Notes to Accounts of S R Industries Ltd.

Mar 31, 2025

(H) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of
a past event, it is probable that an 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. When the Company
expects some or all of a provision to be reimbursed, for example, under an insurance contract, the
reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The
expense relating to a provision is presented in the statement of Profit and Loss net of any reimbursement.

Provisions are not discounted to their present value and are determined based on the best estimate required
to settle the obligation at the reporting date. These estimates are reviewed at each reporting date

and adjusted to reflect the best estimate.

Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control
of the Company or a present obligation that is not recognized because it is not probable that an outflow of

resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases,
where there is a liability that cannot be recognized because it cannot be measured reliably. The Company
does not recognize a contingent liability but discloses its existence in the financial statements unless the
probability of outflow of resources is remote.

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

(I) Employee Benefits

• Short term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognized in respect of employee''s service up to the end of reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee
benefit obligation in the balance sheet.

• Other Long-term employee benefit obligations:

The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service. They are therefore measured based on the actuarial
valuation using projected unit credit method at the year end. The benefits are discounted using the market
yields at the end of the reporting period that have terms approximating to the term of the related
obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions
are recognized in profit or loss.

Gratuity Obligations:

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on
projected unit credit method made at the end of each financial year.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding
amounts included in net interest on the net defined benefit liability), are recognized immediately in the
Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which
they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit (liabilities/assets).The
Company recognized the following changes in the net defined benefit obligation under employee benefit
expenses in statement of profit and loss

• Service cost comprising current service cost, past service cost, gain & loss on curtailments and non-routine
settlements.

• Net interest expenses or income.

(J) Revenue Recognition:

Revenue from sale of goods is recognized when control of the products being sold is transferred to our
customer and when there are no longer any unfulfilled obligations. The- Performance Obligations in our
contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on
customer terms.

Revenue is measured on the basis of contracted price, after deduction of any trade discounts, volume rebates
and any taxes or duties collected on behalf of the Government such as goods and services tax, etc.
Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only

recognized to the extent that it is highly probable a significant reversal will not occur.

Our customers have the contractual right to return goods only when authorised by the Company. An estimate
is made of goods that will be returned and a liability is recognised for this amount using a best estimate
based on accumulated experience.

Income from services rendered is recognised based on agreements/arrangements with the customers
as the service is performed and there are no unfulfilled obligations. Interest income is recognised using the
effective interest rate (EIR) method.

(K) Leases

Company, as a lessee

The Company as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements
(if any) , if the contract conveys the right to control the use of an identified asset. The contract conveys the
right to control the use of an identified asset, if it involves the use of an identified asset and the Company
has substantially all of the economic benefits from use of the asset and has right to direct the use of the
identified asset.

The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the
lease liability adjusted for any lease payments made at or before the commencement date plus any initial
direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the
lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement
date over the shorter of lease term or useful life of right-of-use asset.

The Company measures the lease liability at the present value of the lease payments that are not paid at the
commencement date of the lease. The lease payments are discounted using the interest rate implicit in the
lease, if that rate can be readily determined. If that rate cannot be readily determined, the

Company uses incremental borrowing rate.

For short-term and low value leases, the Company recognises the lease payments as an operating expense
on a straight-line basis over the lease term.

The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease(if any). Whenever the
terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is
classified as a finance lease. All other leases are classified as operating

leases. When the Company is an intermediate lessor, it accounts for its interests in the head lease and the
sublease separately.

The sublease is classified as a finance or operating lease by reference to the ROU asset arising from the
head lease. For operating leases, rental income is recognized on a straight line basis over the term of the
relevant lease.

(L) Fair Value Measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance
sheet date.

Fair value is the price 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 fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

i. In the principal market for the asset or liability, or

ii. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants

would use when pricing the asset or liability, assuming that market participants act in their economic best

interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
date are available to measure fair value, maximizing the use of relevant observable inputs and minimizing
the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

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

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

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

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.

The Company''s management determines the policies and procedures for both recurring and non¬
recurring fair value measurement, such as derivative instruments measured at fair value.

External valuers are involved for valuation of significant assets, such as properties and financial
assets and significant liabilities. Involvement of external valuers is decided upon annually by the
management. The management decided, after discussions with the Company''s external valuers
which valuation techniques and inputs to use for each case.

At each reporting date, the management analyses the movements in the values of assets and liabilities which
are required to be re-measured or re-assessed as per the Company''s accounting policies.

The management in conjunction with the Company''s external valuers, also compares the change in the fair
value of each asset and liability with relevant external sources to determine whether the change is
reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on
the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above

(M) Significant accounting judgments, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of the asset or liability affected in future periods.

Judgments

In the process of applying the Company''s accounting policies, management has made the following
judgments, which have the most significant effect on the amounts recognized in the financial statements.

Operating lease commitments - Company as lessee

The Company has taken various properties on leases. The Company has determined, based on an evaluation
of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion
of the economic life of the commercial property, and that it does not retain all the significant risks and
rewards of ownership of these properties and accounts for the contracts as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below. The Company based its assumptions and
estimates on parameters available when the financial statements were prepared.

Existing circumstances and assumptions about future developments, however, may change due to market
changes or circumstances arising beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.

a. Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and
the amount and timing of future taxable income. Given the wide range of business relationships and the
long-term nature and complexity of existing contractual agreements, differences arising between the actual
results and the assumptions made, or future changes to such assumptions, could necessitate future
adjustments to tax income and expense already recorded. The Company establishes provisions, based
on reasonable estimates. The amount of such provisions is based on various factors, such as experience
of previous tax audits and differing interpretations of tax regulations by the taxable entity and the
responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending
on the conditions prevailing in the respective domicile of the companies.

b. Defined benefit plans

The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial
valuation involves making various assumptions which may difer from actual developments in the
future. These include the determination of the discount rate, future salary increases, mortality rates and
future pension increases. Due to the complexity of the valuation, the underlying assumptions and its
long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date. In determining the appropriate discount rate,
management considers the interest rates of long-term government bonds with extrapolated maturity
corresponding to the expected duration of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Future
salary increases and pension increases are based on expected future inflation rates.

c. Fair value measurement of financial instrument

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques
including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable
markets where possible, but where this .is not feasible, a degree of judgment is required in establishing fair
values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect the reported fair value of financial instruments.

(N) Borrowing Costs

Borrowing cost includes interest expense as per effective interest rate [EIR]. Borrowing costs directly
attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset until
such time that the asset are substantially ready for their intended use. Where funds are borrowed specifically
to finance a project, the amount capitalized represents the actual borrowing incurred. Where surplus funds
are available out of money borrowed specifically to finance project, the income generated from such current
investments is deducted from the total capitalized borrowing cost. Where funds used to finance a project
form part of general borrowings, the amount capitalized is calculated using a weighted average of rate
applicable to relevant general borrowing of the Company during the year. Capitalization of borrowing cost
is suspended and charged to profit and loss during the extended periods when the active development
on the qualifying project is interrupted. All other borrowing costs are expensed in the period in which
they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the
borrowing of funds. Borrowing cost also includes exchange differences arising from foreign currency
borrowings to the extent that they are regarded as an adjustment to the borrowing costs.

(O) Impairment of Non-Financial Assets:

The Company assesses, at each reporting date, whether there is an indication that an asset may be
impaired(if any). If any indication exists, or when annual impairment testing for an asset is required, the

Company estimates the assets recoverable amount. An asset''s recoverable amount is the higher of an asset''s
or cash-generating units (CGU) fair value less costs of disposal and its value in use.

Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets. When the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre¬
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.

In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly traded companies or other available fair value
indicators.

The Company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Company''s CGUs to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash
flow projections beyond periods covered by the most recent budgets/forecasts, the Company
extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent
years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term
average growth rate for the products, industries, or country or countries in which the entity operates, or for
the market in which the asset is used.

Impairment losses of operations, including impairment on inventories, are recognized in the statement
of profit and loss, except for properties previously revalued with the revaluation surplus taken to OCI. For
such properties, the impairment is recognized in OCI up to the amount of any previous revaluation surplus.

After impairment depreciation is provided on the revised carrying amount of the asset over its
remaining economic life.

An assessment is made in respect of assets at each reporting date to determine whether there is an indication
that previously recognized impairment losses no longer exist or have decreased. If such indication exists,
the Company estimates the asset''s or CGU''s recoverable amount. A previously recognized impairment loss
is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable
amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such
reversal is recognized in the statement of profit or loss unless the asset is carried at a revalued amount, in
which case, the reversal is treated as a revaluation increase.

(P) Government Grants:

Government grants (if any) are recognized where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense item, it is
recognized as income on a systematic basis over the periods that the related costs, for which it is intended
to compensate, are expensed. When the grant relates to an asset, it is recognized as income in equal
amounts over the expected useful e of the related asset. However, if any export obligation is attached to

the grant related to an asset, it is recognized as income on the basis of accomplishment of the export
obligation.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value
amounts and released to profit or loss over the expected useful life in a pattern of consumption of the
benefit of the underlying asset i.e. by equal annual installments.

(Q) Earnings per share:

Basic and diluted earnings per Equity Share are computed in accordance with Indian Accounting Standard
33 ''Earnings per Share'', notified accounting standard by the Companies (Indian Accounting
Standards) Rules of 2015 (as amended). Basic earnings per share is calculated by
dividing the net profit or loss attributable to equity holder of Company (after deducting preference
dividends and attributable taxes, if any) by the weighted average number of equity shares
outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a fully paid equity share during the
reporting period. The weighted average number of equity shares outstanding during the period is adjusted
for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split
(consolidation of shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period, attributable to
equity shareholders of the Company and the weighted average number of shares outstanding during the
period are adjusted for the effects of all dilutive potential equity shares.

37. The inventories are taken as per records duly certified by the Company. The same have been valued in
accordance with Accounting Policies.

38. Segmental Reporting :

The Company is a Manufacturing & trading company. The Company is managed organizationally as a unified
entity with various functional heads reporting to the top management and is not organized along product lines.
There are therefore, no separate segments within the company as defined by AS-17 (Segmental Reporting)
issued by ICAI.

39. As per the information available with the Company in response to the enquiries from existing suppliers with
whom Company deals, none of the suppliers are registered with The Micro, Small and Medium Enterprises
Development Act, 2006.

42. The GST Returns filed monthly by the Company are subject to reconciliation and the differences, if any, with
the Books of Accounts, will be dealt with at the time of filing of Annual Return in Form GSTR9 and GSTR9C
by the company. GSTR9 & 9C has not been filed by the company from F/Y 2020-21 to F/Y 2022-2023

43. Tax Expense is the aggregate of current year income tax and deferred tax charged to the Profit and Loss
Account for the year.

Current Year Charges

No provision for Income tax has been made during the current financial year.

Deferred Tax Liability/Asset

The Company estimates the deferred tax charge using the applicable rate of taxation based on the impact
of timing differences between financial statements and estimated taxable income for the current year.

However, Deferred tax asset has not been recognized in terms of Ind AS 12 issued by ICAI by adopting the
conservative approach in respect of ascertained profitability in the future years.

44. Related Party Disclosures:

In accordance with the Accounting Standards (Ind AS-24) on Related Party Disclosures, where control
exists and where key management personnel are able to exercise significant influence and, where
transactions have taken place during the year, alongwith description of relationship as identified, are
given below:-

C. The Corporate Insolvency Resolution Process (CIRP) of the company registered as S R Industries
Limited was initiated by the Adjudicating Authority (AA/ Hon''ble NCLT, Chandigarh Bench) on
21.12.2021. Pursuant to the process of Request for Resolution Plan (RFRP), Bazel International
Limited emerged as the Successful Resolution Applicant (SRA), which was granted the approval of
the AA vide its order dated 01.07.2024. As per Ind AS 24 the list of related parities upto 01st July
2024 are given below:

Mr. Udit Mayor Director

Mr. Munish Mahajan Managing Director

Mrs. Sanjeeta Mahajan Director

Mr. Amit Mahajan Whole Time Director & CFO

Mr. Gaurav Jain Director

Mrs. Anu Kumari Director

45. As per the approved Resolution Plan, by order dated 01 July 2024 of the Hon’ble NCLT, Bazel International
Limited (the Successful Resolution Applicant), along with its associates, appointed the Board of Directors of
the Company on 22-11-2024. Thereafter, in accordance with the order of the Hon’ble NCLT and the approved
Plan, the Company has written off all assets and liabilities appearing in the books of account and
debited/credited to Reserves & Surplus. The Company is also taking necessary actions with the statutory
departments to resolve all old related matters.

46. Previous years’ figures have been regrouped / recasted wherever necessary.

For Krishan Rakesh & Co. For and on behalf of the Board

Chartered Accountants S R Industries Limited

Firm Regn. No.: 009088N

Sd/- Sd/- Sd/-

(K.K.Gupta) Pankaj Dawar Manish Kumar Gupta

Partner (Managing Director) (Director cum CFO)

M.No.:087891 DIN: 06479649 (DIN: 05331936)

Place: Delhi Place: Santiago, USA Place: Delhi

Date: 27-05-2025 Date: 27-05-2025 Date: 27-05-2025

UDIN: 25087891BMIDZP6626

Sd/-

Shivam Sharma
(Company Secretary)

(PAN: GACPS4345Q)

Place: New Delhi
Date: 27-05-2025

---

Mar 31, 2024

(H) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as
a result of a past event, it is probable that an 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. When the Company expects some or all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is recognized as a separate asset, but only when
the reimbursement is virtually certain. The expense relating to a provision is presented in the
statement of Profit and Loss net of any reimbursement.

Provisions are not discounted to their present value and are determined based on the best
estimate required to settle the obligation at the reporting date. These estimates are reviewed at
each reporting date and adjusted to reflect the best estimate.

Continqent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond
the control of the Company or a present obligation that is not recognized because it is not probable
that an outflow of resources will be required to settle the obligation. A contingent liability also
arises in extremely rare cases, where there is a liability that cannot be recognized because it
cannot be measured reliably. The Company does not recognize a contingent liability but discloses
its existence in the financial statements unless the probability of outflow of resources is remote.

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

(I) Employee Benefits

• Short term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related
service are recognized in respect of employee''s service up to the end of reporting period and are
measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligation in the balance sheet.

• Other Long-term employee benefit obligations:

The liabilities for earned leave are not expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service. They are therefore measured
based on the actuarial valuation using projected unit credit method at the year end. The benefits
are discounted using the market yields at the end of the reporting period that have terms
approximating to the term of the related obligation. Re-measurements as a result of experience
adjustments and changes in actuarial assumptions are recognized in profit or loss.

Gratuity Obligations:

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each financial year.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the return on
plan assets (excluding amounts included in net interest on the net defined benefit liability), are
recognized immediately in the Balance Sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur. Re-measurements are not reclassified to
profit or loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit
(liabilities/assets).The Company recognized the following changes in the net defined benefit
obligation under employee benefit expenses in statement of profit and loss

• Service cost comprising current service cost, past service cost, gain & loss on curtailments and
non-routine settlements.

• Net interest expenses or income.

(J) Revenue Recognition:

Revenue from sale of goods is recognized when control of the products being sold is transferred
to our customer and when there are no longer any unfulfilled obligations. The- Performance
Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer
acceptance depending on customer terms.

Revenue is measured on the basis of contracted price, after deduction of any trade discounts,
volume rebates and any taxes or duties collected on behalf of the Government such as goods
and services tax, etc. Accumulated experience is used to estimate the provision for such discounts
and rebates. Revenue is only recognized to the extent that it is highly probable a significant
reversal will not occur.

Our customers have the contractual right to return goods only when authorised by the Company.
An estimate is made of goods that will be returned and a liability is recognised for this amount
using a best estimate based on accumulated experience.

Income from services rendered is recognised based on agreements/arrangements with the
customers as the service is performed and there are no unfulfilled obligations. Interest income is
recognised using the effective interest rate (EIR) method.

(K) Leases

Company, as a lessee

The Company as a lessee, recognizes a right-of-use asset and a lease liability for its leasing
arrangements (if any) , if the contract conveys the right to control the use of an identified asset.
The contract conveys the right to control the use of an identified asset, if it involves the use of an
identified asset and the Company has substantially all of the economic benefits from use of the
asset and has right to direct the use of the identified asset.

The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the
lease liability adjusted for any lease payments made at or before the commencement date plus
any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less
any accumulated depreciation, accumulated impairment losses, if any and adjusted for
any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight¬
line method from the commencement date over the shorter of lease term or useful life of right-of-
use asset.

The Company measures the lease liability at the present value of the lease payments that are not
paid at the commencement date of the lease. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be
readily determined, the Company uses incremental borrowing rate.

For short-term and low value leases, the Company recognises the lease payments as an
operating expense on a straight-line basis over the lease term.

The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease(if any).
Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other leases are classified as operating
leases. When the Company is an intermediate lessor, it accounts for its interests in the head lease
and the sublease separately.

The sublease is classified as a finance or operating lease by reference to the ROU asset arising
from the head lease. For operating leases, rental income is recognized on a straight line basis
over the term of the relevant lease.

(L) Fair Value Measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance
sheet date.

Fair value is the price 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 fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:

i. In the principal market for the asset or liability, or

ii. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability
to generate economic benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient date are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:

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

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

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

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair
value measurement as a whole) at the end of each reporting period.

The Company''s management determines the policies and procedures for both recurring and non¬
recurring fair value measurement, such as derivative instruments measured at fair value.

External valuers are involved for valuation of significant assets, such as properties and financial
assets and significant liabilities. Involvement of external valuers is decided upon annually by the
management. The management decided, after discussions with the Company''s external valuers
which valuation techniques and inputs to use for each case.

At each reporting date, the management analyses the movements in the values of assets and
liabilities which are required to be re-measured or re-assessed as per the Company''s accounting
policies.

The management in conjunction with the Company''s external valuers, also compares the change
in the fair value of each asset and liability with relevant external sources to determine whether the
change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level
of the fair value hierarchy as explained above

(M) Significant accounting judgments, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgments

In the process of applying the Company''s accounting policies, management has made the
following judgments, which have the most significant effect on the amounts recognized in the
financial statements.

Operating lease commitments - Company as lessee

The Company has taken various properties on leases. The Company has determined, based on
an evaluation of the terms and conditions of the arrangements, such as the lease term not
constituting a substantial portion of the economic life of the commercial property, and that it does
not retain all the significant risks and rewards of ownership of these properties and accounts for
the contracts as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at
the reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are described below. The Company
based its assumptions and estimates on parameters available when the financial statements were
prepared.

Existing circumstances and assumptions about future developments, however, may change due
to market changes or circumstances arising beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.

a. Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax
laws, and the amount and timing of future taxable income. Given the wide range of business
relationships and the long-term nature and complexity of existing contractual agreements,
differences arising between the actual results and the assumptions made, or future changes to
such assumptions, could necessitate future adjustments to tax income and expense already
recorded. The Company establishes provisions, based on reasonable estimates. The amount of
such provisions is based on various factors, such as experience of previous tax audits and

differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Such differences of interpretation may arise on a wide variety of issues depending on the
conditions prevailing in the respective domicile of the companies.

b. Defined benefit plans

The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations.
An actuarial valuation involves making various assumptions which may difer from actual
developments in the future. These include the determination of the discount rate, future salary
increases, mortality rates and future pension increases. Due to the complexity of the
valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date. In determining the appropriate discount rate, management considers the interest
rates of long-term government bonds with extrapolated maturity corresponding to the expected
duration of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Future
salary increases and pension increases are based on expected future inflation rates.

c. Fair value measurement of financial instrument

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot
be measured based on quoted prices in active markets, their fair value is measured using
valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these
models are taken from observable markets where possible, but where this .is not feasible, a
degree of judgment is required in establishing fair values. Judgments include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors
could affect the reported fair value of financial instruments.

(N) Borrowing Costs

Borrowing cost includes interest expense as per effective interest rate [EIR]. Borrowing costs
directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalized as part
of the cost of the asset until such time that the asset are substantially ready for their intended use.
Where funds are borrowed specifically to finance a project, the amount capitalized represents the
actual borrowing incurred. Where surplus funds are available out of money borrowed specifically
to finance project, the income generated from such current investments is deducted from the total
capitalized borrowing cost. Where funds used to finance a project form part of general borrowings,
the amount capitalized is calculated using a weighted average of rate applicable to relevant
general borrowing of the Company during the year. Capitalization of borrowing cost is suspended
and charged to profit and loss during the extended periods when the active development on
the qualifying project is interrupted. All other borrowing costs are expensed in the period in which
they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds. Borrowing cost also includes exchange differences arising from
foreign currency borrowings to the extent that they are regarded as an adjustment to the borrowing
costs.

(O) Impairment of Non-Financial Assets:

The Company assesses, at each reporting date, whether there is an indication that an asset may
be impaired(if any). If any indication exists, or when annual impairment testing for an asset is
required, the Company estimates the assets recoverable amount. An asset''s recoverable amount
is the higher of an asset''s or cash-generating units (CGU) fair value less costs of disposal and its
value in use.

Recoverable amount is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. When
the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and

In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.

In determining fair value less costs of disposal, recent market transactions are taken into account.
If no such transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

The Company bases its impairment calculation on detailed budgets and forecast calculations,
which are prepared separately for each of the Company''s CGUs to which the individual assets
are allocated. These budgets and forecast calculations generally cover a period of five years. For
longer periods, a long-term growth rate is calculated and applied to project future cash flows after
the fifth year. To estimate cash flow projections beyond periods covered by the most
recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a
steady or declining growth rate for subsequent years, unless an increasing rate can be justified.
In any case, this growth rate does not exceed the long-term average growth rate for the products,
industries, or country or countries in which the entity operates, or for the market in which the asset
is used.

Impairment losses of operations, including impairment on inventories, are recognized in
the statement of profit and loss, except for properties previously revalued with the revaluation
surplus taken to OCI. For such properties, the impairment is recognized in OCI up to the amount
of any previous revaluation surplus.

After impairment depreciation is provided on the revised carrying amount of the asset over its
remaining economic life.

An assessment is made in respect of assets at each reporting date to determine whether there is
an indication that previously recognized impairment losses no longer exist or have decreased. If
such indication exists, the Company estimates the asset''s or CGU''s recoverable amount. A
previously recognized impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset''s recoverable amount since the last impairment loss
was recognized. The reversal is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognized for the asset in prior years. Such
reversal is recognized in the statement of profit or loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a revaluation increase.

(P) Government Grants:

Government grants (if any) are recognized where there is reasonable assurance that the grant
will be received and all attached conditions will be complied with. When the grant relates to an
expense item, it is recognized as income on a systematic basis over the periods that the related
costs, for which it is intended to compensate, are expensed. When the grant relates to an
asset, it is recognized as income in equal amounts over the expected useful e of the related
asset. However, if any export obligation is attached to the grant related to an asset, it is recognized
as income on the basis of accomplishment of the export obligation.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded
at fair value amounts and released to profit or loss over the expected useful life in a pattern of
consumption of the benefit of the underlying asset i.e. by equal annual installments.

(Q) Earnings per share:

Basic and diluted earnings per Equity Share are computed in accordance with Indian Accounting
Standard 33 ''Earnings per Share'', notified accounting standard by the Companies (Indian
Accounting Standards) Rules of 2015 (as amended). Basic earnings per share is calculated by
dividing the net profit or loss attributable to equity holder of Company (after deducting preference
dividends and attributable taxes, if any) by the weighted average number of equity shares
outstanding during the period. Partly paid equity shares are treated as a fraction of an equity
share to the extent that they are entitled to participate in dividends relative to a fully paid equity
share during the reporting period. The weighted average number of equity shares outstanding
during the period is adjusted for events such as bonus issue, bonus element in a rights issue,
share split, and reverse share split (consolidation of shares) that have changed the number of
equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period,
attributable to equity shareholders of the Company and the weighted average number of shares
outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(a) The Central Excise Authorities, Mumbai had imposed duty and penalty aggregating to Rs. 44.00 Lacs for
purchase of certain items against CT-3 forms without payment of duty in earlier years as shown in the following
table:
(b) Interest on bank borrowings has not been provided for during the year due to the reasons mentioned in Note
No. 12 (Borrowings), thus, the liability of the company is understated to the extent of interest not provided for
and the liability in respect of the same may arise in future.

35

³⁵ BSE has imposed a penalty amounting to Rs.1,24,52,540/- for non compliance. RP has filed a request with BSE
for waiver of such penalty. No provision has been taken in the accounts for the said liability as RP is of the
opinion that the said amount shall be waived by BSE. Necessary adjustments shall be made after receiving final
orders from BSE.

36 Bank Borrowings

a) The Banks (SBI and UCO Bank) have classified the accounts of the Company as Non- Performing
Assets on 30.06.2017 and issued notices under SARFAESI Act, 2002 on 02.05.2018 and 24.09.2018
respectively.

b) The Company submitted proposal to State Bank of India for settlement of its dues through One Time
Settlement Scheme (OTS) on 10.07.2019. State Bank of India approved the same vide Sanction Letter No.
SAMB/CHD/T-1/1920 dated 11.02.2020. The total debt was settled for an amount of Rs. 850 Lakhs against the
outstanding amount of Rs 1340.37 Lakhs. However, the company defaulted to make the payment as per the
said OTS Scheme.

The Company submitted another proposal to State Bank of India on 27.08.2020 for extension of time for
payment of balance unpaid compromise amount of Rs. 722 lakhs upto 31.03.2021. State Bank of India
approved the same vide Sanction Letter No. SAMB/CHD/T-1/956/A dated 29.10.2020.

The Company paid only Rs. 138 Lakhs till 31.03.2021 inclusive of upfront payment and the Company and
promoters could not fulfil its commitment to repay the balance in time. State Bank of India has classified the
accounts of the company as Recalled Assets Account on 29.09.2021 and balance due has been transferred to
Recalled Assets account by the Bank.

37 Goods and Services Tax (GST)

The GST Returns filed monthly by the Company are subject to reconciliation and the differences, if any, with the
Books of Accounts, will be dealt with at the time of filing of Annual Return in Form GSTR9 and GSTR9C by the
company. GSTR9 & 9C has not been filed by the company from F/Y 2020-21 to F/Y 2022-2023

38 Deferred Tax

The Company offsets deferred tax assets and liabilities if and only if it has a legally enforceable right to set of
the deferred tax assets with deferred tax liabilities provided it relates to taxes levied by the same tax authority.

The Company has brought forward business losses amounting to Rs. 1844.10 Lakhs (pertaining to AY 2019- 20
to A.Y. 2021-22)

The Company has brought forward unabsorbed depreciation amounting to Rs. 2224.07 lakhs that are available
for offsetting for an indefinite period against future taxable profits of the Company.

The Company has not recognized Deferred Tax Asset as a matter of prudence specifically in the light of
accumulated losses and due to continuing losses incurred by the company in the past. Further, it seems that
there will be no taxable profits in near future for utilization of this deferred tax asset.

39 Claims Admitted :

Claims of Rs 54,63,52,403.00 admitted till the date of audit as per list of claims provided by RP, out of which
Statutory dues amounts to Rs 1,79,99,099.00 for which no provision has been made in the books of accounts
during the year. Detail of Statutory Dues is as follows:

The management assessed that carrying values of trade receivables, cash and cash equivalents, other bank
balances, loans and advances to related parties, interest receivable, trade payables, capital creditors, other
current financial assets and liabilities are considered to be the same as their fair values, due to their short-term
nature.

The fair value of loans from banks and other financial liabilities are estimated by discounting future cash flows
using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation
requires management to use observable and unobservable inputs in the model, out of which the significant
observable and unobservable inputs are disclosed below. Management regularly assesses a range of
reasonably possible alternatives for those significant observable and unobservable inputs and determines their
impact on the total fair value of loans from banks and other financial liabilities.

The fair value of the financial assets and liabilities is reported at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a liquidation or forced sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets/ liabilities.

Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value
are observable, either directly or indirectly.

Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are
not based on observable market data.

42 The Income Tax Authorities has raised the demand of Rs 1,44,79,671.00 (including accrued interest ) for the
Assessment year 2017-18 vide demand ref: no. 2018201737040266463C and for Rs 18,92,570.00 (including
accrued interest ) for Assessment Year 2018-19 vide demand ref: no. 2019201837063789773C for which
no provision has been made in the books of accounts , as claim has not been filled by the Income Tax
Authorities till the date of audit.

43 As there are no foreign currency payable at the end of the year and hence foreign currency exposure not ''
hedged by derivative instruments or otherwise have been disclosed.

44 The inventories are taken as per records of the company. As there are no operations in the company during the
year, the value of Inventories as were appearing as on 31.03.2023 are being taken as on 31.03.2024.

45 The accumulated losses of the company as on 31st March 2024 exceeds its Paid Up Capital & Free Reserves.
Since the net worth of the company have become negative, it is a Sick Industrial Unit. In view of uncertainty, the
financial statements of the company have been prepared on Going Concern Basis during the pendency of
Insolvency & bankruptcy Proceedings.

47 Previous year figures have been regrouped/ reclassified/ recalculated as and where the same were necessary.

A Company undergoing Corporate Insolvency Resolution Process vide NCLT order under the IBC

For Krishan Rakesh & Co.

Chartered Accountants Countersigned by:

Firm Regn. No.: 009088N

Sd/-

Sd/- Rajender Kumar Jain

(K.K.Gupta) Resolution Professional

Place : Delhi Partner (Regd. No. IBBI/IPA-001/IP-

Date : 06-12-2024 M.No.:087891 P00543/2017-18/10968)

---

Mar 31, 2015

1. Terms/Rights attached to Equity Shares

The Company has one class of Equity Shares having a par value of Rs 10. Each holder of Equity Share is entitled to one vote per Share.

2. Terms/RIghts attached to 8% Non-Cum-Preference Shares

The Company has one class of 8% Non-Cummulative Shares having a par value of Rs 100/-. These shares are redeemed on completion of 20 years from the date of issue.

1. CONTINGENT LIABILTIES:-

a) The liabilities in respect of Income Tax, Purchase Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional Demand, if any, shall be accounted for in the year in which the assessment is complete. The status of tax assessments is as under:

i) The Income Tax assessments have been completed upto the assessment year 2012-13. An Additional demands of Rs.45.02 Lacs for A.Y. 2007-08 has already been paid and Shown under Other Current Assets as income tax paid under protest. The company has filed appeals against the said demand before the Income Tax Appellate Tribunal, which is pending for adjudication.

ii) The Sales Tax/Purchase Tax assessments have been completed up to the Financial Year 2010-11 and there is no demand outstanding.

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company against the demand of Rs. 258.70 Lacs (Previous Year Rs.258.70). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of accounts. The requisite provision, if any, will be made in the year the final decision is made.

c) . The Central Excise Authorities, Mumbai had imposed duty

and penalty aggregating to Rs. 723.00 Lacs(Previous Year Rs. 723.00 Lacs) for purchase of certain items against CT-3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any, will be made in the year of final decision.

d) The Company has given counter guarantee to banks of Rs 6.00 lacs (Previous Year Rs. 6.00 Lacs) in respect of the guarantees issued by the banks on behalf of the Company in favour of HPSEB.

2. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06

3. In view of insufficient information from the suppliers regarding their status as Small, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

4. Two creditors of the Company have filed winding up petition against the company under Section 271 of The Companies Act, 2013 in the Punjab & Haryana High Court for payment of Rs. 7.95 Lacs, which is pending for adjudication.

5. The balance of trade receivable, trade payables, contractors and others are subject to reconciliation and confirmation

6. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs.9.21 Lacs for doubtful debts, if realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

7. As per Accounting Standard-11, "Effects of Change in Foreign Exchange Rates" issued by "The Institute of Chartered Accountants of India", the amount due to foreign creditors have been restated at closing rate i.e. rate as at 31.03.2015. The difference amount of Rs. 65,429.32 is adjusted through Exchange Rate fluctuation Account.

8. During the year, the company has provided depreciation based on the useful life of the assets as per schedule II to the companies act,2013 whereas earlier the same was provided at the rates prescribed in schedule XIV to the companies act, 1956. As the result of this change, the amount of depreciation charged is higher by Rs 42.45 Lacs.

9. As per Accounting Standard - 15 "Employee Benefits", the disclosure of Employee Benefits as defined in the Accounting Standard are as follows

The assumptions are as follows:

i) All valuation assumptions have been set strictly in accordance with guidelines contained in AS15(R)

ii) The assumptions employed for calculation are:

iii) The discount rate has been determined by reference to market yields as at 31st March, 2015 on CG-Secs of currency and term consistent with those of benefit obligations.

iv) The estimated rate of increase in compensation levels takes into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market. This estimate is also tempered by quick review undertaken, in cooperation with the company's officials, of the company's past and current wage structure, staff compensation practices and the level of price neutralization likely to be affected through periodic wage increase over the next 5 to 10 years. Furthur, it is assumed that the ceiling on gratuity amount will increase in line with salary inflation over the long term. No allowance has been made for performance based discretionary increase in salary in individual cases.

v) The retirement age has been uniformly taken as 58 years.

vi) No allowance has been made for future improvement in in-service mortality.

vii) It is assumed, based on their overall behavior pattern, that the employees are unlikely to avail/encash the entire accumulated/ cany forward of leave during the coming 12 months.

viii) Attrition rate vary from industry to industry and, within industry, from company to company. In practice no single averaged out figure is likely to be representative of the different attrition rates observed over the entire age range. Since the data regarding the number of employees who left the services of the company during past few years is not available, the attrition rate, which is chosen with the concurrence of the company's authorized officials, is based on the experience gathered from other similar manufacturing units broadly corresponding in size, activity and staffing pattern to those of the Company

10 RELATED PARTY DISCLOSURES:-

Disclosures as required by the Accounting Standard -18 "Related Party Disclosures" issued by the ICAI are given below:

-Associate Companies

1. Universal Cyber Infoway Pvt. Ltd.

2. Pride Properties Pvt. Ltd.

3. Susang mac Pvt. Ltd.

4 Sam Export

5. Waltz Retail and Marketing

6. Gulmohar Investments & Holdings Ltd.

7. Socks & Socks

-Key Management Personnel:

1. Mr. R.C. Mahajan - Managing Director

2. Mr. Amit Mahajan - Director Commercial & Chief Financial Officer

3. Mr. Amit Mahajan - Director Operations

4. Ms. Chetna Anand - Company Secretary

11. As per Accounting Standard -28 "Impairment of Assets" issued by ICAI, the management has reviewed its cash generating units as on 31.03.2015. No indication has been found by the management to suggest that the recoverable amount of Asset is less then the carrying amount. Hence no impairment loss on asset has been recognized.

12. During the month of July, 2014, the company's plant at District Una was flooded and the company suffered a heavy loss. Insurance claim for Rs. 163.03 Lacs was filed with the insurance company. The insurance claim was settled at Rs. 104.13 Lacs. The balance loss of Rs. 58.90 Lacs has been written off as an exceptional item in the Statement of Profit & Loss.

13. Due to inadequate profits, the company has not created Capital Redemption Reserve.

14. CIF Value of Imports, Earnings & Expenditure in foreign Currency

15. Previous year figures have been recasted/regrouped/ rearranged wherever necessary to make them comparable with that of current year.

---

Mar 31, 2014

1. Terms/Rights attached to Equity Shares

The Company has one class of Equity Shares having a par value of Rs 10. Each holder of Equity Share is entitled to one vote per Share.

2. Terms Rights attached to 8% Non-Cum-Preference Shares

The Company has one dass of 8% Non-Cum-Preference Shares having a par value of Rs 100. These shares are redeemed on completion of 20 years from the date of issue.

3. CONTINGENT LIABILITIES:-

a) The liabilities In respect of Income Tax, Purchase Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional Demand, if any, shall be accounted for in the year in which the assessment Is complete. The status of tax assessments is as under:

i) The Income Tax assessments have been completed upto the assessment year 2011-12 and there are demands of Rs.45.02 Lacs for the A.Y.2007-0S against which the company has filed appeals before the Commissioner of Income Tax(Appeals), which is pending for adjudication, ii) The Sales Tax/Purchase Tax assessments have been completed up to the Financial Year 2010-11 and there is no demand outstanding.

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company against the demand of Rs. 256,70 Lacs (Previous Year Rs.256.70). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of accounts. The requisite provision, if any, will be made in the year the final decision is made.

c) . The Central Excise Authorities, Mumbai had imposed duty

and penalty aggregating to Rs. 723.00 Lacs(Previous Year Rs. 723.00 Lacs) for purchase of certain items against CT- 3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any, will be made in the year of final decision.

d) The Company has given counter guarantee to banks of Rs 6.00 lacs (Previous Year Rs. 6.00 Lacs) in respect of the guarantees Issued by the banks on behalf of the Company in favour of HPSE8.

4. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06

5. In view of Insufficient information from the suppliers regarding their status as Smell, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

6. Two creditors of the Company have filed winding up petition against the company under Section 433 & 434 of The Companies Act, 1956 in the Punjab & Haryana High Court for payment of Rs. 7.95 Lacs, which is pending for adjudication.

7. The balance of trade receivable, trade payables, contractors and others are subject to reconciliation and confirmation

8. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs.9.21 Lacs for doubtful debts, If realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

9. As per Accounting Standard-11,'"Effects of Change in Foreign Exchange Rates' issued by 'The Institute of Chartered Accountants of India*, the amount due to foreign creditors have been restated at dosing rate l.e. rate as at 31.03.2014. The difference amount of Rs.2,60 lacs is adjusted through Exchange Rate fluctuation Account.

10. The discount rate has been determined by reference to market yields as at 31st March, 2014 on CG-Secs of currency and term consistent with those of benefit obligations.

11. The estimated rate of increase in compensation levels takes into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market. This estimate is also tempered by quick review undertaken, in cooperation with the company's officials, of the company's past and current wage structure, staff compensation practices and the level of price neutralization likely to be affected through periodic wage Increase over the next 5 to 10 years. Furthur it is assumed that the ceiling on gratuity amount will increase in line with salary inflation over the long term. No allowance has been made for performance based discretionary increase in salary in individual cases.

12. The retirement age has been uniformly taken as 58 years.

13. No allowance has been made for future improvement in in- service mortality.

14. It is assumed, based on their overall behavior pattern, that the employees are unlikely to avail/encash the entire accumulated/ carry forward of leave during the coming 12 months.

15. Attrition rate vary from Industry to Industry and. within industry, from company to company. In practice no single averaged out figure is likely to be representative of the different attrition rates observed over the entire age range. Since the data regarding the number of employees who left the services of the company during past few years is not available, the attrition rate, which is chosen with the concurrence of the company's authorized officials, is based on the experience gathered from other similar manufacturing units broadly corresponding in size, activity and staffing pattern to those of the Company.

16. SEGMENT REPORTING

The Company has only one segment and deals only in single line of products i.e. "Footwears' .Thus the Accounting Standard 17 "Segment Reporting" issued by "The Institute of Chartered Accountants of India" is not applicable

17. RELATED PARTY DISCLOSURES:-

Disclosures as required by the Accounting Standard -18

Related Party Disclosures" issued by the ICAl are given below:

* Associate Companies

1. Universal Cyber Infoway Pvt. Ltd.

2. Pride Properties Pvt. Ltd.

3. Susamg mac Pvt. Ltd.

4 Sam Export

5. S.R. Footwears Pvt. Ltd.

6. Zoom Merchantile & Finance Ltd.

7. Gulmohar Investments 4 Holdings.Ltd.

8. Socks & Socks

* Key Management Personnel;

1. Mr. R.C. Mahajan - Managing Director

2. Mr. Amit Mahajan - Director Commercial & Chief Financial Officer

3. Mr. Amit Mahajan - Director Operations

18. As per Accounting Standard -28 'Impairment of Assets' issued by 1CAI, the management has reviewed its cash generating units as on 31.03.2014.1 No indication has been found by the management to suggest that the recoverable amount of Asset is less then the carrying amount. Hence no impairment loss on asset has been recognized.

19. Due to inadequate profits, the company has not created Capital Redemption Reserve.

20. Previous year figures have been recasted/regrouped/ rearranged wherever necessary to make them comparable with that of current year.

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Mar 31, 2013

I. CONTINGENT LIABILTIES:- a) The liabilities in respect of Income Tax, Purchase Tax and

Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, shall be accounted for in the year in which the assessment is complete.

i) The Income Tax assessments have been completed upto the assessment year 2010-11 and there are demands of Rs. 58.92 Lacs for the AY 2006-07 and Rs. 45.02 Lacs for the AY 2007-08 against which the company has filed appeals before the Commissioner of Income Tax (Appeals), which are pending for adjudication.

ii) The Sales Tax/Purchase Tax assessments have been completed up to the Financial Year 2005-06 and there is no demand outstanding.

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company against the demand of Rs. 258.70 Lacs (Previous Year Rs.258.70). The company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of account. The requisite provision, if any, will be made in the year of final decision is made.

c) The Central Excise Authorities, Mumbai had imposed duty and penalty aggregating to Rs. 723.00 Lacs(Previous Year Rs. 723.00 Lacs) for purchase of certain items against CT- 3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any, will be made in the year of final decision is made.

d) The company has given counter guantees to banks of Rs.6.00 Lacs(Previous Year Rs. 6.00 Lacs) in respect of the guarantees issued by the banks on behalf of the Company in favour of PSEB.

II. The accounts have been drawn for the nine months period from July 01, 2012 to March 31, 2013.

III. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06.

IV. The stock auditor appointed by the bankers have physical verification the stock in trade of the Company as on April 30, 2013 which has been reconciliation upto March 31, 2013.

V. In view of insufficient information from the suppliers regarding their status as Small, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

VI. Two creditors of the Company have filed winding up petition against the company under Section 433 & 434 of The Companies Act, 1956 in the Punjab & Haryana High Court for payment of Rs. 7.95 Lacs which is pending against adjudication.

VII. The balance of trade receivable, trade payables, contractors and others are subject to reconciliation and confirmation.

VIII. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs. 27.69 Lacs for doubtful debts & Rs. 22.93 Lacs for doubtful receivable, if realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

The above does not include contribution to LIC Group Gratuity Fund and provision for Leave Encashment as such contribution/provision is made on the global basis and the employee-wise breakup is not available.

X. As per Accounting Standard - 28 “Impairment of Assets” issued by ICAI, the management has reveiwed its cash generating units as on March 31, 2013. No indication has been found by the management to suggest that the recoverable amount of Asset is less than the carrying amount. Hence no impairment loss on asset has been recognized.

XI. RELATED PARTY DISCLOSURES:-

Disclosures as required by the Accounting Standard -18 “Related Party Disclosures” issued by the ICAI are given below: -Associate Companies

1. Universal Cyber Infoway Pvt. Ltd.

2. Pride Properties Pvt. Ltd.

3. Susamg mac Pvt. Ltd. 4.Sam Export

5. S.R. Footwears Pvt. Ltd.

6. Zoom Merchantile & Finance Ltd.

7. Gulmohar Investments & Holdings. Ltd.

8. Socks & Socks

-Key Management Personnel:

1. Mr. R.C. Mahajan– Managing Director

2. Mr. Amit Mahajan– Director Commercial

3. Mr. T.N. Tikoo- Director Works

4. Mr. Y.R. Kapur-Director Finance

5. Mr. Amit Mahajan- Director Operations

XII. SEGMENT REPORTING

During the year, the Company discontinued its “Terry Towel” division and now the company deals only in the business of “Footwears”. Thus the Accounting Standard 17 “Segment

Reporting” issued by the “The Institute of Chartered Accounts of India” would not be applicable from this year.

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Jun 30, 2012

I CONTINGENT LIABILTIES:-

a) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favor of the Company against the demand of Rs. 258.70 Lacs (Previous Year Rs.258.70), The company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provisions in the books of account. The requisite provision, if any, will be made in the year of decision.

b) The Central Excise Authorities. Mumbai had imposed duty and penalty aggregating to Rs. 723.00 Lacs(Previou$ Year Rs. 723.00 Lacs) for purchase of certain items against CT-3 forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provisions, if any. will be made in the year decision.

c) The company has given counter guantees to banks of Rs.6.00 Lacs(Previous Year Rs. 15.00 Lacs) in respect of the guarantees issued by the banks on behalf of the Company.

i. The accounts have been drawn for the fifteen months period from April 01, 2011 to June 30. 2012.

ii. Purchase Tax/ Sales Tax liability have been provided based on the returns filed with Sales Tax Authorities. The Sales Tax assessments have been completed up to the Financial Year 2005-06.

II. Income Tax assessments have been completed upto Assessment Year 2010-11 and no demand is pending.

III. The Capital Reserve represents forfeiture of 10% upfront payment received on Convertible Warrants issued during 2005-06.

IV. Turnover includes Rs. 2.09 Lacs (Previous Year 3.37 Lacs) on realization/entitlement of DEPB License.

V. During the year the Company has sold its Land & Building, Plant & Machinery. Electric installation, D.G. Set and Laboratory Equipments of its Terry Towel Division at Derabassi. All the fixed assets except vehicles have been transferred. The stocks lying in the factory on the date of transfer of unit had no realizable value and therefore its value has been taken as nil. Consequently, the loss on sale of terry towel division has been Rs.1019.49 lacs. Inter Corporate Loan from Religare Finvest Limited which was secured by first charge on the land has been classified as unsecured loan consequent upon the sale of the land.

VI. The advances of the Terry Towel Division amounting to Rs.7B.46 lacs are shown as considered good and receivable except to the extent provision made. The management is of the opinion the same will be realized in the coming years.

VII. The Company during the current financial year has received Rs. 30 lacs under Central Capital Investment Subsidy Scheme, 2003 and Rs. 50 lacs as grant/subsidy of assistance under Integrated Development of Leather Sector Scheme of Government of India. The amounts received have been reduced from the cost of Plant and Machinery as per the requirement of Accounting Standard AS-12.

VIII. In the opinion of the Board of Directors all the Current Assets, Loans and Advances except to the extent of provision of Rs 50.64 Lacs for doubtful, if realized in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

IX In view of insufficient information from the suppliers regarding their status as Small, Micro & Medium Enterprises, amount overdue to such undertakings can not be ascertained. However, the Company has not received any claim from any supplier in respect of interest.

X) Previous year figures have been regrouped and rearranged wherever necessary to make than comparable.

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Mar 31, 2010

1) Contingent liabilities :-

a) Export/Domesfc Bills drawn on customers against letters of credit and discounted with bank are Rs. 59.19 lacs (Previous year Rs. 49.47 lacs).

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company for the demand of Rs. 258.70 lacs (Previous year Rs. 258.70 lacs). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provision in the Books of Account. The requisite provision, if any, will be made in the year in which any demand is finally established.

c) The Central Excise Authorities, Mumbai have imposed a duty and penalty aggregating to Rs. 723.00 lacs (Previous year Rs. 723.00 lacs) for purchase of certain temsagainstCT-3 Forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provision, if any, will be made in the year in which any demand is finally established.

d) The company has given counter gaurantee to the bank for Rs. 12.00Lacs (Previous Year Nil) in respect of the gaurantees issued by the bank on behalf of the company.

2) Purchase Tax/Sales Tax liability has been provided based on the retums filed with the Sales Tax Authorities. The Sales Tax assessments have been completed upto the financial year 200506.

3) Income Tax assessments have been completed upto the Assessment Year 2006-07.

4) In the opinion of the Management, the current assets, loans and advances have a value which on realisation in the ordinary course of business would be at least equal to that at which these have been stated in the books of account

5) The turnover includes Rs.1.29 lacs (Previous year 4.54 Lacs) on account of realisation/entitlement of DEPB Licence.

6) The term loans from the State Bank of Patiala and Uco Bank are secured by way of first parri passu charge on the fixed assets and second parri passu charge on current assets of the company. Furter, the working captal facilities from the State Bank of Patiala and UCO Bank are secured by way of first parri passu charge on the current assets and second parri passu charge on the fixed assets of the company. The term loans and working capital facilities are further secured by the personal guarantees of three Directors. Further, the loan from Religare Finvest Limited is secured by first charge on the land at Village - Bhagwanpur, Dera Bassi

7) The company after stabilisation started its commercial production at its footwear unit in Una & Gurgaon on March 26, 2010. The expenditure net of sales upto that date has been capitalised.

8) There are no claim from suppliers under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act 1993. Sundry creditors include Rs.35.54 lacs (Previous year Rs. 40.69 lacs) due to small scale industrial undertakings to whom the Company owes sum exceeding Rs. one lac and which are outstanding for more than 30 days. These units are Creative Arts, Jai Balaji Labels, Maps India Ltd.. RSA Industries Pvt. Ltd., Vaibhav International, Vee Emm Industries, Lace India Company, Tex n Nets. SMG International and Enkay HWS India Ltd. The above has been furnished on the basis of information regarding the status of suppliers available with the Company.

9) The company has opted for the exemtion under Notification No. 30/2004 dated July 9, 2004 issued by the Central Board of Excise & Customs and therefore no excise duty is payable on the goods manufactured/despatched by it.

10) Capital Reserve has arisen from the Capital profit on forfeiture of 10% upfront payments on 5,91,000 Convertible Warrants at a price of Rs. 29/- each issued during 2005-06.

11) IMPAIRMENT OF ASSETS

In the opinon of the Board, if ere is no material imparme it the value of overal assets.

12) Previous year figures have been regrouped and rearranged wherever necessary to make them comparable.

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Mar 31, 2009

1) Contingent liabilities :-

a) Export/Domestic Bills drawn on customers against letters of credit and discounted with bank are Rs. 49.47 lacs (Previous year Rs. 50.88 lacs).

b) Central Excise Authorities have gone in appeal against the order of Commissioner (Appeals) which was decided in favour of the Company for the demand of Rs. 258.70 lacs (Previous year Rs. 258.70 lacs). The Company has refuted the liability based on the advice received from the legal experts and accordingly has not made any provision in the Books of Account. The requisite provision, if any, will be made in the year in which any demand is finally established.

c) The Central Excise Authorities, Mumbai have imposed a duty and penalty aggregating to Rs. 723.00 lacs (Previous year Rs. 723.00 lacs) for purchase of certain items against CT-3 Forms without payment of duty. The Company has disputed the said demand and filed an appeal to set aside the said orders. The requisite provision, if any, will be made in the year in which any demand is finally established.

d) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 403 lacs net of advances (Previous year Nil)

2) Purchase Tax/Sales Tax liability has been provided based on the returns filed with the Sales Tax Authorities. The Sales Tax assessments have been completed upto the financial year 2004-05 and no demand is pending in respect thereto.

3) Income Tax assessments have been completed upto the Assessment Year 2006-07 and no demand is pending in respect thereto.

4) In the opinion of the Management, the current assets, loans and advances have a value which on realisation in the ordinary course of business would be at least equal to that at which these have been stated in the books of account.

5) The turnover includes Rs.4.54 lacs (Previous year Nil) on account of realisation/entitlement of DEPB Licence.

6) There is no claim from suppliers under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. Sundry creditors include Rs. 40.69 lacs (Previous year Rs. 47.70 lacs) due to small scale industrial undertakings to whom the Company owes sum exceeding Rs. one lac and which are outstanding for more than 30 days. These units are Didesu Chemicals (P) Ltd., Dipsi Chemicals (P) Ltd., Creative Arts, Jai Balaji Labels (P) Ltd., M.K.Enterprises, E-Fuel, Maps India Ltd., RSA Industries (P) Ltd., Vaibhav International and Vee Emm Industries. The above information has been furnished on the basis of information regarding the status of supplier available with the Company.

7) The Company has opted for the exemption under Notification No. 30/2004 dated July 9, 2004 issued by the Central Board of Excise & Customs and therefore no excise duty is payable on the goods manufactured/despatched by it.

8) Capital Reserve has raised from the Capital profit on forfeiture of 10% upfront payment on 591000 Convertible Warrants at a price of Rs. 29/- each issued during 2005-06.

9) SEGMENT REPORTING

Based on the guiding principles given in the Accounting Standard 17 "Segment Reporting" issued by "The Institute of Chartered Accountants of India" the Board of Directors considers and maintains that the manufacture of Terry Towels" is the only business segment of the Company.

10) IMPAIRMENT OF ASSETS

In the opinion of the Board, there is no material impairment in the value of overall assets.

11) RELATED PARTY DISCLOSURE

Disclosures as required by the Accounting Standaid 18 "Related Party Disclosure" issued by the Institute of Chartered Accountants of India, are given below :-

a) RELATED PARTIES

Key Management Personnel - Mr. R. C. Mahajan, Mr. Amit Mahajan, Mr. TN.Tikco, Mr. Y.R.Kapur and Mr. Amit Mahajan

Associates - Universal Cyber Infoway (P) Ltd., Susang Mac (P) Ltd, Gulmohar Investments & Holdings Ltd. and Pride Properties (P) Ltd.

12) Previous year figures have been regrouped and rearranged wherever necessary to make them comparable.