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Notes to Accounts of Akar Auto Industries Ltd.

Mar 31, 2018

1. CORPORATE INFORMATION

Akar Auto Industries limited (formerly known as Akar Tools Limited) is listed in India on Bombay stock exchange (BSE). Company name got change from Akar tools limited to Akar Auto Industries Limited with effect from 23 rd Oct 2017. The company is in the business of manufacturing hand tools, auto leaf spring, parabolic springs & commercial automotive forging & has its manufacturing facilities in Aurangabad (Maharashtra). The registered office of company is situated at 304, Abhay Steel House, Baroda Street, Carnac Bunder, Mumbai-400009, Maharashtra, India.

iii Explanation of material adjustments to Statement of Cash Flows for the year ended 31 March, 2017:

The transition from Previous GAAP to Ind AS has no material impact on the Statement of Cash Flows

Foot note to reconciliation of equity as at April 1, 2016 and Mar 31, 2017 and profit & loss for year ended Mar 31, 2017.

a) Provisions.

Under Indian GAAP, proposed dividends including DDT are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the company, the declaration of dividend occurs after period end. Therefore, the liability of Rs. 65.94 lac for the year ended on 31 March, 2016 recorded for dividend has been derecognized against retained earnings on 1 April, 2016.

b) Defined benefit plan

Under Indian GAAP(previous GAAP), the Company did not complied with AS 15 and no provision were made in books for defined benefit plan. Under IND AS the company has complied with IND AS 19 requirement and recognized defined benefit plan liability from transition date i.e Apr 1, 2016 by adjusting retained earnings. Accordingly for subsequent year under Ind AS, 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.

c) Other comprehensive Income

Under Indian GAAP, the company has not presented other comprehensive income (OCI) separately. Hence it has reconciled India GAAP profit or loss to profit or loss as per IND AS.

There is no amount due from director, other officer of company, or firm in which any director is partner or private companies in which any director is a director or member at any time during the reporting period except mentioned below.

i- Advance given to Akar Alloys private limited in which one of company director is also director in Akar Auto Industries Limited.

Footnote:

*Interest free security Deposit has been given to Gupta Concast Ltd against tenancy of Plot No. B- 5&6, MIDC, Waluj, Aurangabad

Footnote:

1. The mode of valuation of inventories has been stated in note 2.10

2. Loans are secured by first charge on stock (including raw material finished goods and work in progress) and book debts (refer note 9 and 14)

Footnote:

1. The credit period ranges from 7 days to 120 days.

2. Before accepting any new customer, the company assesses the potential customer''s credit quality and define credit limits by customer.

Limits attributed to customer are reviewed annually.

3. No trade or other receivables are due from directors or other officer of the company either severally or jointly with any other person.

Nor any trade or other receivables are due from firms or private companies respectively in which any director is a partner or a director or a member (refer note 7)

4. Loans are secured by first charge on stock (including raw material finished goods and work in progress) and book debts (refer note 8 & 14)

*The share of the company were sub divided from face value of Rs. 10/- per share to Rs. 5/- per share with effect from 1st Dec 2017.

Accordingly the authorised share capital of company 1,00,00,000 (One crores) divided into 2,00,00,000 (Two crores) equity shares of Rs. 5/- each. Also paid up share capital of the company Rs. 5,39,40,050 (Five crores thirty nine lacs forty thousand fifty) is divided into 1,07,88,010 (one crores seven lacs eighty eight thousand & ten) equity shares of Rs. 5 each.

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. For the year ended 31 March 2018, the amount of per share dividend proposed as distributions to equity shareholders is Rs.0.55 on face value of Rs.5 (31st March 2017: Rs.1.10 on face value of Rs.10) which is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive the assets of the company, in proportion to the number of equity shares held by the shareholders.

The general reserve is used from time to time to transfer profits from retained earnings for appropriations purposes.

As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

ii Vehicle loans taken from Punjab National Bank Ltd, HDFC Bank Ltd carries interest @ 8.45 to 10.65% p.a., This loan is repayable in 7 years.

Vehicle Loans are secured by way of hypothecation of respective motor vehicles purchased.

Footnote:

1. Rupee term loan from Canara Bank is secured by first charged by way of mortgage, by deposit of title deeds in respect of immovable properties and hypothecation of the movable fixed assests of the company, both present & future except excluded assets, subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings. The above term loan and working capital loan from canara bank is also further secured by personal guarantees of some Directors and collacteral security by way of mortgage of Land and Building of M/s Gupta Concast Ltd.

2. Unsecured loan of Rs.50 lacs taken from Kotak Mahindra bank on fixed interest rate, payable in 36 installment starting month of April 18.

3. Unsecured loan of Rs.50 lacs taken from Magma financials on fixed interest rate, payable in 36 installment starting month of April 18.

3. Unsecured loan of Rs.125 lacs taken from Tata Finance on fixed interest rate payable in 11 installment starting month of Feb 18.

Footnote:

Based on the information available with the Company, there are no dues outstanding in respect of Micro, Small and Medium Enterprises at the balance sheet date. No amounts were payable to such enterprises which were outstanding for more than 45 days. Further, no interest during the year has been paid or payable in respect thereof.

The above disclosure has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the Auditor.

# The Government of India introduced the Goods and Service tax (GST) with effect from 01st July, 2017. Consequently Domestic Sales for the year ended 31st March, 2018 includes excise duty upto 30th June, 2017 (Rs.478.79) and for the previous year ended 31st March, 2017 (Rs.1805.56). Effective 01st July, 2017 revenue from operations are net of Goods and Service Tax. Accordingly, the figures for previous period are not comparable.

*The Shares of the Company were sub-divided from the face value of Rs.10 per share to Rs.5 per share with effect from 1st December, 2017. Accordingly Paid up Share Capital of the Company is Rs.5,39,40,050 (Rupees Five Crores Thirty Nine Lakhs Forty Thousand and Fifty) divided into 1,07,88,010 (One Crore Seven Lakhs Eighty Eight Thousand and Ten) Equity Shares of Rs.5/- (Rupees Five) each. Earning Per Share (EPS) for the previous periods have been restated accordingly.

2. SEGMENT REPORTING

The Company is engaged in the business of "Automotive Components" and therefore, has only one reportable segment in accordance with Ind AS 108 "Operating Segments".

3. EMPLOYEE BENEFIT PLAN

Defined contribution plan

The company makes provident fund contribution to defined contribution retirement benefit plan for eligible employees. Under the scheme, the company is required to contribute a specific percentage of pay roll costs to fund the benefits. The contribution as specified under the law are paid to government authorities ( PF commissioner) and such contribution is recognised as expense in year it is determined.

Defined benefit plan

The company offer it employees defined benefit plan in form of gratuity scheme.( a lump sum amount). The gratuity scheme covers all regular employees. In case of gratuity scheme company contributes funds to gratuity trust which is irrevocable, and if company did not make contribution in trust then such unpaid contribution is shown under provision in financial statement. Commitments are acturially determined at year end. The acturial valuation is done based on " Projected Unit Credit " method. These plan typically expose the company to acturial risk such as ; investment risk, interest rate risk, longevity risk and salary risk.

Investment risk:

The present value of defined benefit liability is calculated using discount rate which is determined by using reference to market yields at the end of reporting period on government bonds. If return on planned assets is below this rate it will create plan deficit.

Interest risk:

A decrease in bond interest rate will increase the plan liability; however this will partially offset by an increase in plan assets.

Longevity risk:

The present value of defined benefit plan is calculated by reference to the best estimate of the mortality of plan participants. An increase in life expectancy of plan participants will increase the plan''s liability.

Salary risk:

The present value of defined benefit plan is calculated by reference to the future salary of plan participants. As such an increase in the salary of plan participants will increase the plan''s liability.

4. FINANCIAL RISK MANAGEMENT OBJECTIVE & POLICIES

The company''s principal financial liabilities , other then derativies , comprise borrowings, trade payable , other payable, security deposits, un paid dividend. The company''s principal financial assets includes investments, trade and other receivables, cash & cash equivalents that derived directly from its operation. The company''s financial risk management is an integral part of how to plan and execute its business strategies. The company is exposed to various business risk such as market risk, credit risk, and liquidity risk.

The company''s senior management overseas the management of these risk. The company has system based approach to risk management, established policies and procedures, and internal financial controls with object to ensure early identification , evaluation and management of key financial risk. Accordingly the company''s risk management frame work has objective of ensuring that such risk are managed with acceptable & approved paramaters in disciplined and consistent manner and in compliance with applicable regulation. The board of directors reviews policies for managing each of these risk which are summarised below.

Market risk- Market risk is risk that the fair value of future cash flows of financial instrument will fluctuate because of changes in market prices. The company''s activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The company enter into derivative financial instruments to manage its exposure to foreign currency risk including forward foreign exchange contracts to hedge the exchange rate risk arising on import and exports.

Foreign Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts. The Carrying amounts of the company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting are as follows:

Foreign currency sensitivity analysis

The Company is mainly exposed to the currency: USD and EUR

The following table details the company''s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. This is mainly attributable to the exposure outstanding on receivables and payables in the company at the end of the reporting period. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% charge in foreign currency rate. A positive number below indicates an increase in the profit or equity share where the Rupee Strengthens 5% against the relevant currency. For a 5% weakening of the Rupee against the relevant currency, there would be a comparable impact on the profit or equity, and the balanced below would be negative.

The company in accordance with its risk management policies and procedures, enter into foreign currency forward contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one month and 11 month. The above sensitivity does not include the impact of foreign currency forward contracts which largely mitigate the risk.

Derivate instruments:

The company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to accounts receivable and accounts payable. The uses of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

The line item in the Balance Sheet that includes the above hedging instruments are "other financial assets and other financial liabilities".

Equity risk

There is no material equity risk relating to the company''s equity investments which are detailed in note 6 "Investments".

Interest risk

There is no material interest risk relating to the company''s financial liabilities which are detailed in note 17, 18 and 19.

Credit risk management

Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the company. The company uses its own trading records to evaluate the credit worthiness of its customers. The Company''s exposure are continuously monitored and the aggregate value of transactions concluded, are spread amongst approved counter parties (refer note 9 - Trade receivable).

Liquidity risk management

Ulitmate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidty management requirements. The Company manages liquidity risk by maintaining adequate reserves, bank facilities and reserves borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Liquidity risk table

The following table detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

Borrowing includes short term working capital limits from Banks which generally get renewed every year. (Refer No. 14)

5. CAPITAL MANAGEMENT

For purpose of company capital management, capital includes equity attributable to equity holders of the company and all other equity reserves. the primarily objective of the company capital management is to ensure that it maintains an efficient capital structure and maximise shareholder value. Company declare dividends or adjust dividend payments after considering required capital structure

No changes were made in the objectives , policies or process for managing capital during the year ended Mar 31, 2018, Mar 31, 2017, and Apr 1, 2016

6. Investors'' Protection Fund : A sum of Rs. 0.77 Lakhs relating to Financial Year 2009-10 is transferred to the credit of Investors'' Protection Fund and there is no due and outstanding for transfer to the credit of the Investors'' Protection Fund as on 31/03/2018 (Previous Year S 0.66 Lakhs).

7. The company has decided to apply for compounding under section 441 of the Companies Act, 2013 of matter arose out of the inspection by MCA. Since the matter is not finalized its impact on the account could not be ascertained. Once the same is decided by the competent authority, the same shall be accounted for in the year in which it is determined.

8. Previous year''s figures have been regrouped and / or reclassified wherever necessary to conform to this year''s classification.


Mar 31, 2016

a There is no movement of the shares outstanding during the financial year.

b Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. During the year ended 31 March 2016, the amount of per share dividend proposed as distributions to equity shareholders is Rs .1.00/- (31st March 2015: Rs. 0.70/-) which is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive the assets of the company, in proportion to the number of equity shares held by the shareholders.

1. LONG TERM BORROWINGS (contd.)

a) Rupee term loan from Canara bank (Rs. 450 lacs sanctioned) Rs.211.05 lacs availed during the year (Previous year Rs. Nil) carries interest rate of BR 5.75%= 15.75% p.a.(floating), The loan is repayable after a moratorium period of 3 months from Date of Commencement of Commercial Operations in 72 monthly installments of Rs.6.25 lacs and Interest to be paid as and when due.

b) Rupee term loans from Siemens Financial Services Private Limited carries interest @ 14% to 14.5% p.a., This loan is repayable in 4 years.

c) Vehicle loans taken from Punjab National Bank Ltd carries interest @ 9.85 to 10.65% p.a., This loan is repayable in 7 years.

d) Unsecured loan received from Akar Industries Private Limited for Rs. 500 lacs carries interest @ 12% p.a., This loan is repayable at the end of 7 years.

e) Unsecured loan received from Macotax Consultant Private Limited for Rs. 250 lacs carries interest @ nil% p.a., This loan is repayable in 9 years.

f) Unsecured loan received from Avro commercial Private Limited for Rs. Nil (previous year Rs. 100 lacs), carries interest @18% p.a. Repaid during the year

g) Details of security for each type of borrowings.

(i) Rupee term loan from canara bank is secured by first pari-passu charged by way of mortgage, by deposit of title deeds in respect of immovable properties and hypothecation of the movable fixed assets of the company, both present & future except excluded assets, subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

(ii) Rupee term loan from Siemens Financial Services Private Limited is secured by exclusive hypothecation over assets funded by SFSPL.

(iii) Vehicle Loans are secured by way of hypothecation of respective motor vehicles purchased.

Notes:

a Cash credits/ short term loans/ export packing credits are secured/to be secured by hypothecation of inventories, trade receivable and second charge on fixed assets secured to financial institutions except assets exclusively charged and also further secured by personal guarantees of Directors. b Cash credit/short term loans /export packing credit of Rs 40.30 crores sanctioned by Canara Bank is repayable on demand and carries interest @ base rate 5.25%= 15.25% per annum.

* Based on the information available with the Company, there are no dues outstanding in respect of Micro, Small and Medium Enterprises at the balance sheet date. No amounts were payable to such enterprises which were outstanding for more than 45 days. Further, no interest during the year has been paid or payable in respect thereof. The above disclosure has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the Auditor.

NOTE: Liabilities in respect of Retirement Benefits to employees are accounted for on actual payment basis. No provision is being made in the accounts for Liabilities on actuarial valuation as required by Accounting Standard AS15. Amount accrued as on 31.03.2016 on account of gratuity is Rs.152.02 lacs (Net ) [Previous Year Rs. 145.37 lacs (Net)] and on account of Leave Encashment is Rs.50.87 lacs. (Previous Year Rs. 44.47 lacs ).

2. RELATED PARTY DISCLOSURE

Information given in accordance with the requirements of Accounting Standard 18 - Related Party disclosures notified by Ministry of Corporate Affairs Under sub section (3C) of Section 211 of the Companies Act, 1956 read with General circular 8/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs.

3. Name of the party and relationships

SL No. Description of Relationship Name of Related parties

4. Enterprises over which Key Managerial Personnel are R.L. Steels & Energy Ltd. able to exercise significant influence Akar Alloy Pvt Ltd

Aurangabad Forgings P Ltd.

Gupta concast Ltd Santh Eknath Rolling Mills Pvt Ltd Akar Industries Pvt Ltd Akar Minerals Pvt Ltd Lavanya Investments Pvt Ltd.

Shatrunji Investments Pvt Ltd

5. Key Management Personnel R L Gupta - Chairman

Sunil Todi - Managing Director

Shri Pradeep Nijampurkar -Executive Diector

N K Gupta - Director

Radhamohan Garg- Chief Financial Officer Rajshree Dubey- Company Secretary

6. Relatives of Key Management Personnel Nitin Gupta

Usha Devi Gupta Shushila Devi Gupta

7. derivative instruments

a The company enters into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter party to such forward contracts is a bank. These contracts are entered into to hedge the foreign currency risks on outstanding. Details of forward contracts outstanding as at the year end.

8. Confirmations for Loans and advances and creditors and debtors in some cases have not been received. Any adjustment in respect of these, if any, will be done by the company in the year in which the same is crystallized .

9. Investors'' Protection Fund: A sum of Rs. 0.97 lacs relating to F.Y.2007-08 is due and outstanding for transfer to the credit of the Investors'' Protection Fund as on 31.03.2016 (Previous Year Rs.NIL).

10. Sales and Purchases includes Rs. 126.09 Lacs- inter-unit sales and purchases. (Previous Year: Nil). It has no effect on the profitability of the company.)

11. Previous year''s figures have been regrouped and / or reclassified wherever necessary to conform to this year''s classification.


Mar 31, 2015

1 CORPORATE INFORMATION

The Company is in the Business Manufacturing of hand tools, auto leaf spring, parabolic springs and commerical automo- tive forgings & having its manufacturing facilities around Aurangabad, Maharashtra

NOTE 2. RELATED PARTY DISCLOSURE

Information given in accordance with the requirements of Accounting Standard 18 - Related Party disclosures notified by Min- istry of Corporate Affairs Under sub section (3C) of Section 211 of the Companies Act, 1956 read with General circular 8/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs.

NOTE 3. SEGMENT REPORTING

The Company is engaged in the business of "Hand Tools " and "Lea Spring" which, as per the Accounting Standard - 17 Segment Reporting are considered as the only reportable primary business segments.

NOTE 4. PREVIOUS YEAR FIGURES

Previous year's figures have been regrouped and reclassified where necessary to conform to thisyear's classification


Mar 31, 2014

Note 1. Corporate information

The Company is in the Business of Manufacturing of hand tools, auto leaf spring, parabolic springs and commercial automotive forgings & having its manufacturing facilities around Aurangabad, Maharashtra.

Contingent Liabilities not provided for: -

(a) Guarantees issued by Banks on behalf of the Company and outstanding as at 31/03/2014 is of Rs.106.19 Lacs (Previous Year 104.94 Lacs).

(b) Liabilities not acknowledge as debt and outstanding as at 31/03/2014 are for Income Tax Rs.42.17 lacs (Previous year Rs. 69.87 Lacs) and for Sales Tax Rs. 19.64 Lacs ( Previous year 19.64 Lacs)

(c) Foreign Bills and Inland Bills discounted and outstanding as at 31/03/2014 is Nil Lacs (Previous Year Nil).

In the opinion of the Board of Directors the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business.

Confirmation from certain parties for amount due to them/amount due to the company as per accounts of the company are not yet received, necessary adjustments, if any, will be made when accounts are reconciled and settled.

NOTE 2. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

2.1 Contingent liabilities and commitments (to the extent not provided for) (Rs. in Lacs)

Contingent liabilities As at As at 31st March, 2014 31st March, 2013

(a) Claims against the Company not acknowledged as debt Income Tax-A.Y. 2010-2011 A.Y. 2010-2011 2.07 2.07

Income Tax-A.Y. 2009-2010 A.Y. 2009-2010 NIL NIL

Income Tax-A.Y. 2008-2009 A.Y. 2008-2009 NA NA

Income Tax-A.Y. 2007-2008 A.Y. 2007-2008 1.81 1.81

Income Tax-A.Y. 2006-2007 A.Y. 2006-2007 28.42 28.42

Income Tax-A.Y. 2004-2005 A.Y. 2004-2005 4.16 4.16

Income Tax-A.Y. 2003-2004 A.Y. 2003-2004 13.65 13.65

Income Tax-A.Y. 2002-2003 A.Y. 2002-2003 3.26 3.26

Income Tax-A.Y. 2001-2002 A.Y. 2001-2002 10.72 10.72

Income Tax-A.Y. 2000-2001 A.Y. 2000-2001 5.34 5.34

Income Tax-A.Y. 1999-2000 A.Y. 1999-2000 0.44 0.44

Sales Tax A.Y. 2003-2004 19.64 19.64

(b) Guarantees @ (give details) 106.19 104.94

Note 2.2 Previous year''s figures

The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

Note 1. Corporate information

The Company is in the Business of Manufacturing of hand tools, auto leaf spring, parabolic springs and commercial automotive forgings & having its manufacturing facilities at Aurangabad, Maharashtra.

Note 2.1 Previous year''s figures

The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

NOTE 1. CORPORATE INFORMATION

The Company is in the Business of Manufacturing of hand tools, auto leaf spring, parabolic springs and commercial automotive forgings & Having its manufacturing facilities around Aurangabad, Maharashtra.

Contingent Liabilities not provided for: -

(a) Guarantees issued by Banks on behalf of the Company and outstanding as at 31st March, 2012 is of Rs.106.19 Lacs (Previous Year 97.94 Lacs).

(b) Liabilities not acknowledge as debt and outstanding as at 31st March, 2012 are for Income Tax Rs.37.58 lacs (Previous year Rs.37.58 Lacs) and for Sales Tax Rs.19.64 Lacs ( Previous year 23.25 Lacs )

In the opinion of the Board of Directors the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business.

Confirmation from certain parties for amount due to them/amount due to us as per accounts of the company are not yet received, necessary adjustments, if any, will be made when accounts are reconciled and settled.

*Term Loans from Banks are secured by a first mortgage of all the Company's immovable properties, both present and future ranking paripassuinterse and first charge by way of hypothecation of all company's movable subject to prior charges created in favour of Company's bankers on inventories, book debts, and other movables for securing the borrowing for working capital requirement

2.1 Contingent liabilities and commitments (to the extent not provided for)

Contingent liabilities

(a) Claims against the Company not acknowledged as debt

Income Tax-A.Y. 2004-2005 416,295 416,295

Income Tax-A.Y. 2003-2004 1,000,000 1,000,000

Income Tax-A.Y. 2003-2004 365,451 365,451

Income Tax-A.Y. 2002-2003 326,377 326,377

Income Tax-A.Y. 2001-2002 1,071,661 1,071,661

Income Tax-A.Y. 2000-2001 533,572 533,572

Income Tax-A.Y. 1999-2000 44,149 44,149

Sales Tax 1,964,039 2,325,425

(b) Guarantees 10,619,000 9,794,000

Note 2.2 Previous year's figures

The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2010

1) Contingent Liabilities not provided for

a) Guarantees issued by banks on behalf of the Company 57.50 lacs (previous year Rs. 57.50 lacs)

2) Figures of the previous year have been re-grouped/re-arranged wherever necessary.

3) Disclosure requirement as per Accounting Standard 18(AS-18)" Related Party Disclosure" issued by the Institute of Chartered Accountants of India.

4) Key management personnel / associates

R. L. Steels & Energy Limited, Sant Eknath Rolling Mills Pvt. Ltd., Gupta Concast Ltd., Mr.R.L. Gupta, Mr.N.K.Gupta, Mr. Sunil Todi, Mr. P.M. Nijampurkar.

5) In the opinion of the Board of Directors the current assets, loans and advances are approximately of the value stated, if realised in the ordinary Course of business. Unsecured loans includes Rs. Nil (previous year Rs. 52.25 lacs) from Directors and associates.

6) Manpower expenses included Rs. 25.40 lacs (previous yearRs. 21.80 lacs) paid to Directors as remuneration.

7) The creditors for goods include Rs. 21.24 lacs (previous year Rs. 14.22 lacs) outstanding for a period exceeding 30 days towards SSI undertakings. There are four (previous year three) SSI units to which the Company owed a sum exceeding Rs. 1.00 lacs with the Company.

8) In accordance with revised guidance notes issued by Institute of Chartered Accountants of India, Excise duty payable on finished goods lying in the stock has to be included in the expenditure as well as in the valuation of such stock. However precise bifurcation between finished goods meant for export market which consist major portion of business (which is excise duty free) and finished goods meant for domestic market is not possible. Hence the excise duty is not included in the cost and stock value. This accounting treatment has no impact on profitability of the Company.

9) Confirmation from certain parties for amounts due to/from them due by/to the Company as per accounts of the Company are not yet received, necessary adjustment if any will be made when accounts are reconciled and settled.

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