further, the Company has recognized share-based payment amounting Rs. 419.52 lacs (including amount of Rs. 252.85 lacs pertaining to period prior to 31 March 2022 determined by management on the basis of graded vesting schedule) as an expense under employee benefit expense (refer note 25) with a corresponding credit to Other equity as Deemed capital contribution (refer note 13).

49. Additional Disclosures

a) The title deeds of immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the standalone financial statements are held in the name of the Company.

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

c) The Company has not revalued its property, plant and equipment (including right-of-use assets) or Intangible assets or both during the year.

d) The Company has been sanctioned working capital amounts from banks on the basis of security of Inventories, Cash and Cash Equivalents and Trade Receivables. The returns being filed by the Company with banks are in line with the books of account.

e) The Company has not been declared willful defaulter by any bank or financial institution or other lender during the year.

f) The Company does not have any material transactions with companies which were struck off under section 248 of the Companies Act, 2013.

g) The Company has not traded or invested in Crypto curreny or virtual currency during the financial year.

i) As per the MCA notification dated August 05, 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain back-up on daily basis of such books of account and other relevant books and papers maintained in electronic mode that should be accessible in India at all the time. Also, the Companies are required to create backup of accounts on servers physically located in India on a daily basis. The books of account along with other relevant records and papers of the Company are maintained in electronic mode. These are readily accessible in India at all times however backup is not maintained in India.

j) The Code on Social Security,2020 (''Code'') 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. Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

k) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

l) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

n) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

o) As per records maintained by the Company, there are no charges which are pending to be registered with Registrar Of Companies (ROC). Further, in respect of credit facilities availed and settled in earlier years to the extent of ? 12,560 lacs, satisfaction of charges are yet to be registered with ROC beyond the statutory period. The Company is taking necessary steps for rectifying of ROC records in respect of the same.

50. The financial statements of the Company for the year ended 31 March 2022 (Comparative Financial Information), were audited by Walker Chandiok & Co LLP, Chartered Accountants, the predecessor auditor. The report of predecessor auditor on these Comparative Financial Information dated 20 May 2022 expressed an unmodified opinion.

For and on behalf of the Board of Directors of

Federal-Mogul Goetze (India) Limited

Vinod Kumar Hans Manish Chadha Dr. Khalid Iqbal Khan

Whole Time Managing Director Chief Financial Officer Whole Time Director- Legal &

& Finance Director Company Secretary

DIN :03328309 DIN :07195652 DIN :05253556

Place: Gurugram

Date: 22 May 2023

Mar 31, 2018

Corporate information

Federal-Mogul Goetze (India) Limited (âFMGILâ or âthe Companyâ), is inter-alia engaged mainly in the manufacture, supply and distribution of âautomotive componentsâ used in two/three/four wheeler automobiles.

The principal facilities of the Company are located at Patiala (Punjab), Bengaluru (Karnataka) and Bhiwadi (Rajasthan), with its registered office in Delhi. The Company is listed at National Stock Exchange of India Limited and Bombay Stock Exchange.

Federal Mogul Holdings Limited, Mauritius, is the immediate parent company and ultimate parent company is Federal Mogul LLC, USA.

1. Statement of significant accounting policies

1.1 Statement of compliance with Ind AS

These financial statements (âfinancial statementsâ) of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs (âMCAâ) under section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015, as amended and other relevant provisions of the Act. The Company has uniformly applied the accounting policies during the periods presented.

For all periods up to and including the year ended 31 March 2017, the Company had prepared its financial statements in accordance with accounting standards notified under section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). These financial statements for the year ended 31 March 2018 are the first financial statements which the Company has prepared in accordance with Ind AS (see note 32 for explanation for transition to Ind AS). For the purpose of comparatives, financial statements for the year ended 31 March 2017 and opening balance sheet as at 1 April 2016 are also prepared as per Ind AS.

The financial statements for the year ended 31 March 2018 were authorized and approved for issue by the Board of Directors on 29th May 2018.

1.2 Recent accounting pronouncement

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018. The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.

1 A) Indian rupee loan amounting to Rs 2,000 lacs from Yes Bank in two tranches of Rs 1,000 lacs each taken on 31 May 2013 and 28 June 2013 respectively carried interest @ 11.70% p.a. Both tranches are repayable in 36 equal monthly installments of Rs. 27.77 lacs each along with interest after moratorium period of 12 months from the date of the disbursement of loan, viz., 31 May 2014 and 28 June 2014 respectively. The loan was secured by first parri passu charge on moveable assets of the Company including plant and machinery, spares, tools and accessories, furniture and fixtures and other moveable assets of the Company, excluding vehicles.

B) Indian rupee loan amounting to Rs 4,000 lacs from Yes Bank in two tranches of Rs 2,000 lacs each taken on 22 Dec 2015 and 31 Dec 2015 respectively carries interest @ 10.40% p.a. Both tranches are repayable in 36 equal monthly installments of Rs. 55.55 lacs each along with interest after a moratorium period of 12 months from the date of the disbursement of loan, viz., 22 Dec 2016 and 31 Dec 2016 respectively. The loan is secured by first parri passu charge on moveable assets of the Company including plant and machinery, spares, tools and accessories, furniture and fixtures and other moveable assets of the Company, excluding vehicles.

C) In May 2017, the company had repaid all of its term loans amounting to Rs 3,555 lacs and there is no such term loan exists as on 31st March 2018.

2. Current maturities of long term borrowings amounting to Rs. Nil as on 31 March 2018 (Rs. 1,388.89 lacs as on 31 March 2017 and Rs. 1,000 lacs as on 1 April 2016) are included under the head âOther financial liabilitiesâ. (refer Note no.19).

Note (a)

(i) Indian rupees working capital loans and cash credit facilities are secured against hypothecation of current assets of the company, both present and future with HDFC bank, Yes Bank, Kotak Mahindra Bank, State Bank of India and Deutsche Bank.

(ii) Cash credit facilities carries interest rate ranges from 9% to 11.80% p.a.

(iii) Details of working capital loans:

Note (b): Inter-corporate deposits are repayable on demand and carry rate of interest ranging from 8.50 % to 9.50% p.a. (31 March 2017, 9.50% p.a.) (1 April 2016, 9.50% p.a.)

Note (c): Balance as on 31 March 2018 includes unsecured cash credit facility from Bank of America which carries interest rate @ 7.75%. Balance as on 31 March 2017 includes Export Packing Credit Loan from Bank of America of Rs.1,979.74 lacs at interest rate of 5% p.a., repayable in May, 2017. Balance as on 1 April 2016 includes unsecured loan from HDFC of Rs. 2,000 lacs carriying interest rate of 9.8% p.a, repayable in April, 2016. Also, Company also took an Export Packing Credit Loan for Rs 2,009.92 lacs from Bank of America at interest rate of 6.25% p.a., repayable in May, 2016.

3. First Time Adoption of Ind AS Transition to Ind AS

These standalone financial statements, for the year ended March 31, 2018, are the first financial statements the Company has prepared in accordance with Ind AS. For the periods upto March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and Amendment thereof (âIndian GAAPâ or âprevious GAAPâ).

Accordingly, the Company has prepared standalone financial statements which comply with Ind AS applicable for the year ended March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at April 1, 2016, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

A. Exemptions and exceptions applied

Ind AS 101 allows first-time adopters certain optional exemptions and mandatory exceptions from the retrospective application of certain requirements under Ind AS.

Ind AS optional exemptions A.1.1 Deemed cost- Previous GAAP carrying amount: (Property, plant and equipments and Intangible Assets)

The Company has elected to avail exemption under Ind AS 101 to use previous GAAP carrying value as deemed cost at the date of transition for all items of property, plant and equipment and intangible assets as per the balance sheet prepared in accordance with previous GAAP.

A.1.2 Investment in Subsidary

In separate financial statements, a first-time adopter that subsequently measures an investment in a subsidiary at cost, may measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) in its separate opening Ind AS balance sheet.

The Company has elected to apply previous GAAP carrying amount of its investment in subsidiary for investment in equity shares of one of its subsidiary as at April 1, 2016 as deemed cost on the date of transition to Ind AS Ind AS mandatory exceptions A.1.3 Estimates

The estimates as at April 1, 2016 and as at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP apart from the Impairment of financial assets based on Expected Credit Loss (ECL) model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at April 1, 2016 the date of transition to Ind AS, and as of March 31, 2017

A.1.4 Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS:

Note-1. Environment health safety provision

Under IND-AS, non current provision for Environment, health and Saftey are recorded amortised cost. The amount of a provision is discounted to present value based on the interest cost determined by management equal to its interest cost of borrowing of the Company.

Note-2. Depreciation on leasehold land

Under Ind AS, amortisation of leasehold land has been recorded over the period of lease.

Note-3. Deferred tax impact on adjustments

Under Previous GAAP deferred taxes were recognised for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The above difference, together with the consequential tax impact of the other Ind AS transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or through profit and loss account or other comprehensive income.

Note-4. Other comprehensive income

Items of income and expense that are not recognised in profit and loss are shown in the statement of profit and loss as âother comprehensive incomeâ includes re-measurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP Note-5. Cash flow statement

The transition from previous GAAP to Ind AS has no material impact on the standalone cash flow of the Company.

4. Fair value disclosures

i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are classified into three Levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(iii) Fair value of instruments measured at amortised cost

The management assessed that cash and cash equivalents, trade receivables, other receivables, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The fair values of loans, security deposits, borrowings and other financial assets and liabilities are considered to be the same as their fair values, as there is an immaterial change in the lending rates.

ââInvestment in equity instrument of subsidiary has been accounted at cost in accordance with Ind AS 27, therefore not within scope of Ind AS 109, hence, not included here.

** The company has an investment in GI Power Corporation Limited which is carried at fair value which is equivalent to zero.

ii) Risk Management

The Companyâs activities expose it to market risk, liquidity risk and credit risk. The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

A. Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the company. The Company is exposed to this risk for various financial instruments, for example by granting loans and receivables to customers, placing deposits, etc. The Companyâs maximum exposure to credit risk is limited to the carrying amount of following types of financial assets.

- cash and cash equivalents,

- trade receivables,

- loans & receivables carried at amortised cost, and

- deposits with banks

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring defaults of customers and other counterparties, identified either individually or by the company, and incorporates this information into its credit risk controls. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

A: Low B: Medium C: High

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Trade receivables

The Company closely monitors the credit-worthiness of the debtors through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts receivable become six months past due.

Other financial assets measured at amortised cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

The Company provides for expected credit losses based on the following:

The company recognizes lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by âanalysing historical trend of default based on the criteria defined above. And such provision percentage determined have been âconsidered to recognise life time expected credit losses on trade receivables.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Companyâs liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyses the Companyâs financial liabilities into relevant maturity companyings based on their contractual maturities for all non-derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. For balances due within 12 months amounts equal their carrying values as the impact of discounting is not significant.

C) Market Risk

a) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar, Euro and Japanese Yen. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the functional currency of any of the Company. Considering the low volume of foreign currency transactions, the Companyâs exposure to foreign currency risk is limited and the Company hence does not use any derivative instruments to manage its exposure. Also, the Company does not use forward contracts and swaps for speculative purposes.

(i) Foreign currency risk exposure:

The Companys exposure to foreign currency risk at the end of the reporting period expressed in Rs., are as follows:-

b) Interest rate risk

i) Liabilities

The Companyâs policy is to minimise interest rate cash flow risk exposures on long-term financing. As at 31 March 2018, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates. The Companyâs investments in fixed deposits pay fixed interest rates.

Interest rate risk exposure

Below is the overall exposure of the Company to interest rate risk:

ii) Assets

The Companyâs fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

c) Price risk

The Company does not have any significant investments in equity instruments which create an exposure to price risk.

35. Capital management

The Companyâ s capital management objectives are

- to ensure the Companyâs ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the Companyâs capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Companyâs various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

5. Segment information

As the Companyâs business activities fall within a single primary business segment viz. auto components for automobile industry, the disclosure requirement of Indian Accounting Standard (Ind AS-108), Operating Segments is not applicable.

The analysis of geographical segment is based on the geographical location of the customers. The following table shows the distribution of the Companyâs consolidated sales by geographical market, regardless of where the goods were produced.

Revenue from one customer amounts to Rs. 13,437.40 Lacs (previous year Rs. Nil). No other single customer represents 10% or more to the Group revenue for financial year ended March 31, 2018 and March 31, 2017.

6. Related Party Transactions

(i) In accordance with the requirement of Indian Accounting Standard (Ind AS - 24) on related party disclosures where control exist and description of the relationship are as follows:

(a) Name of Parties where control exists

i) Holding Company

- Federal Mogul Holdings Limited (Mauritius)

ii) Subsidiary Company

- Federal-Mogul TPR (India) Limited

iii) Ultimate Holding Company

- Federal Mogul LLC, USA

(b) Key managerial personnel

- Mr. Vinod Kumar Hans, Whole Time Managing Director

- Mr. Manish Chadha, Chief Finance Officer & Finance Director

- Mr. Rajesh Sinha, Additional Director

- Mr. Khalid Iqbal Khan, Whole Time Director- Legal and Company Secretary

- Mr. Krishnamurthy Naga Subramaniam, Non-executive Director

- Mr. Mukul Gupta, Non-executive Director

- Mr. Sundareshan Kanakku Chembakaraman Pillai, Non-executive Director (appointed w.e.f 16th Dec 2016)

- Mr. Mahendra Kumar Goyal, Non-executive Director

(c)Fellow and step fellow subsidiaries

- Federal Mogul Burscheid GMBH, Germany

- Federal Mogul Nurnberg, GMBH (Germany)

- Federal Mogul Holding Deutschland (Germany)

- Federal Mogul Limited (U.K.)

- Federal Mogul Financial Services FRANCTNL (France)

- Federal Mogul Gorzyce, S.A. (Poland)

- Federal Mogul Friedberg, GMBH (Germany)

- Federal Mogul Sintered Products Limited. (U.K.)

- Federal Mogul Friction Products Limited (Thailand)

- Federal Mogul Thailand Manufacturina Ayutthaya, (Thailand)

- Federal Mogul France, S.A. (France)

- Federal Mogul Corporation, Garennes (France)

- Federal Mogul (Shanghai)

- Federal Mogul Friction Products Limited

- Federal Mogul Worldwide Aftermarket

- Federal Mogul Sistemas Brazil

- Federal Mogul Dongsuh Piston Co. Limited. (China)

- Federal Mogul Bradford Limited.

- Federal Mogul Powertrain Spara, MII

- Federal Mogul KK Yokohama

- Federal Mogul Powertrain Inc, Southbend

- Federal Mogul Chasseneuil

- Federal Mogul Kontich

- Federal Mogul Anand Bearings India Limited (India)

- Federal-Mogul Ignition Products India Limited (India)

- Federal-Mogul Motorparts Limited. (India)

- Federal-Mogul Powertrain Solutions India Private Limited (India)

- Federal Mogul Anand Sealing India Limited (India)

- Motocare India Private Limited (India)

7. Operating lease

a) Assets taken under operating lease

Office premises taken by the company are on operating leases. The company enter into certain cancellable and non cancellable operating leases arrangement towards office premises.

The details disclosure required by Ind AS-17, Leases is given below:

8. Employee benefit obligations Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services, gets a gratuity on departure at 15 days basic salary (last drawn) for each completed year of service on terms not less favourable than the provisions of the payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan.

9. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, the following are the details:

10. Expense capitalisation

The Company has capitalized various expenses incurred in the course of construction of self generated assets in accordance with Ind AS 16 - Property, plant and equipments, the details of expenses capitalized for the purpose of construction of self generated assets are as follows:

11. Provision for regulatory matters

The Company is continuosly evaluating processes for regulatory matters at its factories based on more accurate evidences available, a provision, towards costs to be incurred to remediate these matters, of Rs. 367.33 lacs is included under Note no. 15 for provisions which are net of amounts utilized of Rs. 247.38 lacs during the year towards remediation.

In addition to the above, the provision for regulatory matters includes a provision of Rs.1,959.19 lacs towards certain other regulatory matters.

The Company is actively seeking to resolve these actual and potential statutory, taxation, regulatory and contractual obligations. In accordance with requirements of Indian Accounting Standard (Ind AS) 37 on âProvisions, Contingent liability and Contingent assetsâ issued by the Institute of Chartered Accountants of India, although difficult to quantify based on the complexity of the issues, the Company has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information and best professional judgment of experts appointed for this exercise.

Based on consultations obtained from the experts in respect of the said matters, in managementâs view, no further costs are expected to be incurred for which a provision would be required at this stage and considers the provisions made to be adequate

12. Management support charges

During the financial year 2017-18, the Audit committee in its meeting held on December 6, 2017, had approved increase in management support charges under Cost Allocation Agreement with Federal Mogul Holding Deutschland Gmbh to Rs. 3,776.35 lacs (approx.) per annum, effective July 1, 2017 against the earlier charge of Rs. 580.06 lacs per annum for financial year 201617. The propotionate charge for the full financial year 2017-18 is Rs. 3,016.57 lacs (Previous year 2016-17 Rs.580.06 lacs).

These charges are availment of centralised services pertaining to all the products of the company and, inter-alia, include Technical Support, Operations Management, Applications Engineering, Global Executive Management Services, Purchasing, Key Accounts Sales Management. This charge is based on actual services received by the company on cost basis without any mark up and is at an armâs length basis.

13. Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing armâs length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the âStudyâ) to determine whether the transactions with associate enterprises undertaken during the financial year are on an âarms length basisâ. Management is of the opinion that the Companyâs international transactions are at armâs length and that the results of the ongoing study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

14. Corporate social responsibility

a) Gross amount required to be spent by the Company during the year in compliance with section 135 of the Act is Rs. 155.11 lacs.

b) Amount spent during the year on :-

15. With the implementation of Goods and service tax Act, 2017 (GST), w.e.f 1st July 2017, Revenue from operations for the year ended 31 March 2018 is reported net of GST (from 01 July 2017 till 31 March 2018) and gross of excise duty (from 01 April 2017 till 30 June 2017). However, revenue from operations for the year ended 31 March 2017 is presented in the financial gross of excise duty. Had previously reported revenues were shown net of excise duty, the comparative revenue of the company would have been as follows:

Mar 31, 2017

1. (A) Indian rupee loan amounting to Rs 2,000 lacs from Yes Bank in two tranches of Rs 1,000 lacs each taken on May 31, 2013 and June 28, 2013 respectively carries interest @ 11.70% p.a. Both tranches are repayable in 36 equal monthly installments of Rs. 27.77 lacs each along with interest after moratorium period of 12 months from the date of the disbursement of loan, viz., May 31, 2014 and June 28, 2014 respectively. The loan is secured by first parri passu charge on moveable assets of the Company including plant and machinery, spares, tools and accessories, furniture and fixtures and other moveable assets of the Company, excluding vehicles.

(B) Indian rupee loan amounting to Rs 4,000 lacs from Yes Bank in two tranches of Rs 2,000 lacs each taken on Dec 22, 2015 and Dec 31, 2015 respectively carries interest @ 10.40% p.a. Both tranches are repayable in 36 equal monthly installments of Rs. 55.55 lacs each along with interest after a moratorium period of 12 months from the date of the disbursement of loan, viz., Dec 22, 2016 and Dec 31, 2016 respectively. The loan is secured by first parri passu charge on moveable assets of the Company including plant and machinery, spares, tools and accessories, furniture and fixtures and other moveable assets of the Company, excluding vehicles.

2. Current maturities of long term borrowings amounting to Rs. 1,388.89 lacs (Previous year: Rs. 1,000 lacs) are included under the head ''Other current liabilities''. (refer note 11)."

Note (a)

i. Indian rupees working capital loans and cash credit facilities are secured against hypothecation of current assets of the company, both present and future with HDFC bank, Yes Bank, Kotak Mahindra Bank, State Bank of India and Deutsche Bank.

ii. Cash credit facilities carries interest rate range of 9.50% to 11.80% p.a.

iii. Details of working capital loans.

Note (b): Inter-corporate deposits are repayable on demand and carry rate of interest 9.50 % p.a

Note (c): Balance as on 31 March 2017 includes Export Packing Credit Loan from Bank of America of of Rs 1,979.74 lakhs at interest rate of 5% p.a., repayable in May, 2017.

3. Segment Information

Based on the guiding principles given in AS-17 ''Segmental Reporting'' notified under Companies (Accounting Standard) Rules, 2006, the Company''s primary business segment is manufacturing and trading of auto components. Considering the nature of Company''s business and operations, there are no separate reportable business segment, as there is only one business segment and hence, there are no additional disclosures required to be provided other than those already been provided in the financial statements.

The analysis of geographical segment is based on the geographical location of the customers. The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced.

The Company has common assets for producing goods for India and outside countries. Hence, separate figures for assets/ additions to fixed assets cannot be furnished.

32. Capital and other commitments

Total estimated amount of contracts, remaining to be executed on capital account (net of advances) and not provided for as at 31 March 2017 is Rs 1,206.51 lacs (31 March 2016 Rs. 1,392.81 lacs).

34(I). In accordance with the requirement of Accounting Standard (AS - 18) on related party disclosures where control exist and description of the relationship are as follows:

(a) Name of Parties where Control Exists

i) Holding Company

- Federal Mogul Holdings Limited (Mauritius)

ii) Subsidiary

- Federal-Mogul TPR (India) Limited

iii) Ultimate Holding Company

- Federal Mogul LLC, USA

(b) Key managerial personnel*

- Mr. Vinod Kumar Hans, Managing Director (w.e.f Jan 1, 2016)

- Mr. Andreas Wilhelm Kolf, Managing Director (resigned on Dec 31, 2015)

- Mr. Manish Chadha, CFO and Director (CFO : w.e.f June 1, 2015 and Director: w.e.f Feb 5, 2016)

- Mr. Rajesh Sinha, Additional Director (w.e.f Jan 1, 2016)

- Mr. Sachin Selot, CFO and Whole Time Director (resigned on May 26, 2015)

- Mr. Khalid Iqbal Khan, Whole Time Director

- Federal Mogul Burscheid GMBH, Germany

- Federal Mogul Nurnberg, GMBH (Germany)

- Federal Mogul Holding Deutschland (Germany)

- Federal Mogul Limited (U.K.)

- Federal Mogul Financial Services FRANCTNL (France)

- Federal Mogul Gorzyce, S.A. (Poland)

- Federal Mogul Friedberg, GMBH (Germany)

- Federal Mogul Sintered Products Limited. (U.K.)

- Federal Mogul Friction Products Limited (Thailand)

- Federal Mogul Thailand Manufacturina Ayutthaya, (Thailand)

- Federal Mogul France, S.A. (France)

- Federal Mogul Corporation, Garennes (France)

- Federal Mogul (Shanghai)

- Federal Mogul Friction Products Limited.

- Federal Mogul Worldwide Aftermarket

- Federal Mogul Sistemas Brazil

- Federal Mogul Dongsuh Piston Co. Limited. (China)

- Federal Mogul Bradford Limited.

- Federal Mogul Powertrain Spara, MII

- Federal Mogul KK Yokohama

- Federal Mogul Powertrain Inc, Southbend

- Federal Mogul Chasseneuil

- Federal Mogul Kontich

- Federal Mogul Anand Bearings India Limited (India)

- Federal-Mogul Ignition Products India Limited (India)

- Federal-Mogul Motorparts Limited. (India)

- Federal-Mogul Powertrain Solutions India Private Limited (India)

(Formerly Federal-Mogul PTSB India Private Limited. (India))

- Federal Mogul Anand Sealing India Limited (India)

- Motocare India Private Limited (India).

Those transactions along with related balances as at 31 March 2017 and 31 March 2016 are presented in the following table:

4. Provision for regulatory matters

During the year ended 31 December 2010, the Company had commenced an evaluation process for various regulatory matters at its factories. Based on more accurate information discovered, a provision, towards costs to be incurred to remediate these matters, of Rs. 424.63 lacs is included under Note no. 8 of Standalone Financial Statements for provisions which are net of amounts utilized of Rs. 185.39 lacs during the year towards remediation.

In addition to the above, the provision for regulatory matters includes a provision of Rs.1,505.39 lacs towards certain other regulatory matters.

The Company is actively seeking to resolve these actual and potential statutory, taxation, regulatory and contractual obligations. In accordance with requirements of Accounting Standard 29 on ''Provisions, Contingent liability and Contingent assets'' issued by the Institute of Chartered Accountants of India, although difficult to quantify based on the complexity of the issues, the Company has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information and best professional judgment of experts appointed for this exercise.

Based on consultations obtained from the experts in respect of the said matters, in management''s view, no further costs are expected to be incurred for which a provision would be required at this stage and considers the provisions made to be adequate.

5. Management support charges

During the year 2016-17, the Company has paid management support charges to its group companies of Rs 580.06 lacs (31 March 2016 Rs 581.32 lacs) in respect of certain global support services related to various functions including engineering, IT, finance, legal and HR etc provided to the Company. The Company carries out its transfer pricing study annually and updates its documentation, choice of methods and benchmarks to ascertain adequacy and compliance with the "arms length" principles prescribed under Income Tax Act. For the year April 1, 2016 to March 31, 2017, the process of updation is ongoing and management is confident of completing the same. The provision for current tax has been made accordingly considering the said amounts of Rs. 580.06 lacs as "allowable expenditure".

6. Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the ''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

7. Previous year numbers have been regrouped/reclassified, wherever considered necessary.

Mar 31, 2016

1. Segment Information

Based on the guiding principles given in AS-17 ''Segmental Reporting'' notified under section 133 of the Companies Act 2013, read to together with Company (Accounts) Rules, 2014, the Company''s primary business segment is manufacturing of auto components. Considering the nature of Company''s business and operations, there are no separate reportable business segment, as there is only one business segment and hence, there are no additional disclosures required to be provided other than those already been provided in the financial statements.

2. Related Party Transactions (I) In accordance with the requirement of Accounting Standard (AS - 18) on related party disclosures where control exist and description of the relationship are as follows:

(a) Name of Parties where control exists

i) Holding Company

- Federal Mogul Holdings Limited (Mauritius)

ii) Subsidiary

- Federal-Mogul TPR (India) Limited

iii) Ultimate Holding Company

- Federal Mogul Corporation, USA"

(b) Key managerial personnel

- Mr. Vinod Kumar Hans, Managing Director (w.e.f January 1, 2016)

- Mr. Andreas Wilhelm Kolf, Managing Director (resigned on December 31, 2015)

- Mr. Manish Chadha, CFO and Director (CFO : w.e.f June 1, 2015 and Director: w.e.f Feb 5, 2016)

- Mr. Rajesh Sinha, Additional Director (w.e.f January 1, 2016)

- Mr. Sachin Selot, CFO and Whole Time Director (resigned on May 22, 2015)

- Mr. Khalid Iqbal Khan, Whole Time Director (w.e.f May 22, 2015) and Company Secretary

- Federal Mogul Burscheid GMBH, Germany

- Federal Mogul Nurnberg, GMBH (Germany)

- Federal Mogul Holding Deutschland (Germany)

- Federal Mogul Limited (U.K.)

- Federal Mogul Financial Services FRANCTNL (France)

- Federal Mogul Gorzyce, S.A. (Poland)

- Federal Mogul Friedberg, GMBH (Germany)

- Federal Mogul Sintered Products Ltd. (U.K.)

- Federal Mogul Friction Products Ltd (Thailand)

- Federal Mogul Thailand Manufacturina Ayutthaya, (Thailand)"

- Federal Mogul France, S.A. (France)

- Federal Mogul Corporation, Garennes (France)

- Federal Mogul (Shanghai)

- Federal Mogul Friction Products Ltd.

- Federal Mogul Worldwide Aftermarket

- Federal Mogul Sistemas Brazil

- Federal Mogul Dongsuh Piston Co. Ltd. (China)

- Federal Mogul Bradford Ltd.

- Federal Mogul Powertrain Spara, MII

- Federal Mogul KK Yokohama

- Federal Mogul Powertrain Inc, Southbend

- Federal Mogul Chasseneuil

- Federal Mogul Kontich

- Federal Mogul Anand Bearings India Ltd (India)

- Federal-Mogul Ignition Products India Ltd (India)

- Federal-Mogul Motorparts Ltd. (India)

- Federal-Mogul Powertrain Solutions India Private Limited (India)

(Formerly known as Federal-Mogul PTSB India Pvt. Ltd. (India))

- Federal Mogul Anand Sealing India Limited (India)

- Motocare India Private Limited (India).

Those transactions along with related balance as at 31 March 2016 and 31 March 2015 are presented in the following table.

3. Disclosures in accordance with AS-15 on "Employee Benefits"

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services, gets a gratuity on departure at 15 days basic salary (last drawn) for each completed year of service on terms not less favorable than the provisions of the payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan.

The Company''s expected contribution to the fund in the next year is not presently ascertainable and hence, the contribution expected to be paid during the annual period beginning after the balance sheet date as required by para 120(o) of the accounting standard 15(revised) on employee benefits has not been disclosed.

4. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, the following are the details:

5. Provision for regulatory matters

During the year ended 31 December 2010, the Company had commenced an evaluation process for various regulatory matters at its factories. Based on more accurate information discovered, a provision, towards costs to be incurred to remediate these matters, of Rs. 439.46 lacs is included under Note no. 8 for provisions which are net of amounts utilized of Rs. 305.50 lacs during the year towards remediation.

In addition to the above, the provision for regulatory matters includes a provision of Rs.1,384.83 lacs towards certain other regulatory matters.

6. Management support charges

During the year 2015-16, the Company has paid management support charges to its group companies of Rs 581.32 lacs (31 March 2015 Rs 774.68 lacs) in respect of certain application engineering services provided to the Company. The Company carries out its transfer pricing study annually and updates its documentation, choice of methods and benchmarks to ascertain adequacy and compliance with the arms length principles prescribed under Income Tax Act. For the year April 1, 2015 to March 31, 2016, the process of updating is ongoing and management is confident of completing the same. The provision for current tax has been made accordingly considering the said amounts of Rs. 581.32 lacs as allowable expenditure.

7. Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the ''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

8. During the year 2014-15 the Company had entered into a power purchase agreement with Real Captive Power (RCP) and paid Rs. 850 lacs as refundable security deposit which was recoverable in 5 equal installments beginning from 7th to 11th year. Further, the Company had purchased 26% equity shares in RCP for Rs 26 lacs, in order to be eligible as a captive user for sourcing power at a cheaper rate from RCP As RCP was a newly incorporated company, recoverability of security deposit would solely be dependent on the financial position of RCP at the time of repayment, therefore, on a conservative basis, the management created a provision of Rs. 850 lacs and the same was duly provided for in the books of accounts of the Company in March 2015. Now, in view of delay in the start of power supply by RCP RCP has refunded the said security deposit of Rs. Rs. 850 lacs. The same amount which had already been provided for during the year ended March 2015 has been reversed now and shown as part of other income. Further, the Company has also disposed off the 26% equity holding in RCP at cost.

9. Previous year/period numbers have been regrouped/ reclassified, wherever considered necessary. Last year, the Company has changed the financial year from January - December to April - March . Pursuant to change in financial year the previous period financials has been prepared from January 1, 2014 to March 31, 2015 (i.e 15 months).

Mar 31, 2015

1. a) Corporate Information

Federal-Mogul Goetze (India) Limited (''FMGIL'' or ''the Company''), is inter-alia engaged in the manufacture, supply and distribution of ''automotive components'' used in two/three/four wheeler automobiles.

The principal facilities of the Company are located at Patiala (Punjab), Bangaluru (Karnataka) and Bhiwadi (Rajasthan), with its registered office in Delhi. The Company is listed at National Stock Exchange of India Ltd. and Bombay Stock Exchange.

Federal Mogul Holdings Limited, Mauritius, is the immediate parent company and ultimate parent company is Federal Mogul Corporation, USA.

b) Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Company (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

Pursunat to the requirement of Compaines Act 2013, the Company has changed the financial year from Janurary to December every year to April to March every year. Accordingly, the current financial year for a period of fifteen months commencing from January 1,2014 and ending on March 31,2015.

The accounting policies adopted in the preparation of financial statment are consistent with those of previous year.

(a) There is no movement in equity share capital during the current and comparative period.

(b) Right/restriction attached to equity shares.

The Company has only one class of equity shares having par value of Rs.1 0 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 liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

(e) The Company has not issued any equity shares pursuant to any contract without payment being received in cash, allotted as fully paid up by way of bonus issues and bought back during the current reporting period and immediately preceding four years.

"Note (a): Indian rupee loans amounting to Rs. 2,000 lacs from Yes Bank in two tranches of Rs 1,000 lacs each taken on 31 May 2013 and 28 June 2013 respectively, carries interest @ 1 2.20% p.a. Both tranches are repayable in 36 equal monthly instalments of Rs. 27.77 lacs each along with interest, after a moratorium period of 1 2 months from the date of disbursement of loan i.e. 31 May 2014 and 28 June 2014 respectively. The loan is secured by first parri passu charge on moveable assets of the Company including plant and machinery, spares, tools and accessories, furniture and fixtures and other movable assets of the Company, excluding vehicles."Current maturities of long term borrowings amounting to Rs. 666.67 lacs (Previous year: Rs. 444.44 lacs) are included under the head ''Other current liabilities (refer note 11).

Note (a) :

i. Indian rupees working capital loans and cash credit facilities are secured against hypothecation of current assets of the Company, both present and future with HDFC, Yes Bank, ING Vysya Bank, State Bank of India and Deutsche Bank. Cash credit facilities carries interest rate ranging from 10.00 % p.a to 12.50% p.a.

ii. Details of working capital loans

Note (b): Inter-corporate deposits are repayable on demand and carry rate of interest ranging between 9.35 % p.a to 10.50 % p.a

Note (c): Indian rupees working capital loan and cash credit facilities taken from Bank of America is at interest rate of 10.5% p.a., which was repayable in 30 days from the date of loan.

Note (d) : Indian rupees loan amounting to Rs 61 lacs taken from Goetze India employee welfare trust is at interest rate of 8% p.a. Entire loan is repayable on 31 March 2014.

2. Segment Information

Based on the guiding principles given in AS-17 ''Segmental Reporting'' notified under Companies (Accounting Standard) Rules, 2006, the Company''s primary business segment is manufacturing of auto components. Considering the nature of Company''s business and operations, there are no separate reportable business segment, as there is only one business segment and hence, there are no additional disclosures required to be provided other than those already been provided in the financial statements.

The analysis of geographical segment is based on the geographical location of the customers. The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced.

The Company has common assets for producing goods for India and outside countries. Hence, separate figures for assets/ additions to fixed assets cannot be furnished.

3. Capital and other commitments (net of capital advances)

Total estimated amount of contracts, remaining to be executed on capital account and not provided for as at 31 March 2015 is Rs: 1,853.51 lacs ( as at 31 December 2013 : 1,093.67 lacs)

4. Contingent liabilities

(a) Bank guarantees 596.25 554.54

(b) Claims/notices contested by the Company

(i) Excise duty and service tax 4,051.40 687.20

(ii) Sales tax 2,250.91 1,781.70

(iii) Employee related cases 286.05 242.99

(iv) Electricity demand 52.24 52.24

(v) Income tax demands 800.28 609.55

1) In relation to b (i) above, Excise duty cases contested by the Company comprise of :

i) Matters are pending at Joint Commissioner, Central Excise , Bangalore where four show cause notice were received for the period 2000 to 2004 for the excise duty demand of Rs.76.42 lacs on the differential discount which was given to stockist. Matter is pending with Joint Commissioner, Central Excise, Bangalaru. (Previous period Rs.33.73 lacs).

ii) Matters are pending with CESTAT, Bangalaru wherein notice was received for the period of 2006-07 for disallowing the cenvat credit taken twice on the invoices for the excise demand of Rs.5.03 lacs The case is pending for hearing. (Previous period Rs. 5.03 lacs).

iii) Matter is pending with CESTAT, Delhi on the six show cause notices received for the period 2002 to 2006 for the excise duty demand of Rs. 189.48 raised on the Turnover Discount for the period of 2002-06. The cases are pending with the CESTAT, Delhi for hearing (Previous peri od Nil ) .

iv) Matters are pending for two show cause notices received on the Patiala plant for the interest amount of Rs.14.02 lacs on the reversal of Special additional duty taken wrongly. Cases are related to 2000-2001 and pending with the CESTAT, Delhi for hearing. (Previouse Year 14.02 lacs).

v) Matter is pending on the show cause notice received for the excise duty amounting Rs. 6.96 lacs on the classification issue related to the period of 1 998-99. After filing of reply, there is no movement in the case and pending before Joint Commissioner, Excise (Previous period Rs. 6.96 lacs).

vi) Matter is pending for a show cause notice received in 2002 for the excise duty of Rs. 3.32 lacs on scrap sale for the period 2001 -02. After filing of reply, there is no movement in the case and it is pending with Joint Commissioner, Excise, Patiala (Previous period 3.32 lacs).

vii) Matter is pending for a show cause notice on disallowance of excise credit of Rs.9.34 lacs on the ground that credit does not fall in the category of input category. The case is related to the period 1987 to 1990 and pending with Honourable High Court.

viii) Matter is pending with Joint Commissioner, Central Excise on five notices related to period of 1997-98,1998-99, 1995-96 and 2003-04 for the disallowance of Modvat Credit on the input raw material for amounting Rs.6.16 lacs (Previouse Year Nil).

ix) . Matter is pending before the Supreme Court in the valuation case where two notices were issued to Patiala plant where department

alleged on the job work valuation and demanded excise duty of Rs.15.13 lacs.(Previous period 15.13 lacs).

x) . Matter is pending before the Commissioner, Excise, Jaipur for taking excess credit of excise duty of Rs.3.19 lakhs for the period 2010-

5.(Previous period Nil).

xi) . Matter is pending before the Commissioner, Excise on issuance of show cause notice on the cenvat credit taken on LPG on the invoice addressed to Goetze India (technical errors) amounting to Rs. 0.97 lacs (Previous period Nil).

1) In relation to b (i) above, Service tax cases contested by the Company comprise of:

i) . Matter is pending with CESTAT, Bangaluru in respect of notice for the period FY 2006-2007 amounting to Rs. 86.44 lacs wherein disallowed the service tax credit taken on Input Service Distributor invoices received from Gurgaon. (Previous period Rs 86.44 lacs).

ii) . Nine matters are pending for the year 2009 to 2014 where company disallowed the service tax credit for Rs.2829 lacs for the common inputs used in the job work which are exempted activities as per the excise authorities.

iii) Matter is pending for a notice received for the period 2005-06 wherein service tax credit was disallowed for Rs.113.70 lacs on account of non-availability of service invoices. The case is pending before the CESTAT, Bangalaru for the decision. (Previous period Rs.113.70 lacs).

iv) Company received seven show cause notices at Patiala plants for the period 2005 to 2011 for disallowance of service tax credit on various services for the service tax amounting Rs.96.11 lacs. The case is pending with Joint Commissioner, Service Tax (Previous period Rs 96.11 lacs).

v) Matter is pending with the Commissioner (Appeals ), Central Excise, Chandigarh for two show cause notices received for the period 2009 to 2013 for demanding the service tax credit taken on the inward and outward freight amounting Rs.31.93 lacs (Previous period Nil).

vi) Matter is pending in Bangalaru unit for the period 2008 to 2011 for the service tax not paid on written off material for Rs.5.81 lacs The case is pending before Commissioner, Service Tax. Company is confident of favaourbale decision in this case. (Previous period Nil).

vii) Matters are pending for seven show cause notices for Patiala plant for the period 2006 to 2007 for disallowance of service tax credit on mediclaim services for the service tax amounting Rs.19.18 lacs. The case is pending before CESTAT, Delhi. (Previous period Nil).

viii) Matter are pending for seven show cause notices received for the period 2008 to 2012 for the disallowance of service tax credit amounting Rs.79.02 lacs on few certain services for Bhiwadi Plant for disallowance and demanding the service tax. Cases are pending with Joint Commissioner and Additional Commissioner, Service Tax, Jaipur for hearing. (Previous period Rs. 79.02 lacs).

ix) Matter is pending on the show cause notice received for corporate office for the period 2008 to 2011 for the service tax demand of Rs.134.18 lacs for disallowance of service tax credit on various services.(Previous period Rs. 134.18 lacs).

x) Matter is pending for the service tax demand on the Royalty and technical know how for Rs.16.79 lacs.(Previous period Nil).

xi) Service tax is pending for the service tax credit of Rs.1 0.71 lacs for disallowance of service tax credit for 2011 to 213 (Previous period Nil).

xii) Recently, service tax show casuse notice received on manpower recuritement services for Rs.4.54 lacs where service tax not paid on PF and ESI services in the year 2012-13 (Previous period Nil ).

xiii) Service tax show cause notice received for non-maintenaince of service tax register for past period for the demand Rs.294 lacs for the period 2009-13. Reply is to be filed for defending the case before Commissioner. (Previous period Nil).

2) In relation of b (ii) above, sales tax cases contested by the Company comprise of :

i) Sale tax matter is pending for assessment year 1 996-97 to 2001 -02 where sale tax demand was raised on the classification issue/rates difference on product "Groove Insert Casting" for amounting Rs.97 lacs. Company has deposited Rs.215.87 lacs. Recently, adverse verdict received and tax demand is 97 lacs with interest which will be adjusted from the deposited amount. Company has provided Rs.97 lacs in the books. (Previous period the total demand amount was Rs. 442.92 lacs).

ii) Matter is pending with Honb''ble High Court of Karnataka on sale tax demand notice for the period 2005-06 for the sale tax demand of Rs. 278.51 lacs for the sale tax rate difference charged on the Piston. Case is pending before the Honb''ble High court for the final decision. The Company so far has made an under protest payment of Rs.55 lacs in this matter (Previous period 278.51 lacs).

iii) Matter is pending with Karnataka Sale Tax Tribunal for the penalty of Rs.1.36 lacs for not paying CST on the central sale on the C form liability. Company has deposited Rs.1.36 lcas in this case. The case is related to 2007-08 pending before the Karnataka Sale tax Tribunal for decision. (Previous period Nil).

iv) Matters is pending with next DCCT, Audit Bangalaru for Full 2014-15 on account C Forms pendency for Rs. 293 lacs. The company has filed an appeal before the Joint Commissioner. (Previous period Nil).

v) Matter is pending with Joint Commissioner,Ghaziabad for the sale tax demand of Rs.82.78 lacs for the financial year 2007 -08 on account of several issues like rate differences, disallowance of central sales, stock transfer and best judgement sales. Company has deposited Rs.47.54 lacs in this case and provided Rs.30 in one of the tax issue (Previous period Rs. 82.78 lacs).

vi) Matter is pending with Sale Tax authorities, Patna for the sale tax demand of Rs.25.66 lacs on account of non-availabilities of few documents and pending for hearing. (Previous period Rs. 25.66 lacs).

vii) Four matters are pending at Kolkata sale tax authorities on various reason for the financial year 2001 -02, 2004-05 and 2006 -07 for the sale tax demand of Rs.6.37 lacs on account of disallowance of sale returns, warranty material and stock transfer forms. (Previous period Rs. 6.37 lacs).

viii) Tax demand notice received from Maharashtra Sale Tax Demand of Rs.30.1 9 lacs on non-submission of forms F and matter is pending with next appellate authorities. (Previous period 30.19 lacs).

ix) Matter is pending with Additional Commissioner, Delhi for the total sale tax demand of Rs. 613.92 lacs on the four notices issued on best judgement basis for various reasons including disallowance of stock transfer, Central sale and penalty on the above. One issue is related to sale of fixed assets where sale tax demand is Rs.175 lacs out of total tax demand. Company made a provision of Rs. 172 lacs for this. The case is pending with hearing and related to financial year 2007-08. Company is confident of favourable order on the remaining tax demand as case was adjudged wrongly without giving opportunity.(Previous period the total demand amount was Rs. 613.92 lacs).

x) Matter is pending with Joint Commissioner, Sale / Commercial Tax, Ghaziabad for the sale tax demand on the disallowance of stock transfer of Rs.32.68 lacs for the financial year 2012-13 (Previous period Rs. 32.11 lacs).

xi) Matter is pending with Additional Commissioner, Delhi for the financial year 2008-09 for the sale tax demand of Rs. 73.44 lacs which is demanded on the basis of best judgement (Previous period 73.44 lacs).

xii) Three matters are pending with next appellate authorities (Bhiwadi) for Full2008-09, 2009-10 and 2012-13 on account C Forms pendency. Amount involved Rs. 306.00 lacs.(Previous period Nil).

xiii) Entry tax not paid on imported machinery in the Bangalaru as similar case is pending before the Supreme Court on the decision that entry tax is unconstitutional and should not be levied. Afer 201 1, Company started paying entry tax and capitalising the amount of entry tax. Amount Involved is Rs 410 lacs.

3) In relation of b (iii) above, employee related cases comprise of:

Claims against the Company not acknowledged as debt, in respect of demands raised by the workers. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. Amount involved is Rs. 286.05 lacs. (Previous period Rs. 242.99 lacs).

4) In relation to b (iv) above, electricity demand comprise of In respect of a demand raised by Punjab State Electricity Board (PSEB) for various years in relation to availment of additional load. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. Amount involved is Rs. 52.24 lacs (Previous period Rs. 52.24 lacs).

5) In relation to b (v) above, income tax cases disputed by the Company comprise of:

i) In respect of Assessment Year 1998-99, certain additions were made on normal as well as on book profits. The matter is pending with Honourable High court. The Company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 86.69 lacs (Previous period Rs 86.69 lacs).

ii) In respect of Assessment Year 2002-03, certain additions were made on normal income as well as on book profits. The matter is pending with Assessing Officer for appeal effect. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 68.45 lacs. (Previous period Rs. 23.13 lacs).

iii) In respect of Assessment Year 2003-04, disallowance was made for carry forward losses as well as certain disallowances. The matter is subject to two different appeals. One is pending with the Assessing Officer and other with the Commissioner of Income Tax(Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount involved is Rs.158.01 lacs. (Previous period Rs. 158.01 lacs).

iv) In respect of Assessment Year 2006-07, certain additions were made on normal as well as on book profit. The matter is pending with AO. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 39.52 lacs (Previous period Rs. 39.52 lacs).

v) In respect of Assessment Year 2006-07, under Wealth tax assessment, debts relating to certain taxable assets were disallowed. The matter is pending with Income Tax Appellate Tribunal. The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs 3.90 lacs (Previous period Rs 3.90 lacs).

vi) In respect of Assessment Year 2008-09, certain additions were made on normal profits. The matter is pending with Income Tax Appellate Tribunal. The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs 72.68 lacs. (Previous period Rs 72.68 lacs).

vii) In respect of Assessment Year 2009-1 0, certain additions were made on normal profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs 163.61 lacs. (Previous period Rs 163.61 lacs).

viii) In respect of period starting 01.04.2007 to 31.03.2015, Company has received TDS default notices on account of short deduction/ short payment of tax deduction at Source. The Company believes that defaults should have arisen due to some technical and clerical errors and could be corrected by filing of revised return/correction statements. The amount involved is Rs. 19.06 lacs. (Previous period Rs 27.71 lacs).

ix) In respect of Assessment Year 1999-2000, certain additions were made on normal as well as on book profit. The matter is pending with Honourable Supreme Court. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. The amount for contingent liability for the year is Rs. 83.26 lacs (Previous period Rs. Nil).

x) In respect of Assessment Year 2010-11, certain additions were made on normal profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs 87.26 lacs. (Previous period Rs NIL).

xi) In respect of Assessment Year 2011-12, certain additions were made on normal profits in the draft order. The matter is pending filling objection before DRP The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs 17.85 lacs. (Previous period Rs NIL).

6. Related Party Disclosures

(i) In accordance with the requirement of Accounting Standard (AS - 18) on related party disclosures where control exist and description of the relationship are as follows:

(a) Name of Parties where Control Exists

i) Holding Company

Federal Mogul Holdings Limited (Mauritius)

ii) Subsidiary

Federal-Mogul TPR (India) Limited

iii) Ultimate Holding Company Federal Mogul Corporation, USA

(b) Key managerial personnel

- Mr. Andreas Wilhelm Kolf, Managing Director

- Mr. Sachin Selot, CFO & Whole Time Director

- Mr. Khalid Iqbal Khan, Company Secretary

- Mr. Sunit Kapur, Director

- Mr. Dan Brugger, Whole Time Director (till Feb. 2013)

- Mr. Vikrant Sinha, Whole Time Director (till March 2013)

(c) Fellow subsidiaries

- Federal Mogul Burscheid GMBH, Germany

- Federal Mogul Nurnberg, GMBH (Germany)

- Federal Mogul Holding Deutschland (Germany)

- Federal Mogul Limited (U.K.)

- Federal Mogul Financial Services FRANCTNL (France)

- Federal Mogul Gorzyce, S.A. (Poland)

- Federal Mogul Friedberg, GMBH (Germany)

- Federal Mogul Sintered Products Ltd. (U.K.)

- Federal Mogul Friction Products Ltd (Thailand)

- Federal Mogul Thailand Manufacturina Ayutthaya, (Thailand)

- Federal Mogul France, S.A. (France)

- Federal Mogul Corporation, Garennes (France)

- Federal Mogul (Shanghai)

- Federal Mogul Friction Products Ltd.

- Federal Mogul Worldwide Aftermarket

- Federal Mogul Sistemas Brazil

-Federal Mogul Dongsuh Piston Co. Ltd. (China)

- Federal Mogul Bradford Ltd.

- Federal Mogul Powertrain Sparta, MII

- Federal Mogul KK Yokohama

- Federal Mogul Powertrain Inc, Southbend

- Federal Mogul Chasseneuil

- Federal Mogul Kontich

- Federal Mogul Bearings India Ltd (India)

- Federal-Mogul Ignition Products India Ltd (India) (Formerly Federal Mogul Automotive Product (India) Pvt Ltd.)

- Federal-Mogul Motorparts Ltd. (India) (Formerly known as Federal Mogul VSP India Ltd.)

- Federal-Mogul PTSB India Pvt. Ltd. (India) (Formerly known as Federal-Mogul Trading India Pvt. Ltd.)

(d) Associates

GI Power Ltd.

Those transactions along with related party balances for fifteen months ended 31 March 201 5 and year ended 31 December 201 3 are presented in the following table:

a) Assets taken under operating lease

The Company has taken office and residential facilities under cancellable and non-cancellable operating leases, which are renewable on a periodic basis and have escalations ranging from 5% to 15% per annum

37. Disclosures in accordance with AS-15 on "Employee Benefits"

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services, gets a gratuity on departure at 15 days basic salary (last drawn) for each completed year of service on terms not less favourable than the provisions of the payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan.

Statement of Profit and Loss

Net employee benefit expense (recognized in Employee cost) [AS15 Revised (c) (i) to (x)]

The Company''s expected contribution to the fund in the next year is not presently ascertainable and hence, the contribution expected to be paid during the annual period beginning after the balance sheet date as required by para 120(o) of the accounting standard 15(revised) on employee benefits has not been disclosed.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:-

The estimates of seniority, future salary increases, considered in actuarial valuation, take account of price inflation, promotions and other relevant factors, such as supply and demand in the employment market.

Note (a) : the overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Amount for the current year and previous four years are as follows:

7. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

The Micro, small and medium enterprises have been identified by the Company from the available information, which has been relied upon by the auditors. According to such identification, the disclosures in respect to Micro and Small Enterprises as per MSMED Act, 2006 is as follows:

8. Expenses capitalised

The Company has capitalized various expenses incurred in the course of construction of self generated assets in accordance with AS 10 -Accounting for Fixed Assets, the details of expenses capitalized for the purpose of construction of self generated assets are as follows:

9. Provision for regulatory matters

The Company had commenced an evaluation process for various regulatory matters at its factories in December 2010. Based on more accurate information discovered, a provision, towards costs to be incurred to remediate these matters, of Rs. 355.05 lacs is included under Note no. 8 for provisions which are net of amounts utilized of Rs. 810.00 lacs during the year towards remediation.

In addition to the above, the provision for regulatory matters includes a provision of Rs.922.23 lacs towards certain other regulatory matters.

The Company is actively seeking to resolve these actual and potential statutory, taxation, regulatory and contractual obligations. In accordance with requirements of Accounting Standard 29 on ''Provisions, Contingent liability and Contingent assets'' issued by the Institute of Chartered Accountants of India, although difficult to quantify based on the complexity of the issues, the Company has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information and best professional judgment of experts appointed for this exercise.

Based on consultations obtained from the experts in respect of the said matters, in management''s view, no further costs are expected to be incurred for which a provision would be required at this stage and considers the provisions made to be adequate.

10. Management support charges

For the period 1 January 2014 till 31 March 2015, the Company has paid management support charges to its group companies of Rs 774.68 lacs in respect of certain application engineering services provided to the Company. The Company carries out its transfer pricing study annually for the tax period of April- March and updates its documentation, choice of methods and benchmarks to ascertain adequacy and compliance with the "arms length" principles prescribed under Income Tax Act. For the year April 1, 2014 to March 31, 2015, the process of updation is ongoing and management is confident of completing the same before filing tax return for the same. The provision for current tax has been made accordingly considering the said amounts of Rs. 774.68 lacs as "allowable expenditure".

11 Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the ''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s domestic and international transactions are at arm''s length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

12. (a) Excess provision written back includes income on account of reversal of provision for diminution in value of investment in GI Power of Rs 876.44 Lacs.

The provision has been reversed during the period because the Company has sold the investment.

(b). During the period the Company has entered into Power Purchase Agreement with Real Captive Power Private Limited (RCP) and paid Rs 850 lacs as security deposit which is recoverable in 5 equal instalments beginning from 7th to 11th year. RCP is a newly incorporated enterprise and, as such, recoverability of the security deposit will solely be dependent on the financial position of RCP at the time of repayment. The management believes that purchase of power from RCP would result into savings. On conservative basis, the Company has created a provision for security deposit of Rs 850 Lacs.

13. Corporate social responsibility

a) Gross amount required to be spent by the company during the year in compliance with section 135 of the Act is Rs. 57.35 lacs.

b) Amount spent during the year on-

1. Name of the Subsidiary Companies Federal-Mogul TPR (India) Limited

2. Financial Year of the Subsidiary 31st March, 2015 Companies ended on

3. Holding Company''s Interest Holders of 51,00,000 Equity Shares out of the Subscribed and Paid up Capital of the 1,00,00,000 Equity shares of Rs.10/- each (51%)

4. Net Aggregate amount of Profit Less Losses of the subsidiary Companies so far as it concerns the Members of Federal-Mogul Goetze (India) Ltd

a] Not dealt with in the Accounts

of Federal-Mogul Goetze (India) Ltd.

i) for the subsidiary''s financial year above referred Rs. 1171.07 Lacs

ii) for previous financial years of subsidiary since it became subsidiary of Federal-Mogul Goetze (India) Ltd. Rs 2409.17 Lacs

b] Dealt with the Accounts of Federal -Mogul Goetze (India) Ltd.

i) for the subsidiary''s financial year above referred Nil

ii) for previous financial years of subsidiary since it became subsidiary of Federal-Mogul

Goetze (India) Ltd. Nil

Dec 31, 2013

1.Corporate Information

Federal-Mogul Goetze (India) Limited (''FMGIL'' or ''the Company''), is inter-alia engaged in the manufacture, supply and distribution of ''automotive components'' used in two/three/four wheeler automobiles.

The principal facilities of the Company are located at Patiala (Punjab), Bengaluru (Karnataka) and Bhiwadi (Rajasthan), with its registered office in Delhi. The Company is listed at National Stock Exchange and Bombay Stock Exchange of India.

Federal Mogul Holdings Limited, Mauritius, is the immediate parent company and ultimate parent company is Federal Mogul Corporation, USA.

2. Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with the General Circular 15/ 2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.The financial statements have been prepared on an accrual basis and under the historical cost convention.

3. Segment Information

Based on the guiding principles given in AS-17 ''Segmental Reporting'' notified under Companies (Accounting Standard) Rules, 2006, the Company''s primary business segment is manufacturing of auto components. Considering the nature of Company''s business and operations, there are no separate reportable business segment, as there is only one business segment and hence, there are no additional disclosures required to be provided other than those already been provided in the financial statements.

The analysis of geographical segment is based on the geographical location of the customers. The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced.

4. Capital and other commitments

Total estimated amount of contracts, remaining to be executed on capital account and not provided for as at 31 December 2013 is Rs. 1,093.67 lacs (Previous year Rs. 982.57 lacs)

5. Contingent liabilities

(a) Bank guarantees 554.54 1,378.66

(b) Claims/notices contested by the Company

(i) Excise duty and service tax # 687.20 217.70

(ii) Sales tax # 1,781.70 579.88

(iii) Employee related cases 242.99 201.36

(iv) Electricity demand 52.24 52.24

(v) Income tax demands # 609.55 629.95

# The management is of the opinion that the appeals will be allowed in favor of the Company and hence no provision is required for the above.

1) In relation to b (i) above, Excise duty cases contested by the Company comprise of :

i) Matters pending with Joint Commissioner, Central Excise , Bangaluru in respect of four show cause notice amounting to Rs.33.73 lacs. in which excise duty was demanded on the differential discount which was given to stockiest for the period from FY 2000 to 2004.

ii) Matter is pending with CESTAT, Bangaluru is respect of notice issued towards disallowing the Cenvat Credit taken twice on the invoices for the period FY 2006-2007 amounting to Rs. 5.03 lacs.

iii) Matter is pending with CESTAT, Bangaluru in respect of show cause notice amounting to Rs. 8.57 lacs issued for non-payment of excise duty on the removal of obsolete items ( piston ) without payment of duty and permission for the period FY 2005-06.

iv) Matter is pending with CESTAT, Bangaluru in respect of show cause notice issued for turn over discount amounting to Rs. 42.71 lacs.

v) Matter is pending with CESTAT, Delhi in respect two show cause notices received at Patiala plant amounting to Rs. 14.02 lacs for the interest amount on the reversal of SAD taken wrongly for the period FY 2000-2001.

vi) Matter is pending with Joint Commissioner, Excise in respect of show cause notice received for the excise duty amounting to Rs. 6.96 lacs for the period FY 1998-99.

vii) Matter is pending with the High Court, in respect of a show cause notice amounting to Rs. 9.34 lacs on disallowance of excise credit on the ground that credit does not fall in the category of input category for the period from FY 1987 to 1990.

viii) Matter is pending with he Supreme Court in the valuation case where two notices were issued to Patiala plant where department alleged on the job work valuation for an amount of Rs.15.13 lacs.

1) In relation to b (i) above, Service tax cases contested by the Company comprise of:

i) Matter is pending with CESTAT, Bangaluru in respect of notice for the period FY 2006-2007 amounting to Rs. 86.44 lacs wherein disallowed the service tax credit taken on Input Service Distributor invoices received from Gurgaon.

ii) Matter is pending with CESTAT, Bangaluru in respect of notice for the period FY 2005-2006 amounting to Rs. 113.70 lacs wherein service tax credit was disallowed for on account of non-availability of service invoices.

iii) Matter is pending with Joint Commissioner, Service Tax, in respect of seven show cause notices at Patiala plant for disallowance of service tax credit on various services for the period from FY 2005 to 2011 amounting to Rs.96.11 Lacs.

iv) Matter is pending with the Commissioner (Appeal ), Central Excise, Chandigarh for a show cause notice for demanding the service tax credit taken on the inward and outward freight received for the period from FY 2005 to 2008 amounting to Rs.7.09 Lacs.

v) Matters are pending with Joint Commissioner & Additional Commissioner, Service Tax, Jaipur for seven show cause notices received for the disallowance of service tax credit amounting to Rs. 79.02 lacs for the period from FY 2009 to 2012.

vi) Matter is pending on the show cause notice received from Commissioner Gurgaon office for service tax demand for the period from FY 2005 to 2011 amounting to Rs.134.18 Lacs

vii) Matter is pending Additional Commissioner, in respect of a show cause notice for disallowing service tax credit of Rs.35.12 Lacs taken on the service tax payment on the royalty remittances made to overseas for the period 2008-2012.

2) In relation of b (ii) above, sales tax cases contested by the Company comprise of :

i) Matter is pending with Hon''ble Karnataka High Court where sales tax demand amounting to Rs. 442.92 lacs was raised on the classification issue/ rates difference on product "Groove Insert Casting" for Sales tax matter is pending for assessment year 1996-97 to 2001-02.

ii) Matter is pending with the Hon''ble High Court , Karnataka on sales tax demand notice for the period FY 2005-06 for the sales tax rate difference charged on the Piston amounting to Rs. 278.50 lacs. The company so far has made an under protest payment of Rs.55 Lacs in this matter.

iii) Matters are pending on the five sales tax demand order issued by Rajasthan Sales tax Department for amounting Rs.486.35 Lacs on account of non- submission of statutory form in the last five assessment of 2007-2012. Company has made a provision of Rs.17 Lacs for the forms and other issue where tax liability may arise.

iv) Matter is pending with Joint Commissioner, Ghaziabad for the sales tax demand of Rs.82.78 Lacs for the financial year 2007-08 on account of several issues like rate differences, disallowance of central sales, stock transfer and best judgment sales. Company has deposited Rs.47.54 Lacs in this case. Hearing awaited and company expect that tax demand may get reduce further after submission of documents.

v) Matter is pending with Joint Commissioner, Sales / Commercial Tax, Ghaziabad for the sales tax demand on the disallowance of stock transfer of Rs. 32.11 Lacs for the FY 2012-13.

vi) Matter is pending with Additional Commissioner, Delhi for the sales tax demand of Rs. 613.92 Lacs on the four notices issued on best judgment basis for various reasons including disallowance of stock transfer, Central sale and penalty on the above. One issue is related to sale of fixed assets where sales tax demand would be Rs.171 lacs out of total tax demand. Company made a provision of Rs. 171 lacs. The case is pending with hearing and related to financial year 2007-08.

vii) Matter is pending with Additional Commissioner, Delhi for the FY 2008-09 which issue demand notice amounting Rs. 73.44 lacs on the basis of best judgment.

viii) Matter is pending with Sales tax, Patna for the sales tax demand of Rs.25.66 Lacs on account of non-availabilities of few documents.

ix) Matter is pending with Kolkata sales tax authorities on various reason for period from FY 2001-02,2004-05 & 2006-07 for the sales tax demand of Rs.6.37 Lacs on account of disallowance of sale returns, warranty material and stock transfer forms.

x) Matter is pending with Maharashtra Sales tax in respect of Tax demand notice received amounting to Rs.30.19 Lacs on non-submission of forms F and matter is pending with next appellate authorities.

xi) Matters are pending before the Karnataka VAT on the entry tax payment on the capital assets where tax authorities demanding entry tax along with interest amount. Similar case is pending before the Supreme Court for decision. In this case, company started paying entry tax and only interest liability is remaining. Company made a provision in the books for the interest liability of Rs.227 lacs.

6) In relation of b (iii) above, employee related cases comprise of:

Claims against the Company not acknowledged as debt, in respect of demands raised by the workers. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 242.99 Lacs. (Previous year Rs. 201.36 Lacs)

7) In relation to b (iv) above, electricity demand comprise of in respect of a demand raised by Punjab State Electricity Board (PSEB) for various years in relation to availment of additional load. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 52.24 Lacs (Previous year Rs. 52.24 Lacs).

8) In relation to b (v) above, income tax cases disputed by the Company comprise of:

i) The matter is pending with High court in respect of Assessment Year 1998-99, certain additions were made on normal as well as on book profits. The amount involved is Rs 86.69 Lacs (Previous year Rs 86.69 Lacs).

ii) The matter is pending with Commissioner Income Tax (Appeals) in respect of Assessment Year 2002-03, certain additions were made on normal income as well as on book profits. The amount for contingent liability for the year is Rs. 23.13 Lacs. (Previous year Rs. 23.13 Lacs).

iii) The matter is pending with Income Tax Appellate Tribunal in respect of Assessment Year 2003-04, disallowance was made for carry forward losses as well as certain disallowances. The amount involved is Rs.158.01 Lacs. (Previous year Rs. 158.01 Lacs).

iv) The matter is pending with Income Tax Appellate Tribunal in respect of Assessment Year 2005-06, certain additions were made on normal as well as on book profit. The amount for contingent liability for the year is Rs. 2.00 Lacs (Previous year Rs. 38.42 Lacs).

v) The matter is pending with Income Tax Appellate Tribunal in respect of Assessment Year 2006-07, certain additions were made on normal as well as on book profit. The amount for contingent liability for the year is Rs. 39.52 Lacs (Previous year Rs. 39.52 Lacs)

vi) The matter is pending with Commissioner Income Tax (Appeals) in respect of Assessment Year 2007-08, certain additions were made on normal profits. The amount involved is Rs 32.79 Lacs (Previous Year Rs 32.79 Lacs).

vii) The matter is pending with Income Tax Appellate Tribunal in respect of Assessment Year 2007-08, under Wealth tax assessment, debts relating to certain taxable assets were disallowed. The amount involved is Rs 3.90 Lacs (Previous Year Rs NIL Lacs).

viii) The matter is pending with Income Tax Appellate Tribunal in respect of Assessment Year 2008-09, certain additions were made on normal profits. The amount involved is Rs 72.68 Lacs. (Previous Year Rs. 227.l3 Lacs).

ix) The matter is pending with Commissioner Income Tax (Appeals) in respect of Assessment Year 2009-10, certain additions were made on normal profits. The amount involved is Rs 163.61 Lacs. (Previous Year Rs NIL).

x) In respect of Assessment Year 2007-08, company has received TDS default notices on account of short deduction/ short payment of tax deduction at Source. The company believes that defaults should have arisen due to some technical and clerical errors and could be corrected by filing of revised return. The amount involved is Rs. 7.51 Lacs.

xi) In respect of Assessment Year 2013-14, company has received TDS default notices on account of short deduction/ short payment of tax deduction at Source. The company believes that defaults should have arisen due to some technical and clerical errors and could be corrected by filing of revised return. The amount involved is Rs. 19.71 Lacs.

xii) In respect of Assessment Year 2000-01, certain additions were made on normal as well as on book profits. The matter is pending with Honorable High Court is Rs. Nil (Previous year Rs. 21.21 Lacs).

xiii) In respect of Assessment Year 2001-02, certain additions were made on normal as well as on book profit. The matter is pending with Honorable High Court is Rs. Nil (Previous year Rs. 3.05 Lacs).

9. Related Party Disclosures

(i) In accordance with the requirement of Accounting Standard (AS - 18) on related party disclosures where control exist and description of the relationship are as follows:

(a) Name of Parties where Control Exists

i) Holding Company Federal Mogul Holdings Limited (Mauritius)

ii) Subsidiary Federal-Mogul TPR (India) Limited

iii) Ultimate Holding Company Federal Mogul Corporation, USA

(b) Key managerial personnel

- Mr. Sunit Kapur, Managing Director & President (Till 5 November 2013)

- Mr. Dan Brugger, Whole Time Director & CFO (Till 28 February 2013)

- Mr. Vikrant Sinha, Whole time Director & CFO (w.e.f. 28 February 2013 till 31 March 2013)

- Mr. Andreas Kolf, Managing Director (w.e.f. 6 November 2013)

- Mr. Sachin Selot, Whole time Director & CFO (w.e.f. 6 November 2013)

(c) Fellow subsidiaries

- Federal Mogul Burscheid GMBH, Germany

- Federal Mogul Nurnberg, GMBH (Germany)

- Federal Mogul Holding Deutschland (Germany)

- Federal Mogul Financial Services FRANCTNL (France)

- Federal Mogul Gorzyce, S.A. (Poland)

- Federal Mogul Sintered Products Ltd. (U.K.)

- Federal Mogul Friction Products Ltd (Thailand)

- Federal Mogul Bearings India Ltd (India)

- Federal-Mogul Automotive Products India Ltd (India)

- Federal-Mogul VSP India Ltd. (India)

- Federal-Mogul PTSB India Pvt. Ltd. (India)

(d) Associates

GTZ Securities Limited

10. Disclosures in accordance with AS-15 on "Employee Benefits"

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services, gets a gratuity on departure at 15 days basic salary (last drawn) for each completed year of service on terms not less favorable than the provisions of the payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan.

11. Non fulfillment of export obligation under Export promotion Capital Goods (EPCG) Licenses

The Company had obtained certain licenses under Export Promotion Capital Goods scheme against which the Company has fulfilled the entire export obligation (levied in lieu of permission to import fixed assets at a concessional rate of import duty). Accordingly, provision created in the books for shortfall in export obligation if any,(included as ''Provision for non fulfillment of export obligation'' in provisions under note 8) has been reversed in August 2013.

12. Provision for regulatory matters

The Company had commenced an evaluation process for various regulatory matters at its factories in December 2010. Based on more accurate information discovered, a provision, towards costs to be incurred to remediate these matters, of Rs. 370.80 lacs is included under note no. 8 for provisions which are net of amounts utilized of Rs. 539.15 lacs during the year towards remediation.

In addition to the above, the provision for regulatory matters includes a provision of Rs.842.51 lacs towards certain other regulatory matters.

The Company is actively seeking to resolve these actual and potential statutory, taxation, regulatory and contractual obligations. In accordance with requirements of Accounting Standard 29 on ''Provisions, Contingent liability and Contingent assets'' issued by the Institute of Chartered Accountants of India, although difficult to quantify based on the complexity of the issues, the Company has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information and best professional judgment of experts appointed for this exercise.

Based on consultations obtained from the experts in respect of the said matters, in management''s view, no further costs are expected to be incurred for which a provision would be required at this stage and considers the provisions made to be adequate.

13. Management support charges and other transactions with associated entities

In December 2013, the Company has paid management support charges to its group companies of Rs 631.51 lacs in respect of certain application engineering services provided to the Company. The Company has also purchased/supplied goods/services to other group entiites. The Company carries out its transfer pricing study annually for the tax period of April-March and updates its documentation, choice of methods and benchmarks to ascertain adequacy and compliance with the "arms length" principles prescribed under Income Tax Act. For the year 1 April 2013 to 31 March 2014, the process of updating is ongoing and management is confident of completing the same and is of the view that no additional tax provision is required to be recorded in this regard.

14. Investments in G.I. Power Corporation Limited

The Company is holding an investment of Rs. 1,070.92 lacs (equity shares: Rs. 194.48 lacs and preference shares: Rs. 876.44 lacs) in GI Power Corporation Limited (GIPCL). Since the Company is not confident that it would be able to recover the entire carrying value of these investments a provision of Rs. 1070.92 lacs (representing the full cost of these investments) had been created during the previous year. The Company has been assessing various options for liquidating these investments as these are not related to the core business of the Company.

15. Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the ''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

16. Previous year number has been regrouped/reclassified wherever considered necessary.

Dec 31, 2012

1. a) Corporate Information

Federal-Mogul Goetze (India) Limited (''FMGIL'' or ''the Company''), is inter-alia engaged in the manufacture, supply and distribution of ''automotive components'' used in two/three/four wheeler automobiles.

The principal facilities of the Company are located at Patiala (Punjab), Bengaluru (Karnataka) and Bhiwadi (Rajasthan), with its registered office in Delhi. The Company is listed at National Stock Exchange of India Limited and Bombay Stock Exchange.

Federal Mogul Holdings Limited, Mauritius, is the immediate parent company and ultimate parent company is Federal Mogul Corporation, USA.

b) Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

During the year ended 31 December 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year

(a) There is no movement in equity share capital during the current year and previous year.

(b) Right/preferences/restriction attached to equity shares.

The Company has only one class of equity shares having 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. The distribution will be in proportion to the number of equity shares held by the shareholders.

(c) List of shareholders holding more than 5% of the equity share capital of the Company at the beginning and at the end of the reporting year.

(e) The Company has not issued any equity shares pursuant to any contract without payment being received in cash, allotted as fully paid up by way of bonus issues and bought back during the last five years

1. Indian rupee loan from banks carries interest @ 15.70% p.a. The loan is repayable in monthly instalments of Rs. 33.33 lacs each along with interest, from the date of the loan, viz., December 15, 2009. The loan is secured by first parri passu charge on entire fixed assets of the Company including land and building and whole of moveable assets of the Company including plant & machinery, spares, tools and accessories, furniture & fixtures and other moveable assets of the Company.

2. Current maturities of long term borrowings amounting to Rs. 400 lacs (Previous year: Rs. 400 lacs) are included under the head (''Other current liabilities'').

3. Segment Information

Based on the guiding principles given in AS-17 ''Segmental Reporting'' notified under Companies (Accounting Standard) Rules, 2006, the Company''s primary business segment is manufacturing of auto components. Considering the nature of Company''s business and operations, there are no separate reportable business segment, as there is only one business segment and hence, there are no additional disclosures required to be provided other than those already been provided in the financial statements.

The analysis of geographical segment is based on the geographical location of the customers. The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced.

Geographical segment

Net sales revenue (including trading sales but excluding excise duty) by geographical market

The Company has common assets for producing goods for India and outside countries. Hence, separate figures for assets/ additions to fixed assets cannot be furnished.

4. Capital and other commitments

Total estimated amount of contracts, remaining to be executed on capital account and not provided for as at 31 December 2012 is Rs: 982.57 lacs (Previous year Rs: 4,359.65 lacs)

5. Contingent liabilities

(a) Bank guarantees 1,378.66 949.88

(b) Claims/notices contested by the Company

(i) Excise duty 217.70 155.27

(ii) Sales tax 579.88 405.91

(iii) Employee related cases 201.36 136.18

(iv) Electricity demand 52.24 52.24

(v) Income tax demands 629.95 648.13

1) In relation to b (i) above, Excise duty cases contested by the Company comprise of:

i) The deputy commissioner of Central Excise, Banguluru, confirming the demand in respect of excess availment of Cenvat credit during the FY 2005-06.The Company has not filed an appeal against this decision and paid the demand. Since, the amount of demand is already paid, contingency existing as on date is NIL (Previous year Rs. 0.93 lacs)

ii) Matter was pending with Central Excise & Service Tax Appellate Tribunal, Chandigarh in respect of service tax on transport services for the period 2007-08 and which was favourably decided in Company''s favour. Contingency existing as on date is NIL (Previous year Rs.2.92 lacs).

iii) Matters pending with Central Excise & Service Tax Appellate Tribunal in respect of interest on reversal of special additional duty (SAD) for 2000-01. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. Amount involved is Rs. 14.02 lacs. (Previous year Rs. 14.02 lacs).

iv) Miscellaneous service tax cases with respect to disallowance of Cenvat credit claimed on various input services are pending with Cestat Banguluru/ Joint Commissioner Jaipur/ Joint Commissioner Patiala for the period 2005-06 to 2010-11. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. Amount involved is Rs. 203.68 lacs (Previous year Rs. 137.40 lacs).

2) In relation of b (ii) above, sales tax cases contested by the Company comprise of:

i) In respect of Assessment Year 1996-97 to 2001-02, the department raised a demand on account of differences in sales tax rates. The matter is pending with Karnataka Honourable Hight Court. The Company has taken legal opinion in this regard and is confident of success. Amount involved is Rs. 301.38 lacs. (Previous year Rs. 315.21 lacs). The Company has so far made an ''under protest payment'' of Rs. 215.87 lacs in this matter.

ii) In respect of Assessment Year 2005-06, the department raised a demand on account of differences in sales tax rates. The Honourable Hight Court has favourably decided this matter in Company''s favour, but later the department filed writ appeal against said order and this matter is pending with Karnataka Honourable Hight Court. The Company has taken legal opinion in this regard and is confident of favourable outcome. Amount involved is Rs.278.50 lacs. (Previous year Rs. 90.70 lacs). The Company so far has made an ''under protest payment'' of Rs.55 lacs in this matter.

3) In relation of b (iii) above, employee related cases comprise of:

Claims against the Company not acknowledged as debt, in respect of demands raised by the workers. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. Amount involved is Rs.201.36 lacs. (Previous year Rs. 136.18 lacs)

4) In relation to b (iv) above, electricity demand comprise of:"In respect of a demand raised by Punjab Electricity Board (PSEB) for various years in relation to availment of additional load. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. Amount involved is Rs. 52.24 lacs (Previous year Rs. 52.24 lacs).

5) In relation to b (v) above, income tax cases disputed by the Company comprise of:

i) In respect of Assessment Year 1998-99, certain additions were made on normal as well as on book profits. The matter is pending with Honourable Hight Court. The Company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 86.69 Lacs (Previous year Rs 86.69 Lacs).

ii) In respect of Assessment Year 2000-01, certain additions were made on normal as well as on book profits. The matter is pending with Honourable Hight Court. The Company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 21.21 Lacs (Previous year Rs 21.21 Lacs).

iii) In respect of Assessment Year 2001-02, certain additions were made on normal as well as on book profit. The matter is pending with Honourable Hight Court. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. The amount for contingent liability for the year is Rs. 3.05 lacs (Previous year Rs. 8.14 lacs).

iv) In respect of Assessment Year 2002-03, certain additions were made on normal income as well as on book profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. The amount for contingent liability for the year is Rs. 23.13 lacs. (Previous year Rs. 23.13 lacs).

v) In respect of Assessment Year 2003-04, disallowance was made for carry forward losses as well as certain disallowances. The matter is pending with Income Tax Appellate Tribunal. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. The amount involved is Rs.158.01 lacs. (Previous year Rs. 158.01 lacs).

vi) In respect of Assessment Year 2004-05, certain additions were made on normal income. The Income Tax Appellate Tribunal has decided the matter in Company''s favour. The amount of contingency for the year is Rs. NIL. (Previous year Rs. 13.05 lacs)

vii) In respect of Assessment Year 2005-06, certain additions were made on normal as well as on book profit. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. The amount for contingent liability for the year is Rs. 38.42 lacs (Previous year Rs. 38.42 lacs).

viii) In respect of Assessment Year 2006-07, certain additions were made on normal as well as on book profit. The matter is pending with Income Tax Appellate Tribunal. The Company has done an analysis and is of the opinion that it has fair chance of a favourable decision. The amount for contingent liability for the year is Rs. 39.52 lacs (Previous year Rs. 39.52 lacs).

ix) In respect of Assessment Year 2007-08, certain additions were made on normal profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 32.79 Lacs (Previous Year Rs 32.79 Lacs).

x) In respect of Assessment Year 2008-09, certain additions were made on normal profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 227.13 Lacs. (Previous Year Rs 227.13 lacs).

6. In accordance with the requirement of Accounting Standard (AS - 18) on related party disclosures where control exist and description of the relationship are as follows:

(a) Name of Parties where Control Exists

i) Holding Company

Federal Mogul Holdings Limited (Mauritius)

ii) Subsidiary

Federal-Mogul TPR (India) Limited

iii) Ultimate Holding Company

Federal Mogul Corporation, USA

(b) Key managerial personnel*

Mr. Sunit Kapur, Managing Director

Mr. Dan Brugger, Whole Time Director & CFO

(c) Fellow subsidiaries

Federal Mogul Burscheid GMBH, Germany

Federal Mogul Maysville (USA)

Federal Mogul Operation S.R.L (Italy)

Federal Mogul Bimet S.A. (Poland)

Federal Mogul Nurnberg, GMBH (Germany)

Federal Mogul Wiesbaden GMBH, (Germany)

Federal Mogul Power Train System (South Africa)

Federal Mogul Holding Deutschland (Germany)

Federal Mogul Valves (PTY) Ltd (South Africa)

Federal Mogul Limited (U.K.)

Federal Mogul KK (Japan)

SSCFRAN FM Financial Services SAS Veurey Voroize (France)

Federal Mogul Financial Services FRANCTNL (France)

Federal Mogul Gorzyce, S.A. (Poland)

Federal Mogul Friedberg, GMBH (Germany)

Federal Mogul Sintered Products Ltd. (U.K.)

Federal Mogul Sealing Systems, GMBH (Germany)

Federal Mogul Brasil do Limited (Brazil)

Federal Mogul Friction Products Ltd (Thailand)

Federal Mogul Corporation Power Train Systems (USA)

Federal Mogul Power Train Systems Schofield (USA)

Federal Mogul S.A.R.L. (Switzerland)

Federal Mogul France, S.A. (France)

Federal Mogul Corporation, Lake City (USA)

Federal Mogul Corporation, Garennes (France)

Federal Mogul Dongsuh Piston Co. Ltd. (China)

Federal Mogul Corp, Mgmoogus (USA)

KFM Bearing Company (South Korea)

Federal Mogul Bradford Ltd.

T&N Limited Manchester (England)

Federal Mogul Powertrain Spara, MII

Federal Mogul KK Yokohama

Federal Mogul Sintertech SVC Functionnels

Federal Mogul Powertrain Inc, Southbend

Federal Mogul Kontich

Federal Mogul Schofield

Federal Mogul Bearings India Ltd (India)

Federal-Mogul Automotive Products India Ltd (India) (Formerly Federal Mogul Automotive Product (India) Pvt Ltd.)

Federal-Mogul VSP India Ltd. (India) (Formerly known as Ferodo India Pvt. Ltd.)

Federal-Mogul PTSB India Pvt. Ltd. (India) (Formerly known as Federal-Mogul Trading India Pvt. Ltd.)

(d) Associates

GTZ Securities Limited

*Mr. Dan Brugger. Whole Time Director and CFO has resigned w.e.f 28 February 2013 and Mr. Vikrant Sinha has been appointed as Whole Time Director and CFO of the Company w.e.f 28 February 2013.

Those transactions along with related balances as at 31 December 2012 and 31 December 2011 and for the years then ended are presented in the following table:

7. Disclosures in accordance with AS-15 on "Employee Benefits"

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services, gets a gratuity on departure at 15 days basic salary (last drawn) for each completed year of service on terms not less favourable than the provisions of the payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy."The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan."

8. Non fulfilment of export obligation under Export promotion Capital Goods (EPCG) Licenses

The Company has identified some licenses obtained under Export Promotion Capital Goods scheme, which have expired and against which the Company has partially fulfilled the export obligation (levied in lieu of permission to import fixed assets at a concessional rate of import duty). In view of partial shortfall in fulfilling export obligation, the management has decided, on prudent basis, to make a provision aggregating to Rs. 186.22 lacs (Previous Year Rs. 214.89 lacs) in these financial statements which in view of the management, is adequate to cover any liability on this account at all its facilities'' and is included as ''Provision for non fulfilment of export obligation'' in Provisions under Note 8.

9. Provision for regulatory matters

During the year ended 31 December 2010, the Company had commenced an evaluation process for various regulatory matters at its factories. Based on more accurate information discovered, a provision, towards costs to be incurred to remediate these matters, of Rs. 383.60 lacs is included under Note no. 8 for provisions which are net of amounts utilized of Rs. 610.53 lacs during the year towards remediation.

During the year, the Company became aware of certain discrepancies regarding sales tax matters at one of its factories. It thereafter undertook a review and based on the information available at this stage of the ongoing evaluation, has paid / provided an amount of Rs. 625.81 lacs [included under Note no. 8 under the head provision for regulatory matters net of payments made of Rs. 398.03 lacs. Provision created during the year relating to this has been disclosed as an exceptional item in the Statement of Profit and Loss.

In addition to the above, the provision for regulatory matters include a provision of Rs.487.68 lacs (Previous Year Rs. 654.96 lacs ) towards certain other regulatory matters.

The Company is actively seeking to resolve these actual and potential statutory, taxation, regulatory and contractual obligations. In accordance with requirements of Accounting Standard 29 on ''Provisions, Contingent liability and Contingent assets'' issued by the Institute of Chartered Accountants of India, although difficult to quantify based on the complexity of the issues, the Company has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information and best professional judgment of experts appointed for this exercise.

Based on consultations obtained from the experts in respect of the said matters, in management''s view, no further costs are expected to be incurred for which a provision would be required at this stage and considers the provisions made to be adequate.

10. Management support charges

In December 2012, the Company has paid management support charges to its group companies of Rs 556.81 lacs in respect of certain application engineering services provided to the Company. The Company carries out its transfer pricing study annually for the tax period of April-March and updates its documentation, choice of methods and benchmarks to ascertain adequacy and compliance with the "arms length" principles prescribed under Income Tax Act. For the year April 1, 2012 to March 31, 2013, the process of updation is ongoing and management is confident of completing the same. The provision for current tax has been made accordingly considering the said amounts of Rs. 556.8 lacs as "allowable expenditure".

11. Change in accounting policy

Till the year ended 31 December 2011, the Company, in accordance with the pre-revised schedule VI requirement, was recognizing dividend declared by subsidiary company after the reporting date in the current year''s Statement of Profit and Loss if such dividend pertained to the period ending on or before the reporting date. The revised schedule VI, applicable for financial years commencing on or after 1 April 2011, does not contain this requirement. Hence, to comply with AS 9 Revenue Recognition, the company has changed its accounting policy for recognition of dividend income from subsidiary companies. In accordance with the revised policy, the company recognized dividend as income only when the right to receive the same is established by the reporting date. Pursuant to this change, loss for the year ended 31 December, 2012 is higher by Rs. 357 lacs

12. Investments in G.I. Power Corporation Limited

The Company is holding an investment of Rs. 1,070.92 lacs (Equity Shares: Rs. 194.48 lacs and Preference Shares: Rs. 876.44 lacs) in GI Power Corporation Limited (GIPCL). During the year ended 31 December 2011, the Company''s shareholding in GIPCL has reduced from 26.00% to 6.60% due to conversion of the preference shares held by other investors into equity shares. Accordingly GIPCL has discontinued to be an ''Associate'' of the Company in the previous year.

In addition to the above, the Company had changed the classification of the investment in GIPCL from long term investment to current investment in the previous year, as the Company had started assessing various options for liquidating these investments as these are not related to the core business of the Company. The recoverability of these Investments is being consistently evaluated and based on current assessment, the Company is not confident that it would be able to recover the entire carrying value of these investments and accordingly a provision of Rs. 1072.25 lacs (representing the full cost of these investments) has been created during the year.

Dec 31, 2011

1. Background

Federal-Mogul Goetze (India) Limited ('FMGIL' or 'the Company'), is inter-alia engaged in the manufacture, supply and distribution of 'automotive components' used in two/three/four wheeler automobiles.

The principal facilities of the company are located at Patiala (Punjab, Bangaluru (Karnataka) and Bhiwadi (Rajasthan), with its registered office in delhi. The Company is listed at National Stock Exchange of India Limited and Mumbai Stock Exchange.

Federal Mogul Holdings Limited, Mauritius, is the immediate parent company and ultimate parent company is Federal Mogul Corporation, USA.

2. Segment Information

Based on the guiding principles given in AS-17 'Segmental Reporting' notified under Companies (Accounting Standard) Rules, 2006, the Company's primary business segment is manufacturing of auto components. Considering the nature of Company's business and operations, there are no separate reportable business segment, as there is only one business segment and hence, there are no additional disclosures required to be provided other than those already provided in the financial statements.

The analysis of geographical segment is based on the geographical location of the customers. The following table shows the distribution of the Company's consolidated sales by geographical market, regardless of where the goods were produced.

3. Related party transactions

During the year under review, the Company has entered into transactions with related parties. Name of Parties where Control Exists

i) Holding Company

- Federal Mogul Holdings Limited (Mauritius)

ii) Subsidiary

- Federal-Mogul TPR (India) Limited

iii) Ultimate Holding Company

- Federal Mogul Corporation, USA.

Name of related Parties where transactions have taken place

i) Key managerial personnel

- Mr. Jean De Montleur, Managing Director & President

- Mr. Dan Brugger, Whole Time Director & CFO

4. Contingent liabilities not provided for:

Particulars Year ended Year ended December 31, 2011 December 31, 2010 (Rs in lacs) (Rs in lacs)

(a) Bank Guarantees 949.88 457.47

(b) Claims/notices contested by the company

i) Excise duty 155.27 17.87

ii) Sales Tax 405.91 405.91

iii) Employee Related Cases 136.18 102.44

iv) Electricity Demand 52.24 52.24

v) Income Tax Demands 648.13 420.96

vi) Consumer Cases (settled during the current year) - 30.91

c) In relation to b (i) above, Excise Duty cases contested by the Company comprise of:

a) Matter pending with Deputy Commissioner of Central Excise, Bangalore, in respect of excess availment of Cenvat credit. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount involved is Rs 0.93 lacs (Previous year Rs. 0.93 lacs)

b) Matters pending with Central Excise & Service Tax Appellate Tribunal, Chandigarh in respect of Service Tax on Transport Services for the period 2007-08. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 2.92 lacs (Previous year Rs.2.92 lacs).

c) Matters pending with Central Excise & Service Tax Appellate Tribunal in respect of interest on reversal of Special Additional Duty (SAD) for 2000-01. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 14.02 lacs. (Previous year Rs. 14.02 lacs).

d) Miscellaneous Service tax cases in respect disallowance of Cenvat Credit claimed on various input Services are pending with Cestat Bangalore/ Joint Commissioner Jaipur/ Joint Commissioner Patiala for the period 2005-06 to 2010-11. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 137.40 lacs (Previous year Rs. Nil).

d) In relation of b (ii) above, Sales Tax cases contested by the Company comprise of:

i) In respect of Assessment Year 1996-97 to 2001-02, on account of differences in sales tax rates, (the matter is pending with Karnataka High court. The Company has taken legal opinion in this regard and is confident of success). Amount involved is Rs. 315.21 lacs. (Previous year Rs. 315.21 lacs).

ii) In respect of Assessment Year 2005-06, on account of differences in sales tax rates, (the matter is pending with superintendent audit Banga- lore. The Company has taken legal opinion in this regard and is confident of success). Amount involved is Rs. 90.70 lacs. (Previous year Rs. 90.70 lacs).

e) In relation of b (iii) above, Employee related cases comprise of:

Claims against the Company not acknowledged as debt, in respect of demands raised by the workers. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs.136.18 lacs. (Previous year Rs. 102.44 lacs)

f) In relation to b (iv) above, Electricity demand comprise of:

In respect of a demand raised by Punjab Electricity Board (PSEB) for various years in relation to availment of additional load. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 52.24 lacs (Previous year Rs. 52.24 lacs).

g) In relation to b (v) above, Income Tax cases disputed by the Company comprise of:

i) In respect of Assessment Year 1998-99, certain additions were made on normal as well as on book profits. The matter is pending with High court. The Company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 86.69 Lacs (Previous year Rs 86.69 Lacs).

ii) In respect of Assessment Year 2000-01, certain additions were made on normal as well as on book profits. The matter is pending with High court. The Company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 21.21 Lacs (Previous year Rs 21.21 Lacs).

iii) In respect of Assessment Year 2001-02, certain additions were made on normal as well as on book profit. The matter is pending with High Court. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 8.14 lacs (Previous year Rs. 8.14 lacs).

iv) In respect of Assessment Year 2002-03, certain additions were made on normal income as well as on book profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 23.13 lacs. (Previous year Rs. 23.13 lacs).

v) In respect of Assessment year 2003-04, disallowance was made for carry forward losses as well as certain disallowances. The matter is pending with Income Tax Appellate Tribunal. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount involved is Rs.158.01 lacs. (Previous year Rs. 158.01 lacs).

vi) In respect of Assessment Year 2004-05, certain additions were made on normal income. The matter is pending with Income Tax Appellate Tribunal (the matter has been heard and the order is awaited). The amount of contingency for the year is Rs. 13.05 lacs. (Previous year Rs. 13.05 lacs)

vii) In respect of Assessment Year 2005-06, certain additions were made on normal as well as on book profit. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 38.42 lacs (Previous year Rs. 38.42 lacs).

viii) In respect of Assessment Year 2006-07, certain additions were made on normal as well as on book profit. The matter is pending with Income Tax Appellate Tribunal. During the year, management has done an analysis and is of the opinion that chances of liability getting materialised are high. Hence the Company has created provision for the same. The amount for contingent liability for the year is Rs. 39.52 lacs (Previous year Rs. 39.52 lacs)

ix) In respect of Assessment Year 2007-08, certain additions were made on normal profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs 32.79 Lacs (Previous Year Rs 32.79 Lacs).

x) In respect of Assessment Year 2008-09, certain additions were made on normal profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs 227.17 Lacs. (Previous Year Rs Nil).

*As the liabilities for compensated absences are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the directors are not included above.

b) Personal expenses under schedule 18 include Rs. 197.99 lacs (including Rs. 29.33 lacs pertaining to previous year) towards whole time Finance Direct or and CFO's remuneration for which the company has filed an application in January, 2011 with Central Government for appointment and payment of remuneration for the period November 12, 2010 to November 11, 2015, which was pending for the approval of the Central Govern- ment.

c) During an earlier year, the company has filed an application for approval of excess managerial remuneration to its erstwhile managing director of Rs. 84.14 lacs for the period January 1, 2007 to September 24, 2007 with the Central Government under section 309(3) of the Companies Act, 1956 which was in excess of permissible remuneration under schedule XIII of the Companies Act, 1956. The Company received an approval from Central Government for partial amount of Rs. 45.67 lacs on September 14, 2010, while the approval for balance amount of Rs. 38.47 lacs paid to the erstwhile managing director is awaited.

Pending such approvals, the management believes that no material adjustments are deemed necessary in financial statements in this regard.

5. In accordance with Explanation below Para 10 of Accounting standard 9 notified by Companies (Accounting Standards) Rules, 2006, excise duty on sales amounting to Rs. 9,398.49 lacs (Previous year Rs. 7,218.17 lacs) has been reduced from sales in profit & loss account and excise duty on (decrease)/increase in stock amounting to Rs. 170.40 lacs (Previous year Rs. 140.97) lacs has been considered as expense in the financial statements.

6. Gratuity and other post-employment benefit plans:

a) The Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB) of the Institute of Chartered Accountants of India states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Pending the issuance of the Guidance Note from the Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability. However, the Company, on a conservative basis has made a provision for the deficit in the fund. The deficit accounted for the in the books as on December 31, 2011 is Rs. 50.57 lacs.

b) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The following table summarizes the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans.

7. Non fulfillment of export obligation under Export promotion Capital Goods (EPCG) Licenses

The Company has identified some licenses obtained under Export Promotion Capital Goods scheme, which have expired and against which the Company has partially fulfilled the export obligation (levied in lieu of permission to import fixed assets at a concessional rate of import duty). In view of partial shortfall in fulfilling export obligation, the management has decided, on prudent basis, to make a provision aggregating to Rs. 214.89 lacs (Previous Year Rs. 932.32 lacs) in these financial statements which in view of the management, is adequate to cover any liability on this account at alrits facilities' and is included as 'Provision for non fulfillment of export obligation' in Provisions under schedule 14.

As at December 31, 2011, the Company has export benefits receivable of Rs. 695.94 lacs, of which Rs 315.26 lacs is outstanding in respect of export invoices over one year, due to delay in fulfillment of export obligations as explained above. The management believes that such recognition is in accordance with relevant accounting guidance and basis an expert opinion, there is reasonable certainty of its ultimate realization and no adjustments are deemed necessary in financial statements in this regard.

8. Provision for regulatory matters

During the year ended December 31, 2010, the Company had commenced an evaluation process for various regulatory matters at its factories. Based on more accurate information discovered, a provision, towards costs to be incurred to remediate these matters, of Rs. 288.30 lacs is included under Schedule no. 14 for provisions which are net of amounts utilized of Rs. 269.75 lacs during the year towards remediation. Further, the Company has also recognized a provision of Rs 654.96 lacs (including interest of Rs. 357.37 lacs) against certain other regulatory matters. The Company is actively seeking to resolve these actual and potential statutory, taxation regulatory, and contractual obligations. In accordance with requirements of Accounting Standard 29 on 'Provisions, Contingent liability and Contingent assets' issued by the Institute of Chartered Accountants of India, although difficult to quantify based on the complexity of the issues, the Company has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information and best professional judgment of experts appointed for this exercise.

Based on consultations obtained from the experts in respect of the said matters, in management's view, no further costs are expected to be incurred to remediate for which a provision would be required at this stage and considers the provisions made to be adequate

9. Management support charges

In December 2011, the Company has received management support charges from its group companies of Rs 498.52 lacs in respect of certain application engineering rendered by the Company. Further, the charges amounting to Rs. 354.40 lacs (on net basis) in respect of certain other set of services received from the parent company, which were accounted for by the Company for the period January 1, 2011 to September 30, 2011, have been reversed as these charges have been discontinued by the parent company. The Company carries out its transfer pricing study annually for the tax period of April-March and updates its documentation, choice of methods and benchmarks to ascertain adequacy and compliance with the "arms length" principles prescribed under Income Tax Act. For the year April 1, 2011 to March 31, 2012, the process of updation is ongoing and management is confident of completing the same. The provision for current tax has been made accordingly considering the said amounts of Rs. 498.52 lacs as "allowable expenditure".

10. Investments in G.I. Power Corporation Limited

The Company is holding an investment of Rs. 1,070.92 lacs (Equity Shares: Rs. 194.48 lacs and Preference Shares: Rs. 876.44 lacs) in GI Power Corporation Limited (GIPCL). During the year, the Company's shareholding in GIPCL has reduced from 26.00% to 6.60% due to conversion of the preference shares held by other investors into equity shares. Accordingly GIPCL has discontinued to be an 'Associate' of the Company.

In addition to the above, the Company has now changed the classification the investment in GIPCL from long term investment to current investment, as the Company is assessing various options for liquidating these investments as these are not related to the core business of the Company. Based on current assessment, the Company is confident that it would be able to recover the entire carrying value of these investments and these investments have been carried at cost in the balance sheet in accordance with the requirements of AS-13 "Accounting for Investments".

11. Previous year figures have been regrouped and rearranged wherever necessary to make these comparable.

Dec 31, 2010

1. Background

Federal-Mogul Goetze (India) Limited (FMGIL or the Company1), is inter-alia engaged in the manufacture, supply and distribution of automotive components used in two/three/four wheeler automobiles.

The principal facilities of the Company are located at Patiala (Punjab), Bengaluru (Karnataka) and Bhiwadi (Rajasthan), with its registered office in Delhi. The Company is listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Federal Mogul Holdings Limited, Mauritius, is the immediate parent company and ultimate parent company is Federal Mogul Corporation, USA.

2. Segment Information

Based on the guiding principles given in AS-17 Segmental Reporting notified under Companies (Accounting Standard) Rules, 2006, the Companys primary business segment is manufacturing of auto components. The Company operates in one geographical segment that is "India" and no further disclosures as per AS17 need to be made.

3. Related party transactions

During the year under review, the Company has entered into transactions with related parties. i) Key managerial personnel and their relatives Mr. Jean De Montlaur, Managing Director & President Mr. Rustin Murdock, Whole Time Director (upto June 30, 2010) Mr. Dan Brugger, Whole Time Finance Director (from November 12, 2010) ii) Holding Company

Federal Mogul Holdings Limited (Mauritius)

ii) Fellow subsidiaries

Federal Mogul Burscheid GMBH, Germany.

Federal Mogul Maysville (USA).

Federal Mogul Operation S.R.L (Italy)

Federal Mogul Bimet S.A. (Poland).

Federal Mogul Numberg, GMBH (Germany).

Federal Mogul Wiesbaden GMBH, (Germany)

Federal Mogul Power Train System (South Africa).

Federal Mogul Holding Deutschland (Germany).

Federal Mogul Valves (PTY) Ltd (South Africa).

Federal Mogul Limited (U.K)

Federal Mogul KK (Japan)

SSCFRAN FM Financial Services SAS Veurey Voroize (France).

Federal Mogul Financial Services FRANCTNL (France).

Federal Mogul Gorzyce, S.A (Poland).

Federal Mogul Friedberg, GMBH (Germany).

Federal Mogul Sintered Products Ltd. (U.K.).

Federal Mogul Sealing Systems, GMBH (Germany).

Federal Mogul Brasil do Limited (Brazil)

Federal Mogul Friction Products Ltd (India).

Federal Mogul Corporation Power Train Systems (USA).

- Federal Mogul Plant Van Wert (USA.)

Federal Mogul Power Train Systems Schofield (USA).

Federal Mogul S.A.R.L. (Switzerland)

Federal Mogul France, S.A. (France)

Federal Mogul Corporation, Lake City (USA)

Federal Mogul Corporation, Garennes (France)

Federal Mogul Dongsuh Piston Co. Ltd. (China)

Federal Mogul Corp, Mgmoogus (USA)

KFM Bearing Company (South Korea)

Federal Mogul Bradford Ltd.

Federal Mogul Bearing India Ltd (India)

Federal Mogul Automotive Product (India) Pvt Ltd. (India).

Ferodo India Private Ltd. (India)

Federal Mogul Trading India Pvt. Ltd. (India) iv) Associates

Gl Power Corporation Limited

GTZ Securities Limited

v) Subsidiaries

Federal-Mogul TPR (India) Limited

Satara Rubbers and Chemicals Limited (upto March 31, 2010)

vi) Ultimate Holding Company

Federal Mogul Corporation, USA.

4. Contingent liabilities not provided for:

Particulars Year ended Year ended December 31, 2010 December 31, 2009 (Rs in lacs) (Rs in lacs)

(a) Bank Guarantees 457.47 355.82

(b) Claims/notices contested by the company

i) Excise duty 34.96 47.80

ii) Sales Tax 59.23 59.23

iii) ESI Cases - 14.51

iv) Employee Related Cases 102.44 63.33

v) Electricity Demand 52.24 52.24

vi) Income tax Demands 464.83 651.98

vii) Consumer Cases 30.91 60.91

c) In relation to b (i) above Excise Duty cases contested by the Company comprise of:

i) Matter pending with Central Excise & Service Tax Appellate Tribunal (CESTAT) in respect of valuation rates employed for certain products sold by the Company for the period 2004-2005 & 2005-2006. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount involved is Rs 0.93 lacs (Previous year Rs. 0.93 lacs)

ii) Miscellaneous Excise Cases in respect of MODVAT credits are pending with Deputy Commissioner Central Excise Patiala (DCCE PTA)/ Addi- tional Commissioner/Punjab and Haryana High Court/Assistant Commissioner Central Excise for the period 1987-1988 to 2006-2007. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 16.46 lacs {Previous year Rs. 16.82 lacs).

iii) Matters pending with Additional Commissioner, Chandigarh in respect of Service Tax on Transport Services for the period 2005-06, 2006-07 & 2007-08. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 2.92 lacs (Previous year Rs. 15.40 lacs).

iv) Matters pending with Commissioner Appeals/ Joint Commissioner in respect of interest on reversal of Special Additional Duty (SAD) for 200001. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 9.37 lacs. (Previous year Rs. 9.37 lacs).

v) Matter pending with Central Excise & Service Tax Appellate Tribunal (CESTAT) in respect of valuation rates employed for certain products sold by the Company for the period 2001-2002 to 2004-2005. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs:5.28 lacs. (Previous year Rs. 5.28 lacs).

d) In relation of b (ii) Sales Tax cases contested by the Company comprise of:

i) In respect of Assessment Year 1996-97 to 2001-02, on account of differences in sales tax rates, (the matter is pending with Karnataka High court. The Company has taken legal opinion in this regard and is confident of success). Amount involved is Rs. 59.23 lacs. (Previous year Rs. 59.23 lacs)

e) In relation b (iii) above Employee State Insurance claims comprise on

i) In respect of demand from Employee State Insurance, relating to non deposit of Employee State Insurance on certain employee related expenses pending with the Assessing Officer. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. Nil (Previous year Rs. 14.51 lacs)

f) In relation of b (iv) above Employee related cases comprise of:

i) Claims against the Company not acknowledged as debt, in respect of demands raised by the workers. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs.102.44 lacs. (Previous year Rs. 63.33 lacs)

g) In relation to b (v) above Electricity demand relates to:

In respect of a demand raised by Punjab State Electricity Board (PSEB) for various years in relation to availment of additional load. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 52.24 lacs (Previous year Rs. 52.24 lacs). h) In relation to b (vi) above Income Tax cases disputed by the Company:

i) In respect of Assessment Year 2001-02, certain additions were made on normal as well as on book profit. The matter is pending with ITAT. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 28.90 lacs (Previous year Rs. 28.90 lacs).

ii) In respect of Assessment Year 2002-03, certain additions were made on normal income as well as on book profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 116.23 lacs. (Previous year Rs. 214.28 lacs)

iii) In respect of Assessment Year 2003-04, disallowance was made for carry forward losses as well as certain disallowances. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision.

The amount involved is Rs. 145.81 lacs. (Previous year Rs. 220.66 lacs)

iv) In respect of Assessment Year 2004-05, certain additions were made on normal income. The matter is pending with ITAT. During the year, Company has got the order in its favour, hence the amount involved is Rs. 16.02 lacs. (Previous year Rs. 24.07 lacs)

v) In respect of Assessment Year 2005-06, certain additions were made on normal as well as on book profit. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 12.30 lacs (Previous year Rs. 47.19 lacs)

vi) In respect of Assessment Year 2006-07, certain additions were made on normal as well as on book profit. The matter is pending with Commissioner Income Tax (Appeals). During the year, management has done an analysis and is of the opinion that chances of liability getting materialised are high. Hence the Company has created provision for the same. The amount for contingent liability for the year is Rs. 78.21 lacs (Previous year Rs. 39.52 lacs)

vii) In respect of Assessment Year 1997-98, demand was raised due to disallowance of previous year expense made in regular assessment and also certain penalty proceedings on the above issue. The amount involved is Rs. 23.24 lacs. (Previous year Rs. 33.24 lacs)

viii) In respect of Assessment Year 2000-01, certain additions were made on normal as well as on book profits. The matter is pending with High court. The company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 1 1.01 Lacs (Previous year Rs 11.01 Lacs).

ix) In respect of Assessment Year 2007-08, certain additions were made on normal profits. The matter is pending with Commissioner Income Tax (Appeals). The company has done an analysis and is of the opinion that it has fair chance of favourable decision. The amount involved is Rs 33.11 Lacs (Previous Year Rs 33.11 Lacs).

i) In relation to b (vii) above Consumer cases filed against the company:

i) Matter pending with Delhi High Court relating to cases filed by a customer of the Company relating to defective goods for the period 1995-1996.

The Company nas done an analysis and is of the opinion that it has fair chance of a favorable decision Amount involved is Rs. 30.91 lacs (Previous year Rs. 60.91 lacs).

(b) Personnel expenses under Schedule 18 include Rs. 333.28 lacs (including Rs.. 195.67 lacs in respect of earlier financial year) towards director remuneration which is in excess of permissible remuneration determined under Schedule XIII of the Companies Act, 1956. Management has filed an application with the Central government on June 23, 2009 for approval of payment of salary to the managing director for Rs. 54.96 lacs per month for 5 years. Pending approval from the government, management has taken a confirmation from the managing director that he shall refund the amounts in the event of such approvals being refused.

(c) Remuneration of Rs. 1 19.85 Lacs for the period April 1, 2006 to December 31, 2006, paid to the erstwhile managing director of the Company was in excess of permissible remuneration under Schedule XIII of the Companies Act, 1956. The Company had applied to the Central Government for the approval of such excess remuneration which was rejected by the Central Government vide letter dated May 26, 2009. The Company has filed an application on April 29, 2010 under Section 309(5B) of tne Companies Act, 1956 to waive the recovery of the aforesaid amount from the erstwhile managing director. Further during the year company has received an approval from Central Government for partial amount of Rs 45.67 lacs (total amount of Rs 84.14 iacs) on September 14, 2010 for the period January 01, 2007 to September 24, 2007. Company has again applied to Central Government on November 18, 2010 for waiver of recovery of balance amount of Rs 38.47 Lacs paid to the erstwhile managing director.

5. In accordance with Explanation below Para 10 of Accounting standard 9 notified by Companies (Accounting Standards^ Rules, 2006, excise duty on sales amounting to Rs. 7,218.17 lacs (Previous year Rs. 5,175.75 lacs) has been reduced from sales in profit & loss account and excise duty on (decrease) / increase in stock amounting to Rs. 140.97 lacs (Previous year Rs. (218.58) lacs has been considered as (income) / expense in the financial statements.

6. The Company has sold its entire investment amounting to Rs. 1,902 lacs in the shares of its wholly owned subsidiary company, Satara Rubbers and Chemicals Limited on March 31, 2010 for a consideration of Rs. 1,130 lacs (Rs. 200 lacs was received in the previous year ended December 31, 2009 as advance payment and the balance amount was received on March 31, 2010). The Company has accordingly considered an additional loss of Rs. 570.59 lacs on sale of this investment which has been recorded in Operating and other expenses.

7. Non fulfillment of export obligation under (Export promotion Capital Goods) EPCG Licenses

The Company has identified some licenses obtained under Export Promotion Capital Goods scheme, which have expired and against which the Company has partially fulfilled the export obligation [levied in lieu of permission to import fixed assets at a concessional rate of import duty), in view of partial shortfall in fulfilling export obligation, the management has decided, on prudent basis, to make a provision aggregating to Rs. 932.32 lacs (Previous Year Rs. 822.76 lacs) in these financial statements which in view of the management is adequate to cover any liability on this account at ail its facilities and is included as Provision for non fulfillment of export obligation in Provisions under schedule 14.

8. During the year ended December 31, 2010, the Company commenced an evaluation process for various regulatory matters at its factories. Based on more accurate information discovered, a provision, towards costs to be incurred to remediate these matters, of Rs. 424.91 lacs is included under Schedule no. 14 for provisions which are net of amounts utilized of Rs. 513.23 lacs towards remediation. The Company is actively seeking to resolve these actual and potential statutory, regulatory, and contractual obligations. accordance with requirements of Accounting Standard 29 on Provisions, Contingent liability and Contingent assets issued by the Institute of Chartered Accountants of India, although difficult to quantify based on the complexity of the issues, the Company has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information and best professional judgment of experts appointed for this exercise. Based on consultations obtained from these experts, in managements view/ no further costs are expected to be incurred to remediate for which a provision would be required at this stage and considers the provisions made to be adequate.

9, The Company carries out its transfer pricing study annualfy for the tax period of April-March and updates its documentation, choice of methods and benchmarks to ascertain adequacy and compliance with the "arms length" principles prescribed under Income Tax Act. For the year April 1, 2010 to March 31, 201 1, the process of updation is ongoing and management expects to complete this before March 31, 2011. Accordingly, the provision for current tax includes adequate amount to cover any additional liability till the completion of study.

10. Previous year figures have been regrouped and rearranged wherever necessary to make these comparable.

Dec 31, 2009

1. Background

Federal-Mogul Goetze (India) Limited (FMGIL or the Company), is inter-alia engaged in the manufacture, supply and distribution of automotive components used in two/three/four wheeler automobiles.

The principal facilities of the Company are located at Patiala (Punjab), Bengaluru (Karnataka) and Bhiwadi (Rajasthan), with its registered office in New Delhi. The Company is listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Federal Mogul Holdings Limited, Mauritius, is the immediate parent company and ultimate parent company is Federal Mogul Corporation, USA.

2. Segment Information

Based on the guiding principles given in AS-17 Segmental Reporting notified under Companies (Accounting Standard) Rules, 2006, the Companys primary business segment is manufacturing of auto components. The Company operates in one geographical segment that is "India" and no further disclosures as per AS-17 need to be made.

3. Related party transactions

During the year under review, the Company has entered into transactions with related parties. i) Key managerial personnel and their relatives

Mr. Jean De Montlaur, Managing Director & President (w.e.f March 03, 2008)

Mr. Rustin Murdock, Whole Time Director & CFO

ii) Holding Company

Federal Mogul Holdings Limited (Mauritius)

iii) Fellow subsidiaries

Federal Mogul Burscheid GMBH, Germany.

Federal Mogul Vemogensuverwaltungs GMBH (Germany)

Federal Mogul Maysville (USA).

Federal Mogul Operation S.R.L (Italy)

Federal Mogul Bimet S.A. (Poland).

Federal Mogul Nurnberg, GMBH (Germany).

Federal Mogul Wiesbaden GMBH, (Germany)

Federal Mogul Power Train System (South Africa).

Federal Mogul Holding Deutschiand (Germany).

Federal Mogul Valves (PTY) Ltd (South Africa).

Federal Mogul Limited (formerly T & N Limited) (U.K)

Federal Mogul KK (Japan)

SSCFRAN FM Financial Services SAS Veurey Voroize (France).

Federal Mogul Financial Services FRANCTNL (France).

Federal Mogul Gorzyee, S.A (Poland).

Federal Mogul Friedberg, GMBH (Germany).

Federal Mogul Sintered Products Ltd. (U.K.).

Federal Mogul Sealing Systems, GMBH (Germany).

Federal Mogul Friction Products Ltd (India).

Federal Mogul Corporation Power Train Systems (USA).

Federal Mogul Plant Van Wert (USA.)

Federal Mogul Power Train Systems Schofield (USA).

Federal Mogul S.A.R.L. (Switzerland)

Federal Mogul France, S.A. (France)

Federal Mogul Corporation, Lake City (USA)

Federal-Mogul Chivasso. (Italy)

Federal Mogul Corporation, Garennes (France)

Federal Mogul Dongsuh Piston Co. Ltd. (China)

Federal Mogul Corp, Mgmoogus (USA).

KFM Bearing Company (South Korea).

Federal Mogul Bearings India Ltd (India).

Federal Mogul Automotive Products (India) Pvt Ltd. (India).

Ferodo India Private Ltd. (India).

Federal Mogul Trading India Pvt Ltd.(India)

iv) Associates

Gl Power Corporation Limited

GTZ Securities Limited

v) Subsidiaries

Federal-Mogul TPR (India) Limited

Satara Rubbers and Chemicals Limited

vi) Ultimate Holding Company

Federal Mogul Corporation, USA.

4. Contingent liabilities not provided for:

Particulars Year ended Year ended December 31, 2009 December 31, 2008 (Rs in lacs) (Rs in lacs)

(a) Bank Guarantees 355.82 518.06

(b) Claims/notices contested by the company

i) Excise duty 47.80 146.45

ii) Sales Tax 59.23 59.23

iii) ESI Cases 14.51 40.53

iv) Employee Related Cases 63.33 72.67

v) Electricity Demand 52.24 52.24

vi) Income Tax Demands 683.20 154.88

vii) Consumer Cases 60.91 60.91

c) In relation to b (i) above Excise Duty cases contested by the Company comprise of:

i) Matter pending with Central Excise & Service Tax Appellate Tribunal (CESTAT) in respect of valuation rates employed for certain products sold by the Company for the period 2004-2005 & 2005-2006. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount involved is Rs 0.93 lacs (Previous year Rs. 0.93 lacs) ii) Matter pending with Additional Commissioner of Central Excise (ADCCE) in respect of excise duty on scrap produced by the Company for the period 2000-2001 to 2002-2003. During the year, the order was passed in favour of the company. The amount involved is Rs. Nil (Previous year Rs. 34.11 lacs)

iii) Miscellaneous Excise Cases in respect of MODVAT credits are pending with Deputy Commissioner Central Excise Patiala (DCCE PTA)/ Additional Commissioner/Punjab and Haryana High Court/Assistant Commissioner Central Excise for the period 1987-1988 to 2006-2007. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 16.82 lacs (Previous year Rs. 16.82 lacs).

iv) Matters pending with Additional Commissioner, Chandigarh in respect of Service Tax on Transport Services for the period 2005-06, 2006-07 & 2007-08. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 15.40 lacs (Previous year Rs. 14.56 lacs).

v) Matters pending with CESTAT in respect of excise cases in relation cenvat credit availed on imported goods for the period 2006-07.During the year, the order was passed in the favour of the company. Amount involved is Rs. Nil (Previous year Rs. 55.72 lacs).

vi) Matters pending with Commissioner Chandigarh/ Deputy Commissioner Central Excise (DCCE) Patiala in respect of clearance of reprocessed goods without payment of duty for the period 2004-2005 to 2006-2007. During the year, the order was passed in the favour of the Company. Amount involved is Rs. Nil. (Previous year Rs. 8.82 lacs).

vii) Matters pending with Commissioner Appeals/ Joint Commissioner in respect of interest on reversal of Special Additional Duty (SAD) for 2000-01. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 9.37 lacs. (Previous year Rs. 9.3/ lacs).

viii) Matter pending with Central Excise & Service Tax Appellate Tribunal (CESTAT) in respect of valuation rates employed for certain products sold by the Company for the period 2001 -2002 to 2004-2005. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs.5.28 lacs. (Previous year Rs. 6.12 lacs).

d) In relation of b (ii) Sales Tax cases contested by the Company comprise of:

i) In respect of Assessment Year 1996-97 to 2001-02, on account of differences in sales tax rates, (the matter is pending with Karnataka High court. The Company has taken legal opinion in this regard and is confident of success). Amount involved is Rs. 59.23 lacs. (Previous year Rs. 59.23 lacs)

e) In relation b (iii) above Employee State Insurance claims comprise of:

i) In respect of demand from Employee State Insurance, relating to non deposit of Employee State Insurance on certain employee related expenses pending with the Assessing Officer. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 14.51 lacs. (Previous year Rs. 40.53 lacs)

f) In relation of b (iv) above Employee related cases comprise of:

i) Claims against the Company not acknowledged as debt, in respect of demands raised by the workers. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs.63.33 lacs. (Previous year Rs. 72.67 lacs)

g) In relation to b (v) above Electricity demand relates to:

In respect of a demand raised by Punjab Electricity Board (PSEB) for various years in relation to availment of additional load. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. Amount involved is Rs. 52.24 lacs (Previous year Rs. 52.24 lacs). h) In relation to b (vi) above Income Tax cases disputed by the Company:

i) In respect of Assessment Year 2001-02, certain additions were made on normal as well as on book profit. The matter is pending with ITAT The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 104.24 lacs (Previous year Rs. Nil)

ii) In respect of Assessment Year 2002-03, certain additions were made on normal income as well as on book profits. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 214,28 lacs. (Previous year Rs. 15.10 lacs)

iii) In respect of Assessment Year 2003-04, disallowance was made for carry forward losses as well as certain disallowances. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount involved is Rs.220.66 lacs. (Previous year Rs. 55.62 lacs)

iv) In respect of Assessment Year 2004-05, certain additions were made on normal income. The matter is pending with ITAT, during the year Company has got the order in its favour, hence the amount involved is Rs. 24.07 lacs. (Previous year Rs. 11.71 lacs)

v) In respect of Assessment Year 2005-06, certain additions were made on normal as well as on book profit. The matter is pending with Commissioner Income Tax (Appeals). The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision. The amount for contingent liability for the year is Rs. 47.19 lacs (Previous year Rs. 39.21 lacs)

vi) In respect of Assessment Year 2006-07, certain additions were made on normal as well as on book profit. The matter is pending with Commissioner Income Tax (Appeals). During the year, management has done an analysis and is of the opinion that chances of liability getting materialised are high. Hence the Company has created provision for the same. The amount for contingent liability for the year is Rs. 39.52 lacs (Previous year Rs. Nil)

vii) In respect of Assessment Year 1997-98, demand was raised due to disallowance of previous year expense made in regular assessment and also certain penalty proceedings on the above issue. The amount involved is Rs. 33.24 lacs. (Previous year Rs. 33.24 lacs)

i) In relation to b (vii) above Consumer cases filed against the company:

i) Matter pending with Delhi High Court relating to cases filed by Space 2000 a customer of the Company relating to defective goods for the period 1995-1996. The Company has done an analysis and is of the opinion that it has fair chance of a favorable decision Amount involved is Rs. 60.91 lacs (Previous year Rs. 60.91 lacs).

5. (a) (i) Payment made to Directors:

(b) Personnel expenses under Schedule 18 include Rs. 540.12 lacs (including Rs. 305.54 lacs in respect of earlier financial year) towards director remunera- tion which is in excess of permissible remuneration determined under Schedule XIII of the Companies Act, 1956. Management has filed an application with the Central government on June 23, 2009 for approval of payment of salary to the managing, director for Rs. 54.96 lacs per month for 5 years. Pending approval from the government, management has taken a confirmation from the managing director that he shall refund the amounts in the event of such approvals being refused.

(c) Remuneration of Rs. 119.85 lakhs for the period April 1, 2006 to December 31, 2006, paid to the erstwhile managing director of the Company was in excess of permissible remuneration under Schedule XIII of the Companies Act, 1956. the Company had applied to the Central Government for the approval of such excess remuneration which was rejected by the Central Government vide letter dated May 2o, 2009. The Company is in the process of filing an application under Section 309 (5B) of the Companies Act, 1956 to waive the recovery or the aforesaid amount from the erstwhile managing director. Further, there is another application for excess remuneration of Rs. 84.15 lakhs for the period January 1, 2007 to September 24, 2007 applied to the Central Government for its approval under Section 309 (3) of the Companies Act, 1956. The management has confirmed from the erstwhile managing director that he will refund this amount, to the extent of this being not approved by the Central Government. Pending above mentioned approvals by Central Govt, no adjustments have been made to these financial statements in this regard.

6. (a) In accordance with Explanation below Para 10 of Accounting standard 9 notified by Companies (Accounting Standards) Rules, 2006, excise duty on sales amounting to Rs. 5,175.75 lacs (Previous year Rs. 8,194.26 lacs) has been reduced from sales in profit & loss account and excise duty on (decrease) / increase in stock amounting to Rs. (218.58) lacs (Previous year Rs. (380.69) lacs has been considered as (income) / expense in the financial statements.

7. On December 31, 2009, the Company has entered into an agreement/memorandum of understanding with a third party to sell the investment made in one of the subsidiary for Rs 1,200 lacs. As per the terms of the agreement the Company will convert the loan recoverable of Rs 1,700 lacs into equity share capital with a face value of Rs 10 per share of subsidiary. Accordingly a provision of Rs 514.71 lacs has been made.

8. Non fulfillment of export obligation under (Export promotion Capital Goods) EPCG Licenses

During the year, the Company has identified some of the licenses, obtained under Export Promotion Capital Goods scheme under which Company had imported certain fixed assets without payment of relevant custom duties, on which the Company has fulfilled the export obligation partially. The Company, based on opinions by legal experts, is of the view that they will be able to apply for the extension of the time period and will be exploring various possibilities for completing the export obligations.

However, considering that these licenses have already expired, the management has decided, on prudent basis, to make a provision for the potential interest payable to the Government aggregating to Rs. 532.20 lacs in these financial statements and has also capitalized the duty portion to be paid for Rs. 380.06 lacs with the relevant fixed assets and has depreciated the same as if these were capitalized on the date of respective assets being put to use. This has resulted in Company charging the additional depreciation ana additional interest of Rs. 822.76 lacs during the year (including Rs. 351.25 lacs for earlier periods).

9. Previous year figures have been regrouped and rearranged wherever necessary to make these comparable.

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