Notes to Accounts of Polar Industries Ltd.

Mar 31, 2012

Terms/ rights attached to equity shares

Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amount. The distribution will be in proportion of the number of equity shares held by the shareholders. There is no restriction on distribution of dividend. However, same is subject to the approval of the shareholders in the Annual General Meeting.

Terms/ rights attached to preference shares

The Company has alloted 14% Redeemable Cumulative Preference Shares having a value of Rs. 100 per shares. The Preference Shareholders enjoy a preferential right in the payment of dividend at a fixed rate of 14% p.a. and repayment of capital in case of winding up. Such shareholders are not entitled for any voting right except in case of nonpayment of dividend for continuous period of 3 years. CCPS shall rank senior to all present and future preference shares and /or equity shares issued by the Company and their rights, references and restrictions are governed by / in terms of their issue under the provisions of the Companies Act, 1956.

14% Redeemable Cumulative Preference Shares were due for redemption during 24.01.1999 to 24.01.2002. However, during previous period company has applied with General Insurance Corporation of India and its subsidiaries for one time settlement of principal amount to be repaid with in three months from the date of sanction and waiver of outstanding dividend as on date for which decision is awaiting. As on 31.03.2012 Rs. 44,62,500 (previous period Rs. 41,12,500) were the arrears of divided @ 14% on above preference shares.

NOTES ON THE ACCOUNTS 31.03.3011 31.03.3012

1) Contingent Liabilities not provided for in respect of: (other than as disclosed in notes no 2, 10 & 14 below)

a) Demand from Central Excise, sales Tax etc. disputed by the Company** 95017523 95017523 **Amount deposited Rs.3141733 (previous year Rs 3141733)

b) Interest on delayed payments to suppliers not provided in accounts** NIL Nil **As on date the extent of uncertainties involved, cannot be determined, hence not provided for

2)(a)In earlier years, the company has given corporate gurantees to banks and financial institutions on behalf of such bodies corporate & others on account of credit facilities provided by such banks and financial institutions to them and to Government Departments against their disputed demands, Based on the informations submitted by the such bodies corporate & others, following amounts were overdue as on 31 st March 2012 Due to financial constraints all parties have suspended their operations. As on 31st March 2012 corporate gaurantees given by the company have not been invoked by the lenders & the Government Departments. Therefore the company continue to consider obligations under these gurantees as contingent liability and not provided for the same. However the company holds counter gurantees from the Chairman and Managing Director to reimburse the outgo, if any, on these accounts.

b) In earlier years the company has given a corporate guarantee to a financial institution for buy back of share of a body corporate at agreed rate within agreed time frame. The agreed time has been expired and said financial institution has not invoked the guarantee till date. As on 31.03.2012 the company has considered the estimated liability of Rs 16,28,07,234 (previous year Rs13,79,72,232) on this account as contingent liability. However the company holds the counter guarantee by the Chairman & Managing Director to reimburse the outgo, if any, on this account

c) Above guarantees are in excess of Rs 52,63,05,201 ( previous year Rs 52,63,05,201 )of the approved limit by the shareholders.Increase in dues of M/s Polar Pharma India Limited to bank and financial institutions from initial Rs 19.60,00,000 to Rs 96,86,96,025 arised due to non compliance of terms of OTS by PPIL resulting thereby increase in their loan laibiliities and consquent impact on the corporate guarantee furnished by the company.

d) The Company has given Corporate guarantee for Rs 9,00,00,000 to a Co-Operative Bank on behalf of Polaron Marketing Limited for credit facility for which approval of shareholders has been taken.

3. Debentures, Rupee Term Loans, Funded Interest Term Loans (including the loans acquired by ARCIL and NBFC) are secured/to be secured by first pari passu charge on all fixed assets and second charge on the current assets of the company. Working capital loans acquired by ARCIL are secured / to be secured by first charge on the current assets and second charge on the fixed assets. ARCIL's loan will be further secured by pledge of equity shares of the company by the promoters to bring ARCIL voting rights to a level of 51% post restructuring, including the including the shares allotted to ARCIL. Term Loans are also Guaranteed by Chairman & Managing Director and one of the Directors of the company. Also these are further secured by shares pledged by third parties as Collateral Security.

4.a) In earlier years Asset Reconstruction Company (India) Ltd and a NBFC have restructure secured debts under CDR Mechanism aggregating to Rs. 32.00,00,000 at Rs. 62,07.43,000 to be repaid by issue of 3074300 Nos equity at par for Rs. 30743000 and the balance debts of Rs. 59,00,00,000 to be repaid over a period of 5 years without any interest ARCIL & NBFC had acquired the debts including debenture on the basis of individual sanction from all but one lender.

b) As per the sanction of ARCIL & NBFC restructuring would become effective affter compliance of certain conditions as mentioned in the sanction letter of ARCIL dated 31.03.2008

c) In the earlier years the company has issued 3074300 equity shares of Rs. 10 each at par aggregating Rs. 3,07,43,000.

d) ARCIL has issued a notice dated 05.05.2009 u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFASI) for recalling of the its loan and interest thereon & others charges aggregating Rs. 92,17,81,197.

e) Thereafter ARCIL has taken the possession of residential property located at Maharani Bagh New Delhi having book value Rs. 3,86,14,213 (WDV Rs. 2,78,83,502) & disposed off the same at undisclosed amount Despite repeated request by the company ARCIL has not provided about the details of the amount realised on sale of property. Pending receipt of information from ARCIL the Company has considered minimum reserve price of Rs. 27,50,00,000 for the purpose of provisional adjustment in insured loan due as on 31.03.2012 and Fixed Assets of apearing the books of accouts. Final adjustment will be carried out on receipt of detail information from ARCIL.

f) ARCIL has further issued noticed dated 26.11.2009 under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFASI) for demanding payment of Rs. 73,84,91,390 together with further interest and other amount at document rate from 27.11.2009 till repayment.

g) Subsequently ARCIL has taken the possession of one of the property located at Noida having book value or Rs. 1,56,47,141 (WDV Rs. 41,34,662) which was already seized by the UP Sale Tax Department. The Company has disputed such position by ARCIL. Pending settlement, on accounting adjustment has been carried out.

5) The Stock of Finished goods Rs 86,40,825 under the custom bonded Godown is relating to one business segment,the operation of which has been suspended, The stock has been valued at lower of Cost or Net Relisable Value. In the opinion of the management these stocks are expected to realise the value at which they have been stated, The company has not provided interest, demurrange charges etc on above material lying in custom bonded warehouse. Amount not ascertained

6) The net worth of the company became negative due to continuous loss incurred by the company and provisions made for doubtful recovery.ln view of restructuring/acquisition of loans by ARCIL and its likely impact on the networth, the company is hopeful of recovery, hence account has been prepared on Going Concern basis.

7) The Management is taking necessary step to recover advances/due aggregating Rs 2,23,09,160 ( Previous year 2,14,74,831) from various parties and ex- employees, Pending recovery same have been considered good.

8) Loans, Advances, Sundry Debtors,and Creditors are subject to reconciliation & confirmations . Adjustment, if any, will be carried out on completion of reconcilations & confirmations. The Management do not expect any material adjustment on this account.

9) As a measure of prudence, the company has decided not to recognise any deferred tax assets due to substantial unabsorbed depreciation and brought forward losses under the Income Tax Act.

10) In the opinion of the management value of Current Assets and other loans and advances, considered good, will be realised at not less than their stated value in the ordinary course of business.

11) The Company had executed agreement, jointly with other promoters of Polar Marmo Agglomerates Ltd (PMAL) to buyback 1,85,000 EquityShares of PMAL, subscribed, by Rajasthan State Industrial & Investment Corporation Limited (RIICO). RIICO has initiated legal action in the Hon'ble High Court at Kolkata for the enforcement of buyback clause. Against the decision of single bench judgement, company has gone into appeal before the full bench of High Court, Kolkata. In terms of the Hon'ble High Courts order, the Company has advanced/deposited a sum of Rs. 5,00,000 to a third party who is acting as a custodian.The company has also pledged 5,000 equity shares of PMAL with RIICO as per the Buy back agreement. Shares of PMAL has been written off in the books of accounts.

12) Based on the insurance claim filed by the owner of Custom warehouse, the Company has accounted for insurance claim of Rs 6,76,27,254 in the earlier year. The insurance company has declined the claim against which the Company has filed the petition in the National Consumer Forum Delhi, pending decision of the Forum the company has considered above claim as good for recovery. Further custom duty Rs. 1,58,10,965 on above stock remains unprovided and unpaid as the company has applied for the remission of the same.

13) The Company has Mortgaged Land & Building at value of Rs 2,47.26,244/- (WDV Rs 2,31,04,394) SIDCUL Haridwar with one of the secured lender of Polaron Marketing Limited.

14) a) In earlier years the sales tax authorities had disallowed certain transactions of the sale by a Branch and raised demand of Rs. 1,48,56,050 The company has filed a writ petition against the order in the Hon'ble High Court of Rajasthan. The Hon'ble High Court had remanded back to the assessing authority for fresh hearing, but the Sales Tax Department had filed revision petition before the Hon'ble High Court against the remand order The management is of the opinion that there would not be any liability in this case and therefore, no provision is made in the books of accounts.

b) In one of the unit, the company has disputed the basis of determination of the assessable value for payment of excise duty on post manufacturing expenses for the period from 01.04.1981 to 30.09.1984 and preferred an appeal with the Appellate Authorities. The said appeal has yet to be disposed off and in the absence of the decision of Appellate Authorities, it is difficult to ascertain the Excise Duty liability, if any.

c) In two unit of the company demand arising from the order of the Central Excise Authorities passed on 02.05.2002 in pursuance of show cause notice recived in the year 1999-2000 was set aside in appeal by CEGAT with direction to recompute the duty demand for the period within the permissible time limit U/s 11A of the Act. Pending receipt of the final order recomputing such demand from the Central Excise Authorities, an amount Rs. 1,33,652 was provided in earlier year and paid.

d) The Central Excise Department has rasied demand and penalty of Rs 8,52,792 on the unit as per objection raised by CERA against which company has already filed an appeal to Commisioner on 25.05.2009. Based on legal opinion management was of the opinion that there will not be any liability against this demand. Order of the Excise Commis ; sioner Dt. 15.02.2010 received by company whereby the stay and waiver of predeposit was rejected. The Company has filed a Misc. Application on 26.02.2010 for waiver stating financial constraint and BIFR status of the company.

e) The Central Excise Department has raised demand and penalty of Rs 74,73,404 for the period 01.10.2001 to 09.02.2005 against which the company has filed an appeal with CESTAT The unit has paid Rs. 10,01,000 against the said demand which has been disclosed under Loan & Advance.

f) In the previous year the Commercial Tax Department UP has raised the demand of Rs7,32,86,106 for the period 2006- 07 to 2007-08 against which the Company has filed an appeal disputing demand.

15) No forward contracts/ hedging instruments are outstanding at the Balance Sheet date. As on the Balance Sheet date amount payable for unhedged foreign currency exposures was Rs.25,56,31,102 (previous year Rs 22,80,32,901)

16) In Earlier year the Company has applied to the Central Govermment for approval of Rs 12,07,480 paid to the Ex- executive director (finance and corporate affairs). In the previous year the Company has received approval of Rs 7,95,346. The Company intend to apply to the Central Govermment for waiver of Rs 4,12,134. Pending approval no adjustment has been made in the books of accunts.

17) Company has not provided penalties on various outstanding statutory dues except interest on Sale tax / VAT, Amount not ascertained.

18) Being not material, the Company has provided Rs NIL for the year ( previous year 68,417) liabilities under Define benfit (Gratuity) on Actual basis instead of acturial valuation basis. In the current year Company has not provided gratutiy provision as per AS -15.

19) The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17)," Account- ing for Segment Reporting" notified under Accounting Standard Rules 2006.

20(a) List of Related Parties (To the extend identified by the Company)

Enterprises owned or significantly influenced by key Management Personnel & their relatives

1. Sheffield Appliances Ltd

2. Polar Pharma India Ltd

3. S.A.Engineering Works

4. Vinsa Electricals (P) Limited

5. A.V.Enterprises

6. Polaron Marketing Limited

7. Koyo Tech Electro Pvt Limited

8. Vishva Electotech Limited

9 Human Sales Pvt. Ltd.

(b) Co-promoters & Associates

1. Polar Marmo Agglomerates Ltd

2. Heynen India Ltd

(c) Key Management Personnel

Mr. Anil Kumar Agarwal Chairman & Managing Director

Mr.Sunil Agarwal Director

(d) Relatives of Key Management Personnel

Mrs. Savitri Devi Agarwal Mother of Mr.Anil Kumar Agarwal Agarwal and Mr.Sunil

Mrs. Shailja Agarwal Wife of Mr.Anil Kumar Agarwal

Mrs. Vinita Agarwal Wife of Mr.Sunil Agarwal

Mr. Viraj Agarwal Son of Mr.Anil Kumar Agarwal

Mr. Achintya Agarwal Son of Mr.Sunil Agarwal

Ms. Mansi Agarwal Daughter of Mr.Sunil Agarwal

21) Previous year figures have been re

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Mar 31, 2010

As at 31st As at 31st March, 2010 March. 2009 Rs. Rs.

1. Contingent Liabilities not provided for in respect of (Other than as disclosed in notes no. 3,13 & 17 below)

a) Demand from Central Excise, Sales Tax etc. disputed by the Company* 2,17,31.456 2,17,31,456

*Amount deposited Rs. 3141733 (previous year Rs. 3773349)

b) Interest on delayed payments to suppliers not provided in accounts" NIL 1,47,81,382

"As on date the extent of uncerta inities involved, cannot be determind, hence not provided for.

2. a) 14% Redeemable Cumulative Preference Shares were due for redemption during 24.01.1999 to 24.01.2002. However, during the previous period company had applied with General Insurance Corporation of India and its subsidiaries for one time settlement of Principal amount to be repaid within three months from the date of sanction and waiver of outstanding dividend as on date, for which decision is awaiting. As on 31.03.2010 Rs. 37,62,500 (Previous period 34,12,500) were the arrears of dividend @ 14% on above shares b) The company has allotted 39,00,000 Zero coupon Convertible Warrants of Rs. 11.51 each (Rs. 2.8775 paid up being 25% of the issue price) on 3rd July, 2009 to be converted into equity shares of Rs. 10 each of premium of Rs. 1.51 within 18 months from the date of allotment. The warrant holders shall pay balance 75% of the consideration before conversion into equity share.

3. a) In earlier years, the company has given corporate guarantee to banks and financial institutions on behalf of body corporates and others on account of credit facilities provided by such banks and financial institutions to them and to Government Departments against their disputed demands, based on the informations submitted by the such bodies corporate & others following amounts were overdue as on 31st March 2010. Due to financial constraints all parties have suspended their operations. As on 31st March 2010 corporate guarantees given by the company have not been invoked by the lenders & the Government Departments. Therefore the company continue to consider obligations under these guarantees as contingent liability and not provided for the same. However the company holds counter guarantees from the Chairman and Managing Director to reimburses the outgo, if any, on these accounts.

b) In earlier years the company has given guarantee to a financial institution for buy back Of share of a corporate at agreed rate within agreed time frame. The agreed time has expired and said financial institution has not invoked the guarantee till date. As on 31.03.10 the company has considered the esitmated liability of Rs. 11,69,25,620 (previous year Rs. 9,90,89,509) on this account has contingent liability. However the company holds the couner guarantee by the Chairman & Managing Director to reimburse the outgo, if any, on this account. Above guarantees are in excess of Rs. 29,60,25,189 (previous year Rs. 18,22,37,395) of the approved limit by the shareholders. Increase in dues of M/s Polar Pharma India Limited to bank and financial institutions from Rs. 31,03,31,918 to Rs. 85,78,17,556 arised due to non compliance of terms of OTS by PPIL resulting thereby increase in their loan liabilities and consequent impact on the corporate guarantee furnished by the company.

4. a) In earlier years Assets Reconstruction Company (India) Ltd. and a NBFC agreed to acquire and restructure secured debts under CDR Machanism aggregating Rs. 32,00,00,000 at Rs. 62,07,43,000 to be repaid by issue of 3074300 nos. equity shares at par for Rs. 30,74,300 and the balance debts of Rs. 59,00,00,000 to be repaid over a period of 5 years without any interest. ARCIL & NBFC had acquired the debts including debenture on the basis of individual sanction from all but one lender and the company had considered the same at proportionate restructure value of Rs. 58,79,19,599.

b) As per the sanction of ARCIL & NBFC restructuring would become effective after compliance of certain conditions as mentioned in the sanction letter of ARCIL dated 31.03.2008.

c) During the year the company has issued 30,74,300 equity shares of Rs. 10 each at par aggregating Rs. 3,07,43,000 but failed to pay installments aggregating Rs. 12,50,00,000 on stipulated date due to financial constraint.

d) ARCIL has issued a notice dated 05.05.2009 u/s 13(2) of the Securitasation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI) for recalling of its loan and interest thereon & other charges aggregating Rs. 92,17,81,197/-.

e) Thereafter, ARCIL has taken the prossession of residential property located at Maharani Bagh New Delhi having value Rs, 3,86,14,213 (WDV Rs. 2,78,83,502) & disposed off the same at undisclosed amount. Despite repeated request by the company, ARCIL has not provided amount realised on sale of property. Pending receipt of information from ARCIL the Company has considered minimum reserve price of Rs. 27,50,00,000 for the prupose of provisional adjustment in the books of accounts.

f) ARCIL has further issued notice dated 26th November 2009 under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for demanding payment of Rs. 73,84,91,390, together with further interest and other amount due at documents date from 27.11.2009 till repayment.

g) Subsequently ARCIL has taken the posession of one of the property located at Noida having value Rs. 1,56,47,141 (WDV Rs. 55,60,669) which was already seized by the UP Sale Tax Department. The Comnany is taking necessary step to resolve the issue with ARCIL. Pending settlement, no accounting adjustment has been carried out. h) Pending sanction from one of the lender, debts aggregating Rs. 6,79,75,501 not acquired by ARCIL, has been shown at the gross value without giving any effect of restructuring. In view of proposed acquistion by ARCIL interest Rs. 37,71,900 (till date Rs. 75,43,800) on the debt has not been provided.

5, a) Debentures, Rupee Term Loans, Funded Interest Term Loans (Including the loans acquired by ARCIL and NBFC) are secured/to be secured by first pari passu charge on all fixed assets and second charge on the current assets of the company. Working capital loans acquired by ARCIL are secured/to be secured by first charge on the current assets and second charge on the fixed assets. ARCIL loan will be further secured by pledge of equity shares of the company by the promoters to bring their voting rights to a level of 51 % post restructuring, including the shares allotted to ARCIL, and also, by pledge of entire share holding of a body corporate owning Polar brand. Term Loans are also Guaranteed by Chairman & Managing Director and one of the directors of the company. Also these are futher secured by shares pledged by third parties as Collateral Security.

b) Car loans from Banks are secured by hypothecation of specific vehicles.

6. The stock of Finished goods Rs. 86,40,825 under the custom bonded godown is relating to one business segment, the operation of which has been suspended. The stock has been valued at lower of cost or Net Realisable Value. In the opinion of the management these stocks are expected to realise the value at which they have been stated. The company has not provided interest, demurrage charges etc. on above material lying in custom bonded ware house. Amount not ascertained.

7 The net worth of the company became negative due to continuous loss incurred by the company and provisions made for doubtful recovery. In view of restructuring/acquisition of loans by ARCIL and its likely impact on the networth, the company is hopeful of recovery, hence account has been prepared on Going Concern basis.

8. The Management is taking necessary step to recover advances / dues aggregating Rs. 2,63,01,835 from various parties and ex-employees Pending recovery, same has been considered good.

9. The company has pledged following equity shares of Polar Pharma (India) Ltd. as on 31.03.2010.

No of shares Against

300 (Previous Year 300) With financial Institutions against term loan

1,95,000 (Previous Year 6,40,000) With others against unsecured loan/other credit facilities

7,25,000 (Previous Year 7,25,000) With others against unsecured loan taken by other body corporate.

During the year one of the lender has sold 4,45,000 shares pledged with him having average book value Rs. 48,86,100, without informing the company. The Company is taking necessary leger action against the lender. Pending final information/settlement the company has accounted for sate of share at the estimated rate prevailing in the market.

10. Loans, Advances, Sundry Debtors, and Creditors are subject to reconciliation & confirmations. Adjustment, if any, will be carried out on completion of reconciliations & confirmations. The Management do not expect any material adjustment on this account.

11. As a measure of prudence, the company has decided not to recognise any deferred tax assets due to substantial unabsorbed depreciation and brought forward losses under the Income Tax Act.

12. In the opinion of the management value of Current Assets and other loans and advances, considered good, will be realised at not less than their stated value in the ordinary course of business.

13. The Company had executed agreement, jointly with other promoters of Polar Marmo Agglomerates Ltd. (PMAL) to buyback 1,85,000 Euqity Shares of PMAL, subscribed, by Rajasthan State Industrial & Investment Corporation Limited (RIICO). RIICO has initiated legal action in the Honble High Court at Kolkata for the enforcement of buyback clause. Against the decision of single bench judgement, company has gone into appeal befire the full bench of High Court, Kolkata. In terms of the Honble High Courts order, the company has advanced / deposited a sum of Rs. 5,00,000 to a third pary who is acting as a custodian. The company has also pledged 5,000 equity shares of PMAL with RIICO as per the Buy back agreement. Shares of PMAL has been written off in the books of accounts.

14. In earlier year, the company had discharged the dues of Polar Marmo Agglomerates Limited (PMAL) to Financial Institutions & Banks under One Time Settlement (OTS). The Company had total exposure of Rs. 31,84,83,228 in PMAL as on 31st March, 2006 on variuos accounts including OTS of dues of the said company. In view of winding up recommendation received from BIFR by PMAL (which has been stayed by AAIFR), the managmeni has made provision for doubtful recovery in the earlier year for Rs. 27,84,83,228 net of Rs. 4,00,00,000 being the estimated current realisable value of the assets of said Company as determined by the management. In the current year the management has written off above amount being not recoverable

15. Based on the insurance claim filed by the owner of Custom warehouse, the Company has accounted for insurance claim of Rs. 6,76.27.254 in the previous year. In current year the insurance Company has declined the claim against which the Company has filed the petition in the National Consumer Forum Delhi, pending decision of the Forum the copmpany has considered above claim as good for recovery. Further custom duty Rs 1,58,10,965 on above stock remains unprovided and unpaid as the company has applied for the remission of the same.

16. The Company has secured the trade dues of M/s. K.K.G Industries and M/s. Excellent Moulders by Land & building at SIDCUL Haridwar. However, allotment related to this land is under litigation with State Authorities.

17. a) Sales Tax Authorities has disallowed Sales Tax exemption of erstwhile Faridabad unit of the company and raised a demand of Rs. 3.23,60,683 The Company has filed a writ petition against the order in Honble Court of Chandigarh & Haryana. Writ has been admitted by the court. Based on the legal opinion, the management is of the opinion that there will not be any liability against this demand and therefore, the company has not made any provision for the said demand in the books of accounts.

b) In earlier years the sales tax authorities had disallowed certain transactions of the sale by a Branch and raised demand of Rs. 1,48,56,050 The company has filed a writ petition against the order in the Honble High Court of Rajasthan. The Honble High Court had remanded back to the assessing authority for fresh hearing, but the Sales Tax Department had filed revision petition before the Honble High Court against the remand order. The management is of the opinion that there would not be any liability in this case and therefore, no provision is made in the books of accounts.

c) In one of the unit, the company has disputed the basis of detemination of assessable value for payment of exicse duty on post manufacturing expenses for the period from 01.04.81 to 30.09.84 and prefered an appeal with the Appellate Authorities. The said appeal is yet to be disposed off and in the absence of the decision of Appellate Authorities, it is difficult to ascertain the Excise duty liability if any.

d) In two units of the company demand arising from the order of the Central Excise Authorities passed on 02.05.02 in pursuance of Show Cause notice received in the year 1999-2000 was set aside in appeal by CEGAT with direction to recompute the duty demand for the period within the permissible time limit U/s 11A of the Act. Pending receipt of final order recomputing such demand from the Central Excise Authorities, an amount Rs. 1,33,652 was provided in earlier year and paid,

e) The Central Excise Department has raised demand and penalty of Rs. 8,52,792 on the unit as per objection raised by CERA against which company has already filed an appeal to Commissioner on 25.05.2009. Based on legal opinion, management was of the opinion that there will not be any liability against this demand Order of the Excise Commissioner Dt. 15.02.2010 received by company whereby the stay and waiver of predepositwas rejected. The Company has filed a Misc. Application on 26.02.2010 for waiver starting financial constraint and BIFR status of the company. f) The Central Excise Department has raised demand and penalty of Rs. 74,73,404 for the period 01.10.2001 to 09.02.2005 against which ., e company has fifed an appeal with CESTAT. The unit has paid Rs. 10,01,000 against the said demand which has been disclosed under Luan & Advances.

19. The Company has no information from its suppliers being registered under Micro, Small & Medium Enterpirses as defined under MSME Act 2006 Hence requirement regarding payment within specified date, interest on payment beyond specified date, if any, and other disclosure requirement in Annual Accounts could not be determined/provided.

20. No forward contracts/hedging instruments are outstanding at the Balance Sheet date. As on the Balance Sheet date amount payable for unhedged foreign currency exposures was Rs. 22,99,01,518 (previous year Rs. 26,00,49,817)

b) Approval from the Central Government is awaited for the remuneration Rs. 12,07,480 paid/provided to Ex-Executive Director (Finance and Corporate affairs) in the previous period.

21. Segment Financial

The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), "Accouting for Segment Reporting" notified Accountng Standard Rules 2006.

Segment Reporting Policies

Indentification of Segments.

Primary Segment

Business Segment: The companys operating businesses are organised and managed seperately according to the nature of products with each segment representing a strategic business and different products. The four indentified segments are Fan, Light & Luminaries, Pumps & Appliances.

Secondary Segment

Geographical Segment: The analysis of geographical segment is based on the geographical location of the customers.

Unallocated Corporation income and expenses are considered as a part of Unallocable expenses (net.) which are not indentifiable to any business segment.

Segment Information

1. Loans and Advances shown, above to (he associates fall under the category of "Loans and Advances" in the nature of Loans where there is no repayment schedule.

2. Provision for doubtful debts made in the previous year ended and Written off during the year.

22. List of Related Parties (To the extent indentified by the company)

a) Enterprises owned or significantrly influenced by key Management Personnel & their relatives

1. Sheffield Appliances Ltd.

2. Polar Pharma India Ltd,

3. S.A. Engineering Works

4 Vinsa Electricals (P) Limited

5. Polaron Marketing Limited

6. Koyo Tech Electro Pvt. Limited

7. Vishva Electrotech Limited

b) Co-promoters & Associates

1. Polar Marmo Agglomerates Ltd.

2. Heynen India Ltd.

3. Polar Forgings & Tools Ltd.

c) Key Management Personnel

Mr. Anil Agarwal Chariman & Managing Director

Mr, Sunil Agarwal Director

d) Relatives of Key Management Personnel

Mrs. Savitri Devi Agarwal Mother of Mr. Anil Agarwal and Mr. Sunil Agarwal

Mrs. Shailja Agarwal Wife of Mr. Anil Agarwal

Mrs. Vinita Agarwal Wife of Mr. Sunil Agarwal

Mr. Viraj Agrawal Son of Mr. Anil Agarwal

Mr. Achintya Agarwal Son of Mr. Sunil Agarwal

Ms. Mansi Agarwal Daughter of Mr. Sunil