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Notes to Accounts of Axtel Industries Ltd.

Mar 31, 2018

CORPORATE INFORMATION

Axtel Industries Limited was incorporated in 1991 as public limited Company and presently has registered office at P.O. Nurpura, Vadodara - Halol Highway, Tal : Halol Dist.: Vadodara. The Equity Shares of the Company are listed on BSE Ltd. (BSE). The Company is principally engaged in business of manufacturing of process engineering equipment for food Pharmaceuticals and Chemical Industries

Note :

a. The average credit period ranges from 01 to 90 days. No Interest is charged on trade receivable during credit period.

b. The Company has not provided for expected credit loss as it has used a practical expedient for Computing the expected credit loss allowance for trade receivables based on historical credit loss experience and adjusted to forward looking information. Further, the debts are examined and assessed partywise individually by respective department head and top management, for doubtful recovery, if any. As a final result of the above exercise it is determined that no allowance is required for Credit Loss as there is no bad debts in recent past

Details of security for secured loans

a. Rs. 285,69,634/- (P.Y. 271,02,969/-) secured Working Capital loan from bank

Secured by first charge on hypothecation of Plant and machinery, Book debts and stock and equitable mortagage of land and building.

b. Rs. 115,86,464/- (P.Y. NIL/-) secured Term Loan from bank Secured by first charge on hypothecation of Vehicle Purchase Terms of repayment of term loans :

Term Loan from bank is repayable in 60 Monthly instalments comencing from 15.04.2018 at interest rate of 08.31% p.a.

1. DEFINED BENEFIT AND CONTRIBUTION PLAN

The employees Gratuity and Leave encash fund Scheme is managed by Trust in association with LIC is a defined benefit fund. The Present Value of Obligation is determined based on acturial valuation using Project Unit Credit Method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit seperately to buildup the final obligation

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, promotion seniority and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared with the previous period.

Note :

a. The Excise duty on Sales is included in Sales figures Under IND AS which as per previous GAAP were shown net of Excise duty. Under IND AS Excise Duty is shown as separate expense head

b. The Investment in Mututal Fund were measured at lower of the Cost or Fair Value under previous GAAP. Under IND AS , these financial assets have been classified as FVTPL on the date of transition. Changes in fair value of these investments are recognised in Profit and Loss Account. This has resulted in higher fair value which is being recognised under IND AS as carring amount has increased by Rs. 0.40 lacs as on 31.03.2017

Note :

a. The Investment in Mututal Fund were measured at lower of the Cost or Fair Value under previous GAAP. Under IND AS, these financial assets have been classified as FVTPL on the date of transition. Changes in fair value of these investments are recognised in Profit and Loss Account. This has resulted in higher fair value which is being recognised under IND AS as carring amount has increased by Rs. 0.40 lacs as on 31.03.2017.

b. Under the previous GAAP, the Amount held in foreign Currency in EEFC account where converted on Balance Sheet date in Indian Rupees at Closing exchange rate of respective currency on that date. Since the gain or loss on conversion on balance sheet date were not realised this amount of Rs. 3.67 lac was tranfered to foreign exchange fluctuation suspense reserve, which was either debit or credit and reversed in next year. Under IND AS such gain or loss on balance sheet date is recognised under Other Comprehensive Income and same is debited under OCI in Profit and Loss Account and hence the debit of Loans and advances have reduced.

c. Under the previous GAAP, the acturial gains and losses were not there as specific provisions were made. Under IND AS the acturial gain and loss forming part of the remeasurement of defined benefit liability i.e. Graturity in this case are regcongnised in Other Comprehensive Income Net of Tax. The Acturial Loss of Rs. 22.16 lacs net of tax in respect of increase in liability as on transition date is recognised under IND AS and Current provision has been increased.

2. OTHER NOTES ON ACCOUNTS

(1) FAIR VALUE MEASUREMENT

Financial Instrument by category and hierarchy

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

The following methods and assumptions were used to estimate the fair values:

i. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

ii. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

iii For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

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

Level 1 : Quoted (unadjusted) price in active markets for identical assets or liabilities

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

(2) Financial risk management objectives and policies

In the course of business, the company is exposed to certain financial risk that could have considerable influence on the Companyâs business and its performance. These include market risk (including currency risk, interest risk and other price risk), credit risk and liquidity risk. The Board of Directors review and approves risk management structure and policies for managing risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictability to earnings.

In line with the overall risk management framework and policies, the treasury function provides service to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks. It is the Companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The company uses derivative financial instruments, if required, to hedge risk exposures in accordance with the Companyâs policies as approved by the board of directors.

a) Market Risk - Interest rate risk:

Interest rate risk is risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company is exposed to interest rate risk pertaining to funds borrowed at both fixed and floating interest rates. In order to optimize the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

The Sensitivity analysis below has been determined based on the exposures to interest rates at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming that the amount of the liability as at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents Managementâs assessment of the reasonably possible changes in interest rates.

b) Market Risk- Foreign currency risk.

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities. The Company manages its foreign Currency risk, if required, by hedging transaction that are expected to occur within a maximum 12 month periods for hedge of forecasted sales and purchases in foreign currency.

The hedging is done, if required, through foreign currency forward contracts. In past year, the company has not much imports, but has exports which are more, hence foreign exchange exposure for exports proceeds due cover the liability of import dues, thus hedging was not required to cover foreign exchange exposure of the Company

Unhedged foreign currency exposure

Market Risk - Foreign Currency Risk:-

i) The following table shows foreign currency exposures in USD, EUR and GBP on financial instruments at the end of the reporting period.

c) Equity Price Risk

Equity price risk is related to the change in market reference price of the investments in quoted equity securities. The fair value of some of the Companyâs investments exposes the company to equity price risks. At the reporting date, the company do not hold any equity securities.

d) Credit Risk

Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and market intelligence. Trade receivables consist of a large number of customers, spread across geographical areas. Outstanding customer receivables are regularly monitored.

The average credit period is in the range of 01 -90 days. However in select cases credit is extended which is backed by security deposit/bank guarantee/letter of credit and other forms. The Companyâs Trade receivables consist of a large number of customers, across geographies hence the Company is not exposed to concentration risk.

The Company has not provided for expected credit loss as it has used a practical expedient for computing the expected credit loss allowance for trade receivables based on historical credit loss experience, industry practices and the business environment in which the entity operates and adjusted to forward looking information. Further, the debts are examined and assessed partywise individually by respective department head and top management, for doubtful recovery, if any. As a final result of the above exercise it is determined that no allowance is required for Credit Loss as there is no bad debts in recent past.

Financial Assets are considered to be of good quality and there is no significant increase in credit risk.

e) Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital limits from bank. Furthermore, the Company access to funds from debt markets and also short term working capital loans.

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments.

(3) First time adoption of Indian Accounting Standards:

These are Companyâs first Financial Statements prepared in Accordance with Ind AS for the year ended 31^st March, 2018, the Company prepared itâs financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ended 31st March, 2018, together with Comparative data as at and for the year ended 31st March, 2017 as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs Opening balance sheet was prepared as at 1st April, 2016, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including balance sheet as at 1^st April, 2016 and the financial statements as at and for the year ended 31^st March, 2017

An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs Financial position and financial Performance is set out in tables and Notes along with reconciliation statement Exemptions Applied Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS.The Company has applied the following exemptions:

i) Mandatory exemptions: a) Estimates

An entity estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent withestimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind ASestimates at April 1, 2016 are consistent with the estimates as at the same date made in conformitywith previous GAAP

ii) Optional exemptions:

a) Deemed Cost for Property Plant & equipment

lnd AS101 permits a first time adopter to elect to fair value its property, plant and equipment asrecognized in financial statements as at the date of transition to Ind AS, measured as per previous GAAPand use thatas its deemed cost as at the date of transition or apply principles of Ind ASretrospectively. Ind AS101 also permits the first time adopter to elect to continue with the carrying value for all of its property plant andequipment as recognized in the financial statements as at the date of transition to Ind AS. This exemptioncan be also used for intangible assetscovered by Ind-AS 38.

Accordingly, as per Ind AS 101, the Company has elected to consider fair value of its property, plant and equipment, capital work in progress and intangibles as its deemed cost on the date of transition to Ind AS. The Revaluation Reserve of Rs. 20.55 lacs has been reclassified as Other reserves Considering the FAQ issued by the ICAI, regarding application of deemed cost, the Company has disclosed the cost as at 1^st April, 2016 net of accumulated amortization.

iii) Fair value measurement offinancial assets andliabilities Under IGAAP thefinancial assets andliabilities were being carried at the transaction value.

First-time adopters may apply Ind AS 109 to day one gain or loss provisions prospectively to transactions occurring on or after the date of transition to Ind AS. Therefore, unless a first-time adopter elects to apply Ind AS 109 retrospectively to day one gain or loss transaction, transactions that occurred prior to the date of transition to Ind AS do not need to be retrospectively restated.

The Company has measured its financial assets and liabilities at amortised cost or fair value.

(4) Previous Financial Statements:

The financial information of the Company for the year ended 31^st March, 2017 and the transition date opening balance sheet as at 1^st April, 2016 included in these Ind AS financial statements, are based on previously issued statutory financial statements for the year ended 31^st March, 2017 and the year ended 31^st March, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited and the auditors had given unmodified opinion. The adjustments to those financial statements for the differences in accounting principles have been adopted by the Company on transition to the Ind AS.

(5) Excise Duty and GST:

Consequent to the introduction of Goods and Service Tax (GST) with effect from 1st July, 2017, Excise Duty has been subsumed into GST. In accordance with IND AS. GST is not part of revenue unlike Excise Duty. Accordingly, from 01.07.2017 GST is not included in revenue. Further, it is stated that this excise figure of quarter one 30th June 17 is added to turnover of year ended 31st March, 2018, whereas for previous year ended 31st March, 2017 the excise for full year is added to turnover

(6) Current Tax: During the year the income tax provision is made for taxes payable for the year ended 31st March, 2018 based on Computation of Income as per provisions of the Income T ax Act,1961.

Income Tax

The Major Components of Income Tax expense for the year ended 31st March, 2018

(7) In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans and advances, debtors and other current assets in the ordinary course of the business will not be less than the amount at which they are stated in Balance Sheet.

(8) Figures have been rounded off to the nearest rupee.

(9) Claims against the Company not acknowledged as debts Rs. NIL (previous year Rs. NIL).

(10) Estimated amount of contracts remaining to be executed on capital account and not provided Rs. NIL (Previous year Rs. NIL).

(11) The Company has initiated the process to identify the status of its suppliers and asked them to inform the Company if they are a Micro, Medium and Small Enterprise under Micro, Medium and Small Enterprise Act,2006 (MSMED), so that the information regarding dues to MSMED Enterprise could be stated. However, since no response have been received from the suppliers, due to which it is not possible for the Company to disclose exactly, the dues to S.S.I. units included in the Sundry Creditors.

(12) Remuneration to Directors:-

The Company has paid remuneration to its Executive Directors, in accordance with the provision of Schedule V of the Companies Act, 2013 and as per the special resolution passed by the Company in the Annual general meeting which is within the limits specified therein.

(13) As required under Paragraph (10C) of Ind AS 101, the Company has reclassified items that it recognised in accordance with previous GAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity in accordance with Ind AS

(14) In accordance with Ind AS-108 â there are no separate operating segments hence segment information has not been disclosed as there is only one product and has no separate segments.

Mar 31, 2016

OTHER NOTES ON ACCOUNTS

(1) The Company has provided for leave encashment and gratuity liability as per the payment made to L.I.C. of India in respect of Premiums of Policy to cover the liability of Leave Encashment and gratuity, for which provision for current year is charged to Profit & Loss account:

Leave Encashment Gratuity

Premium Paid during period-ended 31.03.2016 Rs. 9,99,735 Rs. 47,86,216

The Actuarial liability is equal to the fund value along with the accrued appreciation with L.I.C. of India hence the Company has not provided for any further liability except payment of the premium as required under policy to L.I. C. of India

(2) In the opinion of the Management and to the best of their knowledge and belief, the value on realization of loans and advances, debtors and other current assets in the ordinary course of the business will not be less than the amount at which they are stated in Balance Sheet.

(3) Figures have been rounded off to the nearest rupee.

(4) Claims against the Company not acknowledged as debts Rs. NIL (previous year Rs. NIL).

(5) Estimated amount of contracts remaining to be executed on capital account and not provided Rs. NIL (Previous year Rs. NIL).

(6) The Company has initiated the process to identify the status of its suppliers and asked them to inform the Company if they are a Micro, Medium and Small Enterprise under Micro, Medium and Small Enterprise Act,2006 (MSMED), so that the information regarding dues to MSMED Enterprise could be stated. However, since no response have been received from the suppliers, due to which it is not possible for the Company to disclose exactly, the dues to S.S.I. units included in the Sundry Creditors.

(7) Remuneration to Directors:-

(8) Current Tax: During the year the income tax provision is made for taxes payable for the year ended 31^st March, 2016 based on Computation of Income as per provisions of the Income Tax Act,1961.

(9) In accordance with Accounting Standard - 17 âSegment Reporting â, segment information has not been disclosed as there is only one product and has no separate segments.

(10) Depreciation and Amortization expense for the year have been calculated as per provisions of Schedule II of the Companies Act 2013, wherein all the Fixed Assets having not completed their useful life as on 01.04.2014 and shown at the Carrying Value (i.e. Written Down Value) have been depreciated on that value for the remaining useful life as per the rate derived from the expected life of assets

(11) In accordance with Accounting Standard - 18 - âRelated Party Disclosuresâ issued by the Institute of Chartered Accountants of India, the transactions with related parties are given below.

Mar 31, 2015

(1) The Company has provided for leave encashment and gratuity liability as per the payment made to L.I.C. of India in respect of Premiums of Policy to cover the liability of Leave Encashment and gratuity, for which provision for current year is charged to Profit & Loss account, is as per details given hereunder:

(2) In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans and advances, debtors and other current assets in the ordinary course of the business will not be less than the amount at which they are stated in Balance Sheet.

(3) Figures have been rounded off to the nearest rupee.

(4) Claims against the Company not acknowledged as debts Rs. NIL (previous year Rs. NIL).

(5) Debtors and Creditors Balance Confirmation have not been obtained.

(6) Estimated amount of contracts remaining to be executed on capital account and not provided Rs. NIL (Previous year Rs. NIL).

(7) The Company has initiated the process to identify the status of its suppliers and asked them to inform the Company if they are a Micro, Medium and Small Enterprise under Micro, Medium and Small Enterprise Act,2006 (MSMED) so that the information regarding dues to MSMED Enterprise could be stated. However, since no response have been received from the suppliers due to which is not possible for the Company to disclose exactly, the dues to S.S.I. units included in the Sundry Creditors.

(8) Remuneration to Directors:-

The Company has paid remuneration to its Executive Directors, in accordance with the provision of Schedule V of the Companies Act, 2013 and as per the special resolution passed by the Company in the Annual general meeting which is within the limits specified therein.

(9) Current Tax; During the year the income tax provision is not made in view of loss for the year ended 31st March 2015 based on computation of Income as per Provisions of lncome Tax Act, 1961. Moreover, no tax is payable on the book profit (i e MAT) U/s 115JB of the Income tax Act, 1961.

(10) In accordance with Accounting Standard -17 "Segment Reporting ", segment information has not been disclosed as there is only one product and has no separate segments.

(11) Depreciation and Amortization expense for the year have been calculated as per provisions of Schedule II of the Companies Act 2013, wherein all the Fixed Assets having not completed their useful life as on 01.04.2014 and shown at the Carrying Value (i.e. Written Down Value) have been depreciated on that value for the remaining useful life as per the rate derived from the expected life of assets .

Mar 31, 2014

1. Contingent liabilities and Commitments: (to the extent not provided for)

a) Contingent Liabilities:

i) Claims against the Company not acknowledged as debts

ii) Guarantees (Bank) 20,429,860 54,697,198

iii) Bills receivable discounted with the bank not matured 10,000,000 19,115,125

Iv) Tax demands under disputes Including FBT 191,350 4,097,890

b) Commitments

i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) - Â

li) Uncalled liability on shares and investments partly paid - Â

iii) Other Commitments (Specify nature) - -

2. OTHER NOTES ON ACCOUNTS

(1) The Company has provided for leave encashment and gratuity liability as per the payment made to L.I.C, of India in respect of Premiums ol Policy to cover the liability ol Leave Encashment and gratuity, for which provision for current year is charged to Profit & Loss account, is as per details given hereunder:

Leave Encashment Gratuity

Premium Paid during period-ended 31.03.2014 Rs. 3,24,630/- Rs.20,73,292/-

The Actuarial liability is equal to the fund value along with the accrued appreciation with L.I.C. of India hence the Company has not provided for any further liability except payment of the premium as required under policy to L.I.C. of India

3. In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans and advances, debtors and other current assets in the ordinary course of the business will not be less than the amount at which they are stated In Balance Sheet.

4. Figures have been rounded off to the nearest rupee.

5. Claims against the Company not acknowledged as debts As, NIL (previous year As. NIL).

6. Debtors and Creditors Balance Confirmation have not been obtained.

7. Estimated amount of contracts remaining to be executed on capital account and not provided As, NIL (Previous year Rs. NIL).

8. The Company has initiated the process to identify the status of its suppliers and asked them to inform the Company if they are a Micro. Medium and Small Enterprise under Micro, Medium and Small Enterprise Acl,2006 (MSMED), so that the informalion regarding dues lo MSMED Enterprise could be stated. However, since no response have been received from the suppliers, due to which it is not possible for the Company to disclose exactly, the dues to S.S.I. units included In the Sundry Creditors.

9. Remuneration to Directors:-

The Company has paid remuneration to its Executive Directors, in accordance with the provision of Schedule XIII of the Companies Act, 1956 and as per the resolution passed by the Company in the Annual general meeting,

10. Current Tax: During the year the Income tax provision is made for taxes payable tor the year ended 31st March, 2014 based on Computation of Income as per provisions of Income Tax Act, 1961. Moreover, no tax is payable on the book profit (i.e. MAT) U/s 115JB of the Income tax Act, 1961.

Mar 31, 2013

(1) The Company has provided for leave encashment and gratuity liability as per the payment made to L.I.C. of India in respect of Premiums of Policy to cover the liability of Leave Encashment and gratuity, for which provision for current year is charged to Profit & Loss account, is as per details given hereunder:

The Actuarial liability is equal to the fund value along with the accrued appreciation with L.I.C. of India hence the Company has not provided for any further liability except payment of the premium as required under policy to L.I.C. of India

(2) In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans and advances, debtors and other current assets in the ordinary course of the business will not be less than the amount at which they are stated in Balance Sheet.

(3) Figures have been rounded off to the nearest rupee.

(4) Claims against the Company not acknowledged as debts Rs. NIL (previous year Rs. NIL).

(5) Debtors and Creditors Balance Confirmation have not been obtained.

(6) Estimated amount of contracts remaining to be executed on capital account and not provided Rs. NIL (Previous year Rs. NIL).

(7) The Company has initiated the process to identify the status of its suppliers and asked them to inform the Company if they are a Micro, Medium and Small Enterprise under Micro, Medium and Small Enterprise Act,2006 (MSMED), so that the information regarding dues to MSMED Enterprise could be stated. However, since no response have been received from the suppliers, due to which it is not possible for the Company to disclose exactly, the dues to S.S.I. units included in the Sundry Creditors.

(8) Remuneration to Directors: -

The Company has paid remuneration to its Executive Directors, in accordance with the provision of Schedule XIII of the Companies Act, 1956 and as per the resolution passed by the Company in the Annual general meeting,

(9) Current Tax: During the year the income tax provision is made for taxes payable for the year ended 31 st March, 2013. Moreover no tax is payable on the book profit (i.e. MAT) U/s 115JB of the Income tax Act, 1961.

(10) Investment in mutual Fund: The company had invested Rs. 25 lakhs in the units of Crayon Capital Art Fund Scheme -1, which fund invest in Art and paintings of reward artists in previous financial year 2011-12 which had been sold by the company in current financial year 2012-13 resulting in to loss of Rs. 1,47,250/-. The units of the fund are not listed.

(11) Additional information Pursuant to para 4 & 5 of part II of Schedule VI of the Companies Act 1956.

Mar 31, 2012

1 Contingent liabilities and Commitments:

(to the extent not provided for)

a) Contingent Liabilities:

i) Claims against the Company not acknowledged as debits - -

ii) Guarantees (Bank) 32,523,139 -

iii) Letters of credit - -

iv) Tax demands under disputes (FBT) 191,350

b) Commitments

i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) -

ii) Uncalled liability on shares and investments partly paid - -

iii) Other Commitments (Specify nature) - -

(2) The Company has provided for leave encashment and gratuity liability as per the payment made to L.I.C. of India in respect of Premiums of Policy to cover the liability of Leave Encashment and gratuity, for which provision for current year is charged to Profit & Loss account, is as per details given hereunder:

Leave Encashment Gratuity

Premium Paid during period-ended 31.03.2012 Rs.1,64,429/- Rs.2,87,195/-

The Actuarial liability is equal to the fund value along with the accrued appreciation with L.I.C. of India hence the Company has not provided for any further liability except payment of the premium as required under policy to L.I.C. of India

(3) In the opinion of the Management and to the best of their knowledge and belief, the value on realization of loans and advances, debtors and other current assets in the ordinary course of the business will not be less than the amount at which they are stated in Balance Sheet.

(4) Figures have been rounded off to the nearest rupee.

(5) Claims against the Company not acknowledged as debts Rs. NIL (previous year Rs. NIL).

(6) Debtors and Creditors Balance Confirmation have not been obtained.

(7) Estimated amount of contracts remaining to be executed on capital account and not provided Rs. NIL (Previous year Rs. NIL).

(8) The Company has initiated the process to identify the status of its suppliers and asked them to inform the Company if they are a Micro, Medium and Small Enterprise under Micro, Medium and Small EnterpriseAct,2006 (MSMED), so that the information regarding dues to MSMED Enterprise could be stated. However, since no response have been received from the suppliers, due to which it is not possible for the Company to disclose exactly, the dues to S.S.I. units included in the Sundry Creditors.

(9) Remuneration to Directors: -

The Company has paid remuneration to its Executive Directors, in accordance with the provision of Schedule XIII of the Companies Act, 1956 and as per the resolution passed by the Company in the Annual general meeting,

(10) Current Tax: During the year the income tax provision is made for taxes payable for the year ended 31 st March, 2012. Moreover no tax is payable on the book profit (i.e. MAT) U/s 115JB of the Income tax Act, 1961. It also includes Rs. 29,820 (RY. Rs.45,80,252) of prior period income tax paid during current year.

(11) Investment in mutual Fund: The company had invested Rs. 25 lakhs in the units of Crayon Capital Art Fund Scheme -1, which fund invest in Art and paintings of reward artists. The company has received back original investment of Rs.22,50,000/- till 31-03-2012. The units of the fund are not listed.

(12) Additional information Pursuant to para 4 & 5 of part II of Schedule VI of the Companies Act 1956.

Mar 31, 2010

(1) The Company has provided for leave encashment and gratuity liability as per the actuarial calculation, for which provision for current year charged to Profit & Loss account is as per details given hereunder:

(2) In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans and advances, debtors and other current assets in the ordinary course of the business will not be less than the amount at which they are stated in Balance Sheet.

(3) Figures have been rounded off to the nearest rupee.

(4) Claims against the Company not acknowledged as debts Rs. NIL (previous year Rs. NIL).

(5) Debtors and Creditors Balance Confirmation have not been obtained.

(6) Estimated amount of contracts remaining to be executed on capital account and not provided Rs. NIL (Previous year Rs. NIL).

(7) The Company has initiated the process to identify the status of its suppliers and asked them to inform the Company if they are a Micro, Medium and Small Enterprise under Micro, Medium and Small Enterprise Act,2006 (MSMEDJ, so that the information regarding dues to MSMED Enterprise could be stated. However, since no response have been received from the suppliers, due to which it is not possible for the Company to disclose exactly, the dues to S.S.I, units included in the Sundry Creditors

(8) Remuneration to Directors:-

The Company has paid remuneration to its Executive Directors, in accordance with the provisions ot Schedule XIII of the Companies Act, 1956 and as per the resolution passed by the Company in the Annual General Meeting.

(9) Current Tax: During the year the income tax provision is made for taxes payable for the year ended 31st March. 2010. Moreover no tax is payable on the book profit (i.e. MAT) U/s 115JB of the Income tax Act, 1961,

(10) Investment in mutual Fund: The company had invested Rs. 25 lakhs in the units ot Crayon Capital Art Fund Scheme - I, which fund invest in Art and paintings of reward artists. The company has received back original investment of Rs. 7,50,000/-during the year. The units of the fund are not listed,

(11) Schedule A to Q form an integral part of the Balance Sheet and Profit and loss Account and have been hereby duly authenticated.

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