Notes to Accounts of Modipon Ltd.

Mar 31, 2025

i) Provisions, Contingent liabilities, Contingent assets an(
Commitments:

General

Provisions are recognised when the Company has a presen
obligation (legal or constructive) as a result of a past event, i
is probable that the outflow of resources embodying economi<
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.

Contingent liability is disclosed in the case of:

• There is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future event
not wholly within the control of the Company.

• A present obligation arising from past event, when it is no
probable that as outflow of resources will be required t<
settle the obligation

• A present obligation arises from the past event, when no
reliable estimate is possible

• A present obligation arises from the past event, unless th
probability of outflow is remote.

Commitments include the amount of purchase order (net o
advances) issued to parties for completion of assets.

Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each balance sheet date.

Contingent assets

Contingent assets are not recognised. However, when th
realisation of income is virtually certain, then the related asset i
no longer a contingent asset, but it is recognised as an asset.

j) Income Taxes

Income tax expense comprises of current and deferred tax
Current income tax is measured at the amount expected to b
paid to the tax authorities in accordance with the Income-ta
Act, 1961 enacted in India. The tax rates and tax laws used t<
compute the amount are those that are enacted or substantivel
enacted, at the reporting date.

Current tax assets and current tax liabilities are off set, and
presented as net.

Deferred Tax

Deferred tax is provided using the balance sheet approach or
temporary differences at the reporting date between the ta
bases of assets and liabilities and their carrying amounts fo
financial reporting purpose at reporting date. Deferred income
tax assets and liabilities are measured using tax rates and ta

limited 60

laws that have been enacted or substantively enacted by the
balance sheet date and are expected to apply to taxable income
in the years in which those temporary differences are expected
to be recovered or settled. The effect of changes in tax rates
on deferred income tax assets and liabilities is recognized as
income or expense in the period that includes the enactment or
the substantive enactment date. A deferred income tax asset is
recognized to the extent that it is probable that future taxable
profit will be available against which the deductible temporary
differences and tax losses can be utilized.

The carrying amount of deferred tax assets are reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow
all or part of the deferred tax assets to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future
taxable profits will allow deferred tax assets to be recovered.

The Company offsets current tax assets and current tax liabilities,
where it has a legally enforceable right to set off the recognized
amounts and where it intends either to settle on a net basis, or
to realize the asset and settle the liability simultaneously.

k) Non-current assets held for sale

Non-current assets and disposal groups are classified as held
for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use.
Non-current assets and disposal groups classified as held for sale
are measured at the lower of their carrying amount and fair value
less costs to sell. This condition is regarded as met only when the
sale is highly probable and the asset or disposal group is available
for immediate sale in its present condition. Management must
be committed to the sale, which should be expected to qualify
for recognition as a completed sale within one year from the
date of classification.

l) Revenue Recognition

Effective April 1, 2018, the Company has applied Ind AS 115,
Revenue from Contracts with Customers, which establishes a
comprehensive framework for determining whether, how much
and when revenue is to be recognised. Ind AS 115 replaces Ind AS
18 Revenue and Ind AS 11 Construction Contracts. The Company
has adopted Ind AS 115 using the cumulative effect method. The
effect of initially applying this standard is recognised at the date
of initial application (i.e. April 1, 2018). The standard is applied
retrospectively only to contracts that are not completed as at the
date of initial application and the comparative information in the
statement of profit and loss is not restated - i.e. the comparative
information continues to be reported under Ind AS 18 and Ind
AS 11. Refer note 2(K) - Significant accounting policies - Revenue
recognition in the Annual report of the Company for the year
ended March 31, 2018, for the revenue recognition policy as
per Ind AS 18 and Ind AS 11. The impact of the adoption of
the standard on the financial statements of the Company was
insignificant.

i) Revenue in respect of sale of scrap is recognized when the
significant risks and rewards of ownership of the goods have
passed to the buyer.

ii) Indirect costs are treated as "period costs" and are charged
to the Statement of profit & loss in the year in which they
are incurred.

iii) Interest income on fixed deposit with banks is recognized
on time proportion basis taking into account the amount
outstanding and the rates applicable.

iv) Dividend income is recognized when right to receive the
payment is established.

m) Borrowing costs

Borrowing costs are interest and other costs incurred in
connection with borrowings of funds. Borrowing costs directly
attributable to the acquisition, construction or production of a
qualifying asset are capitalized during the period of time that
is required to complete and prepare the asset for its intended
use or sale. Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended use or

sale. All other borrowing costs not eligible for capitalization are
expensed in the period in which they are incurred.

n) Employee Benefits

Expenses and liabilities in respect of employee benefits are
recorded in accordance with Indian Accounting Standard (Ind
AS)-19 - ''Employee Benefits''.

o) Financial Instruments

i. Initial Recognition

The Company recognizes financial assets and financial
liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and
liabilities are recognized at fair value on initial recognition,
except for trade receivables which are initially measured
at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets
and financial liabilities, which are not at fair value through
statement of profit or loss, are added to the fair value on
initial recognition.

Subsequent Measurement

Non-derivative financial instruments

> Financial assets carried at amortised cost-debt

A financial asset is subsequently measured at amortised
cost if it is held within a business model whose objective
is to hold the asset in order to collect contractual cash
flows and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

> Financial assets at fair value through other comprehensive
income-debt

A financial asset is subsequently measured at fair value
through other comprehensive income if it is held within
a business model whose objective is achieved by both
collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

> Financial assets at fair value through profit or loss-debt

A financial asset which is not classified in any of the
above categories are subsequently fair valued through
statement of profit or loss.

> Financial assets at fair value through other comprehensive
income -equity (FVOCI)

The Company has made an irrevocable election for its
investments which are classified as equity instruments
to present the subsequent changes in fair value in other
comprehensive income based on its business model.
Further, in cases where the Company has made an
irrevocable election based on its business model, for its
investments which are classified as equity instruments,
the subsequent changes in fair value are recognized in
other comprehensive income.

> Financial assets at fair value through profit or loss-equity

A financial asset i.e. equity which is not classified as
FVOCI, are subsequently fair valued through profit or
loss.

> Financial guarantee contracts

Financial guarantee contracts issued by the Company
are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the
specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised initially
as a liability at fair value, adjusted for transaction costs
that are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured at the

higher of the amount of loss allowance determined
as per impairment requirements of Ind-AS 109 and the
amount recognised less cumulative amortisation.

> Impairment of Financial assets

The Company recognizes loss allowances using the
expected credit loss (ECL) model for the financial assets
which are not fair valued through statement of profit
and loss. For impairment purposes significant financial
assets are tested on an individual basis, other financial
assets are assessed collectively in groups that share
similar credit risk characteristics.

The Company recognizes lifetime expected losses for
all contract assets and / or all trade receivables that
do not constitute a financing transaction. For all other
financial assets, expected credit losses are measured
at an amount equal to the 12 month expected credit
losses or at an amount equal to the life time expected
credit losses if the credit risk on the financial asset has
increased significantly since initial recognition. The
amount of expected credit losses (or reversal) that is
required to adjust the loss allowance at the reporting
date to the amount that is required to be recognized is
recognized as an impairment gain or loss in statement
of profit and loss.

> Investment in subsidiaries/associates/joint ventures

Investment in subsidiaries/associates/joint venture is
carried at cost in the financial statements.

> Cash and cash Equivalents

Cash and cash equivalents for the purpose of cash flow
statement comprise cash at bank and in hand and short¬
term deposits with an original maturity of three months
or less, which are subject to an insignificant risk of
changes in value, net of outstanding bank overdrafts as
they are considered an integral part of the Company''s
cash management.

> Financial liabilities

Financial liabilities are subsequently carried at
amortized cost using the effective interest method,
for trade and other payables maturing within one year
from the balance sheet date, the carrying amounts
approximate fair value due to the short maturity of
these instruments.

ii. Derecognition

The Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial asset
expire or it transfers the financial asset and the transfer
qualifies for derecognition under Ind AS 109. A financial
liability (or a part of a financial liability) is derecognized from
the Company''s balance sheet when the obligation specified
in the contract is discharged or cancelled or expires.

iii. Reclassification of financial assets

The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition,
no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial
assets which are debt instruments, a reclassification is made
only if there is a change in the business model for managing
those assets. Changes to the business model are expected
to be infrequent. The Company''s senior management
determines change in the business model as a result of
external or internal changes which are significant to the
Company''s operations. Such changes are evident to external
parties. A change in the business model occurs when the
Company either begins or ceases to perform an activity that
is significant to its operations. If the Company reclassifies
financial assets, it applies the reclassification prospectively
from the reclassification date which is the first day of the
immediately next reporting period following the change
in business model. The Company does not restate any
previously recognised gains, losses (including impairment
gains or losses) or interest.

iv. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net
amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, to realise
the assets and settle the liabilities simultaneously.

v. Current and Non-current Classification

The Management classifies assets and liabilities into current
and non-current categories on its operating cycle.

p) Critical accounting estimates, assumptions and judgements

In the process of applying the Company''s accounting policies,
management has made the following estimates, assumptions
and judgements, which have significant effect on the amounts
recognised in the financial statement:

i) Property, plant and equipment

On transition to IND AS, the Company has adopted optional

umitea

exemption under IND AS 101 for considering carrying cost
as deemed cost on the date of transition for property, plant
and equipment.

ii) Income taxes

Management judgment is required for the calculation of
provision for income taxes and deferred tax assets and
liabilities. The Company reviews at each balance sheet date
the carrying amount of deferred tax assets. The factors used
in estimates may differ from actual outcome which could
lead to significant adjustment to the amounts reported in
the standalone financial statements.

iii) Contingencies

Management judgement is required for estimating
the possible outflow of resources, if any, in respect of
Contingencies/claim/litigations against the Company as it is
not possible to predict the outcome of pending matters with
accuracy.

Notes:-

1. Aggregate Market Value is exclusive of these investments in view of non-availability of Current Market rates.

2. In view of Rehabilitation Scheme of Modi Spinning & Weaving Mills & Co. Ltd. (MSWM), the Company was alloted free of cost 15,126 equity shares

of R 10 each of Haryana Distliery Limited (HDL) and Rajputana Fertilizers Limited (RFL) on account of demerger of units of MSWM to HdL & RFL.

Consequently the orignal cost of R 1 has been allocated on notional basis among MSWM, HDL, RFL shares of HDL are yet to be received by the

Company.

3. The cost of the above shares have been taken as Nil since these shares have been received by the Company in pursuance of slump sale agreement
dated October 28, 2006 executed for transfer of Indofil Chemicals division to Indofil Industries Limited.

4. During the FY 2024-25, 100 shares of JK Cement sold @ of R 4,76,000.

1) Cash Credit/WCDL from banks and loan from Ashoka Mercantile Limited

and Modi Intercontinental Private Limited are secured by charge by
way of pari passu charge on block assets of the Company.

2) (a) Cash Credit/Working Capital Demand Loans (including interest

Accrued and Due) taken from Punjab National Bank was out of order
and classified by Bank as Non-Performing Assets since calender year
2007. Also Company has defaulted into the loan repayment amount
of R 65 Lakhs excluding interest. (Refer note 40)

(b) The Punjab National Bank issued notice to the Company under section
13(2) of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery
of its dues and has also issued notice under section 13(4) of the
SARFAESI to the Company for taking possession of the secured assets
of the Company.

(c ) Borrowings from related parties includes loan from Ashoka Merchantile
Limited, Status Mark Finvest Limited and Modi Intercontinental Private
Limited.

The Company has taken waiver for interest till March 31, 2026 on
the loan amount from Ashoka Merchantile Limited and Status Mark
Finvest Limited. However, the terms of repayment are yet to be
entered into with the said parties.

(b) (ii) There is a balance sales tax liability of R 183.90 Lakhs (plus interest/
penalty, if any) imposed by Commercial Tax Authorities, Modinagar on
Punjab National Bank on account of tax payable on auction held by
the bank for old plant & machinery of the Company. The Company has
undertaken to reimburse the same to Punjab National Bank, in case
the bank is required to pay the same to the sales tax authorities. In the
meantime, the Company shall continue to keep mortgage/charge over
the administrative block (with land) of the Company, as security, in
favour of the bank till final disposal of the above tax case. No provision
of interest has been made on the sales tax liability of R 183.90 Lakhs.

(c) Suppliers Interest on outstanding dues (Gujarat State Fertilizers and
Chemical Company Limited-GSFC) amounting to R 1000.54 Lakhs upto
March 31, 2008, has not been provided in the Books of Account as the
same are being disputed by the Company. The amount of interest for
the 144 month period ended March 31, 2025 is not ascertainable.

(d) Singhal Transport filed a suite for recovery of R 95.08 Lakhs
(comprising of the principal amount of Rs. 70 Lakhs and interest due
till 19.05.2009) along with claim for pendente- lite and future interest
and costs against Modipon Limited. The total sum due as on March
31, 2019 amounts to R 178.17 Lakhs (R 171 Lakhs as on March 31,
2018) including interest for which the Company has not made any
provision.

(e) The Punjab National Bank (PNB) had approved one time settlement of
its outstanding dues vide its approval letters dated April 02, 2014 and
April 12, 2014 respectively. In terms of the settlement, OTS amount
of R 1710 Lakhs (Net of upfront payment of R 190 Lakhs) was to be
paid by the Company in four quarterly installments with interest
during financial year 2014-15. However, the Company was able to
manage the payment of R 630 Lakhs up to March 31, 2015 and at the
request of the Company, PNB had condoned the delay and revived
the OTS vide its letter dated July 02, 2015 requiring the Company
to make payment of residual OTS amount of R 1270 Lakhs by March
31, 2016 and total interest on OTS payment @ 10.25% (simple) by
June 30, 2016. The Company has paid R 1270 lakhs upto December
31, 2018 along with interest of R 2,59,62,100/-. The Company has
already made provision of interest on account of delayed payment
of OTS of R 94,43,358/- in their books upto September 30, 2018 and
booked balance amount of interest in the quarter ending December
31, 2018. (Refer Note 40(b) and (c))

Note No. 34: Balance confirmation certificates were not obtained by the
Company from creditors, house/shop security depositors, in-operative
current accounts with banks and loan account with Punjab National Bank
(PNB) and consequently adjustments required, if any, has not been carried
out in the financial results.

Note No. 35: The Accounts of the Company have not been prepared on
a going concern basis in view of closure of manufacturing operations of
the Company during the year ended September 30, 2007 and sale of all
moveable assets including Plant & machinery during the year 2009-10.
However, once the liabilities of the Company towards secured creditors are
cleared, the Company will start business operations. The Manufacturing
Operations of the Company have been closed with effect from May 19,
2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act,
1947, the closure has become operative from the date of expiration of the
period of 90 days from the date of application i.e. on September 8, 2007.

Note No. 36: The Company has elected to exercise the options permitted
under section 115BAA of the Income Tax Act, 1961 as introduced by the
Taxation Laws (Amendment) Ordinance 2019. No Provision for Income Tax
under the Income Tax Act, 1961 is considered necessary for current financial
year on account of unabsorbed depreciation, unabsorbed business losses
and capital loss. The recognition of Deferred Tax Assets (Net) has been
postponed on consideration of prudence.

Note No. 37: Under the Micro, Small and Medium Enterprises Development
Act, 2006, which came into force on October 2, 2006, certain disclosures are
required to be made relating to Micro, Small and Medium Enterprises. The
Company has not collected the relevant information. Since the information
is not readily available, no disclosures/provision for interest has been made
in the Books of Account.

Note No. 38: Exceptional Items in Statement of Profit and Loss includes :

“During the year Company has taken waiver for payment of interest on the
loan amount from Ashoka Merchantile Limited and on the loan amount from
Status Mark Finvest Limited which is shown as exceptional item.

Note No. 39: (a) Since the Net Book value of Land, Residential buildings at
Modinagar, Office premises outside Modinagar and factory/ administrative
building in Modinagar amounting to R 230.88 Lakhs, is lower than the
Net Realisable Value as per Valuer''s Report / Management''s estimate, no
provision for diminution is required to be made as at March 31, 2025.

(b) The Company has sold 65,743 sq. yds. of its vacant land at Modinagar
for R 1021.15 Lakhs (original cost R 1.95 lakhs) which resulted in Profit
on Sale of Land amounting to R 1019.20 Lakhs during the year ended
March 31, 2009. Approval of banks to whom immovable properties of the
Company, including the above Land, are charged is pending.

Note No. 40: (a) Cash credit/Working Capital Demand Loans (including
interest accrued and due) taken from Punjab National Bank was out of
order and has been classified by Bank as Non-Performing Assets. The Bank
issued notice to the Company under section 13(2) of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice
under section 13(4) of the SARFAESI to the Company for taking possession
of the secured assets of the Company.

(b) The Punjab National Bank (PNB) had approved one time settlement of
its outstanding dues vide its approval letters dated April 02, 2014 and
April 12, 2014 respectively. In terms of the settlement, OTS amount of
R 1710 Lakhs (Net of upfront payment of R 190 lakhs) was to be paid
by the Company in four quarterly installments with interest during
financial year 2014-15. However, the Company was able to manage
the payment of R 630 Lakhs up to March 31, 2015 and at the request
of the Company, PNB condoned the delay and revived the OTS vide its
letter dated July 02, 2015 requiring the Company to make payment
of residual OTS amount of R 1270 Lakhs by March 31, 2016 and total
interest on OTS payment @ 10.25% (simple) by June 30, 2016.The
Company has paid R 1270 Lakhs upto December 31, 2018 along with
interest of R 2,59,62,100/-. The Company has already made provision
of interest on account of delayed payment of OTS of R 94,43,358/- in
their books upto September 30, 2018 and booked balance amount of
interest in the quarter ending December 31, 2018.

The Punjab National Bank has initiated the proceeding against the
Company under section 7 of the Insolvency and Bankruptcy Code, 2016
before the NCLT, Allahabad Bench and other Proceeding before DRT-II
and recovery Officer, DRT- II, New Delhi due to non-fulfillment of OTS
Terms/conditions vide OTS letter dated July 02, 2015 issued by PNB.

The Debts Recovery Tribunal-II, Delhi passed its order dated July 30,
2018, in favor of the Company and directed PNB to accept payment of
R 65 Lakhs towards outstanding principal of OTS plus R 2,59,62,100/- as
interest @10.25% as per revived OTS vide its letter dated July 02, 2015
on delayed payment upto March 15, 2018. which was later on accepted
and paid by the Company in terms of DRAT order.

“During the pendency of the appeal, PNB has encashed the said
amount of R 65 Lakhs towards principal OTS and R 2,59,62,100/-
towards interest in term of the order of Debts Recovery Appellate
Tribunal (DRAT), New Delhi. Further, the DRAT has reserved the order
on December 27, 2018 in the said matter and not pronounced till the
date of our reporting, as a result the Company has not considered any
liability in its books in addition to the dues already settled as per DRT
order dated July 30, 2018.

During the pendency of order before DRAT, the PNB has revived OTS
vide letter dated March 25, 2019 against payment of R 459.62 Lakhs
on the following terms & conditions:

1) The proceeds of FDRs amounting to R 65 Lakhs and R 259.62
Lakhs kept with us will be appropriated simultaneously on
conveying approval of revival of OTS.

2) R 135 lakhs will be deposited within one week of receipt of this
sanction letter.

3) The party to undertake to pay commercial tax liability as
demanded by the Commercial Tax Authority.

4) No Dues Certificate will be issued, Bank''s charge on the security/
tittle deeds will be released only after receipt of OTS amount in
full and on clearance of commercial tax liability as stated above.
(Satisfactory proof/letter from the competent authority in this
regard to be submitted).

The Company has already deposited balance of OTS amount of R 65
Lakhs plus delayed period interest of R 259.62 Lakhs with the bank in
terms of DRT & DRAt orders and further R 135 Lakhs over and above
original OTS amount has been deposited by the Company in terms
of revived OTS vide letter dated March 25, 2019 within one week of
receipt of letter.

(c) In respect of commercial tax liability, the Company has filed an appeal
against the order of Commissioner of Commercial Tax before Hon''ble
High Court of Allahabad through Punjab National Bank and the Court
has directed vide order dated November 26, 2018 that the operation
and effect of the impugned order dated August 08, 2018 passed
by the Commercial Tax Tribunal, Ghaziabad in Appeal no. 1353 of
2013, shall remain stayed subject to the applicant depositing 50%
of the commercial tax liability imposed on it and furnish security
for the balance amount other than cash or bank guarantee to the
satisfaction of the tribunal within a period of three weeks from the
date of direction.

The Company deposited Commercial Tax of R 54.94 Lakhs out of
Commercial Tax liability of R 183.90 Lakhs along with interest of
R 3.07 Lakhs for the period starting from December 18, 2018 to
May 02, 2019 as on May 03, 2019 in compliance with order dated
November 26, 2018 of the Hon''ble High Court of Allahabad and
communicated the same to PNB vide letter dared May 03, 2019.

(d) Further, PNB vide letter dated May 04, 2019 requested the Company
to submit No Dues Certificate from tax authorities after paying the
commercial tax liability to bank for compliance of OTS Sanction within
3 days else OTS will be declared as failed. PNB vide letter dated July 04,
2019 informed the Company and declared OTS revival as failed and
PNB is resuming all recoveries as usual. Further, DRAT allowed appeal
of PNB on August 20, 2019. The Company filed Writ Petition in the
Delhi High Court against order of the DRAT. The Hon''ble Delhi High
Court vide its order dated October 24, 2019, stayed the DRAT and
NCLT proceedings filed by the PNB till the next date of hearing which
is listed on February 19, 2020. On February 19, 2020 interim order
dated October 24, 2019 was made absolute during the pendency
of the writ petition. The next date of hearing is August 20, 2025.
Further, NCLT matter has been dismissed on the last date of hearing
(September 22, 2023) due to non-appearance on behalf of financial
creditor (PNB), the matter has been dismissed for non -prosecution.

The outstanding liability in the books of the Company is higher
than the OTS amount by R 183.90 Lakhs and in the absence of any
documentary evidences from the management as well as PNB, we
are unable to quantify the amount of interest on the amount of R
183.90 Lakhs; the amount of R 183.90 Lakhs is over and above the
loan amount on account of the sales tax liability on PNB on account
of the auction held by the bank for old plant and machinery of the
Company.

The above matter is subjudice before Hon''ble High Court of Allahabad
for further hearing.

(e) (i) Loan liability of R 749.20 Lakhs to Karnatka Bank has been discharged
by the Company under OTS (one time settlement), in arrangement
with Ashoka Mercantile Limited paying the settled sum of R 410 Lakhs
to the said bank. The settlement resulted into remission of liability by
R 339.20 Lakhs. As per the terms approved by the Board of Directors
of the Company on August 16, 2012 with Ashoka Mercantile Limited,
they shall be entitled to so much of the waived-off amount under OTS
as agreeable, but to the extent such sum does not exceed the sum as
worked out by applying the ratio of waiver agreed by the company for
settlement under OTS with Punjab National Bank (PNB). Pending the
successful implementation of OTS with PNB as stated in note 40(b)
above, the amount of R 339.20 Lakhs being the subject matter of OTS
arrangement with Ashoka Mercantile Limited and liable to be dealt
with later has been kept aside and shown in Balance Sheet under the
head “Non Current borrowings (Unsecured)".

Ashoka Mercantile Limited has waived interest from the FY 2021-22
till date on loan repaid by Ashoka Mercantile Limited under the OTS
deal.

(ii) Loan liability of R 832.04 Lakhs to Bank of Baroda has been discharged
by the Company under OTS (one time settlement), in arrangement
with Ashoka Mercantile Limited who has paid the settled sum of
R 600 Lakhs to the said bank. The settlement resulted into remission
of liability by R 232.04 Lakhs. As per the terms approved by the Board
of Directors of the Company on February 11, 2013 with Ashoka
Mercantile Limited., they shall be entitled to so much of the waived-
off amount under OTS as agreeable, but to the extent such sum does
not exceed the sum as worked out by applying the ratio of waiver
agreed by the Company for settlement under OTS with Punjab
National Bank (PNB). Pending the successful implementation of OTS
with PNB as stated in note 40(b) above, the amount of R 232.04 Lakhs
being the subject matter of OTS arrangement with Ashoka Mercantile
Limited and liable to be dealt with later has been kept aside and
shown in Balance Sheet under the head “Non current borrowings
(Unsecured)".

Ashoka Mercantile Limited has waived interest from the FY 2021-22
till date on loan repaid by Ashoka Mercantile Limited under the OTS
deal.

(iii) Pending finalisation of terms of loan agreements with Ashoka
Mercantile Limited (AML) which has outstanding amount of secured
and unsecured loans of R 882.29 Lakhs and R 1125.57 Lakhs
respectively for payment of OTS dues of banks. No provision of
Interest on loan have been provided till the March 31, 2014. However,
from April 01, 2014, interest has been provided on unsecured loan
on reducing balance method @ 10.25% per annum equivalent to the
rate of interest agreed with PNB in OTS.

(f) (i) The Abu Dhabi Commercial Bank Limited has settled its dues of
R 351.05 Lakhs under One Time Settlement (OTS) as conveyed vide
its letter dated September 23, 2008. Since the Company did not have
funds to pay the settled dues, it had approached Ashoka Mercantile
Limited (AML) for making payment of settled dues to the Banks.
Further, it has also been agreed with AML that it shall not be entitled
to settlement of its claim better than what is agreed by the Company
with PNB.

(ii) (ii) Since successful implementation of settlement of dues of PNB is
still pending, the amount paid towards OTS by AML of R 157.13 Lakhs
(net of R 40 lakhs paid to AML upto March 31, 2011) is shown as
secured loan in Note 18 and the balance amount of R 153.92 Lakhs (R
351.05 Lakhs - R 197.13 Lakhs) outstanding in the books of accounts
has also been shown as unsecured loan in Note 14, to be written back
or credited to AML at the time of OTS with PNB as stated in (i) above.

Ashoka Mercantile Limited has waived interest from the FY 2021-22
till date on loan repaid by Ashoka Mercantile Limited under the OTS
deal.

Level 1 — Quoted (unadjusted) market prices in active markets for identical
assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly observable

Level 3 — Level 3 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable

Fair valuation techniques

The Company maintains policies and procedures to value financial assets or
financial liabilities using the best and most relevant data available. The fair
values of the financial assets and liabilities are included at the amount that
would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.The
following methods and assumptions were used to estimate the fair values:

1) Fair value of cash and deposits, trade receivables, trade payables, and
other current financial assets and liabilities approximate their carrying
amounts largely due to the short-term maturities of these instruments.

2) Long-term fixed-rate and variable-rate receivables / borrowings are
evaluated by the Company based on parameters such as interest rates,
specific country risk factors, credit risk and other risk characteristics. Fair
value of variable interest rate borrowings approximates their carrying
values. For fixed interest rate borrowing fair value is determined by
using the discounted cash flow (DCF) method using discount rate
that reflects the issuer''s borrowings rate. Risk of non-performance
for the company is considered to be insignificant in valuation.

3) The fair values of derivatives are estimated by using pricing models,
where the inputs to those models are based on readily observable
market parameters basis contractual terms, period to maturity, and
market parameters such as interest rates, foreign exchange rates, and
volatility. These models do not contain a high level of subjectivity as
the valuation techniques used do not require significant judgement,
and inputs thereto are readily observable from actively quoted market
prices. Management has evaluated the credit and non-performance
risks associated with its derivative counterparties and believe
them to be insignificant and not warranting a credit adjustment.

4) IND AS 101 allow Company to fair value property, plant and machinery
on transition to IND AS, the Company has fair valued property, plant and
equipment, and the fair valuation is based on replacement cost approach.
*5) Fair value of investments in equity shares of entities other than
investment in subsidiary, associates & joint ventures is taken at cost as
sufficient recent information is not available to measure the fair value and
cost represents the best estimate of fair value within that range.

Note No. 47: FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The purpose of financial risk management is to ensure that the Company
has adequate and effective utilized financing as regards the nature and
scope of the business. The objective is to minimize the impact of such risks
on the performance of the Company. The Company''s senior management
oversees the management of these risks.

The Company''s principal financial liabilities comprise bank loans, trade
payables and other liabilities. The main purpose of these financial
instruments is to raise finance for operations. It has various financial assets
such as loans, advances, cash which arise directly from its operation.

The main risk arising from the Company''s financial instruments are market
risk, credit risk, liquidity risk, and interest rate risk.

Market risk:

Market risk is the risk that the fair values of financial instruments will
fluctuate because of change in market price. Market risk comprises three
types of risk: currency risk, interest rate risk and other price risk. The
risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising
from interest rate risk or currency risk), whether those changes are caused
by factors specific to the individual financial instrument or its issuer, or
factors affecting all similar financial instruments traded in the market.
Financial Instruments affected by market risk include loans and borrowings,
investments and deposits. There is no currency risk since all operations
are in INR. The Company managed interest rate risk by converting existing
loans and borrowings with cheaper means of finance.

Credit risk:

It is the risk that one party to a financial instrument or customer contract
will cause a financial loss due to non fulfillment of its obligations under a
financial instrument or customer contract for the other party, leading to a
finance loss.

Liquidity risk:

The risk that an entity will encounter difficulty in meeting obligations
associated with financial liabilities that are settled by delivering cash or
another financial asset.

Note No. 48: Disclosure of trade receivable

The Company does not have any trade receivables outstanding as at March
31, 2025 and March 31, 2024.

Note No. 49: Capital Management

For the purposes of the Company''s capital management, capital includes
issued capital and all other equity reserves. The primary objective of the
Company''s Capital Management is to maximize the shareholder value.
The company manages its capital structure and makes adjustment in the
light of changes in economic environment and the requirement of financial
covenants.

The company monitors capital using gearing ratio, which is total debt
divided by total capital plus debt.

Note No. 52: Impairment review

Assets are tested for impairment whenever there are any internal or
external indicators of impairment.

Impairment test is performed at the level of each Cash Generating Unit
(''CGU'') or groups of CGUs within the Company at which the goodwill or
other assets are monitored for internal management purposes, within an
operating segment.

The impairment assessment is based on higher of value in use and value
from sale calculations.

During the year, the testing did not result in any impairment in the carrying
amount of goodwill and other assets.

The measurement of the cash generating units'' value in use is determined
based on financial plans that have been used by management for internal
purposes. The planning horizon reflects the assumptions for short to- mid
term market conditions.

Key assumptions used in value-in-use calculations:

- Operating margins (Earnings before interest and taxes)

- Discount RATE

- Growth Rates

- Capital expenditures

Operating margins: Operating margins have been estimated based on
past experience after considering incremental revenue arising out of
adoption of valued added and data services from the existing and new
customers, though these benefits are partially offset by decline in tariffs
in a hyper competitive scenario. Margins will be positively impacted from
the efficiencies and initiatives driven by the Company; at the same time,
factors like higher churn, increased cost of operations may impact the
margins negatively.

Discount rate: Discount rate reflects the current market assessment of the
risks specific to a CGU or group of CGUs. The discount rate is estimated based
on the weighted average cost of capital for respective CGU or group of CGUs.
Growth rates: The growth rates used are in line with the long term average
growth rates of the respective industry and country in which the Company
operates and are consistent with the forecasts included in the industry
reports.

Capital expenditures: The cash flow forecasts of capital expenditure are
based on past experience coupled with additional capital expenditure
required.

Note No. 53: Post Reporting Events:

No adjusting or significant non-adjusting events have occurred between
the reporting date and the date of authorization.

For B.M. Chatrath & Co. LLP For & on behalf of Board of Directors

Chartered Accountants
FRN: E300025

CA Sunil Kumar Jha (Manish Modi) (Aditee Modi)

Partner Chairman & Managing Director Director

Membership No. : 543805 DIN 00030036 DIN 00030120

Place : New Delhi (Vineet Kumar Thareja)

Dated : May 30, 2025 CFO & Company Secretary

UDIN: 25543805BMJRGE6341

---

Mar 31, 2024

i) Provisions, Contingent liabilities, Contingent assets and Commitments:

General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Contingent liability is disclosed in the case of:

• There is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

• A present obligation arising from past event, when it is not probable that as outflow of resources will be required to settle the obligation

• A present obligation arises from the past event, when no reliable estimate is possible

• A present obligation arises from the past event, unless the probability of outflow is remote.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

Contingent assets

Contingent assets are not recognised. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.

j) Income Taxes

Income tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current tax assets and current tax liabilities are off set, and presented as net.

Deferred Tax

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax

laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.

The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow deferred tax assets to be recovered.

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

0 Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

) Revenue Recognition

Effective April 1, 2018, the Company has applied Ind AS 115, Revenue from Contracts with Customers, which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the cumulative effect method. The effect of initially applying this standard is recognised at the date of initial application (i.e. April 1, 2018). The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information in the statement of profit and loss is not restated - i.e. the comparative information continues to be reported under Ind AS 18 and Ind AS 11. Refer note 2(K) - Significant accounting policies - Revenue recognition in the Annual report of the Company for the year ended March 31, 2018, for the revenue recognition policy as per Ind AS 18 and Ind AS 11. The impact of the adoption of the standard on the financial statements of the Company was insignificant.

i) Revenue in respect of sale of scrap is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

ii) Indirect costs are treated as "period costs" and are charged to the Statement of profit & loss in the year in which they are incurred.

iii) Interest income on fixed deposit with banks is recognized on time proportion basis taking into account the amount outstanding and the rates applicable.

iv) Dividend income is recognized when right to receive the payment is established.

n) Borrowing costs

Borrowing costs are interest and other costs incurred in connection with borrowings of funds. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or

sale. All other borrowing costs not eligible for capitalization are expensed in the period in which they are incurred.

n) Employee Benefits

Expenses and liabilities in respect of employee benefits are recorded in accordance with Indian Accounting Standard (Ind AS)-19 - ''Employee Benefits''.

o) Financial Instruments

i. Initial Recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through statement of profit or loss, are added to the fair value on initial recognition.

Subsequent Measurement

Non-derivative financial instruments

> Financial assets carried at amortised cost-debt

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

> Financial assets at fair value through other comprehensive income-debt

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

> Financial assets at fair value through profit or loss-debt

A financial asset which is not classified in any of the above categories are subsequently fair valued through statement of profit or loss.

> Financial assets at fair value through other comprehensive income -equity (FVOCI)

The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.

> Financial assets at fair value through profit or loss-equity

A financial asset i.e. equity which is not classified as FVOCI, are subsequently fair valued through profit or loss.

> Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the

higher of the amount of loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortisation.

> Impairment of Financial assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through statement of profit and loss. For impairment purposes significant financial assets are tested on an individual basis, other financial assets are assessed collectively in groups that share similar credit risk characteristics.

The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of profit and loss.

> Investment in subsidiaries/associates/joint ventures

Investment in subsidiaries/associates/joint venture is carried at cost in the financial statements.

> Cash and cash Equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

> Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, for trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

ii. Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

iii. Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

iv. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

v. Current and Non-current Classification

The Management classifies assets and liabilities into current and non-current categories on its operating cycle.

p) Critical accounting estimates, assumptions and judgements

In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgements, which have significant effect on the amounts recognised in the financial statement:

i) Property, plant and equipment

On transition to IND AS, the Company has adopted optional

exemption under IND AS 101 for considering carrying cost as deemed cost on the date of transition for property, plant and equipment.

ii) Income taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.

iii) Contingencies

Management judgement is required for estimating the possible outflow of resources, if any, in respect of Contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

(b) (ii) There is a balance sales tax liability of Rs. 183.90 Lakhs (plus interest/ penalty, if any) imposed by Commercial Tax Authorities, Modinagar on Punjab National Bank on account of tax payable on auction held by the bank for old plant & machinery of the Company. The Company has undertaken to reimburse the same to Punjab National Bank, in case the bank is required to pay the same to the sales tax authorities. In the meantime, the Company shall continue to keep mortgage/ charge over the administrative block (with land) of the Company, as security, in favour of the bank till final disposal of the above tax case. No provision of interest has been made on the sales tax liability of Rs. 183.90 Lakhs.

(c) Suppliers Interest on outstanding dues (Gujarat State Fertilizers and Chemical Company Limited-GSFC) amounting to Rs. 1000.54 Lakhs upto March 31, 2008, has not been provided in the Books of Account as the same are being disputed by the Company. The amount of interest for the 144 month period ended March 31, 2024 is not ascertainable.

(d) Singhal Transport filed a suit for recovery of Rs. 95.08 Lakhs (comprising of the principal amount of Rs. 70 Lakhs and interest due till 19.05.2009) along with claim for pendente- lite and future interest and costs against Modipon Limited. The total sum due as on March 31, 2019 amounts to Rs. 178.17 Lakhs (Rs. 171 Lakhs as on March 31, 2018) including interest for which the Company has not made any provision.

(e) The Punjab National Bank (PNB) had approved one time settlement of its outstanding dues vide its approval letters dated April 02, 2014 and April 12, 2014 respectively. In terms of the settlement, OTS amount of Rs. 1710 Lakhs (Net of upfront payment of Rs. 190 Lakhs) was to be paid by the Company in four quarterly installments with interest during financial year 2014-15. However, the Company was able to manage the payment of Rs. 630 Lakhs up to March 31, 2015 and at the request of the Company, PNB had condoned the delay and revived the OTS vide its letter dated July 02, 2015 requiring the Company to make payment of residual OTS amount of Rs. 1270 Lakhs by March 31, 2016 and total interest on OTS payment @ 10.25% (simple) by June 30, 2016. The Company has paid Rs. 1270 lakhs upto December 31, 2018 along with interest of Rs 2,59,62,100/-. The Company has already made provision of interest on account of delayed payment of OTS of Rs. 94,43,358/- in their books upto September 30, 2018 and booked balance amount of interest in the quarter ending December 31, 2018. (Refer Note 40(b) and (c))

Note No. 34: Balance confirmation certificates were NOT obtained by the Company from creditors, house/shop security depositors, in-operative current accounts with banks and loan account with Punjab National Bank (PNB) and consequently adjustments required, if any, has not been carried out in the financial results.

Note No. 35: The Accounts of the Company have NOT been prepared on a going concern basis in view of closure of manufacturing operations of the Company during the year ended September 30, 2007 and sale of all moveable assets including Plant & machinery during the year 2009-10. However, once the liabilities of the Company towards secured creditors are cleared, the Company will start business operations. The Manufacturing Operations of the Company have been closed with effect from May 19, 2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act, 1947, the closure has become operative from the date of expiration of the period of 90 days from the date of application i.e. on September 8, 2007.

Note No. 36: The Company has elected to exercise the options permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance 2019. No Provision for Income Tax under the Income Tax Act, 1961 is considered necessary for current financial year on account of unabsorbed depreciation, unabsorbed business losses and capital loss. The recognition of Deferred Tax Assets (Net) has been postponed on consideration of prudence.

Note No. 37: Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on October 2, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has not collected the relevant information. Since the information is not readily available, no disclosures/provision for interest has been made in the Books of Account.

Note No. 38: Exceptional Items in Statement of Profit and Loss includes :

During the year Company has taken waiver for payment of interest on the loan amount from Ashoka Merchantile Limited and on the loan amount from Status Mark Finvest Limited full F/Y 2021-22 shown as exceptional item.

Note No. 39: (a) Since the Net Book value of Land, Residential buildings at Modinagar, Office premises outside Modinagar and factory/ administrative building in Modinagar amounting to Rs. 230.88 Lakhs, is lower than the Net Realisable Value as per Valuer''s Report / Management''s estimate, no provision for diminution is required to be made as at March 31, 2024.

(b) The Company has sold 65,743 sq. yds. of its vacant land at Modinagar for Rs. 1021.15 Lakhs (original cost Rs. 1.95 lakhs) which resulted in Profit on Sale of Land amounting to Rs. 1019.20 Lakhs during the year ended March 31, 2009. Approval of banks to whom immovable properties of the Company, including the above Land, are charged is pending.

Note No. 40: (a) Cash credit/Working Capital Demand Loans (including interest accrued and due) taken from Punjab National Bank was out of order and has been classified by Bank as Non-Performing Assets. The Bank issued notice to the Company under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice under section 13(4) of the SARFAESI to the Company for taking possession of the secured assets of the Company.

(b) The Punjab National Bank (PNB) had approved one time settlement of its outstanding dues vide its approval letters dated April 02, 2014 and April 12, 2014 respectively. In terms of the settlement, OTS amount of Rs.1710 Lakhs (Net of upfront payment of Rs.190 lakhs) was to be paid by the Company in four quarterly installments with interest during

financial year 2014-15. However, the Company was able to manage the payment of Rs. 630 Lakhs up to March 31, 2015 and at the request of the Company, PNB condoned the delay and revived the OTS vide its letter dated July 02, 2015 requiring the Company to make payment of residual OTS amount of Rs.1270 Lakhs by March 31, 2016 and total interest on OTS payment @ 10.25% (simple) by June 30, 2016.The Company has paid Rs. 1270 Lakhs upto December 31, 2018 along with interest of Rs 2,59,62,100/-. The Company has already made provision of interest on account of delayed payment of OTS of Rs. 94,43,358/- in their books upto September 30, 2018 and booked balance amount of interest in the quarter ending December 31, 2018.

The Punjab National Bank has initiated the proceeding against the Company under section 7 of the Insolvency and Bankruptcy Code, 2016 before the NCLT, Allahabad Bench and other Proceeding before DRT-II and recovery Officer, DRT- II, New Delhi due to non-fulfillment of OTS Terms/conditions vide OTS letter dated July 02, 2015 issued by PNB.

The Debts Recovery Tribunal-II, Delhi passed its order dated July 30, 2018, in favor of the Company and directed PNB to accept payment of Rs. 65 Lakhs towards outstanding principal of OTS plus Rs. 2,59,62,100/-as interest @10.25% as per revived OTS vide its letter dated July 02, 2015 on delayed payment upto March 15, 2018. which was later on accepted and paid by the Company in terms of DRAT order.

During the pendency of the appeal, PNB has encashed the said amount of Rs. 65 Lakhs towards principal OTS and Rs. 2,59,62,100/-towards interest in term of the order of Debts Recovery Appellate Tribunal (DRAT), New Delhi. Further, the DRAT has reserved the order on December 27, 2018 in the said matter and not pronounced till the date of our reporting, as a result the Company has not considered any liability in its books in addition to the dues already settled as per DRT order dated July 30, 2018.

During the pendency of order before DRAT, the PNB has revived OTS vide letter dated March 25, 2019 against payment of Rs. 459.62 Lakhs on the following terms & conditions:

1) The proceeds of FDRs amounting to Rs. 65 Lakhs and Rs. 259.62 Lakhs kept with us will be appropriated simultaneously on conveying approval of revival of OTS.

2) Rs. 135 Lakhs will be deposited within one week of receipt of this sanction letter.

3) The party to undertake to pay commercial tax liability as demanded by the Commercial Tax Authority.

4) No Dues Certificate will be issued, Bank''s charge on the security/ tittle deeds will be released only after receipt of OTS amount in full and on clearance of commercial tax liability as stated above. (Satisfactory proof/letter from the competent authority in this regard to be submitted).

The Company has already deposited balance of OTS amount of Rs. 65 Lakhs plus delayed period interest of Rs. 259.62 Lakhs with the bank in terms of DRT & DRAT orders and further Rs. 135 Lakhs over and above original OTS amount has been deposited by the Company in terms of revived OTS vide letter dated March 25, 2019 within one week of receipt of letter.

c) In respect of commercial tax liability, the Company has filed an appeal against the order of Commissioner of Commercial Tax before Hon''ble High Court of Allahabad through Punjab National Bank and the Court has directed vide order dated November 26, 2018 that the operation and effect of the impugned order dated August 08, 2018 passed by the Commercial Tax Tribunal, Ghaziabad in Appeal no. 1353 of 2013, shall remain stayed subject to the applicant depositing 50% of the commercial tax liability imposed on it and furnish security for the balance amount other than cash or bank guarantee to the satisfaction of the tribunal within a period of three weeks from the date of direction.

The Company deposited Commercial Tax of Rs. 54.94 Lakhs out of Commercial Tax liability of Rs. 183.90 Lakhs along with interest of Rs. 3.07 Lakhs for the period starting from December 18, 2018 to May 02, 2019 as on May 03, 2019 in compliance with order dated November 26, 2018 of the Hon''ble High Court of Allahabad and communicated the same to PNB vide letter dared May 03, 2019.

d) Further, PNB vide letter dated May 04, 2019 requested the Company to submit No Dues Certificate from tax authorities after paying the commercial tax liability to bank for compliance of OTS Sanction within 3 days else OTS will be declared as failed. PNB vide letter dated July 04, 2019 informed the Company and declared OTS revival as failed and PNB is resuming all recoveries as usual. Further, DRAT allowed appeal of PNB on August 20, 2019. The Company filed Writ Petition in the Delhi High Court against order of the DRAT. The Hon''ble Delhi High Court vide its order dated October 24, 2019, stayed the DRAT and NCLT proceedings filed by the PNB till the next date of hearing which is listed on February 19, 2020. On February 19, 2020 interim order dated October 24, 2019 was made absolute during the pendency of

the writ petition. On the last date of hearing i.e., January 18, 2024, counsel for the bank has filed its counter affidavit and Company will file its rejoinder, if any, before the next date of hearing is August 21, 2024. Further, NCLT matter has been dismissed on the last date of hearing (September 22, 2023) due to non-appearance on behalf of financial creditor (PNB), the matter has been dismissed for non -prosecution.

The outstanding liability in the books of the Company is higher than the OTS amount by Rs. 183.90 Lakhs and in the absence of any documentary evidences from the management as well as PNB, we are unable to quantify the amount of interest on the amount of Rs.183.90 Lakhs; the amount of Rs. 183.90 Lakhs is over and above the loan amount on account of the sales tax liability on PNB on account of the auction held by the bank for old plant and machinery of the Company.

The above matter is subjudice before Hon''ble High Court of Allahabad for further hearing.

(e) (i) Loan liability of Rs. 749.20 Lakhs to Karnatka Bank has been discharged by the Company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited paying the settled sum of Rs. 410 Lakhs to the said bank. The settlement resulted into remission of liability by Rs. 339.20 Lakhs. As per the terms approved by the Board of Directors of the Company on August 16, 2012 with Ashoka Mercantile Limited, they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the Company for settlement under OTS with Punjab National Bank (PNB). Pending the successful implementation of OTS with PNB as stated in note 40(b) above, the amount of Rs. 339.20 Lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Non Current borrowings (Unsecured)".

Ashoka Mercantile Limited has waived interest from the FY 2021-22 till date on loan repaid by Ashoka Mercantile Limited under the OTS deal.

(ii) Loan liability of Rs. 832.04 Lakhs to Bank of Baroda has been discharged by the Company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited who has paid the settled sum of Rs. 600 Lakhs to the said bank. The settlement resulted into remission of liability by Rs. 232.04 Lakhs. As per the terms approved by the Board of Directors of the Company on February 11, 2013 with Ashoka Mercantile Limited., they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the Company for settlement under OTS with Punjab National Bank (PNB). Pending the successful implementation of OTS with PNB as stated in note 40(b) above, the amount of Rs.

232.04 Lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Non current borrowings (Unsecured)".

Ashoka Mercantile Limited has waived interest from the FY 2021-22 till date on loan repaid by Ashoka Mercantile Limited under the OTS deal.

(iii) Pending finalisation of terms of loan agreements with Ashoka Mercantile Limited (AML) which has outstanding amount of secured and unsecured loans of Rs. 882.29 Lakhs and Rs. 1125.57 Lakhs respectively for payment of OTS dues of banks. No provision of Interest on loan have been provided till the March 31, 2014. However, from April 01, 2014, interest has been provided on unsecured loan on reducing balance method @ 10.25% per annum equivalent to the rate of interest agreed with PNB in OTS.

(f) (i) The Abu Dhabi Commercial Bank Limited has settled its dues of Rs.

351.05 Lakhs under One Time Settlement (OTS) as conveyed vide its letter dated September 23, 2008. Since the Company did not have funds to pay the settled dues, it had approached Ashoka Mercantile Limited (AML) for making payment of settled dues to the Banks. Further, it has also been agreed with AML that it shall not be entitled to settlement of its claim better than what is agreed by the Company with PNB.

(ii) Since successful implementation of settlement of dues of PNB is still pending, the amount paid towards OTS by AML of Rs. 157.13 Lakhs (net of Rs. 40 lakhs paid to AML upto March 31, 2011) is shown as secured loan in Note 18 and the balance amount of Rs. 153.92 Lakhs (Rs. 351.05 Lakhs - Rs. 197.13 Lakhs) outstanding in the books of accounts has also been shown as unsecured loan in Note 14, to be written back or credited to AML at the time of OTS with PNB as stated in (i) above.

Ashoka Mercantile Limited has waived interest from the FY 2021-22 till date on loan repaid by Ashoka Mercantile Limited under the OTS deal.

Note No. 42 : The Company has not been able to repay the loan as shown above given by Ashoka Mercantile Limited (AML), a related party. During the month of May 2011, the Company has given temporary physical possession with right of user of 59 residential houses owned by it at Modinagar to AML. Out of which possession of 13 houses has since been returned by AML.

Note No. 43: Figures of previous year have been re-grouped and rearranged wherever found necessary.

Note No. 44: Figures have been rounded off to the nearest Lakh, except otherwise stated.

Note No. 45: The Company has adopted IND AS 116 w.e.f. April 1, 2019. IND AS 116 requires lessees to determine lease term as Non-cancellable period of lease adjusted with an option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on lease-by-lease basis and thereby assess whether it is reasonably certain that any option to extend or terminate the contract will be exercised. In evaluating the lease term, the Company consider factors such as any significant leasehold improvement undertaken over the lease term, costs relating to termination of the lease and importance of the underlying assets to Company operations. The Company do not have any applicable lease and has no impact on financial statement.

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 — Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Fair valuation techniques

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values:1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.2) Long-term fixed-rate and variable-rate receivables / borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. For fixed interest rate borrowing fair value is determined by using the discounted cash flow (DCF) method using discount rate that reflects the issuer''s borrowings rate. Risk of non-performance for the company is considered to be insignificant in valuation.3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity, and market parameters such as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.4) IND AS 101 allow Company to fair value property, plant and machinery on transition to IND AS, the Company has fair valued property, plant and equipment, and the fair valuation is based on replacement cost approach.*5) Fair value of investments in equity shares of entities other than investment in subsidiary, associates & joint ventures is taken at cost as sufficient recent information is not available to measure the fair value and cost represents the best estimate of fair value within that range.

Note No. 48: FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The purpose of financial risk management is to ensure that the Company has adequate and effective utilized financing as regards the nature and scope of the business. The objective is to minimize the impact of such risks on the performance of the Company. The Company''s senior management oversees the management of these risks.

The Company''s principal financial liabilities comprise bank loans, trade payables and other liabilities. The main purpose of these financial instruments is to raise finance for operations. It has various financial assets such as loans, advances, cash which arise directly from its operation.

The main risk arising from the Company''s financial instruments are market risk, credit risk, liquidity risk, and interest rate risk.

Market risk:

Market risk is the risk that the fair values of financial instruments will fluctuate because of change in market price. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. Financial Instruments affected by market risk include loans and borrowings, investments and deposits. There is no currency risk since all operations are in INR. The Company managed interest rate risk by converting existing loans and borrowings with cheaper means of finance.

Credit risk:

It is the risk that one party to a financial instrument or customer contract will cause a financial loss due to non fulfillment of its obligations under a financial instrument or customer contract for the other party, leading to a finance loss.

Liquidity risk:

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Note No. 49: Disclosure of trade receivable

The Company does not have any trade receivables outstanding as at March 31, 2024 and March 31, 2023.

Note No. 50: Capital Management

For the purposes of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company manages its capital structure and makes adjustment in the light of changes in economic environment and the requirement of financial covenants.

Note No. 53: Impairment review

Assets are tested for impairment whenever there are any internal or external indicators of impairment.

Impairment test is performed at the level of each Cash Generating Unit (''CGU'') or groups of CGUs within the Company at which the goodwill or other assets are monitored for internal management purposes, within an operating segment.

The impairment assessment is based on higher of value in use and value from sale calculations.

During the year, the testing did not result in any impairment in the carrying amount of goodwill and other assets.

The measurement of the cash generating units'' value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid term market conditions.

Key assumptions used in value-in-use calculations:

- Operating margins (Earnings before interest and taxes)

- Discount RATE

- Growth Rates

- Capital expenditures

Operating margins: Operating margins have been estimated based on past experience after considering incremental revenue arising out of adoption of valued added and data services from the existing and new customers, though these benefits are partially offset by decline in tariffs in a hyper competitive scenario. Margins will be positively impacted from the efficiencies and initiatives driven by the Company; at the same time, factors like higher churn, increased cost of operations may impact the margins negatively.

Discount rate: Discount rate reflects the current market assessment of the risks specific to a CGU or group of CGUs. The discount rate is estimated based on the weighted average cost of capital for respective CGU or group of CGUs. Growth rates: The growth rates used are in line with the long term average growth rates of the respective industry and country in which the Company operates and are consistent with the forecasts included in the industry reports.

Capital expenditures: The cash flow forecasts of capital expenditure are based on past experience coupled with additional capital expenditure required.

Note No. 54: Post Reporting Events:

No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorization.

For B.M. Chatrath & Co. LLP For & on behalf of Board of Directors

Chartered Accountants FRN: E300025

CA Sunil Kumar Jha (Manish Modi) (Aditee Modi)

Partner Managing Director Director

Membership No. : 543805 DIN 00030036 DIN 00030120

Place : New Delhi (Vineet Kumar Thareja)

Dated : May 29, 2024 CFO & Company Secretary

---

Mar 31, 2023

i) Provisions, Contingent liabilities, Contingent assets and Commitments:

General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Contingent liability is disclosed in the case of:

• There is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

• A present obligation arising from past event, when it is not probable that as outflow of resources will be required to settle the obligation

• A present obligation arises from the past event, when no reliable estimate is possible

• A present obligation arises from the past event, unless the probability of outflow is remote.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

Contingent assets

Contingent assets are not recognised. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.

j) Income Taxes

Income tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current tax assets and current tax liabilities are off set, and presented as net.

Deferred Tax

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.

The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow deferred tax assets to be recovered.

The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

k) Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

l) Revenue Recognition

Effective April 1, 2018, the Company has applied Ind AS 115, Revenue from Contracts with Customers, which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the cumulative effect method. The effect of initially applying this standard is recognised at the date of initial application (i.e. April 1, 2018). The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information in the statement of profit and loss is not restated - i.e. the comparative information continues to be reported under Ind AS 18 and Ind AS 11. Refer note 2(K) - Significant accounting policies - Revenue recognition in the Annual report of the Company for the year ended March 31, 2018, for the revenue recognition policy as per Ind AS 18 and Ind AS 11. The impact of the adoption of the standard on the financial statements of the Company was insignificant.

i) Revenue in respect of sale of scrap is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

ii) Indirect costs are treated as "period costs" and are charged to the Statement of profit & loss in the year in which they are incurred.

iii) Interest income on fixed deposit with banks is recognized on time proportion basis taking into account the amount outstanding and the rates applicable.

iv) Dividend income is recognized when right to receive the payment is established.

m) Borrowing costs

Borrowing costs are interest and other costs incurred in connection with borrowings of funds. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. All other borrowing costs not eligible for capitalization are expensed in the period in which they are incurred.

n) Employee Benefits

Expenses and liabilities in respect of employee benefits are recorded in accordance with Indian Accounting Standard (Ind AS)-19 - ''Employee Benefits''.

o) Financial Instruments

i. Initial Recognition

The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through statement of profit or loss, are added to the fair value on initial recognition.

Subsequent Measurement

Non-derivative financial instruments

^ Financial assets carried at amortised cost-debt

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

^ Financial assets at fair value through other comprehensive income-debt

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

^ Financial assets at fair value through profit or loss-debt

A financial asset which is not classified in any of the above categories are subsequently fair valued through statement of profit or loss.

^ Financial assets at fair value through other comprehensive income -equity (FVOCI)

The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.

^ Financial assets at fair value through profit or loss-equity

A financial asset i.e. equity which is not classified as FVOCI, are subsequently fair valued through profit or loss.

^ Financial guarantee contracts

Financial guarantee contracts issued by the company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance

with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortisation.

^ Impairment of Financial assets

The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through statement of profit and loss. For impairment purposes significant financial assets are tested on an individual basis, other financial assets are assessed collectively in groups that share similar credit risk characteristics.

The company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of profit and loss.

^ Investment in subsidiaries/associates/joint ventures

Investment in subsidiaries/associates/joint venture is carried at cost in the financial statements.

^ Cash and cash Equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

^ Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, for trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

ii. Derecognition

The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

iii. Reclassification of financial assets

The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

iv. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

v. Current and Non-current Classification

The Management classifies assets and liabilities into current and non-current categories on its operating cycle.

p) Critical accounting estimates, assumptions and judgements

In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgements, which have significant effect on the amounts recognised in the financial statement:

i) Property, plant and equipment

On transition to IND AS, the Company has adopted

optional exemption under IND AS 101 for considering carrying cost as deemed cost on the date of transition for property, plant and equipment.

ii) Income taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.

iii) Contingencies

Management judgement is required for estimating the possible outflow of resources, if any, in respect of Contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

(b) (ii) There is a balance sales tax liability of Rs 183.90 lakhs (plus interest/ penalty, if any) imposed by Commercial Tax Authorities, Modinagar on Punjab National Bank on account of tax payable on auction held by the bank for old plant & machinery of the company. The company has undertaken to reimburse the same to Punjab National Bank, in case the bank is required to pay the same to the sales tax authorities. In the meantime, the company shall continue to keep mortgage/ charge over the administrative block (with land) of the company, as security, in favour of the bank till final disposal of the above tax case. No provision of interest has been made on the sales tax liability of Rs. 183.90 lakhs.

(c) Suppliers Interest on outstanding dues (Gujarat State Fertilizers and Chemical Company Limited-GSFC) amounting to Rs 1000.54 lakhs upto 31st March, 2008, has not been provided in the Books of Account as the same are being disputed by the company. The amount of interest for the 180 month period ended 31st March, 2023 is not ascertainable.

(d) Singhal Transport filed a suite for recovery of Rs. 95.08 lakhs (comprising of the principal amount of Rs. 70 lakhs and interest due till 19.05.2009) along with claim for pendente- lite and future interest and costs against Modipon Limited. The total sum due as on 31st March, 2019 amounts to Rs 178.17 lakhs (Rs 171 lakhs as on 31st march, 2018) including interest for which the company has not made any provision.

(e ) The Punjab National Bank (PNB) had approved one time settlement of its outstanding dues vide its approval letters dated April 02, 2014 and April 12, 2014 respectively. In terms of the settlement, OTS amount of Rs 1710 lakhs (Net of upfront payment of Rs 190 lakhs) was to be paid by the company in four quarterly installments with interest during financial year 2014-15. However, the company was able to manage the payment of Rs 630 lakhs up to March 31, 2015 and at the request of the Company, PNB had condoned the delay and revived the OTS vide its letter dated July 02, 2015 requiring the Company to make payment of residual OTS amount of Rs 1270 lakhs by March 31, 2016 and total interest on OTS payment @ 10.25% (simple) by June 30, 2016. The Company has paid Rs. 1270 lakhs upto December 31st, 2018 along with interest of Rs 2,59,62,100/-. The company has already made provision of interest on account of delayed payment of OTS of Rs 94,43,358/- in their books upto 30th September 2018 and booked balance amount of interest in the quarter ending 31st December 2018. (Refer Note 39(b) and (c))

Note No. 34: Balance confirmation certificates were NOT obtained by the Company from creditors, house/shop security depositors, in-operative current accounts with banks and loan account with Punjab National Bank (PNB) and consequently adjustments required, if any, has not been carried out in the financial results.

Note No. 35: The Accounts of the Company have not been prepared on a going concern basis in view of Closure of Manufacturing Operations of the Company during the year ended 30th September, 2007 and sale of all moveable assets including Plant & machinery during the year 2009-10. However, once the liabilities of the company towards secured creditors are cleared, the company will start business operations. The Manufacturing Operations of the Company have been closed with effect from 19th May, 2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act, 1947, the Closure has become operative from the date of expiration of the period of 90 days from the date of application i.e. on 8th September, 2007.

Note No. 36: The company has elected to exercise the options permitted under section 115BAA of the Income Tax Act 1961 as introduced by the Taxation Laws (Amendment) Ordinance 2019. No Provision for Income Tax under the Income Tax Act, 1961 is considered necessary for current financial year on account of unabsorbed depreciation, unabsorbed business losses and capital loss. The recognition of Deferred Tax Assets (Net) has been postponed on consideration of prudence.

Note No. 37: Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has not collected the relevant information. Since the information is not readily available, no disclosures/provision for interest has been made in the Books of Account.

Note No. 38: (a) Since the Net Book value of Land, Residential buildings at Modinagar, Office premises outside Modinagar and factory/ administrative building in Modinagar amounting to Rs. 230.88 lakhs, is lower than the Net Realisable Value as per Valuer''s Report / Management''s estimate, no provision for diminution is required to be made as at 31st March 2023.

(b) The company has sold 65,743 sq. yds. of its vacant land at Modinagar for Rs 1021.15 lakhs (original cost Rs 1.95 lakhs) which resulted in Profit on Sale of Land amounting to Rs.1019.20 lakhs during the year ended March 31, 2009. Approval of banks to whom immovable properties of the company, including the above Land, are charged is pending.

Note No. 39: (a) Cash credit/Working Capital Demand Loans (including interest accrued and due) taken from Punjab National Bank was out of order and has been classified by Bank as Non-Performing Assets. The Bank issued notice to the company under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice under section 13(4) of the SARFAESI to the company for taking possession of the secured assets of the company.

(b) The Punjab National Bank (PNB) had approved one time settlement of its outstanding dues vide its approval letters dated April 02, 2014 and April 12, 2014 respectively. In terms of the settlement, OTS amount of Rs.1710 lakhs (Net of upfront payment of Rs.190 lakhs) was to be paid by the company in four quarterly installments with interest during financial year 2014-15. However, the company was able to manage the payment of Rs.630 lakhs up to March 31, 2015 and at the request of the Company, PNB condoned the delay and revived the OTS vide its letter dated July 02, 2015 requiring the Company to make payment of residual OTS amount of Rs.1270 lakhs by March

31, 2016 and total interest on OTS payment @ 10.25% (simple) by June 30, 2016.The Company has paid Rs. 1270 lakhs upto December 31st, 2018 along with interest of Rs 2,59,62,100/-. The company has already made provision of interest on account of delayed payment of OTS of Rs 94,43,358/- in their books upto 30th September 2018 and booked balance amount of interest in the quarter ending 31st December 2018.

The Punjab National Bank has initiated the proceeding against the company under section 7 of the Insolvency and Bankruptcy Code, 2016 before the NCLT, Allahabad Bench and other Proceeding before DRT-II and recovery Officer, DRT- II, New Delhi due to non-fulfillment of OTS Terms/conditions vide OTS letter dated July 02, 2015 issued by PNB.

The Debts Recovery Tribunal-II, Delhi passed its order dated 30 July, 2018, in favor of the Company and directed PNB to accept payment of Rs. 65 lakhs towards outstanding principal of OTS plus Rs. 2,59,62,100/- as interest @10.25% as per revived OTS vide its letter dated July 02,2015 on delayed payment upto 15 March,2018. which was later on accepted and paid by the company in terms of DRAT order.

During the pendency of the appeal, PNB has encashed the said amount of Rs. 65 Lacs towards principal OTS and Rs. 2,59,62,100/-towards interest in term of the order of Debts Recovery Appellate Tribunal (DRAT), New Delhi. Further, the DRAT has reserved the order on 27.12.2018 in the said matter and not pronounced till the date of our reporting, as a result the company has not considered any liability in its books in addition to the dues already settled as per DRT order dated 30th July, 2018.

During the pendency of order before DRAT, the PNB has revived OTS vide letter dated 25.03.2019 against payment of Rs. 459.62 lacs on the following terms & conditions:

1) The proceeds of FDRs amounting to Rs. 65 lakhs and Rs. 259.62 lakhs kept with us will be appropriated simultaneously on conveying approval of revival of OTS.

2) Rs. 135 lakhs will be deposited within one week of receipt of this sanction letter.

3) The party to undertake to pay commercial tax liability as demanded by the Commercial Tax Authority.

4) No Dues Certificate will be issued, Bank''s charge on the security/ tittle deeds will be released only after receipt of OTS amount in full and on clearance of commercial tax liability as stated above. (Satisfactory proof/letter from the competent authority in this regard to be submitted).

The Company has already deposited balance of OTS amount of Rs.65 lacs plus delayed period interest of Rs. 259.62 lacs with the bank in terms of DRT & DRAT orders and further Rs.135 lacs over and above original OTS amount has been deposited by the company in terms of revived OTS vide letter dated 25.03.2019 within one week of receipt of letter.

The IBC Petition filed by PNB referred above is lying pending before the Allahabad Bench due to the consideration of order of the DRT-II, Delhi dated 30.07.2018 with no dues remaining towards PNB and further stay of High Court on the order of DRAT and IBC Petition filed before NCLT Bench, Allahabad by PNB.

(c) In respect of commercial tax liability, the Company has filed an appeal against the order of Commissioner of Commercial Tax before Hon''ble High Court of Allahabad through Punjab National Bank and the Court has directed vide order dated 26.11.2018 that the operation and effect of the impugned order dated 08.08.2018 passed by the Commercial Tax Tribunal, Ghaziabad in Appeal no. 1353 of 2013, shall remain stayed subject to the applicant depositing 50% of the commercial tax liability imposed on it and furnish security for the balance amount other than cash or bank guarantee to the satisfaction of the tribunal within a period of three weeks from the date of direction.

The company deposited Commercial Tax of Rs 54.94 lacs out of Commercial Tax liability of Rs 183.90 lacs along with interest of Rs 3.07 lacs for the period starting from 18.12.2018 to 02.05.2019 as on 03.05.2019 in compliance with order dated 26.11.2018 of the Hon''ble High Court of Allahabad and communicated the same to PNB vide letter dared 03.05.19

(d) Further, PNB vide letter dated 04.05.2019 requested the company to submit No Dues Certificate from tax authorities after paying the commercial tax liability to bank for compliance of OTS Sanction within 3 days else OTS will be declared as failed. Since the company failed to reply to the same, PNB vide letter dated 04.07.2019 informed that the tax authorities have declared OTS revival as failed and PNB is resuming all recoveries as usual. Further, DRAT allowed appeal of PNB on 20.08.2019. The Company filed Writ Petition in the Delhi High Court against order of the DRAT. The Hon''ble Delhi High Court vide its order

dated 24.10.2019, stayed the DRAT and NCLT proceedings filed by the PNB till the next date of hearing which is listed on 19th February, 2020. On 19th February, 2020 interim order dated 24th October, 2019 was made absolute during the pendency of the writ petition. On the last date of hearing i.e., 29.03.2023, Counsel for the Bank seeks time again and granted four weeks'' time to file and rejoinder if any, to be filed before the next date of hearing is 14.08.2023.

The outstanding liability in the books of the company is higher than the OTS amount by Rs. 183.90 lakhs and in the absence of any documentary evidences from the management as well as PNB, we are unable to quantify the amount of interest on the amount of Rs.183.90 lakhs; the amount of Rs.183.90 lakhs is over and above the loan amount on account of the sales tax liability on PNB on account of the auction held by the bank for old plant and machinery of the company.

The above matter is subjudice before Hon''ble High Court of Allahabad for further hearing.

(e) (i) Loan liability of Rs 749.20 lakhs to Karnatka Bank has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited paying the settled sum of Rs 410 lakhs to the said bank. The settlement resulted into remission of liability by Rs 339.20 lakhs. As per the terms approved by the Board of Directors of the company on August 16, 2012 with Ashoka Mercantile Ltd, they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with Punjab National Bank (PNB). Pending the successful implementation of OTS with PNB as stated in note 40(b) above, the amount of Rs 339.20 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Non Current borrowings (Unsecured).

Ashoka Mercantile Limited has waived interest for the FY 2021-22 and 2022-23 on loan repaid by Ashoka Mercantile Limited under the OTS deal.

(ii) Loan liability of Rs 832.04 lakhs to Bank of Baroda has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited who has paid the settled sum of Rs 600 Lakhs to the said bank. The settlement resulted into remission of liability by Rs 232.04 Lakhs. As per the terms approved by the Board of Directors of the company on February 11,2013 with Ashoka Mercantile Ltd., they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with Punjab National Bank (PNB). Pending the successful implementation of OTS with PNB as stated in note 40(b) above, the amount of Rs 232.04 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Non current borrowings (Unsecured)".

Ashoka Mercantile Limited has waived interest for the FY 2021-22 and 2022-23 on loan repaid by Ashoka Mercantile Limited under the OTS deal.

(iii) Pending finalisation of terms of loan agreements with Ashoka Mercantile Limited (AML) who has outstanding amount of secured and unsecured loans of Rs 882.29 lakhs and Rs 1125.57 lakhs respectively for payment of OTS dues of banks. No provision of Interest on loan have been provided till the March 31, 2014. However, from April 01, 2014, interest has been provided on unsecured loan on reducing balance method @ 10.25% per annum equivalent to the rate of interest agreed with PNB in OTS.

(f) (i) The Abu Dhabi Commercial Bank Limited has settled its Dues of Rs 351.05 lakhs under One Time Settlement (OTS) as conveyed vide its letter dated September 23, 2008. Since the Company did not have funds to pay the settled dues, it had approached M/s Ashoka Mercantile Limited (AML) for making payment of settled dues to the Banks. Further, it has also been agreed with AML that it shall not be entitled to settlement of its claim better than what is agreed by the Company with PNB.

(ii) Since successful implementation of settlement of dues of PNB is still pending, the amount paid towards OTS by AML of Rs 157.13 lakhs (net of Rs 40 lakhs paid to AML upto March 31, 2011) is shown as secured loan in Note 18 and the balance amount of Rs 153.92 lakhs (Rs 351.05 lakhs - Rs 197.13 lakhs) outstanding in the books of accounts has also been shown as unsecured loan in Note 14, to be written back or credited to AML at the time of OTS with PNB as stated in (i) above.

Ashoka Mercantile Limited has waived interest for the FY 2021-22 and 2022-23 on loan repaid by Ashoka Mercantile Limited under the OTS deal.

Note No. 41 : The Company has not been able to repay the loan as shown above given by Ashoka Mercantile Limited (AML), a related party. During the month of May 2011, the Company has given temporary physical possession with right of user of 59 residential houses owned by it at Modinagar to AML. Out of which possession of 13 houses has since been returned by AML.

Note No. 42: Figures of previous year have been re-grouped and re-arranged wherever found necessary.

Note No. 43: Figures have been rounded off to the nearest Lakh, except otherwise stated.

Note No. 44: The Company has adopted IND AS 116 W.e.f. 1st April 2019. IND AS 116 requires lessees to determine lease term as Non-cancellable period of lease adjusted with an option to extend or terminate the lease, if the use of such option is reasonably certain. The company makes an assessment on the expected lease term on lease-by-lease basis and thereby assess whether it is reasonably certain that any option to extend or terminate the contract will be exercised. In evaluating the lease term,

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Fair valuation techniques

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values:1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.2) Long-term fixed-rate and variable-rate receivables / borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. For fixed interest rate borrowing fair value is determined by using the discounted cash flow (DCF) method using discount rate that reflects the issuer''s borrowings rate. Risk of non-performance for the company is considered to be insignificant in valuation.3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models

are based on readily observable market parameters basis contractual terms, period to maturity, and market parameters such as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.4) IND AS 101 allow Company to fair value property, plant and machinery on transition to IND AS, the Company has fair valued property, plant and equipment, and the fair valuation is based on replacement cost approach.*5) Fair value of investments in equity shares of entities other than investment in subsidiary, associates & joint ventures is taken at cost as sufficient recent information is not available to measure the fair value and cost represents the best estimate of fair value within that range.

Note No. 47: FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The purpose of financial risk management is to ensure that the Company has adequate and effective utilized financing as regards the nature and scope of the business. The objective is to minimize the impact of such risks on the performance of the Company. The Company''s senior management oversees the management of these risks.

The Company''s principal financial liabilities comprise bank loans, trade payables and other liabilities. The main purpose of these financial instruments is to raise finance for operations. It has various financial assets such as loans, advances, cash which arise directly from its operation.

The main risk arising from the Company''s financial instruments are market risk, credit risk, liquidity risk, and interest rate risk.

Market risk:

Market risk is the risk that the fair values of financial instruments will fluctuate because of change in market price. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. Financial Instruments affected by market risk include loans and borrowings, investments and deposits. There is no currency risk since all operations are in INR. The Company managed interest rate risk by converting existing loans and borrowings with cheaper means of finance.

Credit risk:

It is the risk that one party to a financial instrument or customer contract will cause a financial loss due to non fulfillment of its obligations under a financial instrument or customer contract for the other party, leading to a finance loss.

Liquidity risk:

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Note No. 48: Disclosure of trade receivable

The Company does not have any trade receivables outstanding as at 31.03.2023 and 31.03.2022.

Note No. 49: Capital Management

For the purposes of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s Capital Management is to maximize the shareholder value. The company manages its capital structure and makes adjustment in the light of changes in economic environment and the requirement of financial covenants.

The company monitors capital using gearing ratio, which is total debt divided by total capital plus debt.

Note No. 52: Impairment review

Assets are tested for impairment whenever there are any internal or external indicators of impairment.

Impairment test is performed at the level of each Cash Generating Unit (''CGU'') or groups of CGUs within the Company at which the goodwill or other assets are monitored for internal management purposes, within an operating segment.

The impairment assessment is based on higher of value in use and value from sale calculations.

During the year, the testing did not result in any impairment in the carrying amount of goodwill and other assets.

The measurement of the cash generating units'' value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid term market conditions.

Key assumptions used in value-in-use calculations:

- Operating margins (Earnings before interest and taxes)

- Discount RATE

- Growth Rates

- Capital expenditures

Operating margins: Operating margins have been estimated based on past experience after considering incremental revenue arising out of adoption of valued added and data services from the existing and new customers, though these benefits are partially offset by decline in tariffs in a hyper competitive scenario. Margins will be positively impacted from the efficiencies and initiatives driven by the Company; at the same time, factors like higher churn, increased cost of operations may impact the margins negatively.

Discount rate: Discount rate reflects the current market assessment of the risks specific to a CGU or group of CGUs. The discount rate is estimated based on the weighted average cost of capital for respective CGU or group of CGUs. Growth rates: The growth rates used are in line with the long term average growth rates of the respective industry and country in which the Company operates and are consistent with the forecasts included in the industry reports.

Capital expenditures: The cash flow forecasts of capital expenditure are based on past experience coupled with additional capital expenditure required.

Note No. 53: Post Reporting Events:

No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorization.

For B.M. Chatrath & CO LLP For & on behalf of Board of Directors

Chartered Accountants FRN: E300025

CA Sunil Kumar Jha (Manish Modi) (Aditee Modi)

Partner Managing Director Director

Membership No. : 543805 DIN 00030036 DIN 00030120

Place : New Delhi (Vineet Kumar Thareja)

Dated : May 29, 2023 Company Secretary & CFO

UDIN: 23543805BGXTWU2401

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Mar 31, 2018

NOTE 1 : CORPORATE INFORMATION

Modipon Limited (“the Company’’), was incorporated in the year 1965 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange. The Company has closed its manufacturing operations since May 19, 2007 (closure of factory w.e.f. September 8, 2007) on account of huge losses incurred and sale of entire plant & machinery during the year ended March 31, 2010.

The registered office of Modipon Limited is situated at Hapur Road, Modinagar-201204. District: Ghaziabad(U.P), India.

These financial statements were approved and adopted by board of directors of the Company in their meeting dated 28^th May, 2018. Registration details:-

Registration No. CIN No.:L65993UP1965PLC003082 State code : UP

a. Terms/rights attached to equity shares

The company has only one class of equity shares having par value of $ 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. 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 shareholde’

b. Terms/rights attached to preference shares

The company has 15% Redeemable Cumulative Preference Share of $ 100 per share. Preference Share due for redemption since 31st March, 1996.

e. Details of Equity Shares held by each shareholder holding more than 5 percent shares in the company

1) Cash Credit/WCDL from banks and loan from Ashoka Mercantile Limited and Modi Intercontinental Private limited are secured by charge by way of pari passu charge on block assets of the company.

2)(a) Cash Credit/Working Capital Demand Loans (including interest Accrued and Due) taken from Punjab National Bank was out of order and classified by Bank as Non-Performing Assets since calender year 2007. Also company has defaulted into the loan replayment amount of N 65 Lakhs excluding interest. (Refer note 43 (b))

(b) The PunjabNational Bank issued notice to the company under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice under section 13(4) of the SARFAESI to the company for taking possession of the secured assets of the company.

(c ) Borrowings from related parties includes loan from Ashoka Mer-chantile Limited,Status Mark Finvest Ltd and Modi Intercontinental Private Limited.

-During the year Company has provided interest @ 10.25 % p.a. on the loan amount from Ashoka Merchantile Limited and @ 9.50% on the loan amount from Status Mark Finvest Ltd. However, the terms of repayment are yet to be entered into with the said parties.

Note No. 2: In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31st March, 2018.

Note No. 3: Sundry debtors, creditors, loans and advances are subject to confirmation.

(a) For Assessment Years 2006-07 to 2008-09, the demand towards nondeduction of TDS inclusive of interest and penalty of A 816.93 Lacs raised earlier has been rectified by the Income Tax Department and reduced to A 217.55 Lacs. On an appeal filed by the company, Hon’ble Allahabad High Court had stayed recovery of demand (after rectification) of A 107.71 Lacs while the penalty of A 93.67 Lacs thereon has been stayed by the Additional Commissioner of Income Tax (TDS) Ghaziabad and the matter is pending for disposal. For the rest amount of A 16.17 Lacs the company has filed appeals before Commissioner of Income Tax (Appeals), Ghaziabad/ Income Tax Appellate Tribunal, New Delhi which are also pending adjudication.

(c) Suppliers Interest on outstanding dues (Gujarat State Fertilizers and Chemical Company Limited-GSFC) amounting to A 1000.54 lakhs upto 31st March, 2008, has not been provided in the Books of Account as the same are being disputed by the company. The amount of interest for the 120 month period ended 31st March, 2018 is not ascertainable.

(d) Singhal Transport filed a suite for recovery of A 95.08 lacs (comprising of the principal amount of Rs. 70 lacs and interest due till 19.05.2009) along with claim for pendente- lite and future interest and costs against Modipon Limited. The total sum due as on 31st March, 2018 amounts to 171 lacs including interest for which the company has not made any provision.

(e ) The Punjab National Bank (PNB) had approved one time settlement of its outstanding dues vide its approval letters dated April 02, 2014 and April 12, 2014 respectively. In terms of the settlement, OTS amount of A 1710 lakhs (Net of upfront payment of A 190 lakhs) was to be paid by the company in four quarterly installments with interest during financial year 2014-15. However, the company was able to manage the payment of A 630 lakhs up to March 31, 2015 and at the request of the Company, PNB had condoned the delay and revived the OTS vide its letter dated July 02, 2015 requiring the Company to make payment of residual OTS amount of A 1270 lakhs by March 31, 2016 and total interest on OTS payment @ 10.25% (simple) by June 30, 2016. The Company has paid A 1205 lakhs upto March 31, 2018 and balance A 65 lakhs along with outstanding interest remain to be paid. Due to non compliance of revived OTS, the bank has demanded interest @ 10.25% from the inception and hence the interest outstanding is A 285.89 upto 31st march,2018 out of which provision of only A 17.60 has been made in the books.

(f) There is a balance sales tax liability of A 183.90 lakhs (plus interest/ penalty, if any) imposed by Commercial Tax Authorities, Modinagar on Punjab National Bank on account of tax payable on auction held by the bank for old plant & machinery of the company. The company has undertaken to reimburse the same to Punjab National Bank, in case the bank is required to pay the same to the sales tax authorities. In the meantime, the company shall continue to keep mortgage/ charge over the administrative block (with land) of the company, as security, in favour of the bank till Anal disposal of the above tax case. No provision of interest has been made on the sales tax liability of A 183.90lakhs.

Note No. 4: Balance confirmation certificates were NOT obtained by the Company from creditors, house/shop security depositors, in-operative current accounts with banks and loan account with Punjab National Bank (PNB) and consequently adjustments required, if any, has not been carried out in the financial results.

Note No. 5: The Accounts of the Company have NOT been prepared on a going concern basis in view of Closure of Manufacturing Operations of the Company during the year ended 30th September, 2007 and sale of all moveable assets including Plant & machinery during the year 2009-10. However, once the liabilities of the company towards secured creditors are cleared, the company will start business operations. The Manufacturing Operations of the Company have been closed with effect from 19th May, 2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act, 1947, the Closure has become operative from the date of expiration of the period of 90 days from the date of application i.e. on 8th September, 2007.

Note No. 6: The members of the company have, in their meeting held on 27th September 2013, approved payment of remuneration to Shri Manish K. Modi Managing Director for a period of five years w.e.f. 1st June, 2013. The Central Government approval for managing director’s remuneration had been received on 28th July, 2014 for the period of ten months falling under the the provisions of Companies Act, 1956 i.e. upto 31st March, 2014. For the remaining period of four years and two months, the members, in their meeting held on 30th September, 2015, reaffirmed payment of remuneration to Shri Manish K. Modi and an application seeking Central Government approval to the same was moved. The Central Government has vide its letter dated 18th April, 2016 confirmed that that the proposed remuneration is within the limit of the Companies Act, 2013.

Note No. 7: No Provision for Income Tax under the Income Tax Act, 1961 is considered necessary for current financial year on account of unabsorbed depreciation, unabsorbed business losses and capital loss. The recognition of Deferred Tax Assets (Net) has been postponed on consideration of prudence.

Note No. 8: Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has not collected the relevant information. Since the information is not readily available, no disclosures/provision for interest has been made in the Books of Account.

Note No. 9: Exceptional Items in Statement of Profit and Loss includes :

During the year Compensation received from Kirloskar Pneumetic Company of A 61.17 Lacs on account of non supply of air compresor equipment within time limit for which the company had Ailed suit against Kirlosker Pneumetic Company.

Note No. 10: (a)Since the Net Book value of Land, Residential buildings at Modinagar, Office premises outside Modinagar and factory/ administrative building in Modinagar are lower than the Net Realisable Value as per Valuer’s Report / Management’s estimate, no provision for diminution is required to be made and the net book Value of A 230.88 lakhs as on 31st March 2018 .

(b) The company has sold 65,743 sq. yds. and 2299 sq. yds. of its vacant land at Modinagar for A 986.15 lakhs (original cost A 1.88 lakhs) and A 35.00 lakhs (original cost A 0.07lakhs) respectively which resulted in Profit on Sale of Land amounting to A 1019.20 lakhs during the year ended March 31, 2009. Approval of banks to whom immovable properties of the company, including the above Land, are charged is pending.

Note No. 11: (a) Cash credit/Working Capital Demand Loans (including interest accrued and due) taken from Punjab National Bank was out of order and has been classified by Bank as Non-Performing Assets. The Bank issued notice to the company under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice under section 13(4) of the SARFAESI to the company for taking possession of the secured assets of the company.

(b) The Punjab National Bank (PNB) had approved one time settlement of its outstanding dues vide its approval letters dated April 02, 2014 and April 12, 2014 respectively. In terms of the settlement, OTS amount of A 1710 lakhs (Net of upfront payment of A 190 lakhs) was to be paid by the company in four quarterly installments with interest during financial year 2014-15. However, the company was able to manage the payment of A 630 lakhs up to March 31, 2015 and at the request of the Company, PNB condone the delay and revived the OTS vide its letter dated July 02, 2015 requiring the Company to make payment of residual OTS amount of A 1270 lakhs by March 31, 2016 and total interest on OTS payment @ 10.25% (simple) by June 30, 2016. The Company has paid A 1205 lakhs upto March 31, 2018 and balance A 65 lakhs along with interest remain to be paid. The Company is making efforts to pay the balance OTS amount and the matter is under negotiation with PNB. The balance of PNB as per books of account of the Company was A 2083.90 lakhs and excess amount of A 183.90 lakhs would be dealt with upon final payment of the OTS amount. In view of the pending implementation of OTS as above, no provision for interest has been considered necessary for the year ended March 31, 2016 amounting to A 491.15 lakhs (1867.45 lakhs for the period from April 01, 2009 to March 31, 2016). However, interest on OTS amount has been provided as per the agreement amounting to A 7.35 lakhs for the year ended March 31, 2018 (Previous year: A 10.25 lakhs).

(c) (i)Loan liability of A 749.20 lakhs to Karnatka Bank has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited paying the settled sum of A 410 lakhs to the said bank. The settlement resulted into remission of liability by A 339.20 lakhs. As per the terms approved by the Board of Directors of the company on August 16,2012 with Ashoka Mercantile Ltd, they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with Punjab National Bank (PNB). Pending the successful implementation of OTS with PNB as stated in para 43(b) above, the amount of A 339.20 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Non Current borrowings (Unsecured)”.

During the financial year 2017-18, interest of A 42.02 lakhs has been provided on loan repaid by Ashoka Mercantile Limited under this OTS deal.

(ii) Loan liability of A 832.04 lakhs to Bank of Baroda has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited who has paid the settled sum of A 600 Lakhs to the said bank. The settlement resulted into remission of liability by A 232.04 Lakhs. As per the terms approved by the Board of Directors of the company on February 11, 2013 with Ashoka Mercantile Ltd., they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with Punjab National Bank (PNB). Pending the successful implementation of OTS with PNB as stated in para 31(b) above, the amount of A 232.04 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Non current borrowings (Unsecured)”.

During the financial year 2017-18, interest of A 20.67 lakhs has been provided on loan repaid by Ashoka Mercantile Limited under this OTS deal.

(iii) Pending finalisation of terms of loan agreements with Ashoka Mercantile Limited (AML) who has outstanding amount of secured and unsecured loans of A 882.29 lakhs and A 1125.57 lakhs respectively for payment of OTS dues of banks. No provision of Interest on loan have been provided till the March 31, 2014. However, from April 01, 2014, interest has been provided on unsecured loan on reducing balance method @ 10.25% per annum equivalent to the rate of interest agreed with PNB in OTS.

(d)(i)The Abu Dhabi Commercial Bank Limited has settled its Dues of A 351.05 lakhs under One Time Settlement (OTS) as conveyed vide its letter dated September 23, 2008. Since the Company did not have funds to pay the settled dues, it had approached M/s Ashoka Mercantile Limited (AML) for making payment of settled dues to the Banks. Further, it has also been agreed with AML that it shall not be entitled to settlement of its claim better than what is agreed by the Company with PNB.

(ii) Since successful implementation of settlement of dues of PNB is still pending, the amount paid towards OTS by AML of A 157.13 lakhs (net of A 40 lakhs paid to AML upto March 31, 2011) is shown as secured loan in Note 18 and the balance amount of A 153.92 lakhs (A 351.05 lakhs - A 197.13 lakhs) outstanding in the books of accounts has also been shown as unsecured loan in Note 14, to be written back or credited to AML at the time of OTS with PNB as stated in (i) above.

During the financial year 2017-18, interest of A 16.11 lakhs has been provided on loan repaid by Ashoka Mercantile Limited under this OTS deal.

Note No. 12: The Company has not been able to repay the loan as shown above given by Ashoka Mercantile Limited (AML), a related party. During the month of May 2011, the Company has given temporary physical possession with right of user of 59 residential houses owned by it at Modinagar to AML. Out of which possession of 13 houses has since been returned by AML.

Note No. 13: In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31st March, 2018.

Note No. 14: Sundry debtors, creditors , loans and advances are subject to confirmation.

Note No. 15: Figures of previous year have been re-grouped and re-arranged wherever found necessary.

Note No. 16: Figures have been rounded off to the nearest Lakh.

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Mar 31, 2016

(b) Provision for leave encashment benefits and gratuity of the continuing employees is provided on accrual basis based on actual computation instead of computing on actuarial basis as the company has only one employees at the year end.

b. Terms/rights attached to equity shares

The company has only one class of equity shares having par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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. Terms/rights attached to preference shares

The company has 15% Redeemable Cumulative preference Share of '' 100 per share. preference Share due for redemption since 31st March, 1996.

1) Cash Credit/WCDL from banks and loan from Ashoka Mercantile Limited and Modi Intercontinental Private limited are secured by charge by way of pari passu charge on block assets of the company.

2) (a) Cash Credit/Working Capital Demand Loans (including interest Accrued and Due) taken from Punjab National Bank was out of order and classified by Bank as Non-Performing Assets since calender year 2007. Also company has defaulted into the loan repayment amount of '' 100 Lakhs. (Refer note 31(b))

(b) The Punjab National Bank issued notice to the company under section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice under section 13(4) of the SAR-FAESI to the company for taking possession of the secured assets of the company. The Company could manage payment of '' 1082.24 Lacs (March 31, 2015: '' 630 Lacs) only upto 31st March,2016. The matter of revival of OTS is under consideration of PNB.

(c) Loan and advances from related parties includes loan from Ashoka Merchantile Limited and loan from Modi Intercontinental Private Limited.

-During the year Company has provided interest @ 10.25 % p.a. on the loan amount from Ashoka Merchantile Limited . However, the terms of repayment are yet to be entered into with the said party.

Notes:-

i. Aggregate Market Value is exclusive of these investments in view of no availability of Current Market rates.

ii. In view of Rehabilitation Scheme of Modi Spg & Wvg Mills & Co. Ltd. (MSWM), the company was alloted free of cost 15126 equity shares of '' 10 each during the previous year of Haryana Distliery Ltd. (HDL) and Rajputana Fertilizers Ltd. (RFL) on account of demerger of units of MSWM to HDL & RFL. Consequently the orignal cost of '' 1 has been allocated on notional basis among MSWM, HDL, RFL shares of HDL are yet to be received by the company.

iii. The cost of the above shares have been taken as NIL since these shares have been received by the company in pursuance of slump sale agreement dated October 28, 2006 executed for transfer of Indofil Chemicals division to Indofil Industries Limited.

iv. 5,00,000 equity shares are yet to be transferred to the name of the company.

(b) There is a balance sales tax liability of Rs, 183.90 lakhs (plus interest/ penalty, if any) imposed by Commercial Tax Authorities, Modinagar on Punjab National Bank on account of tax payable on auction held by the bank for old plant & machinery of the company. The company has undertaken to reimburse the same to Punjab National Bank, in case the bank is required to pay the same to the sales tax authorities. In the meantime, the company shall continue to keep mortgage/charge over the administrative block (with land) of the company, as security, in favour of the bank till final disposal of the above tax case.

(c) For Assessment Years 2006-07 to 2008-09, the demand towards nondeduction of TDS inclusive of interest and penalty of Rs, 816.93 Lacs raised earlier has been rectified by the Income Tax Department and reduced to Rs, 217.55 Lacs. On an appeal filed by the company, Hon''ble Allahabad High Court had stayed recovery of demand (after rectification) of Rs, 107.71 Lacs while the penalty of Rs, 93.67 Lacs thereon has been stayed by the Additional Commissioner of Income Tax (TDS) Ghaziabad and the matter is pending for disposal. For the rest amount of Rs, 16.17 Lacs the company has filed appeals before Commissioner of Income Tax (Appeals), Ghaziabad/ Income Tax Appellate Tribunal, New Delhi which are also pending adjudication.

(d) Suppliers Interest on outstanding dues (Gujarat State Fertilizers and Chemical Company Limited-GSFC) amounting to Rs, 1000.54 lakhs up to March 31, 2008, has not been provided in the Books of Account as the same are being disputed by the company. The amount of interest for the 96 month period ended 31st March, 2016 is not ascertainable.

Note 1 : Balance confirmation certificates were not obtained by the Company from creditors, loans and advances given/received, house/shop security depositors, in-operative current accounts with banks and loan account with Punjab National Bank (PNB) and consequently adjustments required, if any, has not been carried out in the financial results.

Note 2 : The Accounts of the Company have not been prepared on a going concern basis in view of Closure of Manufacturing Operations of the Company during the year ended September 30, 2007 and sale of all moveable assets including Plant & machinery during the year 2009-10. However, once the liabilities of the company towards secured creditors are cleared, the company will start business operations. The Manufacturing

Operations of the Company have been closed with effect from May 19, 2007. In terms of the provisions of the Uttar pradesh Industrial Disputes Act, 1947, the Closure has become operative from the date of expiration of the period of 90 days from the date of application i.e. on September 08, 2007.

Note 3 : The members of the company have, in their meeting held on 27th September 2013, approved payment of remuneration to Shri Manish K. Modi Managing Director for a period of five years w.e.f. June 01, 2013. The Central Government approval for managing director''s remuneration has been received on July 28, 2014 for 10 months falling under the provisions of Companies Act, 1956 i.e. up to March 31, 2014. For the remaining period of 4 years and 2 months, the members, in their meeting held on September 30, 2015 reaffirmed payment of remuneration to Shri manish K. Modi and an application seeking Central government approval to the same was moved. The Central government has vide its letter dated April 18, 2016 confirmed that the proposed remuneration is within the limit of the companies Act, 2013.

Note 4 : No Provision for Income Tax under the Income Tax Act, 1961 is considered necessary for current financial year on account of unabsorbed depreciation, unabsorbed business losses and capital loss. In view of Unabsorbed Depreciation, carry forward business losses incurred by the Company in the previous year sale of Fibers Division and Closure of Manufacturing Operations of the Company in the year 2007, the recognition of Deferred Tax Assets (Net) has been postponed on consideration of prudence.

Note 5: Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on October 02, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has not collected the relevant information. Since the information is not readily available, no disclosures/provision for interest has been made in the Books of Account.

Note 6: (A) Exceptional Items in Statement of Profit and Loss includes :

(a) For the year ended March 31, 2016:

(i) Profit on sale of Non factory building Rs, 815.38 (March 31, 2015: Rs, 462.78) lakhs being excess of amount received over cost Rs, 22.85 (march 31, 2015: Rs, 27.51) lakhs;

(ii) provision for diminishing in value of investment written back amounting to Nil (March 31, 2015: Rs, 554.13) Lakhs on the investments sold by the company (Investment name: Lords Chloro Alkali Limited);

(iii) Loss on sale of investments amounting to Nil (March 31, 2015: Rs, 531.22) Lakhs on the investments sold by the company (Investment name: Lords Chloro Alkali Limited)

Note 7:

(a) Since the Net Book value of Land, Residential buildings at Modinagar, administrative building in Modinagar are lower than the Net Realizable Value as per Valuer''s Report / Management''s estimate, no provision for diminution is required to be made and the net book Value of Rs, 237.57 lakhs as on March 31, 2016 has been shown as “Fixed Assets held for Disposal" on the face of the Balance Sheet.

(b) The company has sold 65,743 sq. yds. and 2299 sq. yds. of its vacant land at Modinagar for Rs, 986.15 lakhs (original cost Rs, 1.88 lakhs) and Rs, 35.00 lakhs (original cost Rs, 0.07lakhs) respectively which resulted in Profit on Sale of Land amounting to Rs, 1019.20 lakhs during the year ended March 31, 2009. Approval of banks to whom immovable properties of the company, including the above Land, are charged is pending.

Note 8 :

(a) Cash credit/Working Capital Demand Loans (including interest accrued and due) taken from punjab National Bank was out of order and has been classified by Bank as Non-Performing Assets. The Bank issued notice to the company under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice under section 13(4) of the SARFAESI to the company for taking possession of the secured assets of the company.

(b) The punjab National Bank (pNB) had approved one time settlement of its outstanding dues vide its approval letters dated April 02, 2014 and April 12, 2014 respectively. In terms of the settlement, OTS amount of Rs, 1710 lakhs (Net of upfront payment of Rs, 190 lakhs) was to be paid by the company in four quarterly installments with interest during financial year 2014-15. However, the company was able to manage the payment of Rs, 630 lakhs up to March 31, 2015 and at the request of the Company, pNB condone the delay and revived the OTS vide its letter dated July 02, 2015 requiring the Company to make payment of residual OTS amount of Rs, 1270 lakhs by March 31, 2016 and total interest on OTS payment @ 10.25% (simple) by June 30, 2016. The Company has paid Rs, 1170 lakhs upto March 31, 2016 and balance Rs, 100 lakhs ramain to be paid. The Company is making efforts to pay the balance OTS amount and the matter is under negotiation with pNB. The balance of pNB as per books of account of the Company was Rs, 2083.90 lakhs and excess amount of Rs, 183.90 lakhs would be dealt with upon final payment of the OTS amount. In view of the pending implementation of OTS as above, no provision for interest has been considered necessary for the year ended March 31, 2016 amounting to Rs, 491.15 lakhs respectively (Rs, 1867.45 lakhs for the period from April 01, 2009 to March 31, 2016). However, interest on OTS amount has been provided as per the agreement amounting to Rs, 91.89 lakhs for the year ended March 31, 2016.

(c) (i) Loan liability of Rs, 749.20 lakhs to Karnatka Bank has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited paying the settled sum of Rs, 410 lakhs to the said bank. The settlement resulted into remission of liability by Rs, 339.20 lakhs. As per the terms approved by the Board of Directors of the company on August 16,2012 with Ashoka Mercantile Ltd, they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with punjab National Bank (pNB). pending the successful implementation of OTS with pNB as stated in para 31(b) above, the amount of Rs, 339.20 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Long term borrowing".

No provision of interest has been made on loan repaid by Ashoka Mercantile Limited, pending finalization of Debt Assignment Agreement under this OTS deal and/or successful implementation of the OTS with punjab National Bank.

(ii) Loan liability of Rs, 832.04 lakhs to Bank of Baroda has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited who has paid the settled sum of Rs, 600 Lakhs to the said bank. The settlement resulted into remission of liability by Rs, 232.04 Lakhs. As per the terms approved by the Board of Directors of the company on February 11, 2013 with Ashoka Mercantile Ltd., they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with punjab National Bank (pNB). pending the successful implementation of OTS with pNB as stated in para 31(b) above, the amount of Rs, 232.04 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head “Long term borrowings".

No provision of interest has been made on loan repaid by Ashoka Mercantile Limited, pending finalization of Debt Assignment Agreement under this OTS deal and/or successful implementation of the OTS with punjab National Bank.

(iii) Pending finalization of terms of loan agreements with Ashoka Mercantile Limited (AML) who has outstanding amount of secured and unsecured loans of Rs, 882.29 lakhs and Rs, 1125.57 lakhs respectively for payment of OTS dues of banks. No provision of Interest on loan have been provided till the March 31, 2014. However, from April 01, 2014, interest has been provided on unsecured loan on reducing balance method @ 10.25% per annum equivalent to the rate of interest agreed with pNB in OTS.

(d) (i) The Abu Dhabi Commercial Bank Limited has settled its Dues of Rs, 351.05 lakhs under One Time Settlement (OTS) as conveyed vide its letter dated September 23, 2008. Since the Company did not have funds to pay the settled dues, it had approached M/s Ashoka Mercantile Limited (AML) for making payment of settled dues to the Banks. Further, it has also been agreed with AML that it shall not be entitled to settlement of its claim better than what is agreed by the Company with pNB.

(ii) Since successful implementation of settlement of dues of pNB is still pending, the amount paid towards OTS by AML of Rs, 157.13 lakhs (net of Rs, 40 lakhs paid to AML upto March 31, 2011) is shown as secured loan in Note 8 i.e. as on March 31, 2015 and the balance amount of Rs, 153.92 lakhs (Rs, 351.05 lakhs - Rs, 197.13 lakhs) outstanding in the books of accounts has also been shown as unsecured loan in Note 5, to be written back or credited to AML at the time of OTS with pNB as stated in (i) above.

(iii) As the OTS with pNB as stated above is yet to be implemented as on date, no interest has been provided on the balances mentioned in the 31(d) (i) & (ii) above during the current year as well as in the previous years, amount unascertained.

Note:-The Company has not been able to repay the loan as shown above given by Ashoka Mercantile Limited (AML), a related party. During the month of May 2011, the Company has given temporary physical possession with right of user of 59 residential houses owned by it at Modinagar to AML. Out of which possession of 13 houses has since been returned by AML.

Note 33: In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31st March, 2015.

Note 34: Sundry debtors, creditors , loans and advances are subject to confirmation.

Note 35: Figures of previous year have been re-grouped and re-arranged wherever found necessary.

Note 36: Figures have been rounded off to the nearest Lakh.

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Mar 31, 2014

1 Foot Note:

1. Cash credit/ WCDL from banks and loan from Ashoka Mercantile Limited are secured by charge on block assets of the Company.

2. (a) Cash Credit/ Working Capital Demand Loans (including Interest Accrued and Due) taken from Punjab National Bank was out of order and classified by Bank as Non-Performing Assets since calender year 2007.

(b) Punjab National Bank issued Notices to the Company under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of their Dues and have also issued Notices under Section 13(4) of the SARFAESI to the Company for taking possession of the Secured Assets of the Company. OTS dues of PNB have to be fully paid by 28th March, 2015.

(c) The Punjab National Bank has approved one time settlement of its outstanding dues vide its approval letters dated 02.04.2014 and 12.04.2014. In terms of the settlement, OTS amount of Rs. 1710 lakhs (Net of upfront payment of Rs. 190 lakhs) shall be paid by the Company in four quarterly installments with interest during financial year 2014-15. The balance of PNB as per books of accounts of the Company is Rs. 2083.90 lakhs and the excess amount of Rs. 183.90 lakhs would be dealt with upon final payment of the OTS amount. In view of the OTS as above, no provision for interest has been made for the current year ended 31.03.2014. Further in terms of the OTS, consent decree has been passed by Hon'' ble Debt Recovery Tribunal, Delhi on 29th April, 2014 incorporating there in the terms of settlement.

2 Notes

1. Aggregate Market Value is exclusive of these Investments in view of non-availability of Current Market rates.

2. In view of Rehabilitation scheme of Modi Spg & Wvg Mills Co. Ltd. (MSWM), the company was alloted free of cost 15126 equity shares of Rs. 10 each during the previous year of Haryana Distillery Ltd. (HDL) and Rajputana Fertilizers Ltd. (RFL) on account of demerger of units of MSWM to HDL & RFL. Consequently the orignial cost of Rs. 1 has been allocated on notional basis among MSWM, HDL & RFL. Shares of HDL are yet to be received by the company.

3. 5,00,000 equity shares are yet to be transferred to the name of the company.

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Mar 31, 2013

1. (a) Claims against the company not acknowledged as debts (excluding unascertainable amounts) in respect of :

As at As at 31st March, 2013 31st March, 2012 Rs. lakhs Rs. lakhs

(I) Incom e T ax (S ee note 1(b) below ) 870.24 870.24

(ii) Sales Tax/ Excise/ Customs Duty 206.11 206.11

(iii) Water Tax 7.11 7.11

(iv) Others 157.08 157.08

(v) The following are the particulars of above Dues on account of Sales Tax, Excise Duty, Customs Duty, Water Tax and Income Tax as at 31st March, 2013 that have been disputed by the Company in Appeals pending before the Appellate Authorities:

(b) For Assessment years 2006-07 to 2008-09, a demand of Rs. 816.93 lakhs was raised by Income Tax department towards non-deduction of TDS Rs. 260.77 lakhs plus interest and penalty amounting to Rs. 556.16 lakhs. On an appeal fled by the company, the Hon''ble Allahabad High court has stayed recovery of demand of Rs. 181.87 lakhs along with interest of Rs. 25.46 lakhs and the matter is pending. Company has also fled appeals before Commissioner of Income Tax (Appeals) which are pending. The Commissioner (Appeal), GZB had reduced penalty amount by Rs. 53.21 lacs and conformed the penalty Rs. 335.55 lacs vide order dated 09.02.2012. Company had fled appeal before ITAT, New Delhi against the said order and matter is still pending. During the year ITO (TDS &SURVEY) GZB had rejected our application under section 154 of IT Act, against the said order we had fled appeal before the Commissioner (Appeal) GZB, which is pending.

(c) Guarantees executed in favour of Banks and Government Authorities on behalf of the following Companies against their Counter Guarantees:

(i) Modi Industries Limited, a Company under the same Management Rs.10.63 lakhs (Previous year Rs. 10.63 lakhs);

(ii) Other Corporate Body Rs. 28.00 lakhs (Previous year Rs. 28.00 lakhs).

The amounts outstanding against these Guarantees are not available.

2. Balance confrmation certifcates from Creditors, house/ shop security depositors, and Banks (for cash credit, certain current accounts & fxed deposits including interest accrued with one bank) etc. as on 31st March, 2008 and onwards were not obtained and consequently adjustment required on reconciliations, if any, will be carried out subsequently as and when reconciled/confrmed.

3. The Accounts of the Company have not been prepared on a going concern basis in view of Closure of Manufacturing Operations of the Company during the year ended 30th September, 2007 and sale of all moveable assets including Plant & machinery during the year 2009-10. However, once the liabilities of the company towards secured creditors are cleared, the company will start business operations.

4. Claims from a supplier towards Interest on late payments etc. amounting to Rs. 1000.54 lakhs upto 31st March, 2008, has not been provided in the Books of Account as the same are being disputed by the company. The amount of interest for the 60 month period ended 31st March, 2013 is not ascertainable.

5. The Remuneration of Dr. M. K. Modi, Chairman & Managing Director (C&MD) of Rs. 2.71 lakhs w.e.f. 12th February, 2007 to 31st May, 2007 is subject to the approval of the Central Government.

6. No Provision for Income Tax under the Income Tax Act, 1961 is considered necessary for current fnancial year on account of unabsorbed depreciation, unabsorbed business losses and capital loss.

7. Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has not collected the relevant information. Since the information is not readily available, no disclosures/provision for interest have been made in the Books of Account.

8. In view of Unabsorbed Depreciation, carry forward business losses incurred by the Company in the previous year, sale of Fibers Division and Closure of Manufacturing Operations of the Company in the year 2007, the recognition of Deferred Tax Assets (Net) has been postponed on consideration of prudence.

9. The Manufacturing Operations of the Company have been closed with effect from 19th May, 2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act, 1947, the Closure has become operative from the date of expiration of the period of 90 days from the date of application i.e. on 8th September, 2007.

10. (A) Exceptional Items in Statement of Proft and Loss includes :

(a) For the year ended 31st March, 2013:

(i) Proft on sale of land Rs. 423.73 lakhs being excess of amount received over cost of land of Rs. 1.27 lakhs sold on ''As is where is'' basis.

(ii) Payment to PF Trust for defcit for earlier year Rs. 11.01 lakhs.

(b) For the year ended 31st March, 2012:

(i) Income received Rs. 194.33 lakhs being excess of amount received over cost of land of Rs. 5.67 lakhs sold on ''As is where is'' basis.

(ii) Loss of Rs. 50 lakhs on Disposal of Factory Building in previous year.

(iii) Management has conducted detailed exercise during the year to identify: (i) inoperative credit balances outstanding for more than three years i.e. time-barred which are not payable and (ii) Old entries in amount recoverable account/ in-operative debit balances which are to be written off. Based on the above exercise, the following amounts have been written back/written off during the year:

(i) Excess Provision/ amount written back amounting to Rs. 330.11 lakhs.

(ii) Amount written off amounts to Rs. 53.16 lakhs against which provision made in earlier years.

11. (a) Since the Net Book value of Land, Residential buildings at Modinagar, Offce premises outside Modinagar and factory/ administrative building in Modinagar are lower than the Net Realisable Value as per Valuer''s Report/ Management''s estimate, no provision for diminution is required to be made and the net book value of Rs. 318.00 lakhs as on 31st March, 2013 has been clubbed with ''Fixed Assets held for Disposal'' on the face of the Balance Sheet.

(b) The company has sold 65,743 sq. yds. and 2,299 sq. yds. of its vacant land at Modinagar for Rs. 986.15 lakhs (original cost Rs. 1.88 lakhs) and Rs. 35.00 lakhs (original cost Rs. 0.07lakhs) respectively which resulted in Proft on Sale of Land amounting to Rs. 1,019.20 lakhs during the year ended 31st March, 2009. Approval of banks to whom immovable properties of the company, including the above Land, are charged is pending.

(c) Amount received from Modipon Welfare trust amounting to Rs. 361.86 lakhs shown as a Liability as on 30th September, 2007, which was utilized generally for payment of ''Worker''s Dues'', was treated as Revenue during the year ended 31st March, 2009 since the same is not payable to the Trust.

12. In view of Valuation of fxed assets at lower of cost and net realizable value, no provision for Depreciation has been made since 1st April, 2007.

13. (a) Cash credit/Working Capital Demand Loans (including interest accrued and due) taken from Banks are out of order and have been classifed by Banks as Non- Performing Assets.

(b) Punjab National Bank issued notice to the company under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of its dues and has also issued notice under section 13(4) of the SARFAESI to the company for taking possession of the secured assets of the company.

(c) Punjab National Bank has initiated recovery proceedings before Hon''ble DRT-II, Delhi, taken symbolic possession of Fixed Assets and proceeded to sell the charged Assets during the year 2009-10. Hon''ble DRT-II granted permission to the Bank to sell movable Assets of the Company and the bank has sold these assets during the year 2009-10. The amount of sale consideration of Rs. 3,361.00 lakhs paid to banks on sale of moveable assets has been adjusted in cash credit accounts of bank which also includes interest of Rs. 2,279.61 lakhs credited for the period from 1st April,2007 to 31st March, 2010.

(d) (i) Interest on Working Capital Facilities obtained from Banks was provided during the year ended 31st March, 2009 for the period from 1st April, 2007 to 31st March, 2009 and has been credited to cash credit accounts of the banks.

(ii) Loan liability of Rs. 749.20 lakhs to Karnatka Bank has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited paying the settled sum of Rs. 410 lakhs to the said bank. The settlement resulted into remission of liability by Rs. 339.20 lakhs. As per the terms approved by the Board of Directors of the company on 16th August, 2012 with Ashoka Mercantile Ltd, they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with Punjab National Bank (PNB). Pending the determination of OTS with PNB, the amount of Rs. 339.20 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head ''Short term borrowings''.

No provision of interest has been made on loan repaid by Ashoka Mercantile Limited, pending fnalization of Debt Assignment Agreement under this OTS deal and/ or OTS with Punjab National Bank.

(iii) Loan liability of Rs. 832.04 lakhs to Bank of Baroda has been discharged by the company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited and Asset Reconstruction Company paying Rs. 95 lakhs being part of the settled sum of Rs. 600 lakhs to the said bank. The settlement resulted into remission of liability by Rs. 232.04 lakhs. As per the terms approved by the Board of Directors of the company on 11th February,

2013 with Ashoka Mercantile Ltd., they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the company for settlement under OTS with Punjab National Bank (PNB). Pending the determination of OTS with PNB, the amount of Rs. 232.04 lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head ''Short term borrowings''.

No provision of interest has been made on loan repaid by Ashoka Mercantile Limited, pending fnalization of Debt Assignment Agreement under this OTS deal and/ or OTS with Punjab National Bank.

(iv) Pending fnalisation of terms of loan agreements with Ashoka Mercantile Limited (AML) who has given unsecured loans of Rs. 1,050 lakhs for payment of OTS dues of banks, no provision of Interest on loan taken of Rs. 410 lakhs has been made for the year ended 31st March, 2011 to 31st March, 2013, on loan taken of Rs. 540 lakhs, for the years ended 31st March, 2012 and 31st March, 2013 and on loan taken of Rs. 100 lakhs for the year ended 31st March, 2013.

(v) In view of the above, pending OTS with PNB, simple interest @ 10 % amounting to Rs. 144.08 lakhs on the balance outstanding as on 31st March, 2013, after taking into account the amounts received by banks from sale of movable assets of the company has been provided for during the current year and has been credited to the cash credit accounts of banks. Has the interest been provided as per past practice followed upto 31st March, 2009. Interest expenses for the current year would have been higher by Rs. 241.81 lakhs (upto 31st March, 2013 Rs. 944.34 lakhs).

(e) (i) The Abu Dhabi Commercial Bank Limited has settled its Dues of Rs. 351.05 lakhs under One Time Settlement (OTS) as conveyed vide its letter dated 23rd September, 2008. Since the Company did not have funds to pay the settled dues, it had approached M/s Ashoka Mercantile Limited (AML) for making payment of settled dues to the Banks. Further, it has also been agreed with AML that it shall not be entitled to settlement of its claim better than what is agreed by the Company with PNB.

(ii) Since settlement of dues of PNB is still pending, the amount paid towards OTS by AML of Rs. 157.13 lakhs (net of Rs. 40 lakhs paid to AML upto 31st March, 2011) is shown as secured loan in Note 5 i.e. as on 31st March, 2013 and the balance amount of Rs. 153.92 lakhs (Rs. 351.05 lakhs - Rs. 197.13 lakhs) outstanding in the books of accounts has also been shown as unsecured loan, to be written back or credited to AML at the time of OTS with PNB as stated in (i) above.

(iii) As the OTS with PNB as stated above is pending, no interest has been provided on the balances mentioned in the 13 (e) (ii) above during the current year as well as in the previous years, amount unascertained.

14. Debts Recovery Tribunal (DRT) has, vide its order dt. 19th May, 2011, confrmed/approved sale of a piece of agricultural land admeasuring 40,827sq. mtr., owned by the Company to M/s GDC Buildcon Pvt. Ltd., Mumbai for a consideration of Rs. 425.00 lakhs (Estimated cost Rs. 1.27 lakhs). The payment was to be deposited by the buyer with DRT.Since part of the land was under encroachment of bad elements, the buyer was unable to carry out inspection even. Accordingly, they made an application before Hon''ble DRT seeking time for deposition of balance payment.

The company had also made an application before DRT seeking permission for utilization of sale proceeds of the said land for payment of settled dues of banks. The said application remained pending adjudication.

In the meantime, the company discussed with GDC Buildon Pvt. Ltd. for payment of balance amount & they agreed to make the payment if the possession and documentation of land was done by the company. The company has also fnalised OTS with Bank of Baroda and in terms of the application pending with DRT, it has collected the payment from M/S GDC Buildcon Pvt. Ltd. and paid directly to Bank of Baroda against OTS and has accordingly fled an affdavit to this effect on 03.03.2013 with DRT. The sale of the said land stands concluded and accounted for in the books of accounts for the year ended 31st March, 2013.

15. RELATED PARTIES DISCLOSURE:

A. KEY MANAGEMENT PERSONNEL:

Dr. Mahendra K. Modi – Chairman & Managing Director

B. OTHER RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS ETC;

Enterprises over which the Key Management Personnel and their relatives are able to exercise signifcant infuence.

1. Ashoka Mercantile Limited (AML)

2. Modi Industries Limited (MIL)

C. DISCLOSURE OF TRANSCTIONS BETWEEN THE COMPANY AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCE AS ON 31ST MARCH, 2013 {(Refer Note 18(B)13 (e) } :

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Mar 31, 2012

1. Cash credit/ WCDL from banks and loan from Ashoka Mercantile Limited are secured by charge on block assets of the company.

2. (a) Cash Credit/ Working Capital Demand Loans (including Interest Accrued and Due) taken from Banks are out of order and have been classified by Banks as Non-Performing Assets since calender year 2007.

(b) Punjab National Bank and Bank of Baroda issued Notices to the Company under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of their Dues and have also issued Notices under Section 13(4) of the SARFAESI to the Company for taking possession of the Secured Assets of the Company.

3. Loans from related parties : Terms of repayment are yet to be entered into with these Parties.

Notes :-

1. Aggregate Market Value is exclusive of these Investments in view of non-availability of Current Market rates.

2. Shares certificate of 6,599 equity shares is yet to be received.

3. In view of Rehabilitation scheme of Modi Spg & Wvg Mills Co. Ltd. (MSWM), the Company was alloted free of cost 15,126 equity shares of Rs.10 each during the previous year of Haryana Distillery Ltd. (HDL) and Rajputana Fertilizers Ltd. (RFL) on account of demerger of units of MSWM to HDL & RFL. Consequently the orignial cost of Rs. 1 has been allocated on notional basis among MSWM, HDL & RFL. Shares of HDL are yet to be received by the company.

4. 5,00,000 equity shares are yet to be transferred to the name of the company.

1. (a) Claims against the company not acknowledged as debts (excluding unascertainable amounts) in respect of :

As at As at 31st March, 31st March, 2012 2011 Rs. Lakhs Rs. Lakhs

(i) Income Tax (See note 1(b) below) 870.24 870.24

(ii) Sales Tax/ Excise/ Customs Duty 206.11 191.11

(iii) Water Tax 7.11 7.11

(iv) Others 157.08 157.80

(v) The following are the particulars of above Dues on account of Sales Tax, Excise Duty, Customs Duty, Water Tax and Income Tax as at 31st March, 2012 that have been disputed by the Company in Appeals pending before the Appellate Authorities:

(b) For Assessment years 2006-07 to 2008-09, a demand of Rs. 870.24 Lakhs was raised by Income Tax department towards non-deduction of TDS Rs. 260.77 Lakhs plus interest and penalty amounting to Rs. 609.47 Lakhs. On an appeal filed by the company, the Hon'ble Allahabad High court has stayed recovery of demand of Rs. 181.87 Lakhs along with interest of Rs. 25.46 Lakhs and the matter is pending. Company has also filed appeals before Commissioner of Income Tax (Appeals) which are pending.

(c) Guarantees executed in favour of Banks and Government Authorities on behalf of the following Companies against their Counter Guarantees:

(i) Modi Industries Limited, a Company under the same Management Rs.10.63 Lakhs (Previous year Rs. 10.63 Lakhs);

(ii) Other Corporate Body Rs. 28.00 Lakhs (Previous year Rs. 28.00 Lakhs).

The amounts outstanding against these Guarantees are not available.

2. Balance confirmation certificates from Creditors, house/ shop security depositors and Banks (for cash credit, certain current accounts & fixed deposits including interest accrued with two banks) etc. as on 31st March, 2008 and onwards were not obtained and consequently adjustment required on reconciliations, if any, will be carried out subsequently as and when reconciled/confirmed.

3. The Accounts of the Company have not been prepared on a going concern basis in view of Closure of Manufacturing Operations of the Company during the year ended 30th September, 2007 and sale of all moveable assets including Plant & machinery during the year 2009-10. However, once the liabilities of the Company towards secured creditors are cleared, the Company will start business operations.

4. Claims from a supplier towards Interest on late payments etc. amounting to Rs. 1000.54 Lakhs upto 31st March, 2008, has not been provided in the Books of Account as the same are being disputed by the Company. The amount of interest for the 48 month period ended 31st March, 2012 is not ascertainable.

5. The Ministry of Corporate Affairs has notified the revised Schedule VI to the Companies Act 1956 on 28th February 2011 vide notification number S.O. 447 (E) (as amended by Notification No. S.O. 653(E) dated 30th March, 2011) and the revised schedule VI has replaced the old schedule in respect of the Balance Sheet and Profit & Loss Account prepared for financial year commencing on or after 1st April 2011. Accordingly, the Balance Sheet of company as at 31st March, 2012 and its Profit & Loss for the year ended on 31st March, 2012 are prepared as per revised Schedule VI to the Companies Act 1956, and corresponding figures of previous year have been regrouped, rearranged to make them comparable with figures for current reporting period ended 31st March 2012.

6. No Provision for Income Tax under the Income Tax Act, 1961 is considered necessary for current financial year on account of unabsorbed depreciation and unabsorbed business losses.

7. Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has not collected the relevant information. Since the information is not readily available, no disclosures/provision for interest have been made in the Books of Account.

8. In view of Unabsorbed Depreciation, carry forward business losses incurred by the Company in the previous year, sale of Fibers Division and Closure of Manufacturing Operations of the Company in the year 2007, the recognition of Deferred Tax Assets (Net) has been postponed on consideration of prudence.

9. The Manufacturing Operations of the Company have been closed with effect from 19th May, 2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act, 1947, the Closure has become operative from the date of expiration of the period of 90 days from the date of application i.e. on 8th September, 2007.

10. (A) Exceptional Items in Profit & Loss Account includes :

(a) For the year ended 31st March, 2012:

(i) Income received Rs. 194.33 Lakhs being excess of amount received over cost of land of Rs.5.67 Lakhs sold on "As is where is" basis.

(ii) Loss of Rs. 50 Lakhs on Disposal of Factory Building in previous year.

(iii) Management has conducted detailed exercise during the year to identify: (i) inoperative credit balances outstanding for more than three years i.e. time-barred which are not payable and (ii) Old entries in amount recoverable account/ in-operative debit balances which are to be written off. Based on the above exercise, the following amounts have been written back/written off during the year:

(i) Excess Provision/ amount written back amounting to Rs. 330.11 Lakhs.

(ii) Amount written off amounts to Rs.53.16 Lakhs against which provision made in earlier years.

(b) For the year ended 31st March, 2011:

(i) Provision made for diminution in value of investments in Lords Chloro Alkalies Ltd of Rs. 55.41 Lakhs in earlier year has been written back as the shares are now quoted and market value as on 31st March, 2011 was Rs. 125.31 Lakhs

(ii) Refer note 18B 13 (d) (ii) for write back of interest Rs. 370.59 Lakhs in view of payment of OTS dues of Allahabad Bank.

(B) Extraordinary Item for the year ended 31st March, 2011 represents Issue of 1,17,57,085 fully paid up equity shares of Rs. 10 each of Indofil Organic Industries Ltd (IOIL) for Rs. 4,899.00 Lakhs at a premium of Rs. 3,723.00 Lakhs which was treated as "Goodwill" on receipt of approval of Hon'ble Allahabad High court during the financial year ended 31 st March, 2011, has been written off as per Accounting Standard (AS) 26 i.e. Intangible Assets.

11. (a) Since the Net Book value of Land, Residential buildings at Modinagar, Office premises outside Modinagar and factory/ administrative building in Modinagar are lower than the Net Realisable Value as per Valuer's Report / Management's estimate, no provision for diminution is required to be made and the net book Value of Rs. 319.28 Lakhs as on 31st March, 2012 has been clubbed with "Fixed Assets held for Disposal" on the face of the Balance Sheet.

(b) The company has sold 65,743 sq. yds. and 2,299 sq. yds. of its vacant land at Modinagar for Rs. 986.15 Lakhs (original cost Rs. 1.88 Lakhs) and Rs. 35.00 Lakhs (original cost Rs. 0.07 Lakhs) respectively which resulted in Profit on Sale of Land amounting to Rs. 1,019.20 Lakhs during the year ended 31 st March, 2009. Approval of banks to whom immovable properties of the Company, including the above Land, are charged is pending.

(c) Amount received from Modipon Welfare trust amounting to Rs. 361.86 Lakhs shown as a Liability as on 30th September, 2007, Which was utilized generally for payment of " Worker's Dues", was treated as Revenue during the year ended 31st March, 2009 since the same is not payable to the Trust.

12. In view of Valuation of fixed assets (excluding vehicles) at lower of cost and net realizable value, no provision for Depreciation has been made since 1st April, 2007.

13. (a) Cash credit/Working Capital Demand Loans (including interest accrued and due) taken from Banks are out of order and have been classified by Banks as Non-Performing Assets.

(b) Punjab National Bank and Bank of Baroda issued notices to the company under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of their dues and have also issued notices under section 13(4) of the SARFAESI to the company for taking possession of the secured assets of the company.

(c) Punjab National Bank has initiated recovery proceedings before Hon'ble DRT-II, Delhi, taken symbolic possession of Fixed Assets and proceeded to sell the charged Assets during the year 2009-10. Hon'ble DRT-II granted permission to the Bank to sell movable Assets of the Company and the bank has sold these assets during the year 2009-10. The amount of sale consideration of Rs. 3,361.00 Lakhs paid to banks on sale of moveable assets has been adjusted in cash credit accounts of bank which also includes interest of Rs. 2,279.61 Lakhs credited for the period from 1st April, 2007 to 31st March, 2010.

(d) (i) Interest on Working Capital Facilities obtained from Banks was provided during the year ended 31st March, 2009 for the period from 1st April, 2007 to 31st March, 2009 and has been credited to cash credit accounts of the banks.

(ii) The Management is taking up the matter of one time settlement (OTS) of dues of banks. Allahabad Bank has already approved one time settlement (OTS) of dues at Rs. 540.00 Lakhs which has been paid in 4 equal monthly installments w.e.f. July, 2010 by Ashoka Mercantile Limited (AML) a related party. In view of the above, Rs. 370.59 Lakhs being excess of balance outstanding in the books of account over OTS dues has been recognized as revenue during the previous year on full payment of OTS dues to Allahabad bank.

(iii) Loan liability of Rs.749.20 Lakhs to Karnatka Bank has been discharged by the Company under OTS (one time settlement), in arrangement with Ashoka Mercantile Limited paying the settled sum of Rs. 410 Lakhs to the said bank. The settlement resulted into remission of liability by Rs. 339.20 Lakhs. As per the draft M.O.U. approved by the Board of Directors of the Company on 16th August, 2012 with Ashoka Mercantile Ltd, they shall be entitled to so much of the waived-off amount under OTS as agreeable, but to the extent such sum does not exceed the sum as worked out by applying the ratio of waiver agreed by the Company for settlement under OTS with Punjab National Bank (PNB). Pending the determination of OTS with PNB, the amount of Rs. 339.20 Lakhs being the subject matter of OTS arrangement with Ashoka Mercantile Limited and liable to be dealt with later has been kept aside and shown in Balance Sheet under the head "Short term borrowings".

No provision of interest has been made on loan repaid by Ashoka Mercantile Limited, pending finalization of Debt Assignment Agreement under this OTS deal.

(iv) Pending finalisation of terms of loan agreements with Ashoka Mercantile Limited (AML) who has given unsecured loans of Rs. 950 Lakhs for payment of OTS dues of banks, no provision of Interest on unsecured loan taken of Rs. 410 Lakhs has been made for the year ended 31st March, 2011 and 31st March, 2012 and on unsecured loan taken of Rs. 540 Lakhs, for the year ended 31st March, 2012.

(v) In view of the above, pending OTS with PNB and BOB simple interest @ 10 % amounting to Rs.212.16 Lakhs on the balance outstanding as on 31st March, 2012, after taking into account the amounts received by banks from sale of movable assets of the Company has been provided for during the current year and has been credited to the cash credit accounts of banks. Has the interest been provided as per past practice followed upto 31st March 2009., Interest expenses for the current year would have been higher by Rs.286.15 Lakhs (upto 31st March, 2012 Rs. 702.53 Lakhs)

(e) (i) The Abu Dhabi Commercial Bank Limited has settled its Dues of Rs. 351.05 Lakhs under One Time Settlement (OTS) as conveyed vide its letter dated 23rd September, 2008. Since the Company did not have funds to pay the settled dues, it had approached M/s Ashoka Mercantile Limited (AML) for making payment of settled dues to the Banks. Further, it has also been agreed with AML that it shall not be entitled to settlement of its claim better than what is agreed by the Company with PNB.

(ii) Since settlement of dues of PNB is still pending, the amount paid towards OTS by AML of Rs.157.13 Lakhs (net of Rs.40 lakhs paid to AML upto 31st March, 2011) is shown as secured loan in Note 5 i.e. as on 31st March 2012 and the balance amount of Rs.153.92 Lakhs (Rs.351.05 Lakhs - Rs. 197.13 Lakhs) outstanding in the books of accounts has also been shown as unsecured loan, to be written back or credited to AML at the time of OTS with other banks as stated in (i) above.

(iii) As the OTS with PNB as stated above is pending, no interest has been provided on the balances mentioned in the 13 (e) (ii) above during the current year as well as in the previous years, amount unascertained.

14. Debts Recovery Tribunal (DRT) has, vide its order dt. 19th May, 2011, confirmed/approved sale of a piece of agricultural land admeasuring 40,827sq mtr, owned by the Company to M/s GDC Buildcon Pvt. Ltd., Mumbai for a consideration of Rs.425.00 Lakhs (Estimated cost Rs.1.27 Lakhs). The payment was to be deposited by the buyer with DRT.The balance payment of Rs. 400.00 Lakhs is yet to be deposited by the buyer with DRT and extension of time for deposit of balance amount sought by it is yet to be approved by the DRT. Accordingly, the Company has neither given physical possession of land to the buyer nor entered into any sale agreement/ sale deed etc. with the buyer/ any other party and accordingly, the sale of the land will be accounted for in the books of account of the Company on deposit of entire purchase consideration by the buyer after obtaining approval for extension of time for deposit of balance amount.

15. RELATED PARTIES DISCLOSURE:

A. KEY MANAGEMENT PERSONNEL:

Dr. Mahendra K. Modi - Chairman & Managing Director

B. OTHER RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS ETC;

Enterprises over which the Key Management Personnel and their relatives are able to exercise significant influence.

1. Ashoka Mercantile Limited (AML)

2. Modi Industries Limited (MIL)

C. DISCLOSURE OF TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCE AS ON 31ST MARCH, 2012{(Refer Note 18(B)13(e):}

(a) Transactions with the Enterprises over which the Key Management Personnel and their Relatives are able to exercise significant influence:

Note: The Company has not been able to repay the loans as shown above given by Ashoka Mercantile Limited (AML), a related party. During the month of May, 2011, the Company has given tempo- rary physical possession with right of user of 59 residential houses owned by it at Modinagar to AML and the same is still continuing.

16. The Remuneration of Dr. M. K. Modi, Chairman & Managing Director (C&MD) of Rs. 2.71 Lakhs w.e.f. 12th February, 2007to 31 st May, 2007 is subject to the approval of the Central Government.

---

Mar 31, 2010

A. CONTINGENT LIABILITIES AND NOTES:

1. (a) Claims against the Company not acknowledged as Debts (excluding unascertainable amounts) in respect of :

As at As at

31st March, 31st March,

2010 2009

Rs. Lacs Rs. Lacs

(i) Sales Tax/ Excise/Customs Duty 110.46 110.46

(ii) Water Tax 7.11 7.11

(iii) Others 228.07 358.21

(iv) The following are the particulars of above Dues on account of Sales Tax, Excise Duty, Customs Duty and Water Tax as at 31st March, 2010 that have been disputed by the Company in Appeals pending before the Appellate Authorities:

(b) Guarantees executed in favour of Banks and Government Authorities on behalf of the following Companies against their Counter Guarantees : (i) Modi Industries Limited, a Company under the same Management Rs.10.63 lacs (Previous year Rs.10.63 lacs);

(ii) Other Corporate Body Rs.28.00 lacs (Previous year Rs.28.00 lacs).

The amounts outstanding against these Guarantees are not available.

2. Balance confirmation certificates from the Debtors, Creditors, house security depositors, and Banks (for cash credit & fixed deposits) etc. as on 31st March, 2010 were not obtained and consequently adjustment required on reconciliations, if any, will be carried out subsequently as and when reconciled/confirmed.

3. The Accounts of the Company has not been prepared on a going concern basis in view of Closure of Manufacturing Operations of the Company during the year ended 30th September,2007 and sale of all moveable assets including plant & Machinery during the current year.

4. Claims from a supplier towards Interest on late payments etc. amounting to Rs.1,000.54 lacs upto 31st March, 2008, has not been provided in the Books of Account. The amount of non-provision for the 24 months period ended 31st March, 2010 is not ascertainable.

5. 1,45,495 15% Redeemable Convertible Cumulative Preference Shares of Rs.100 each, carrying a limited right of conversion into Equity Shares on the basis of 13 such Shares being convertible into 100 Equity Shares in case of further issue of Equity Shares, were due for redemption on 31st March, 1996 as per the Order of the Honble Allahabad High Court. Subsequently, the Company had filed an application for extension of time upto the year 2006 for Conversion/Redemption of the aforesaid Preference Shares. The said application was rejected by the Honble Allahabad High Court against which the Company filed a special appeal before the Division Bench. In terms of the Order dated 13th February, 2002, the entire 73,703 Preference Shares held by the Financial Institutions were redeemed on 28th June, 2002. Balance 71,792 Preference Shares are overdue for redemption.

6. (a) The figures for the Current year ended 31st March, 2010 are not comparable with the Previous years figures, as the current year is of 12 months period whereas previous year was extended to 18 months period.

(b) Previous years figures have been regrouped/ recast, wherever necessary.

7. Undertakings given to certain Financial Institutions and/ or Banks :

(a) in respect of Lords Chloro Alkali Limited and Spark Plugs Company (India) Limited to procure funds jointly/severally with others to meet (i) any shortfall in financing their Projects and/or for Working Capital and (ii) Cash Losses in case of Spark Plugs Company (India) Limited. The funds made available/ to be made available can only be withdrawn with the prior approval of the said Institutions and shall not involve any charge or lien on the Assets of the said Companies.

(b) who have given Loans to Lords Chloro Alkali Limited that the Company shall not transfer, assign, pledge, hypothecate or otherwise dispose off in any manner its Shareholding in the Capital of the Company without their prior consent in writing.

8. With the intention of restructuring the Operations, the Company vide Agreement dated 28th October, 2006 has sold its Chemicals Division alongwith certain other Immovable Properties and Investments in the Shares of Quick Investment (India) Limited and Good Investment (India) Limited, the two Wholly-owned Subsidiaries of the Company ("ICC Division") as a going concern with effect from 1st October, 2006 to Indofil Organic Industries Limited (IOIL) for a total consideration of Rs.124.66 crores (arrived at by aggregating Tax Written Down Value in case of depreciable Assets and Net Book Values for other Assets/Liabilities) pursuant to the Resolution passed at its Board Meeting held on 28th October, 2006 and subsequent approval of its Shareholders by Postal Ballots on 23rd December, 2006. Sale consideration has been discharged by IOIL by way of (a) Payment of Rs.17.83 crores by Cheques; (b) taking over the Liabilities of the Fibres Division of Rs.57.84 crores due to the Financial Institutions and (c) Subscription to 1,17,57,086 Fully Paid up Equity Shares of Rs.10 each of IOIL for Rs.48.99 crores i.e. at a Premium of Rs.37.23 crores which were issued and distributed directly to the Equity Shareholders of the Company. The Shareholders of the Company have approved the above transaction of Sale of ICC Division and Issue of Equity Shares of IOIL to themselves under Sections 293(1)(a) and 293(3) respectively of the Companies Act, 1956. The Company has also now sought approval under Section 391 of the Companies Act, 1956 of the Honble Allahabad High Court for treating Rs.48.99 crores as "Goodwill" in the Books of Account for which the approval of the Court is yet to be received. Pending final determination of the matter by the Honble Allahabad High Court, the above amount of Rs.48.99 crores has been shown as "Equity Shares of IOIL issued to Shareholders" on the face of the Balance Sheet under the head "Miscellaneous Expenditure (to the extent not written off or adjusted)". The Accounts for the year have been prepared without giving any effect to the above. Consequent adjustment in the Accounts, i.e. the above amount of Rs.48.99 crores will be charged to Revenue as per Accounting Standard (AS) 26 i.e. Intangible Assets on receipt of the final approval of Honble Allahabad High Court for treating/accounting Rs.48.99 crores as Goodwill in the Books of Account, is pending.

9. Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has not collected the relevant information. Since the information is not readily available, no disclosures/provision for interest have been made in the Books of Account.

10. Arrears of Dividend on Redeemable Convertible Cumulative Preference Shares for the Period from 1st April, 1998 to 31st March, 2010 amounts to Rs.176.11 lacs, excluding Tax on Distributed Profits, if any.

11. In view of Unabsorbed Depreciation, substantial Losses incurred by the Company, sale of Chemical Division and Closure of Manufacturing Operations of the Company (Refer Notes 8 and 12), the recognition of Deferred Tax Assets (Net) has been postponed on consideration of prudence.

12. The Manufacturing Operations of the Company have been closed with effect from 19th May, 2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act, 1947, the Closure has become operative from the date of expiration of the period of 90 days from the date of application i.e. on 8th September, 2007.

13. Exceptional Items in Profit & Loss Account for the year ended 31st March 2010 include :

(a) (i) In view of Closure as stated in Note 12 above, the moveable assets (including Plant & Machinery, Office Equipments, Furniture and Fixtures and Electrical Equipments/ Installations etc.) (Book value as on 31st March 2009 Rs.3850 lacs), retired from active use and held for Disposal were sold by the bank which resulted in profit on sale of movable assets amounting to Rs.188.62 lacs during the current year. (ii) Further in the absence of break-up of sale value of movable assets, the net book value of inventory/ book debts(Net of Provision) of Rs.201.36 lacs has been treated as sale value in the books of accounts during the current year.

(b) Interest income amounting to Rs.228.13 lacs on Income Tax refunds received during the current year has been taken to revenue as per Accounting Policy No.1 of Schedule 14.

(c) Management has conducted detailed exercise during the current year to identify:(i) Provision for expenses made during the previous years which are no longer required,(ii) inoperative credit balances outstanding for more than three years i.e time-barred which are not payable and (iii) Old entries in amount recoverable account/ in-operative debit balances which are to be written off. Based on the above exercise, the following amounts have been written back/written off during the current year:

(i) Excess provision/amount written back amounting to Rs.346.62 lacs.

(ii) Amount written off amounts to Rs. 605.84 lacs against which provision made in earlier years amounting to Rs. 514.02 lacs has been netted off in the inner column in Schedule 13.

14 (a) Since the Net Book Value of Land, Residential Buildings at Modinagar, Office Premises outside Modinagar and Factory/administrative building in Modinagar are lower than the Net Realisable Value as per Valuers Report / Managements estimate, no provision for Diminution is required to be made and the Net Book Value of Rs 426.05 lacs as on 31st March 2010 has been clubbed with "Fixed Assets held for Disposal" on the face of the Balance Sheet.

(b) The Company has sold 65,743 sq. yds. and 2,299 sq. yds. of its vacant Land at Modinagar for Rs.986.15 lacs (original cost Rs.1.88 lacs) and Rs.35.00 lacs (original cost Rs.0.07 lac) respectively which resulted in Profit on Sale of Land amounting to Rs.1,019.20 lacs during the previous year. Approval of Banks to whom immovable properties of the Company, including the above Land, are charged is pending.

(c) The Company has lodged Claim for Recovery of Rs.235.87 lacs being un-utilised CENVAT Credit available and shown as "CENVAT Receivable" in the Balance Sheet. The Excise Authorities have rejected the above Claim against which appeal has been filed before Honble CESTAT, which is pending. However, in view of the uncertainty, provision of the above amount was made during the previous year.

(d) Amount received from Modipon Welfare Trust amounting to Rs.361.86 lacs shown as a Liability as on 30th September, 2007, which was utilised generally for payment of "Workers Dues", was treated as Revenue during the previous year, since the same is not payable to the Trust.

15. In view of Valuation of Fixed Assets (excluding vehicles) at Lower of Cost and Net Realisable Value, no Provision for Depreciation has been made since 1st April, 2007. However,provision for depreciation on vehicles amounting to Rs.8.08 lacs (including Rs.6.55 lacs for previous year) has been made during the current year.

16. (a) Cash Credit/ Working Capital Demand Loans (including Interest Accrued and Due) taken from Banks are out of order and have been classified by Banks as Non-Performing Assets.

(b) Four Member Banks of the Consortium i.e. Punjab National Bank, Allahabad Bank, Bank of Baroda and Karnataka Bank issued Notices to the Company under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for the recovery of their Dues amounting to Rs.5,831.20 lacs. Further, Punjab National Bank, Allahabad Bank and Bank of Baroda have also issued Notices under Section 13(4) of the SARFAESI Act to the Company for taking possession of the Secured Assets of the Company.

(c) Punjab National Bank has initiated Recovery proceedings before Honble DRT-II, Delhi, taken symbolic possession of Fixed Assets and proceeded to sell the charged Assets during the Current year. Honble DRT-II granted permission to the Bank to sell movable Assets of the Company and the bank has sold these assets during the current year as stated in note 13(a) above .The amount of sale consideration of Rs. 33.61 crores paid to banks on sale of moveable assets has been adjusted in cash credit accounts of bank which also includes interest of Rs.2279.61 lacs credited for the period 1st April, 2007 to 31stMarch,2010.

(d) (i) Interest on Working Capital facilities obtained from Banks was provided during the previous year for the period from 1st April, 2007 to 31st March, 2009 (including Interest Rs.419.46 lacs for the period from 1st April, 2007 to 30th September, 2007) and has been credited to cash credit accounts of the banks.

(ii) The Management is taking up the matter of One Time Settlement (OTS) of Dues of Banks. Allahabad Bank has already approved one time settlement (OTS) of dues at Rs.540.00 lacs which is to be paid in 4 equal monthly installments w.e.f. July 2010. In view of the above, no provision of interest for the current year has been made in cash credit dues payable to Allahabad Bank and excess of balance outstanding over OTS dues will be recognized as revenue during 2010-11 on full payment of OTS dues to Allahabad Bank.

(iii) In view of the above, pending OTS with PNB, BOB and Karnataka Bank, simple interest @ 10% amounting to Rs.390.80 lacs, on the balance outstanding as on 31st March 2009 after taking into account the amounts received by banks from sale of movable assets of the company has been provided for during the current year and has been credited to the cash credit accounts of banks. Has the interest been provided as per past practice followed upto 31st March 2009,Interest expenses for the current year would have been higher by Rs. 250.52 lacs.

(e) (i) The Abu Dhabi Commercial Bank Limited has

settled its Dues of Rs.351.05 lacs under One Time Settlement (OTS) as conveyed vide its letter dated 23.09.2008. Since the Company did not have funds to pay the settled dues, it had approached M/s Ashoka Mercantile Limited (AML) for making payment of settled dues to the Bank. Further, it has also been agreed with AML that it shall not be entitled to settlement of its claim better than what is agreed by the Company with PNB.

(ii) Since settlement of Dues of PNB is still pending, the amount paid towards OTS by AML of Rs161.13 lacs (net of Rs.36 lacs paid to AML during the current year) is shown as unsecured loan in Schedule 3 i.e. as on 31st March, 2010 and the balance amount of Rs.153.92 lacs (Rs.351.05 lacs – Rs.197.13 lacs) outstanding in the books of accounts has also been shown as Unsecured Loan, to be written back or Credited to AML at the time of OTS with other banks as stated in (i) above.

(iii) As the OTS with PNB as stated above is pending, no interest has been provided on the balances mentioned in the 16 (e)(ii) above during the current year as well as previous years, amount unascertained.

17. SEGMENT INFORMATION:

In view of closure of manufacturing Operations of the Fibres Divisions Plant in the 18 months period ended 30th September,2007, as stated in Note 12 above, there is no reportable Segment during the Current year, hence no information is required to be furnished.

18. RELATED PARTIES DISCLOSURE:

A . KEY MANAGEMENT PERSONNEL:

Dr. Mahendra K. Modi – Chairman & Managing Director

B. OTHER RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS ETC; Enterprises over which the Key Management Personnel and their relatives are able to exercise significant influence:

1. Ashoka Mercnatile Limited

2. Modi Industries Limited

C. DISCLOSURE OF TRANSCTIONS BETWEEN THE COMPANY AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCE AS ON 31ST MARCH, 2010 {(Refer Note 16(e)}:

(a) Transactions with the Enterprises over which the Key Management Personnel and their Relatives are able to exercise significant influence :

19 The Remuneration of Dr. Mahendra K. Modi, Chairman & Managing Director (C&MD) of Rs. 2.71 lacs w.e.f. 12th February, 2007 to 31st May,2007 is subject to the approval of the Central Government.

20 No Provision for Income Tax under the Income Tax Act, 1961 is considered necessary for current financial year on account of substantial amount of unabsorbed depreciation, unabsorbed business losses and business loss for current financial year on account of substantial payment to banks towards interest.

21 Schedules 1 to 14 form an integral part of the Balance Sheet and the Profit & Loss Account and have been duly authenticated.