Notes to Accounts of Scan Projects Ltd.

Mar 31, 2025

Pledge/Hypotheicated of Freehold Land and Building

-Freehold Land measuring 6K-1M and 3.15M ((i) and (iii)) along with building structures constructed thereupon (labour quarters) having carrying value Rs. Nil (March 31,2024:

Rs.222872.96) and Rs. NIL (March 31, 2024: Rs.306957.00 respectively, are subject to first charge on the company''s borrowings form Punjab National Bank Refer Note 15(A) & (B). "**" The Company had entered into a sale agreement dated October 14, 2020, for the sale of a parcel of land to Mr. Kuldeep Kumar and others for a total consideration of Rs.1975000.00. However, the execution of the transfer deed was delayed due to certain restrictions imposed by the Revenue Authority in the area and other technical issues. During the financial year, the Company completed the transfer of the said land in favour of Mrs. Rita Rani (wife of Mr. Kuldeep Kumar) and Mr. Tilak Singh by executing a registered sale deed dated December 27, 2024, after receiving the balance consideration. Accordingly, the Company has recognized a profit of Rs.894023.00 in the Statement of Profit and Loss for the year, arising from the completion of this sale transaction.

a) The Company is involved in litigation for the recovery of an outstanding amount of Rs.14636498.00 from M/s Well Erectors of New Engineering, Kadalundi. A criminal case has been filed under Section 138 of the Negotiable Instruments Act due to the dishonour of a cheque amounting to Rs.11000000.00 issued by the party. Additionally, a civil suit has been initiated to recover the full outstanding amount. Based on legal counsel’s opinion, the recovery under the criminal proceedings is considered legally sustainable, whereas the civil suit is assessed as having limited prospects of success. Accordingly, considering the current status of cases and the counsel''s assessment, the management has decided to create a provision for doubtful recovery amounting to Rs.3636498.00 (i.e., the remaining balance beyond the cheque amount) and 10% of the amount involved in the criminal case during the current financial year. This provisioning is expected to have a material impact on the Company’s financials and recovery prospects.

e) Terms/rights attached to equity shares:

The Company has only one class of equity shares having face value of Rs.10/- per share. Each holder of fully paid equity share is entitled to one vote per share. In the event of liquidation of the company, the equity shareholders are entitled to receive the remaining assets of the Company in proportion to their respective shareholdings.

f) The Company has neither issued any rights shares to existing shareholders nor granted any stock options under an employee stock option plan. Furthermore, no shares have been issued for consideration other than cash.

g) The Company is neither a subsidiary nor a holding company of any other body corporate. Disclosures as regards the shareholdings in or by such body-corporate, accordingly, are not applicable on the company.

h) The company did not have outstanding calls unpaid by directors and officers of the company (March 31, 2024 NIL) and also did not have any amount of forfeited shares (March 31, 2024 NIL).

[36] EMPLOYEE DEFINED BENEFIT AND CONTRIBUTION PLANS a) Defined Benefit Plans

Gratuity: In accordance with applicable laws, the Company provides for gratuity through a defined benefit retirement plan (“the Gratuity Plan”) for eligible employees. The Gratuity Plan entitles vested employees to a lump sum payment upon retirement, death, incapacitation, or termination of employment, provided they have completed five or more years of continuous service. The benefit payable is determined based on the employee’s last drawn salary and length of service.

The present value of the defined benefit obligation and the related current service cost are determined using the Projected Unit Credit Method, with actuarial valuations conducted at each reporting date. As of the reporting date, the Company contributes to a group pension scheme managed by the Life Insurance Corporation of India (LIC) to fund the obligations under the plan. The disclosures related to the defined benefit Gratuity Plan are provided below:

ix) The major categories of plan asset are as follows:

The Company contributes to a group pension scheme administered by the Life Insurance Corporation of India (LIC) to meet its plan obligations. The trustees of the scheme have delegated the investment management responsibilities to LIC, which manages the funds in accordance with the mandate provided by the trustees and within the asset allocation limits prescribed under applicable insurance regulations. However, due to regulatory restrictions on the types of permissible investments, it is not feasible to implement a precise asset-liability matching strategy.

c) Compensated Absences (Leave with Wages): Regarding accumulating compensated absences, the company does not have an unconditional right to defer their settlement for more than twelve months after the end of the annual reporting period in which the employees render the related services. Therefore, the entire leave is presented as a current liability in the balance sheet, and expenses are recognized in the statement of Profit and Loss account. The company has recognized Rs.169637.00 (March 31, 2024 Rs.66902.00) as expenses towards earned leave with wages during the year.

III) Fair Value of financial assets and liabilities measured at amortised cost.

The fair values of trade receivables, cash and cash equivalents, trade payables, borrowings, lease liabilities, and other financial assets and liabilities approximate their respective carrying amounts, primarily due to the short-term maturities of these instruments.

For all other non-current financial assets and liabilities measured at amortized cost, fair values are determined by discounting future cash flows using current market rates applicable to instruments with similar terms and credit risk profiles. The current discount rates used do not represent significant deviations from those applied at initial recognition. Accordingly, the carrying values of these financial instruments continue to approximate their fair values.

IV) The following is the basis of categorizing the financial instruments measured at fair value into Level 1 to Level 3:

The Company categorizes financial instruments measured at fair value into a three-level hierarchy based on the observability of the inputs used in the valuation process. Fair values are

determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date, under current market conditions, irrespective of whether the price is directly observable or estimated using other valuation techniques.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy includes financial assets and liabilities that are measured by using quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: This hierarchy includes financial assets and liabilities that are not traded in an active is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates.

Level 3: This level includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument not are they based on available market data.

[41] FINANCIAL RISK MANAGEMENT

The company’s activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk and interest rate risk. The Company has various financial assets such as deposits, trade receivables and cash and cash equivalent directly related to its business operations. The principal financial liabilities of the company consist of borrowings and trade payables. The senior management of the company focuses on anticipating unpredictability and minimizing potential adverse effects on the company’s financial performance. The Company’s overall risk management procedures to mitigate the potential adverse effects of financial market on the Company’s performance are as follows:

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. The Company’s exposure to market risk is primarily on account of interest risk, foreign currency risk and Commodiy price risk.

i) Interest rate risk management:

The Company is exposed to interest rate risk due to borrowings funds at both fixed and floating interest rates. This risk is managed by maintaining an appropriate mix between fixed and floating rate borrowings.

Interest rate sensitivity analysis

The sensitivity analysis below is based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for entire year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel, representing management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s Profit for the year ended March 31, 2025 would decrease/increase by Rs. NIL (for the year ended March 31, 2024: decrease/increase by Rs.750.00). This change is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

ii) Foreign currency exchange rate risk

Fluctuation in foreign currency exchange rates may potentially impact the statement of profit and loss, other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in other currency against the functional currencies of the Company.

iii) Commodity Price Risk

The Company is exposed to the risk of changes in commodity prices, particularly related to its purchase of traded goods. The Company develops periodic financial forecasts based on commodity price forecasts by its procurement group and appropriate actions including changes in selling price and cost saving measures are considered as part of the financial modeling to mitigate the impact of commodity price changes.

A 1% increase in commodity prices would have led to approximately Rs.637756.00 additional loss in the Statement of Profit and Loss (2023-24: Rs.610213.00 loss). Conversely, a 1% decrease in commodity prices would have had an equal but opposite effect.

b) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities (particularly trade receivables). To manage this risk, the Company consistently monitors the financial health of its customers, ensuring that sales proceeds are realized according to milestone payment terms to minimize losses from defaults or customer insolvency. Progressive liquidity management practices are employed to mitigate the risk of non-fulfillment of liabilities to various creditors, statutory obligations and stakeholders.

i) Trade Receivables

Credit risk is the risk of financial loss to the Company in the event of a trade partner’s failure to meet its contractual obligations. The Company is primarily exposed to credit risk arising from its trade receivables. This risk is managed in accordance with established policies, procedures, and controls that govern the assessment and monitoring of trade partner creditworthiness.

To measure impairment losses, the Company applies the simplified approach permitted by Ind AS 109, using a provision matrix to recognize lifetime expected credit losses (ECL) on its portfolio of trade receivables. The provision matrix is developed based on historically observed default rates over the expected life of the receivables, and it is further adjusted to reflect current and forward-looking macroeconomic conditions. The Company consistently measures the loss allowance for trade receivables at an amount equal to lifetime ECL. This approach uses practical expedients under the simplified model and incorporates the ageing profile of receivables. Based on an internal assessment—considering historical trends and presently available data on defaults and delays—the credit risk on trade receivables is assessed to be low.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security.

The management believes that no further provision is necessary in respect of trade receivables based on historical trends of these customers. Further, the Company’s exposure to customers is diversified and no single customer has significant contribution to trade receivables balances.

ii) The Company maintains its cash and cash equivalents and term deposits (if any) with reputed banks. The credit risk on these instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

iii) Financial assets other than trade receivables and cash and cash equivalents are not exposed to any material credit risk.

c) Liquidity Risk

Liquidity risk refers to the risk that the Company may not be able to meet its financial obligations as they fall due, whether under normal conditions or during periods of stress, without incurring unacceptable losses or adversely affecting its financial position and reputation.

The Company’s liquidity management approach is focused on ensuring that it has adequate liquidity to meet its liabilities as they become due. This includes maintaining access to sufficient funding sources and aligning the maturity profiles of financial assets and liabilities.

The ultimate responsibility for managing liquidity risk lies with the Board of Directors, which has established a robust framework to oversee the Company’s short-term, medium-term, and long-term funding and liquidity needs. The Company actively manages its liquidity risk by maintaining adequate internal accruals, equity infusion when necessary, and by strategically matching the maturities of its financial assets and liabilities.

The table below has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments.

The details of the contractural maturities of significant liabilities as at March 31, 2025 are as follows:

[42] CAPITAL MANAGEMENT

For the purpose of capital management, the Company defines capital as the aggregate of issued equity share capital and other equity reserves attributable to its equity shareholders. The primary objective of capital management is to ensure the Company''s continued operation as a going concern while maximizing shareholder value.

The Company actively manages its capital structure by adapting to changes in economic conditions, annual operating plans, and long-term strategic investment goals. To achieve an optimal capital structure, it may adjust dividend payouts, return capital to shareholders, or issue new equity. The current capital structure primarily consists of equity, supplemented by borrowings. The Company is not subject to any externally imposed capital requirements.

[43] SEGMENT REPORTING

a) Details of principal activities and reportable segment

Operating segements are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker

(CODM), in deciding how to allocate resources and assessing performance. The Company''s Chief decision maker is the Chief Executive Officer and Managing Director.

The Company has identified two business segment as reportable segments. The business segment comprise of Erection, Commissioning and Supervision Contract etc. and Trading activities.

Revenue and expenses directly attributable to segments are reported under each reportable segement. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All othe expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.

Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, Plant and equipment that are used interchangebly among segments are not allocated to reportable segments.

b) Geographical segment

Company’s performance is predominantly driven by domestic operations, and hence, no separate geographical segment has been identified. Accordingly, no additional segmental disclosures are presented in the financial statements.

c) Information about major customers

Revenue from two customers (related parties) of the Company represents 100% (March 31, 2024: two customers (related parties) represents 100%) of the Company''s total revenue.

[44] OTHER STATUTORY INFORMATION:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iii) The Company has not traded or invested in Crypto currency or Virtual currency during the current and previous year.

iv) The Company has not advanced or loaned or invested funds to any other persons(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary

shall:

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

(b) provide any guarantee security or the like to or on behalf of the Ultimate Beneficiaries.

v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

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

vi) The Lender of the company has not declared company as willful defaulter by any bank or financial institution or any lender and also company has not defaulted in repayment of loan to the lender.

vii) The Company has no subsidiary, associates and joint venture down word.

viii) The Company has not entered into any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant Provisions of the Income Tax Act, 1961).

ix) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

x) Valuation of property, plant and equipment, intengible assets and investment property

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

(1) Total Debts = Long term Loans Current maturities of Long term debts Lease Liabilities

(2) Shareholder''s Fund = Equity Share Capital Other Equity (i.e. Reserve and Surplus etc.)

(3) Earning for Debt Service = Net Profit befor taxes Depreciation and other amortization Long term debt interest Lease Finance Cost

(4) Debt Service = Long term debt interest Lease Payment Principal Repayment of Long term debt

(5) Average Inventory = (Opening Closing Balance)/2

(6) Average Trade Receivables = (Opening Closing Balance)/2

(7) Average Trade Payable = (Opening Closing Balance)/2

(8) Working Capital = Current Assets - Current Liabilities

(9) Capital Employed = Tangible Net Worth - Total Long Term Debts Lease Liabilities

[47] The previous years’ figures have been regrouped / reclassified, wherever necessary, to conform with the current year presentation.

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Mar 31, 2024

q) Provisions and contingent liabilities

Provisions

Provisions are recognized when there is a present legal or constructive obligation as a result of a past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities

Contingent liabilities are disclosed in the Notes to the standalone financial statements. They are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company, or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation, or a reliable estimate of the amount cannot be made.

r) Earning per shares

Basic earnings per share is calculated by dividing the net profit after tax for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares and sub-division of share, other than the conversion of potential equity 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 for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

s) Foreign currency translation

Functional and presentation currency

Items included in the standalone financial statements are measured using the currency of the primary economic environment in which the Company operates (‘the functional currency’). The standalone financial statements are presented in Indian Rupees (INR), which is Company’s functional and presentation currency. Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, as well as from the translation of monetary assets and liabilities denominated in foreign currencies at year-end exchange rates, are generally recognized in the Statement of Profit and Loss. Non-monetary items that are measured at historical cost in foreign currency are not retranslated. All nonmonetary items denominated in foreign currency are carried at historical cost or a similar valuation and are reported using the exchange rate that existed when the values were determined.

In respect of Branch/Permanent Establishment for execution of Job contracted, which are integral foreign operations, the same are translated as if the transactions of the foreign operation have been those of the Company itself. For non-integral foreign operation, the assets and liabilities are translated at the rates prevailing at the end of the year. Income and expenses items of the non-integral foreign operation are translated at the average rate prevailing during the year. Any exchange difference arising on consolidation is recognized in the “Foreign Currency Translation Reserve” until the disposal of the operations.

t) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating decision-maker. The Chief Operating decision-maker is responsible for allocating resources and assessing performance of the operating segments and makes strategic decisions. Refer Note 33 for segment information presented.

u) Exceptional items

When items of income or expense are of such nature, size and incidence that their disclosure is necessary to explain the performance of the Company for the year, the company makes a disclosure of the nature and amount of such items separately under the head “exceptional items.”

v) Statement of Cash Flow

Cash flows are reported using the Indirect Method, as set out in Ind AS 7 ‘Statement of Cash Flow’, whereby profit for the year is adjusted for the effects of transaction of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

e. Terms/rights attached to equity shares:

The Company has only one class of share capital, i.e. equity shares having face value of Rs.10/- per share. Each holder of fully paid equity Share is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion of their shareholding.

f. The Company is neither a subsidiary nor a holding company of any other body corporate. Disclosures as regards the shareholdings in or by such body-corporate, accordingly, are not applicable on the company.

g. The company did not have outstanding calls unpaid by directors and officers of the company (March 31, 2024 NIL) and also did not have any amount of forfeited shares (March 31, 2024 NIL).

[22] LEASES

i) The Company has elected not to apply the requirements of Ind AS 116 to short-term leases of all the assets that have a lease term of twelve months or less, and leases for which the underlying assets is of low value. The lease payments associated with these leases are recognized as expenses on a straight-line basis over the lease term.

ii) Previously, the company entered into leases with terms of 12 months or less and leases of low value. Accordingly, the company applies the “short-term lease” exemptions for those leases and recognized the lease payments as expenses on a straight-line basis over the lease term.

However, in current financial year, the company has entered into a long-term lease agreement for 15 years. As per Ind AS 116 “Leases”, the lease liabilities and carrying value of Right of use (ROU) assets are measured at the present value of the total lease term payments, discounted at the Company’s incremental borrowing rate at the commencement of lease term, i.e. April 1, 2024. Accordingly, the company has recorded the ROU assets and lease liabilities using the discounting values as of April 1, 2024.

iii) Under Ind As 116, the nature of expenses in respect of operating leases has changed from "Lease rent" to "depreciation cost" and "finance cost" for the right-of -use assets and for interest accrued on lease liability respectively.

iv) The weighted average lessee''s incremental borrowing rate applied to the lease liabilities is 10% p.a.

[24] FINANCIAL RISK MANAGEMENT

The company’s activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk and interest rate risk. The Company has various financial assets such as deposits, trade receivables and cash and cash equivalent directly related to its business operations. The principal financial liabilities of the company consist of borrowings and trade payables. The senior management of the company focuses on anticipating unpredictability and minimizing potential adverse effects on the company’s financial performance. The Company’s overall risk management procedures to mitigate the potential adverse effects of financial market on the Company’s performance are as follows: a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. The Company’s exposure to market risk is primarily on account of interest risk, foreign currency risk and Commodiy price risk.

i) Interest rate risk management:

The Company is exposed to interest rate risk due to borrowings funds at both fixed and floating interest rates. This risk is managed by maintaining an appropriate mix between fixed and floating rate borrowings.

Interest rate sensitivity analysis

The sensitivity analysis below is based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for entire year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel, representing management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s Profit for the year ended March 31, 2024 would decrease/increase by Rs.750.00 (for the year ended March 31, 2024: decrease/increase by Rs.3750.00). This change is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

ii) Foreign Currency exchange rate risk

Fluctuation in foreign currency exchange rates may potentially impact the statement of profit and loss, other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in other currency against the functional currencies of the Company.

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities at its Nepal Branch. However, the currency of Nepal is not volatile nature; hence, the risk of fluctuation is negligible. In the current year, the operations of Nepal Branch have been discontinued and there were no outstanding amounts at the end of the reporting period.

iii) Commodity Price Risk

The Company is exposed to the risk of changes in commodity prices, particularly related to its purchase of traded goods. The Company develops periodic financial forecasts based on commodity price forecasts by its procurement group and appropriate actions including changes in selling price and cost saving measures are considered as part of the financial modeling to mitigate the impact of commodity price changes.

A 1% increase in commodity prices would have led to approximately Rs.610213.00 additional loss in the Statement of Profit and Loss (2022-23: Rs.389488.00 loss). Conversely, a 1% decrease in commodity prices would have had an equal but opposite effect.

i) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities (particularly trade receivables). To manage this risk, the Company consistently monitors the financial health of its customers, ensuring that sales proceeds are realized according to milestone payment terms to minimize losses from defaults or customer insolvency. Progressive liquidity management practices are employed to mitigate the risk of non-fulfillment of liabilities to various creditors, statutory obligations and stakeholders.

Trade Receivables

The Company’s exposure to trade receivables is limited due to diversified customer base. The Company consistently monitors progress under its contracts with customers and sales proceeds are being realised as per the milestone payment terms agreed to minimise the loss due to defaults or insolvency of the customer. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

In determining the allowance for doubtful trade receivables the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix.

Allowance for expected credit loss is based on lifetime expected credit loss method as specified under simplified approach as per Ind AS 109.

[25] CAPITAL MANAGEMENT

For the Company’s capital management purposes, capital comprises issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to ensure the Company’s ability to operate as a going concern and to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in response to changes in economic conditions, annual operating plans and long-term strategic investment plans. To maintain or adjust the capital structure, the Company may modify the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The current capital structure of the Company is equity-based, with financing through borrowings and through leasing. The Company is not subject to any externally imposed capital requirements.

There were no changes to the objectives, policies or processes for managing capital during the fiscal years ended March 31, 2024 and April 1, 2022.

The Company monitors the capital structure on the basis of total debt to equity and maturity profile of the overall debt portfolio of the Company. The Debt to equity ratio as at the end of the year is given below:

[30] RELATIONSHIP WTTH STRUCK OFF COMPANIES:

The Company does not have any transaction with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956, during the current year and in the previous year.

[31] OTHER STATUTORY INFORMATION:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

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

iv) The Company has not advanced or loaned or invested funds to any other persons(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

(b) provide any guarantee security or the like to or on behalf of the Ultimate Beneficiaries.

v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

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

vi) The Lender of the company has not declared company as willful defaulter and also company has not defaulted in repayment of loan to the lender.

vii) The Company has no subsidiary, associates and joint venture down word.

viii) The Company has not entered into any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant Provisions of the Income Tax Act, 1961).

[32] The Union Ministry of Labour issued draft rules under section 67 of the Code on Wages Act on July 7, 2020, in the Gazette. The Act is yet to come into effect. The three labour codes i.e. the Occupational Health, Safety and Working Conditions Code 2020, the Industrial Relations Code 2020, and the Code on Social Security 2020, have been passed by the parliament and have also received the assent of the President of India on September 28, 2020. However, the date on which these Codes will come into effect has not been notified. The Company will assess the impact of these Codes and will record any related impact in the period these Codes become effective.

[33] The previous years’ figures have been regrouped / reclassified, wherever necessary, to conform with the current year presentation.

As per our report on even dated attached For and on behalf of the Board of Directors

For Subhash Sajal and Associates

Chartered Accountants Sunil Chandra Satish Kumar

Firm Registration No.: 018178N (Managing Director & CFO) (Company Secretary)

[DIN:01066065]

(Subhash Mittal)

Partner Akshay Chandra

M.No. 089077 (Wholetime Director)

Place: Yamunanagar [DIN: 05208884]

Dated: 28th May 2024

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Mar 31, 2015

A) The Company has started the new activities i.e. Erection, commissioning, supervision, project drawing and designing services and trading of fabricating material, equipment parts, electrical material/components and other items etc. Accordingly, the management has changed the name and main objects of the company as per their present activities and all the current year revenue is related to new activities.

b) The Company is engaged in single business activity (i.e. Erection, commissioning, supervision, project drawing and designing and Trading of fabricating material, equipment parts, electrical material/components and other material etc.) and there is no separate reportable segment as per AS-17.

c) Pursuant to enactment of the Companies Act, 2013, effective from 1st April 2014, the company has revised the estimated useful life of its fixed assets in accordance with Schedule II of the Companies Act, 2013. Accordingly, an amount of Rs, 35179.00 (net of deferred tax liability Rs, 15731.00) has been adjusted in the opening balance of retained earnings in respect of assets useful life exhausted as at 1st April 2014. Further, the consequential impact of depreciation charged for the current year ended 31st March 2015 is higher by Rs, 358331.00.

d) Management has periodically reviewed the value in use/net realizable value of all its assets and ascertained that the value in use/net realizable value of all its assets at the end of the year is more than the book value after depreciation (amortization), hence no provision for impairment has been made during the year.

e) In respect Branch Office/Permanent establishment at Nepal for execution of job contracted there, the Company has prepared and obtained the audited necessary additional financial statement as on 31st March 2015 in compliance with the local laws and applicable accounting standards. The same are duly incorporated in the overall financial results of the company as if the transactions of the foreign operation have been those of the Company itself. All monetary assets and liabilities are translated by using closing exchange rates, non-

f) The Balance Sheet as on March 31, 2015 and the Statement of Profit and Loss for the year ended March 31, 2015 are drawn and presented as per the new format prescribed under Schedule III to the Companies Act, 2013.

g) Previous year figures have been re-grouped/re-classified where ever necessary to confirm to the current presentation. monetary items carried at historical cost denominated in foreign currency and all revenue and expenses by using average exchange rate prevailing during the period. Exchange differences (if any) arising on conversion are recognized in the Statement of Profit and Loss.

i) RELATED PARTY DISCLOSURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same areas under: - A. Related parties and their relationship

1. Key Management Personnel

-Sh. Sunil Chandra (Managing Director)

-Sh. Akshay Chandra (Nonexecutive Director)

-Sh. Chaitanya Chandra (Whole Time Executive Director)

2. Relatives of Key Personnel

-Smt. Kavita Chandra w/o Sh. Sunil Chandra -Smt. Alka Chandra w/o Sh. Sudhir Chandra -Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Associate Concerns owned or significantly influenced by key management personnel or their relatives M/s Chanderpur Works Private Limited, Yamuna Nagar M/s Chanderpur Renewal Power Company Private Limited, Yamunanagar M/s Chanderpur Industries Private Limited, Yamunanagar

h) In respect of provision for retirement gratuity benefits to employees, the company has decided to give the benefit out of its own funds and creates the provision of Rs, 180757.00 by charging to statement of profit and loss as accruing liability during the year. Due to few persons being employed in the company, the accruing liability has been calculated as per method on the assumption that such benefits are payable to all the employees at the end of the accounting year, reviewable every year. The total accumulated provision for retirement gratuity benefits to employees as on March 31, 2015 amounts to Rs, 430882.00 (Previous year Rs, 250125.00).

l) Operating Leases:

1. As a Less or: The Company has given certain assets - Land, building and equipment's on operating leases. These lease arrangements range for a shorter period and include cancellable clause and the same are also renewable for further period on mutually agreeable terms and also include escalation clauses.

2. As a Lessee: The Company has taken office premises on operating lease. These lease arrangements range for shorter period and include cancellable clause and the same are also renewable for further period on mutually agreeable terms and also include escalation clauses.

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Mar 31, 2014

GENERAL INFORMATION

Scan Projects Limited (''the Company'') is a Public limited company engaged in Engineering Services (i.e. Erection, commissioning, supervision, project drawing and designing services) and trading of fabricating material, equipment parts and other items etc. The Company''s registered office is at Village Jorian, Delhi Road, Yamunanagar (Haryana). The.company is also listed on Bombay Stock Exchange Limited (BSE), Delhi Stock Exchange Limited (DSE), Jaipur Stock Exchange and Ahcmdabad Stock Exchange.

The Company has forfeited 2138400 Equity Shares (against which the call money amounting to Rs. 10126500.00 were in arrears) in the Board of Directors meeting held on 24/03/2001, in terms of Articles of Association of the Company, in consequence of having failed to pay the call money due thereon on 12/03/2001.

Terms/rights attached to equity shares:

The Company has only one class of share capital, i.e. equity shares having face value of 10/- per share. Each holder of fully paid equity share is entitled to one vote per share.

The Crane I.oan from HDFC Bank Limited, Yamunanagar are secured against hypotheciatton of crane alongwith the personal guarantee given by the Managing director of the company Sh. Sunil Chandra.

In accordance with the Accounting Standard 22" Accounting for Taxes on Income" the deferred tax liabilities (net) Rs. 2190.00 has been created by debited to Statement of Profit and Loss during the current year and the total accumulated deferred tax assets (net) as on 31 st March 2014 amounts to Rs. 70541.00 [Previous year Rs. 72731.00]

The amount outstanding to Micro, Small & Medium Enterprises has not been given separately, because, the identification of the Micro, Small & Medium Enterprises in terms of The Micro, Small & Medium Enterprises Development Act, 2006, could not be made as the company has not received any information from the creditors/suppliers regarding there status of being a Micro, Small and Medium Enterprises.

a) Provision for taxation on current profit: Tire Company has made the provision for current income tax liability based on the assessable profit as computed in accordance with the Income Tax Act, 1961.

b) In accordance with the Accounting Standard 22" Accounting for Taxes on Income" the deferred tax liabilities (net) Rs. 2190.00 has been created by debited to Statement of Profit and Loss during the current year and the total accumulated deferred tax assets (net) as on 31st March 2014 amounts to Rs. 70541.00 [Previous year Rs. 72731.00]

[I] OTHER NOTES FORMING PART OF THE ACCOUNTS

a) The Balance Sheet as on March 31, 2014 and the Statement of Profit and Loss for the year ended March 31, 2014 are drawn and presented as per the new format prescribed under Schedule VI to the Companies Act, 1956.

b) Previous year figures have been re-grouped/re-classified where ever necessary to confirm to the current presentation.

c) Contingent Liabilities and Commitments (To the extent not provided for)

2013-14 2012-13

*Contingent Liabilities (if any) NIL NIL

*Commitments NIL NIL

d) The Company has started the new activities i.e. Erection, commissioning, supervision, project drawing and designing services and trading of fabricating material, equipment parts, electrical material/components and other items etc. Accordingly, the management has changed the name and main objects of the company as per their present activities and all the current year revenue is related to new activities.

e) The Company is engaged in single business activity (i.e. Erection, commissioning, supervision, project drawing and designing and Trading of fabricating material, equipment parts, electrical material/components and other material etc.) and there is no separate reportable segment as per AS-17.

f) Management has periodically reviewed the value in use/net realizable value of all its assets and ascertained that the value in use/net realizable value of all its assets at the end of the year is more than the book value after depreciation (amortization), hence no provision for impairment has been made during the year.

g) During the year the Company has opened Branch Office/Permanent establishment for execution of job contracted in Nepal. The Company has prepared and obtained the audited necessary additional financial statement as on 31st March 2014 in compliance with the local laws and applicable accounting standards. The same are duly incorporated in the overall financial results of the company as if the transactions of the foreign operation have been those of the Company itself. All monetary assets and liabilities are translated by using closing exchange rates, non-monetary items carried at historical cost denominated in foreign currency and all revenue and expenses by using average exchange rate prevailing during the period. Exchange differences (if any) arising on conversion are recognized in the Statement of Profit and Loss.

h) RELATED PARTY DISCLOSURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same are as under: -

A. Related parties and their relationship

1. Key Management Personnel

*Sh. Sunil Chandra (Managing Director)

*Sh. Krishan Kumar (Non-Executive Director resigned w.e.f.31/05/2013)

*Sh. Akshay Chandra (Non Executive Director w.e.f. 01/07/2013)

*Sh. Chaitanya Chandra (Whole Time Executive Director w.e.f. 15/07/2013)

2. Relatives of Key Personnel

*Smt. Kavita Chandra w/o Sh. Sunil Chandra *Smt. Alka Chandra w/o Sh. Sudhir Chandra

*Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Associate Concerns owned or significantly influenced by key management personnel or their relatives

M/s Chanderpur Works Private Limited, Yamuna Nagar

M/s Chanderpur Renewal Power Company Private Limited, Yamunanagar

M/s Chanderpur Industries Private Limited, Yamunanagar

i) In respect of provision for retirement gratuity benefits to employees, the company has decided to give the benefit out of its own funds and creates the provision of'' Rs. 55942.00 by charging to statement of profit and loss as accruing liability during the year. Due to few persons being employed in the company, the accruing liability has been calculated as per method on the assumption that such benefits are payable to all the employees at the end of the accounting year, reviewable every year. The total accumulated provision for retirement gratuity benefits to employees as on March 31,2014 amounts to Rs. 250125.00 (Previous year Rs. 194183.00).

1. As a Lessee: The Company has taken office premises on operating lease. These lease arrangements range for a shorter period and include cancellable clause and the same are also renewable for further period on mutually agreeable terms and also include escalation clauses.

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Mar 31, 2013

[1A] GENERAL INFORMATION

Scan Projects Limited (''the Company'') is a Public limited company engaged in Engineering Services (i.e. Erection, commissioning, supervision, project drawing and designing services) and trading of fabricating material, equipment parts and other items etc. The Company''s registered office is at Village Jorian, Delhi Road, Yamunanagar (Haryana). The company is also listed on Bombay Stock Exchange Limited (BSE), Delhi Stock Exchange Limited (DSE), Jaipur Stock Exchange and Ahemdabad Stock Exchange.

[2] OTHER NOTES FORMING PART OF THE ACCOUNTS

a) The Balance Sheet as on March 31, 2012 and the Statement of Profit and Loss for the year ended March 31, 2012 are drawn and presented as per the new format prescribed under Schedule VI to the Companies Act, 1956. The amounts pertaining to previous year have been recast to confirm with new format.

b) Previous year figures have been re-grouped/re-classified where ever necessary to confirm to the current presentation.

c) Contingent Liabilities and Commitments (To the extent not provided for)

2012-13 2011-12

-Contingent Liabilities (if any) NIL NIL

-Commitments NIL NIL

d) The Company has started the new activities i.e. Erection, commissioning, supervision, project drawing and designing services and trading of fabricating material, equipment parts, electrical material/components and other items etc. Accordingly, the management has changed the name and main objects of the company as per their present activities and all the current year revenue is related to new activities.

e) The Company is engaged in single business activity (i.e. Erection, commissioning, supervision, project drawing and designing and Trading of fabricating material, equipment parts, electrical material/components and other material etc.) and there is no separate reportable segment as per AS-17.

f) Management has periodically reviewed the value in use/net realizable value of all its assets and ascertained that the value in use/net realizable value of all its assets at the end of the year is more than the book value after depreciation (amortization), hence no provision for impairment has been made during the year.

g) RELATED PARTY DISCLOSURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same are as under: - A. Related parties and their relationship

1. Key Management Personnel

-Sh. Sunil Chandra (Managing Director) -Sh. Krishan Kumar (Non-Executive Director) -Sh. Akshay Chandra (Executive Director)

2. Relatives of Key Personnel

-Smt. Kavita Chandra w/o Sh. Sunil Chandra -Smt. Alka Chandra w/o Sh. Sudhir Chandra -Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Associate Concerns owned or significantly influenced bv key management personnel or their relatives M/s Chanderpur Works Private Limited, Yamuna Nagar

M/s Chanderpur Renewal Power Company Private Limited, Yamunanagar M/s Chanderpur Industries Private Limited, Yamunanagar

i) In respect of provision for retirement gratuity benefits to employees, the company has decided to give the benefit out of its own funds and creates the provision of Rs. 21416.00 by charging to statement of profit and Joss as accruing liability during the year. Due to few persons being employed in the company, the accruing liability has been calculated as per method on the assumption that such benefits are payable to all the employees at the end of the accounting year, reviewable every year. The total accumulated provision for retirement gratuity benefits to employees as on March 31,2013 amounts to Rs. 194183.00 (Previous year Rs. 172767.00).

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Mar 31, 2010

1. Contingent liabilities not provided as on 31-03-2010 is NIL.

2. Previous year figures have been regrouped and rearranged to make their classification comparable with that of the current year.

3. In the opinion of the Board, the Current Assets, loans and advances are approximately of the value as stated, if realized in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of the amount considered necessary.

4. The balance appearing under the head sundry Creditors, other creditors advances recoverable and sundry debtors are not confirmed.

5. As explained to us, the company has no confirmed information with respect to all of its suppliers, whether they constitute small scale industrial undertakings and therefore the amount due to the suppliers cannot be ascertained.

6. The amount outstanding under the head capital work-in-progress amounting to Rs. 893395.13 (Previous year Rs.893395.13), which consist of capital expenditure on plant & Machinery and Electrical equipments etc., has been disposed off during the current year for Rs. 540730.00, thereby suffering a loss of Rs. 352663.11.

7. In respect of the Loan availed from Lloyd Finance Ltd., Chandigarh against equipments, the total overdue amount is Rs. 1298600.98 (including interest and principal as on 31-03-2010) as per revised re-schedulement. For recovery of their dues, the Lolyd Finance Ltd., has filled the litigation case against the company in the Honorable punjab and Harayan High Court and the hearing is still pending.

8. The company had repaid all its dues towards financial institution / Bank under on time settlement scheme by disposing off substantial part of its fixed assets. In the current year the Company has also disposed off the part of remaining assets (i.e. plant & Machinery, Electrical / Pollution / laboratory Equipments, other assets and assets acquired under capital work-In-Progress new expansion scheme, which cost / W.D.V. as on 31-03-2009 Rs. 3456166.11) for Rs. 2293530.00 thereby suffering a loss of Rs. 1162636.11. Due to that and other substantial factors (i.e. profit form new business activities) the accumulated losses of the company has been reduced to some extent in current year as compared to preceding year, but it was still equivalent to its entire net worth of the Company. The accounts have, however been prepared by the company. Because the company has already repaid all the dues towards Financial Institution / Bank under one time settlement scheme after disposing off substantial part of the fixed assets. Previously, the management has started new trading activity (i.e. trading of Store and spares / Machinery spares and material for Cement and allied industry) and achieved the turnover of Rs. 29.36 Lacs and Rs. 127.65 Lacs in the year 2008-09 and 2009-10 respectively. During the last quarter of the current financial year the management of the company has also added new the of activity (i.e. Service for Installation of Machinery parts of Cement and Allied industry) and earned the receipt of Rs. 26.00 Lacs. All these above efforts reflect that the Management of the Company is serious for revival of the company from the existing crisis. Hence, the management is hopeful to re-establish the business activities in the ensuing years.

9. The company's old stock of store and spares outstanding in the stock records has been valued and shown in the profit and Loss Account and the Balance Sheet as certified by the management as on 31-03-2010. As explained to us that, the management could not conduct the physical verification of such old stock of store and spares during the year under consideration to work out damaged stock. Hence the company has taken book value as value of the old stock of stores & Spares.

10. Deferred Tax Liability (Net)

a) In accordance with the Accounting Standard 22 "Accounting for taxes on Income" due to earlier year book loss the company has not recognized any accumulated deferred tax liability (net) as on 31st March 2010 due to uncertainty of future taxable income. Hence, no provision for deferred tax liability has been created in the books of accounts.

b) Provision for taxation on current profits:

No provision for taxation has been made in the books in the view of nil taxable income during the year. Moreover, the provision for taxation under MAT as per Income Tax Act, 1961 under section 115JB is also not required due to nill book profit during the year.

11. Schedule 'A' to 'K' are the integrate part of the accounts of the company and the same have been duly authenticated by us.

12. RELATED PARTY DISCLSOURES:

During the year, the company has carried out some transactions with the following persons, firms (in which the directors of the company are interested) related to expenditure and other transactions. The details of the same are as under:-

A. Related Parties and their relationship

1. Key Management Personnel

- Sh. Sunil Chandra (Managing Director)

- Sh. Krishan Kumar (Director)

- Sh. Pradeep Kumar (Director)

2. Relative of Key Personnel

- Smt. Kavita Chandra w/o Sh. Sunil Chandra

- Smt. Alka Chandra w/o Sh. Sidhir Chandra

- Sh. Sudhir Chandra brother of Sh. Sunil Chandra

3. Enterprises owned or significantly influenced by Key management personnel or their relatives

M/s Chanderput Works, Yamuna Nagar.

M/s Chanderpur Renewal Power Company private Limited, Yamunanagar.

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Mar 31, 2009

1. Contingent liabilities not provided as on 31-03-2009 is NIL.

2. Previous year figures have been regrouped and rearranged to make their classification comparable with that of the current year.

3. In the opinion of the Board, the current assets, loans and advances are approximately of the value as stated, if realized in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of the amount considered necessary.

4. The balance appearing under the head Sundry Creditors, other creditors, advances recoverable and sundry debtors are not confirmed.

5. As explained to us, the company has no confirmed information with respect to all of its suppliers, whether they constitute small scale industrial undertakings and therefore the amount due to the suppliers cannot be ascertained.

6. As per the terms of the prospectus of the company, the expansion scheme has been partially implemented. It could not be fully implemented as per the terms of the prospectus due to norr-receipt of call money from the share holders. The total capital expenditure incurred till date pending for capitalization are shown under the head Capital work-in progress amounting to Rs.895395.13 (Previous year Rs.2541768.96). During the current year the company has disposed off part of Plant & Machinery and demolished/destroyed factory building structure material (Cost as on 31/03/2008 Rs. 1056066.35) for Rs. 1003112.00, thereby suffering a loss of Rs.52954.35.

7. The company has undertaken the new diversification project w Design and installation of oil fired vertical shaft kiln for manufacture of cement clinker in association with Technology Information Fcrcasting and Assessment Council (TIFAC) under Technical Development Assistance Scheme and invested a sum of Rs.l 3034609.39 up to 31/03/2008. Initially, the company had successfully completed the trial run of the manufacturing of Quick Lime urder this Scheme, the ultimate esult of this project couldnt be achieved, which could be commercialized, hence the same has been discontinued/abandoned by the TIFAC vide letter dated 12/10/2006 and assessed the salvage alue of the project Rs 9.00 Lacs, which would be deposited to the TIFAC in single installment. The same has been deposited on dated 17/11/2006, but the no due/objection letter regarding acceptance of the same by the Competent Authority of the TIFAC has not been received up to 31/03/200S, However, the same has duly been accepted by the Competent Authority in the current financial year and we have disposed off all the salvage of the project in the last two quarters of the financial year 20C8-09 by adjusting the contribution of the TIFAC Rs.9100000.00 in the total investment under this scheme and the balance has been shown as loss Rs.2742709.39 by adjusted the sale proceeds of the salvage value of the assets Rs.l191900.00 in the current year.

8. in respect of the loan availed from Lloyd Finance Ltd., Chandigarh, against equipments, the total overdue amount is Rs. 1298600.98 (including interest and principal as on 31-03-2009) as pei revised reschedulement. For recovery of their dues, the Lloyd Finance Ltd., has filed the litigation case against the company in the Honorable Punjab and Haryana High Court and the hearing is still pending.

9. Previously the company had repaid all its dues towards financial institution under one time settlement scheme by disposing off substantial part*of its fixed assets. In the current year the Company has also disposed off substantial part of assets acquired under Capital work in progress new expansion scheme and Technology Development Assistance scheme (Cost/W.D V. as on 31-03-2008 Rs.4990675.74) for Rs.2195012.00, thereby suffering a loss of Rs.2795663.74. Due to that and other substantial factors (i.e. Wavier of unpaid interest by Bank under one time settlement scheme and Loss arisen due to disposal of substantial part of assets acquired under capital work in progress), :he accumulated losses of the company have been increased to some extent in current as compared to preceding year, which is just equivalent to the entire net worth of the company. The accounts have, however, been prepared by the management, as a going concern basis in view of restructuring process initiated by the management of the company. Because the company has already repaid all the dues towards Financial Institution under one time settlement scheme after disposing off substantial part of the fixed assets and retained one plant (50 TPD Capacity). In the current year the Bank has also accepted the compromise proposal of the company for settlement of its dues and the company has executed this compromise proposal by paying necessary upfront amount to the bank. The management nas also started new trading activity i.e. trading of Store and spares/Machinery spares and achieved the turnover of Rs.29.36 Lacs. All these above efforts reflect that the Management of the Company is serious for revival of the company from the existing crisis. Hence, the management is hopeful to re- establish the business activities in the ensuing years.

10. The company s stock outstanding in the stock records ha* been valued and shown in the Piofit and Loss Account and the Balance Sheet as certified by the management as on 31-03-2009. As explained to us that, the management could not conduct the physical venfication of the stock, i.e. raw material, stores & spares and finished/semi-finisKed goods of the company during the year, in view of plant being closed since January 2002, disposal of substantial part of plant and inadequate manpower to work out the damaged stock. The company has taken book val ue as value of the closing stock of raw material, work-in-progress, finished goods and stores & spares.

11. in respect of loan availed from the Central Bank of India, Ambala Cantt, the bank has recalled its whole amount Rs.l 1004919.70 (as on 31/03/2008) and filed the recovery suit against the company in Debt Recovery Tribunal, Chandigarh. The company has already approached the bank for settlement of dues under one time settlement scheme, which has duly been accepted by the bank vide letter dated 31/03/2009 and the company has paid the necessary upfront fee to the bank for execution of the said compromise proposal. In the said compromise proposal the amount of unpaid interest wavier considered by the bank Rs.705087.70 has been written back by the company by crediting to profit and loss account as exceptional items during the current year.

12. Deferred Tax Liability (Net)

a) In accordance with the Accounting Standard 22 " Accounting for taxes on income" due to earlier year book loss the company has not jecognized any accumulated deferred tax liability (nM) as on 31s March 2009 due to uncertainty of future taxable income. Hence, no provision for deferred tax liability has been created in the books of accounts.

b) Provision for taxation on current profits: No provision for taxation has been made in the books in the view of losses during the year. Moreover, the provision for taxation under MAT as per Income Tax Act, 1961 under Section 115 JB is also not equired due to book losses during the year.

13. Schedule "A" to "M" are the integral part of the accounts of the company and the same have been duly authenticated by us.

Note:

-The installed capacity has been stated on triple shift basis [i.e. for 330 working days] turd is as certified by the management and accepted by the auditors, being a technical matter. -The company has disposed off substantial part of the plani and machinery in the earlier year by retaining one plant (50 TPD Capacity), so the capacity has been amended accordingly.