Notes to Accounts of Aroni Commercials Ltd.

Mar 31, 2016

Notes (i):

Fixed deposits with bank of Rs. 3, 75,614/- includes fixed deposit of Rs.3, 08,871/-in the name of District and Cession Judge, Ujjain deposited as guarantee money, and balance amount is subject to reconciliation and adjustment on confirmation from bank. No income on said deposit is accounted.

Note 1 Additional information to the financial statements

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

Contingent liabilities

(i) Contingent liabilities not provided for uncalled liability on a) Partly paid up preference shares Rs.18, 750/-.

(ii) Demand of Rs.80, 22,602/- for AY 1996-97 is pending under Madhya Pradesh Sales Tax Act against which appeals had been filed with Deputy Commissioner of Commercial Tax. The Deputy Commissioner of Commercial tax has redirected case to Assessing Officer for reassessment.

(iii) During F.Y. 2004-05,Company has kept Rs.100.70 Lacs in Escrow account with Calyon Bank, Nariman Point Branch for any demands of stamp duty, penalties and liabilities that may arise on the scheme of arrangement as approved by the High Court of Judicature at Mumbai in terms of which company has transferred its Aluminum Chloride undertaking and wind mill undertaking to Nagda Orgo Chem Private Limited under section 391 to section 394 of the companies Act, 1956.0n 01/10/2012, The High court of Indore (Single Judge ) has given decision in favour of the Company. Revenue had filed an writ appeal against the said order with Hon''ble The High court of M.P., Indore.( Double Judge), wherein order dated 26.09.2014 states that the appeal be listed for final hearing in due course.

(iv) NEPC India Limited had instituted a suit against the company in the court of II FAST TRACK JUDGE Madras for deferment of payment to the NEPC India Limited the sum of Rs. 20,47,156/- together with interest at 24% p.a on Rs. 10,53,450/-.. Vide order dated 13/02/2012, court has given decision in favour of NEPC India limited. In the result the suit is decreed in favour of NEPC India Limited for Rs. 10, 53,450/- with interest at the rate of 12% p.a. from august 98 till realization with costs. Company has filed an appeal with High court of Madras against the said order.

(v) As per Income Tax Department following tax demand is outstanding against the company & it has not been provided in the accounts.

3 Trades Receivable, Trades payable and loans & Advances are subject to confirmation/reconciliation.

4 The Company has a policy of booking Income received from "Kshitij Venture Capital Fund"and"Urban Infrastructure Opportunities Fund" on the basis of provisional income statement received from respective Venture Capital Fund Manager.

5 (a) In the opinion of the Board, the current assets, loans and advances have value on realization in the ordinary course of business at least equal to the amounts at which they are stated. Otherwise, the provisions for depreciation and all known liabilities are adequate and not in excess of amount required.

6 A) Fixed deposits with bank of Rs. 3,75,614/- includes fixed deposit of Rs.3,08,871/-in the name of District and Sessions Judge, Ujjain deposited as guarantee money. However, the entire amount of Rs. 3,75,614 is subject to reconciliation and confirmation from the respective banks and authorities. The Fixed Deposit of Rs.3,08,871/- was renewed in August 2003 having maturity in June 2006 with a maturity value Rs.4,84,974/-. Since the status of the case is pending & there is no communication of renewal of Fixed Deposit post June 2006. Considering this fact, the company has not accounted for any interest income on the said fixed deposit.

B) During F.Y. 2004-05,Company has kept Rs.100.70 Lacs in Escrow account in fixed deposit in the name of Arcil Catalyst Private Limited previously known as ''Atofina'' with Calyon Bank, Nariman Point Branch for any demands of stamp duty, penalties and liabilities that may arise on the scheme of arrangement as approved by the High Court of Judicature at Mumbai in terms of which company has transferred its Aluminum Chloride undertaking and wind mill undertaking to Nagda Orgo Chem Private Limited. The present value of the fixed deposit as on October 2015 is Rs. 1, 76,83,113. Since the fixed deposit is in the name of Arcil Catalyst Private Limited no income on same is accounted for by the Company. Only in the event of a favorable outcome from the apex court in favour of the company, proceeds of fixed deposit are received, the Company will account for interest income.

7 The Board of Directors has, at its meeting held on 9^th April, 2016, approved the Scheme of Arrangement and Amalgamation amongst Aroni Commercials Ltd. and Saraswati Commercial (India) Ltd. The said Scheme has been filed with the Stock Exchanges and shall be submitted with the High Court(s) on its approval by the Stock Exchanges.

8 Employee Benefit Plans

A) As number of employees working in company are less than Ten, Gratuity provisions as per Accounting Standard 15 issued by Institute of Chartered Accountant of India does not apply to company .

B) The company has made provision for Leave Salary on the actual balance leaves of the employees, calculated on the basis of monthly salary of the employees for the FY 2016-2017.

9 Details of related parties:

Description of relationship	Names of related parties
Enterprise which is able to exercise significant influence	Arkaya Commercial Pvt. Ltd.
Enterprise over which management personnel and their	Geecee Ventures Ltd
relatives are able to exercise significant influence	Geecee Business Pvt Ltd
Geecee Investments Ltd
Four Dimensions Securities (India) Ltd.
Saraswati Commercial (India) Ltd
Sareshwar Trading & Finance Pvt Ltd
Winro Commercial (India) Ltd
Key Management Personnel (KMP)	Suresh Kumar Pillai (Director)
Manisha Parekh (Director)
Hatim Harianawala (Director)
Ashish P Mohta (Director)
Anoop Chaturvedi (CFO)
Nirav Shah (CEO)
Shreya Dhende (CS)

Note: Related parties have been identified by the Management.

The Company has recognized deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax (or) The Company has recognized deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management''s estimates of future profits considering the non-cancellable customer orders received by the Company. The Company has not recognized deferred tax asset on carried forward losses, as setoff is not permissible in case of amalgamation/ merger of company under section 72A of income tax act.

10. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2015

1. Trades Receivable, Trades payable and loans & Advances are subject to Confirmation/reconciliation.

2. The Company has a policy of booking Income received from "Kshitij Venture Capital Fund" and "Urban Infrastructure Opportunities Fund" on the basis of provisional income statement received from respective Venture Capital Fund Manager. However, in the case of Kshitij Venture Capital Fund, during the current year the income is accrued on the basis of provisional NAV of the Fund as on 31/03/2015 due to which income of Rs. 20,96,750.5 earlier accrued has been reversed.

3. In the opinion of the Board, the current assets, loans and advances have value on realisation in the ordinary course of business at least equal to the amounts at which they are stated. Otherwise, the provisions for depreciation and all known liabilities are adequate and not in excess of amount required.

4. A) Fixed deposits with bank of Rs. 3,75,614/- includes fxed deposit of Rs.3,08,871/-in the name of District and Sessions Judge, Ujjain deposited as guarantee money. However, the entire amount of Rs. 3,75,614 is subject to reconciliation and Confirmation from the respective banks and authorities. The Fixed Deposit of Rs.3,08,871/- was renewed in August 2003 having maturity in June 2006 with a maturity value Rs.4,84,974/-. Since the status of the case is pending & there is no communication of renewal of Fixed Deposit post June 2006. Considering this fact, the company has not accounted for any interest income on the said fixed deposit.

B) The Company has recorded a demand from the stamp duty authority indore, Madhya Pradesh on account of transfer of alluminium chloride undertaking and windmill undertaking. The Company has kept Rs. 100.70 lakhs in escrow a/c in fixed deposit in the name of Arcil Catalyst Private Limited previously known as 'Atofna'. The present value of the fxed deposit as on April 2014 is Rs. 1,54,27,276. Since the fixed deposit is in the name of Arcil Catalyst Private Limited no income on same is accounted for by the Company. Only in the event of a favourable outcome from the apex court in favour of the company, proceeds of fxed deposit are received, the Company will account for interest income."

5. Our Company has valued its Long term Investment at cost & has not considered temporary decrease in the market value of Investment as in the opinion of management, decrease in market value is not permanent & hence as per guidelines of Accounting Standard 13 – "Accounting for Investment" it has been valued at cost. Had it been valued at lower of cost or market value Profit for the year would have been lower by Rs. 13,29,67,325/-.

6. Employee Benefit Plans

A) As number of employees working in company are less than Ten, Gratuity provisions as per Accounting Standard 15 issued by Institute of Chartered Accountant of India does not apply to company .

B) The company has made provision for Leave Salary on the actual balance leaves of the employees at year end F.Y.2014-2015, calculated at the basic monthly salary of the employees for the FY 2015-2016.

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax (or) The Company has recognised deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management's estimates of future Profits considering the non-cancellable customer orders received by the Company.

Note 7. Previous year's figures

7.1 Previous year's figures have been regrouped / reclassifed wherever necessary to correspond with the current year's classification / disclosure.

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Mar 31, 2013

1 Corporate information

Company is engaged in the business of Investments. The Company has registered with Securities and Exchange Board of India (SEBI) as BSE Sub Broker of M/s Shriyam Broking Intermediary Ltd.

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

Contingent liabilities

(i) Contingent liabilities not provided for uncalled liability on a) Partly paid up preference shares Rs.18,750/- b) Partly paid up equity share capital Rs.10 per shares of City Union Bank Rs.143710/-.

(ii) As per Policy & Notification issued by MP State Government, the company had availed sales tax exemption in respect of wind mills till 15.03.1999 amounting to Rs.988.25 lacs in compare to Rs.350.51 lacs as per eligibility certificates issued by Madhya Pradesh Uraja Vikas Nigam. Against Eligibility Certificate company had filed writ petition in High Court of Indore and matter was decided in favour of Company. However Madhya Pradesh Uraja Vikas Nigam has filed second appeal before the Divisional bench of Hon''ble High Court of Indore, which is still pending.

(iii) Demand of Rs.80,22,602/- is pending under Madhya Pradesh Sales Tax Act against which appeals had been filed with Deputy Commissioner of Commercial Tax. The Deputy Commissioner of Commercial tax has redirected case to Assessing Officer for reassessment.

(iv) During F.Y. 2004-05,Company has kept Rs.100.70 Lacs in Escrow account with Calyon Bank, Nariman Point Branch for any demands of stamp duty, penalties and liabilities that may arise on the scheme of arrangement as approved by the High Court of Judicature at Mumbai in terms of which company has transferred its Aluminium Chloride undertaking and wind mill undertaking to Nagda Orgo Chem Private Limited under section 391 to section 394 of the companies Act, 1956.0n 01/10/2012, The High court of Indore (Single Judge ) has given decision in favour of the Company. Revenue authority has filed an writ appeal against the said order with Hon''ble The High court of M.P., Indore.( Double Judge)

(v) NEPC India Limited had instituted a suit against the company in the court of II FAST TRACK JUDGE Madras for deferment of payment to the NEPC India Limited the sum of Rs. 20,47,156/- together with interest at 24% p.a on Rs. 10,53,450/-.. Vide order dated 13/02/2012, court has given decision in favour of NEPC India limited. In the result the suit is decreed in favour of NEPC India Limited for Rs. 10,53,450/- with interest at the rate of 12% p.a. from August 98 till realisation with costs. Company has filed an appeal with High court of Madras against the said order.

(vi) Assistant Commissioner of Income Tax Department has reopened Income Tax Assessment for A.Y. 2007-2008 , raising a point that Profit on Sale of Shares treated as Short Term Capital Gain / Long Term Capital Gain in the original assessment should be treated as Business Income & taxes under the head of '' Income from Business & Profession''. Reassessment proceeding u/s 147 are initiated. Company has preferred a writ petition against the order of Assistant Commissioner. with Bombay High Court. High court has given interim relief to Aroni by keeping the proceedings of the reassessment on hold till the writ application is pending before the Bombay High court

(vii)As per Income Tax Department following tax demand is outstanding against the company & it has not been provided in the accounts.

2.2 Trades Receivable, Trades payable and loans & Advances are subject to confirmation/ reconciliation.

2.3 In the opinion of Board, the current assets loans and advances have value on realisation in the ordinary course of business at least equal to the amounts at which they are stated otherwise, the provisions for depreciation and all known liabilities are adequate and not in excess of amount required.

2.4 A) Fixed deposits with bank of Rs. 3,75,614/- includes fixed deposit of Rs.3,08,871/-in the name of District and Cession Judge, Ujjain deposited as guarantee money, and balance amount is subject to reconciliation and adjustment on confirmation from bank. No income on said deposit is accounted.

B) No income is accounted on amount deposited with escrow deposits stamp duty account amounting to Rs.1,00,70,000/-.

2.5 Company has valued its Long term Investment at cost & has not considered decrease in the market value of Investment as in the opinion of management decrease in market value is not permanent & hence as per guidelines of Accounting Standard 13 – ''Accounting for Investment'' it has been valued at cost. Had it been valued at lower of cost or market value Profit for the year would have been lower by Rs. 171416268/-.

2.6 Employee Benefit Plans

A) Gratuity Liability has not been provided for in accordance with Accounting Standard 15 issued by Institute of Chartered Accountant of India and unascertained.

B) The company has made provision for Leave Salary on the actual balance leaves of the employees at year end at the basic salary of the employees for the month of March 2013.

2.7 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2012

1 Corporate information

Company is engaged in the business of Investments. During the year has registered with Securities and Exchange Board of India (SEBI) as BSE Sub Broker of M/s Shriyam Broking Intermediary Ltd.

Rights of Equity Shareholders

The Company has only one class of Equity Shares having par value of Rs.10. Each holder of equity shares is entitled to one vote per share.In the event of liquidation of the Company, the holder of equity shares will being entitled to receive any of the remaining assets of the company, after distribution of all preferential amount.

Notes:

(i) Fixed deposits with bank of Rs. 3,75,614/- includes fixed deposit of Rs.3,08,871/-in the name of District and Cession Judge, Ujjain deposited as guarantee money, and balance amount is subject to reconciliation and adjustment on confirmation from bank. No income on said deposit is accounted.

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

Contingent liabilities

(i) Contingent liabilities not provided for uncalled liability on a) Partly paid up preference shares Rs.18,750/-.

(ii) As per Policy & Notification issued by MP State Government, the company had availed sales tax exemption in respect of wind mills till 15.03.1999 amounting to Rs.988.25 lacs in compare to Rs.350.51 lacs as per eligibility certificates issued by Madhya Pradesh Uraja Vikas Nigam. Against Eligibility Certificate company had filed writ petition in High Court of Indore and matter was decided in favour of Company. However Madhya Pradesh Uraja Vikas Nigam has filed second appeal before the Divisional bench of Hon'ble High Court of Indore, which is still pending.

(iii) Demand of Rs.80,22,602/- is pending under Madhya Pradesh Sales Tax Act against which appeals had been filed with Deputy Commissioner of Commercial Tax. The Deputy Commissioner of Commercial Tax has redirected case to assessing officer for reassessment.

(iv) During F.Y. 2004-05,Company has kept Rs.100.70 Lacs in Escrow account with Calyon Bank, Nariman Point Branch for any demands of stamp duty, penalties and liabilities that may arise on the scheme of arrangement as approved by the High Court of Judicature at Mumbai in terms of which company has transferred its Aluminium Chloride undertaking and wind mill undertaking to Nagda Orgo Chem Private Limited under section 391 to section 394 of the companies Act, 1956.The matter is pending before the High court -Indore.

(v) NEPC India Limited had instituted a suit against the company in the court of II FAST TRACK JUDGE Madras for deferment of payment to the NEPC India Limited the sum of Rs. 20,47,156/- together with interest at 24% p.a on Rs. 10,53,450/-.. Vide order dated 13/02/ 2012, court has given decision in favour of NEPC India limited. In the result the suit is decreed in favour of NEPC India Limited for Rs. 10,53,450/- with interest at the rate of 12% p.a. from August 98 till realisation with costs. The Company is planning to file an appeal with High court of Madras against the said order.

(vi) As per Income Tax Department following tax demand is outstanding against the company and it has not been provided in the accounts.

1.2 Trades Receivable, Trades payable and loans & Advances are subject to confirmation/ reconciliation.

1.3 In the opinion of Board, the current assets loans and advances have value on realisation in the ordinary course of business at least equal to the amounts at which they are stated otherwise, the provisions for depreciation and all known liabilities are adequate and not in excess of amount required.

1.4 Fixed deposits with bank of Rs. 3,75,614/- includes fixed deposit of Rs.3,08,871/-in the name of District and Cession Judge, Ujjain deposited as guarantee money, and balance amount is subject to reconciliation and adjustment on confirmation from bank. No income on said deposit is accounted.

1.5 Company has valued its Long term Investment at cost & has not considered decrease in the market value of Investment as in the opinion of management decrease in market value is not permanent & hence as per guidelines of Accounting Standard 13 - "Accounting for Investment" it has been valued at cost. Had it been valued at lower of cost or market value Profit for the year would have been lower by Rs. 14,06,45,003/-.

1.6 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.

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Mar 31, 2011

Related Party Transactions

Disclosure of transactions with related parties, as required by Accounting Standard 18 "Related Party Disclosure" is given below:

i) i). Relationships:

a) Directors of the Company Shri V. V. Sureshkumar

Shri Anilkumar Rajan

Shri Bhagwati Prasad Kejariwal

Shri Ashish Mohta

b) Associate Concerns - Arcies Laboratories Ltd.

- Antique Stock Broking Ltd·

- Antique Finance Private Limited·

- Arkaya Commercials Pvt. Ltd.

- Better Time Realtors P Ltd·

- GeeCee Business Pvt Ltd (Formerly known as Ananya Online IT Designs Pvt Ltd)

- GeeCee Ventures Ltd.

- GTZ (Bombay) Pvt. Ltd.

- Grey River Energy Pvt Ltd·

- GeeCee Investments Ltd. (Formerly known as Jacqart Financial Services Ltd.)

- Four Dimensions Securities (India) Ltd.

- Four Dimensions Capital Markets Pvt. Ltd.

- Four Dimensions Commodities Pvt. Ltd.

- Mahotsav Trading & Finance Pvt. Ltd.

- New Age Dyes & Chemicals Pvt Ltd·

- Rohit Financial Services

- Red Socks Realtors Pvt Ltd

- Sam Jag-Deep Investments Pvt Ltd

- Saraswati Commercial (India) Ltd.

- Sareshwar Trading and Finance Pvt. Ltd.

- Urudavan Investment and Trading Pvt. Ltd.

- Vidushan Commercial & Investment Pvt Ltd·

- Windsor Trading and Finance Pvt. Ltd.

- Winro Commercial (India) Ltd.

2. Segment Reporting

As the company's business activity falls within single segment viz. Investment in shares and mutual fund the disclosure requirements of Accounting Standard 17 "Segment Reporting" issued by Institute of Chartered Accountants of India is not applicable.

3. Taxation

Current tax is determined as the amount of tax payable to the taxation authorities in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence, on timing difference being differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred assets can be realised.

4. Contingent Liabilities not provided for in respect of: (i) Contingent liabilities not provided for uncalled liability on

a) Partly paid up preference shares Rs.18,750/-.

(ii) As per Policy & Notification issued by MP State Government, the company had availed sales tax exemption in respect of wind mills till 15.03.1999 amounting to Rs.988.25 lacs in compare to Rs.350.51 lacs as per eligibility certificates issued by Madhya Pradesh Uraja Vikas Nigam. Against Eligibility Certificate company had filed writ petition in High Court of Indore and matter was decided in favour of Company. However Madhya Pradesh Uraja Vikas Nigam has filed second appeal before the special bench of Hon'ble High Court of Indore, which is still pending.

(iii) Demand of Rs.80,22,602/- is pending under Madhya Pradesh Sales Tax Act against which appeals have been filed with Deputy Commissioner of Commercial Tax, same has been set aside for reassessment .

(iv) During F.Y. 2004-05,Company has kept Rs.100.70 Lacs in Escrow account with Calyon Bank, Nariman Point Branch for any demands of stamp duty, penalties and liabilities that may arise on the scheme of arrangement as approved by the High Court of Judicature at Mumbai in terms of which company has transferred its Aluminium Chloride undertaking and wind mill undertaking to Nagda Orgo Chem Private Limited under section 391 to section 394 of the companies Act, 1956.The matter is pending before the High court –Indore.

(v) NEPC India Limited has instituted a suit against the company in the court of II FAST TRACK JUDGE Madras for deferment of payment to the NEPC India Limited the sum of Rs. 20,47,156/- together with interest at 24% p.a on Rs. 10,53,450/-.

5. Sundry Debtors and Creditors are subject to confirmation/ reconciliation.

6. In the opinion of Board, the current assets loans and advances have value on realisation in the ordinary course of business at least equal to the amounts at which they are stated otherwise, the provisions for depreciation and all known liabilities are adequate and not in excess of amount required.

7. Fixed deposits with bank of Rs. 3,75,614/- includes fixed deposit of Rs.3,08,871/-in the name of District and Session Judge, Ujjain deposited as guarantee money, and balance amount is subject to reconciliation and adjustment on confirmation from bank. No income on said deposit is accounted.

8. Amount of Interest & finance debited to profit & loss account Rs. 5,66,802/- includes interest on Income tax paid Rs. 1,66,119/- for assessment orders received during the year of earlier years.

9. Company has valued its Long term Investment at cost & has not considered decrease in the market value of Investment as in the opinion of management decrease in market value is not permanent & hence as per guidelines of Accounting Standard 13 – "Accounting for Investment" it has been valued at cost. Had it been valued at lower of cost or market value Profit for the year would have been lower by Rs..

10. Previous year figures have been re-grouped or re-arranged wherever deemed necessary.

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Mar 31, 2010

Related Party Transactions

Disclosure of transactions with related parties, as required by Accounting Standard 18 "Related Party Disclosure" is given below: A. a) List of Related Parties

i) Antique Stock Broking Limited

ii) Antique Finance Pvt Ltd

iii) Antique Wealth Advisor Pvt Ltd

iv) Antique Finsec Pvt Ltd

v) Antique Capital Markets Pvt Ltd

vi) Ananya Online IT Designs Pvt Ltd

vii) Arkaya Commercial Pvt. Ltd.

viii) Arcies Laboratories Ltd

ix) Better Time Realtors Pvt. Ltd.

x) Four Dimensions Securities (India) Ltd.

xi) Four Dimensions Capital Markets Pvt. Ltd.

xii) Four Dimensions Commodities Pvt. Ltd.

xiii) Geecee Ventures Ltd (Previously Known as Gwalior Chemical Industries Ltd.)

xiv) Grey River Realtors Pvt. Ltd.

xv) CTZ (Bombay) Pvt Ltd

xvi) Jacqart Financial Services Ltd.

xvii) MahotsavTrading and Finance Pvt. Ltd.

xviii) Neptune Light Realtors Pvt. Ltd.

xix) New Age Dyes Chemicals Pvt Ltd

xx) Red Socks Realtors Pvt. Ltd.

xxi) Rohit Financial Services

xxii) SareshwarTrading and Finance Pvt. Ltd.

xxiii) Saraswati Commercial (India) Ltd.

xxiv) Sam Jag-Deep Investment Pvt. Ltd.

xxv) Urudavan Investment & Trading Pvt Ltd

xxvi) Vidushan Commercial & Investment Pvt Ltd

xxvii) Winro Commercial (India) Ltd.

xxviii) Windsor Trading & Finance Pvt Ltd

b) Directors of the Company

i) Shri Ashwin Kumar Kothari ii) Shri Rohit A. Kothari iii) Shri Rajnikant Khalpada iv) Shri JaysukhlaIN Shah

2. Segment Reporting

As the companys business activity falls within single segment viz. Investment in shares and mutual fund the disclosure requirements of Accounting Standard 17 "Segment Reporting" issued by Institute of Chartered Accountants of India is not applicable.

3. Taxation

Current tax is determined as the amount of tax payable to the taxation authorities in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence, on timing difference being differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred assets can be realised.

4. Contingent Liabilities not provided for in respect of:

(i) Contingent liabilities not provided for uncalled liability on

a) Partly paid up preference shares Rs.18,750/-.

(ii) As per Policy & Notification issued by MP State Government, the company had availed sales tax exemption in respect of wind mills till 15.03.1999 amounting to Rs.988.25 lacs in compare to Rs.350.51 lacs as per eligibility certificates issued by Madhya Pradesh Uraja Vikas Nigam. Against Eligibility Certificate company had filed writ petition in High Court of Indore and matter was decided in favour of Company. However Madhya Pradesh Uraja Vikas Nigam has filed second appeal before the special bench of Honble High Court of Indore, which is still pending.

(iii) Demand of Rs.80,22,602/- is pending under Madhya Pradesh Sales Tax Act against which appeals have been filed with Deputy Commissioner of Commercial Tax, same has been set aside for reassessment and demand Rs. 10,906/- under Madhya Pradesh Sales Tax Act, against which appeal was filed with Tribunal of Sales Tax Gwalior, has been rejected. Final demand notice is awaited

(iv) Demand of Rs. 14,391/- is pending under Central Excise Act. Appeal is filed by Commissioner Indore to Tribunal New Delhi against the order passed by Commissioner (Appeals).

(v) During F.Y. 2004-05, Company has kept Rs. 100.70 Lacs in Escrow account with Calyon Bank, Nariman Point Branch for any demands of stamp duty, penalties and liabilities that may arise on the scheme of arrangement as approved by the High Court of Judicature at Mumbai in terms of which company has transferred its Aluminium Chloride undertaking and wind mill undertaking to Nagda Orgo Chem Private Limited under section 391 to section 394 of the companies Act, 1956.

(vi) As per Income Tax Department following tax demand is outstanding against the company & it has not been provided in the accounts.

5. Sundry Debtors and Creditors are subject to confirmation/ reconciliation.

6. In the opinion of Board, the current assets loans and advances have value on realisation in the ordinary course of business at least equal to the amounts at which they are stated otherwise, the provisions for depreciation and all known liabilities are adequate and not in excess of amount required.

7. Fixed deposits with bank of Rs. 3,86,799/- includes fixed deposit of Rs.3,08,871/-in the name of District and Cession Judge, Ujjain deposited as guarantee money, and balance amount is subject to reconciliation and adjustment on confirmation from bank. No income on said deposit is accounted.

8. Amount of Interest & finance debited to profit & loss account Rs. 29,91,671/- includes interest on Income tax paid Rs. 24,54,705/- and Interest on Fringe benefit Tax Rs. 38/- for assessment orders received during the year of earlier years.

9. Company has valued its Long term Investment at cost & has not considered decrease in the market value of Investment as in the opinion of management decrease in market value is not permanent & hence as per guidelines of Accounting Standard 13 - "Accounting for Investment" it has been valued at cost. Had it been valued at lower of cost or market value Profit for the year would have been lower by Rs. 3,28,94,885/-.