Notes to Accounts of Coromandel Engineering Company Ltd.

Mar 31, 2018

NOTE 39

EMPLOYEE BENEFITS

a) Defined Contribution plans :

The Company operates defined contribution retirement benefit plans for all qualifiying employees. The assets of the plans are held separately from those of the Company under the control of trustees. When any employee leaves the plans before full vesting of contributions, the contributions payable by the Company are reduced by the amount of contributions forfeited by said employee.

Contribution to Provident fund and Other funds under defined contribution plans are as follows :

	2017-18	2016-17
Amount recognised in Profit and Loss for the year	24.88	29.25

b) Defined benefit plans :

The Company offers funded defined benefit plans for employees. Under the plans, the employees are entitled to post-retirement benefits amounting to 57.69% of last drawn monthly salary for each year of completed service until retirement age or resignation, subject to having specified years of service with the Company. The defined benefit plans are administed by separate funds, independent of the Company.

The above plans expose the Company to actuarial risks such as Investment, Interest rate, salary and longevity risk.

These risks typically arise out of movement in market yields, interest rate movements, rate of increase in salary of participants and their tenure with the Company. Some of the risks are partially offset by counter gains of the fund.

No other Post-retirement benefits are provided to the employees.

The actuarial valuation of the plan assets and present value of defined benefit obligation were carried out as at 31st March, 2018 by a certified actuary of the Institute of Actuaries of India. The present value of defined benefit obligation and the related current service cost and past service cost, were measured using the projected unit credit method- (Rs in lakhs)

	2017-18	2016-17
i) Changes in Present Value of Benefit Obligation- Gratuity
1 Present Value of Benefit Obligation at the beginning of the Period	62.89	72.01
2 Current Service Cost	1.25	0.75
3 Interest Cost	0.45	1.97
4 Benefits Paid	(10.59)	(15.02)
5 Actuarial (Gain)/Loss	(2.34)	3.18
6 Present value of Benefits Obligation at the end of the period	51.66	62.89
ii) Changes in Fair Value of Plan Assets
1 Fair Value of Plan Assets at the beginning of the Period	54.90	65.11
2 Expected return on Plan Assets	3.94	4.81
3 Contributions
4 Benefits Paid	(10.59)	(15.02)
5 Actuarial gain/(Loss) on Plan assets	-	-
6 Fair Value of Plan Assets at the end of the period	48.25	54.90
iii) Amount recognised in the Balance Sheet
1 Projected Benefit Obligation at the end of the period	51.66	62.89
2 Fair Value of Plan Assets at the end of the period	48.25	54.90
3 Funded Status of the Plan-Liability/(Asset)	3.41	7.99
iv) Amount recognised in the Statement of Profit & Loss/Other Comprehensive
Income
1 Current Service Cost	1.25	0.75
2 Interest Cost	0.45	1.97
3 Expected return on Plan Assets	(3.94)	(4.81)
4 Net Actuarial (Gain)/Loss recognised in Other Comprehensive Income	(2.34)	3.18
5 Net Cost of defined benefit plan for the year	(4.59)	1.09
Of the above, break up for Net Actuarial (Gain)/Loss are as follows:
Experience adjustments on plan liabilities - (loss)/ gain	2.55	(2.63)
Impact of change in assumptions on plan liabilities - (loss)/gain	(0.21)	(0.55)
Experience adjustments on Plan assets - (loss)/gain	-	-
v) Principal Actuarial Assumptions
1 Discount Rate	7.90%	7.70%
2 Estimated Rate of Return on Plan Assets	7.90%	7.70%
3 Expected rate of Salary increases	6%	6%
4 Attrition Rate	5%	5%
5 Mortality Table used -Indian Assured Lives Mortality (2006-08) Ultimate

NOTE 40

FINANCIAL INSTRUMENTS

a) Capital managemnet

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company''s approach on capital management are

a) Protecting the ability to continue as a going concern, so that return to shareholders and benefits to other stakeholders can be continuously provided

b) Maintain capital structure in such a manner to minimise the weighted average cost of capital Debt to Equity Ratio

Particulars	31.03.2018	31.03.2017	31.03.2016
Debt (including Preference Capital)	5,904.54	3,621.57	3,202.72
Equity	1,668.34	2,921.39	3,691.78
Debt to Equity ratio	3.54	1.24	0.87

Covenants relating to various loans have been adhered to as on March 31, 2018. b) Categories of financial instruments

Particulars	31.03.2018	31.03.2017	31.03.2016
i) Financial assets
Measured at fair value through Profit or Loss (FVTPL)- mandatorily measured	-	-	-
Measured at Amortised cost
- cash and bank balances	12.03	14.35	160.86
- Other financial assets	1,070.19	2,157.46	2,614.74
Measured at fair value through Other Comprehensive Income (FVTOCI)
- Investments in equity instruments designated at initial recognition	19.17	17.67	17.03
ii) Financial liabilities (including borrowings/preference capital and payables)	7,899.67	5,812.29	6,540.78

c) Financial risk management objectives

Based on the Company''s activities, it is exposed to market risk, liquidity risk and credit risk. The following explains the manner in which the Company manages the risk.

i) Market risk arising from interest rate movement on long term borrowings are monitored through trend and sensitivity analysis and managed through negotiations.

ii) Liquidity risk on account of borrowings and other liabilities are monitored through cash flow analysis and managed through having adequate sanctioned undrawn funded and non funded facilities. This addresses the financial liabilities portion.

iii) Credit risk on account of trade receivables and financial assets measured at amortised cost are measured through ageing analysis, counter party risk analysis and financial analysis, managed through review of credit limits, follow up and secured mode of payment.

The risk management is governed by policies established with approval of Board of Directors. This is also reviewed by the Risk Management Committee of the Board and monitored by the senior management on periodic basis.

The Company does not have any risk associated with foreign currency transactions or price risk from current investments.

Fair Value measurements

The Company measures some of the financial assets and liabilities at fair value at the end of the reporting period. The following gives the information on how the fair valuation is done : (Rs in lakhs)

Financial assets and financial liabilities	Fair value as at			Fair value	Valuation
	31.03.2018	31.03.2017	01.04.2017	Hierarchy techniques
Investments in quoted/actively traded equity instruments at FVTOCI	3.80	2.53	1.89	Level 1	Market quoted bid price
Investments in other equity instruments at FVTOCI	15.37	15.14	15.14	Level 3	Valuation based on discounted cash flow

There were no changes in the fair value hierarchy levels in the above periods.

Fair value of financial assets and financial liabilities that are not measured at fair value, but requiring fair value disclosures

Financial assets held at amortised cost :	Carrying value as at			Fair value	Fair value
Non-Current Financial Assets	31.03.2018	31.03.2017	01.04.2017	Hierarchy
Receivables	7.93	27.37	34.07	Level 2	No change
Current Financial Assets
Receivables	935.73	2,019.12	2,463.55	Level 2	No change
Deposits	126.53	110.98	117.12	Level 3	No change
Non current financial liabilties
Borrowings	3,589.80	-	-		No change
Preference Capital	700.00	700.00	700.00	Level 2	No change
Other financial liabilities	154.40	112.40	67.66	Level 2	No change
Current financial liabilities
Borrowings	1,214.74	2,921.57	2,502.72	Level 2	No change
Trade payables	845.10	1,423.07	2,017.76	Level 2	No change
Other financial liabilities	1,395.63	655.24	1,252.64	Level 3	No change

NOTE 41

TRANSITION TO IND AS

The financial statements, for the year ended 31st March, 2018 are the first financial statements the Company has prepared in accordance with Ind AS. For periods upto and including year ended 31st March 2017, the Company prepared its 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 (Indian GAAP).

The Company has accordingly prepared financial statements which comply with Ind AS applicable for periods ending 31st March 2018, together with the comparitive period data as at and for the year ended 31 March 2017, as described in the summary of signifcant accounting policies. In preparing these financial statements, the Company''s Opening Balance Sheet was prepared as at 01st April 2016, which is the Company''s date of transition to Ind AS. Explanation on the transition from previous GAAP to Ind AS and how it has affected the Company''s financial position and performance is given below:

a) Transition election

b) Reconciliation of Other equity reported under previous GAAP to Ind AS

c) Reconciliation of Profits as reported under previous GAAP to Ind AS

d) Reconciliation of Balance sheet as reported under previous GAAP to Ind AS

e) Reconciliation of Statement of Profit and Loss account as reported under previous GAAP to Ind AS

f) Adjustments to the Statement of Cash flows

a) Transition election

I) Optional exemptions :

While applying Ind AS principles for measurement of recognised assets and liabilities, the Company has availed certain optional exemptions, in addition to mandatory exceptions, as detailed below:

Deemed cost for property, plant and equipment and intangible assets, covered under Note 4, wherein Ind AS permits a first time adopting entity to elect to continue with the carrying value of all its property, plant and equipment as recognised in financial statements as at the date of transition to previous GAAP and use that as its deemed cost as at the date of transition to Ind AS has been availed by the Company.

Designation of previously recognised financial instruments wherein an entity may designate an investment in equity instrument as at fair value through Other Comprehensive Income in accordance with Ind AS 109 on the date of transition to Ind AS.

II) Mandatory exceptions:

The mandatory exceptions applicable to the Company are Estimates, De-recognition of financial assets and liabilities.

b) Reconciliation of Other equity as reported under previous GAAP to Ind AS (Rs in lakhs)

	As at
	31.03.2017	01.04.2016
Reserves and surplus as reported under previous GAAP	(302.04)	424.25
Ind AS adjustments that led to increase in equity
Fair value of equity investments	12.47	11.83
b) Ind AS adjustments that lead to decrease in equity
Impact of fixed dividend on preference capital	(112.40)	(67.66)
	(401.97)	368.42

c) Reconciliation of profits reported under previous GAAP to Ind AS

	For the year 2016-17
Profit as reported under previous GAAP	(726.29)
Ind AS adjustments that led to increase/(decrease) in profits
Impact of valuation of employee benefit	3.18
Impact of fixed dividend on preference capital accounted as Interest cost	(44.74)
	(767.85)
Other Comprehensive income (net of Tax)	(2.54)
	(770.39)

NOTE 41 (d)

RECONCILIATION OF BALANCE SHEET AS REPORTED UNDER PREVIOUS GAAP TO

IN DAS (Rs in lakhs)

Particulars					As at 31.03.2017			As at 01.04.2016
				Note No.	Previous GAAP	Effect of transition to Ind AS	As per Ind AS Balance Sheet	Previous GAAP	Effect of transition to Ind AS	As per Ind AS Balance Sheet
A	1		ASSETS
		Non-current assets
			(a) Property, Plant and Equipment	4a	2,065.53		2,065.53	2,454.12		2,454.12
			(b) Capital work-in-progress		-
			(c) Intangible assets	4b	-	-	-	1.53		1.53
			(d) Financial Assets
			(i) Investments	5	5.20	12.47	17.67	5.20	11.83	17.03
			(ii) Trade receivables	6	27.37	-	27.37	34.07		34.07
			(ii) Other Financial Assets				-	-		-
			(e) Deferred tax assets (net)	7	1,535.42		1,535.42	1,517.85		1,517.85
			(f) Other non-current assets	8	415.00	-	415.00	415.00		415.00
		Total Non - Current Assets			4048.52	-	4,060.99	4,427.77	11.83	4,439.60
	2	Current assets
			(a) Inventories	9	1,225.25	-	1,225.25	1,295.97		1,295.97
			(b) Financial Assets
			(i) Investments
			(ii) Trade receivables	10	2,019.12		2,019.12	2,463.55		2,463.55
			(iii) Cash and cash equivalents and bank balances	11	14.35	-	14.35	160.86		160.86
			(iv) Other Financial assets	12	110.98		110.98	117.12		117.12
			(c) Other current assets	13	1,548.98		1,548.46	2,403.90		2,403.90
		Total Current Assets			4,918.16	-	4,918.16	6,441.40	-	6,441.40
		Total Assets (1 2)			8,966.68	12.47	8,979.15	10,869.17	11.83	10,881.00
B			EQUITY AND LIABILITIES
	1	Equity
			(a) Equity Share capital	14	3,323.36	-	3,323.36	3,323.36		3,323.36
			(b) Other Equity excluding non-controlling interests	14 a	(302.04)	(99.93)	(401.97)	424.25	(55.83)	368.42
		Total equity attributable to owners of the Company			3,021.32	(99.93)	2,921.39	3,747.61	(55.83)	3,691.78
		LIABILITIES
	2	Non-current liabilities
			(a) Financial Liabilities
			(i) Preference Capital	15	700.00	-	700.00	700.00		700.00
			(ii) Borrowings	16	-
			(iii) Trade payables		-
			(iv) Other financial liabilities	17	-	112.40	112.40	-	67.66	67.66
			(b) Provisions	18	52.80		52.80	50.66		50.66
			(c) Deferred tax liabilities (Net)		-
			(d) Other non-current liabilities		-	-	-	-		-
		Total Non - Current Liabilities			752.80	112.40	865.20	750.66	67.66	818.32
	3	Current liabilities
			(a) Financial Liabilities
			(i) Borrowings	19	2,921.57	-	2,921.57	2,502.72		2,502.72
			(ii) Trade payables	20	1,423.07		1,423.07	2,017.76		2,017.76
			(iii) Other financial liabilities	21	655.24	-	655.24	1,252.64		1,252.64
			(b) Provisions				-	-		-
			(c) Other current liabilities	22	192.68		192.68	597.78		597.78
		Total Current Liabilities			5,192.56	-	5,192.56	6,370.90	-	6,370.90
		Total Equity and Liabilities (1 2 3)			8,966.68	12.47	8,979.15	10,869.17	11.83	10,881.00

NOTE 41 (e)

RECONCILIATION OF STATEMENT OF PROFIT AND LOSS ACCOUNT AS REPORTED UNDER PREVIOUS GAAP TO IND AS

(Rs in lakhs)

			Note		For the year 2016-17
				Previous GAAP	Effect of transition to IndAS	As per Ind AS
1	Revenue from Operations		23	3,133.84		3,133.84
II	Other Income		24	70.59		70.59
III	Total Revenue! 1 II )			3,204.43		3,204.43
IV	Expenses
	(a)	Materials consumed and Land cost	25	933.74		933.74
	(b)	Changes in Inventories	26	(0.00)		(0.00)
	(c)	Sub-contracting Expenses		1,318.64		1,318.64
	(d)	Employee Benefit Expenses	27	496.49	(3.18)	493.31
	(e)	Finance Cost	28	317.16	44.74	361.90
	(f)	Depreciation and Amortisation Expenses	4	389.55		389.55
	(g)	Other Expenses	29	492.71	_	492.71
	(h)	Total Expenses		3,948.29	41.56	3,989.85
V	Profit/(loss) before tax (III-IV)			(743.86)	(41.56)	(785.42)
VI	Tax expense/(gain)
	(1) Current tax			-		-
	(2) Deferred tax			(17.57)		(17.57)
VII	Net Profit/(loss) aftertax			(726.29)	(41.56)	(767.85)
VIII	Add: Other Comprehensive lncome/(Loss)
	Items that will not be reclassifed to Profit or Loss
	(a) Remeasurements of the defined benefit liabilities / asset				(3.18)	(3.18)
	(b) Equity instruments through other comprehensive income				0.64	0.64
	Other Comprehensive lncome/(Loss) Total				(2.54)	(2.54)
IX	Total Comprehensive Income			(726.29)	(44.10)	(770.39)
X	Earnings per equity share (Rs)
	(1) Basic			(2.19)	(0.12)	(2.31)
	(2) Diluted			(2.19)	(0.12)	(2.31)

NOTE 41 (f)

ADJUSTMENTS TO THE STATEMENT OF CASH FLOWS

The transition to Ind AS from Indian GAAP had no significant impact on cash flows generated by the Company. Cash flows relating to interest are classified in a consistent manner as operating, investing or financing for the year 2016-17.

The cash flows from Operating activities, investing activities, financing activities and net increase in cash and cash equivalents are the same as per Indian GAAP statement prepared earlier and statement prepared under Ind AS currently for the year 2016-17.

NOTE 42

EVENTS AFTER THE REPORTING PERIOD

There is no significant event to be reported that happened between the closing date and the date of meeting of Board of Directors.

NOTE 43

APPROVAL OF FINANCIAL STATEMENTS

The financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors in their respective meeting held on 26th April, 2018.

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Mar 31, 2017

NOTE 1

SHARE CAPITAL

a. Reconciliation of the number of shares outstanding at the beginning and end of the reporting period;

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. The dividend, if proposed by the Board of Directors, 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 remaining assets of the company, after distribution of all preferential amounts.

c. Terms/rights attached to preference shares :

The preference shares are cumulative in nature and by virtue of agreement with Preference Shareholders, the date of redemption is extended upto 22^nd August 2019 and Dividend is waived upto 12th November, 2014. The Preference Shareholders are entitled to fixed dividend of 7% per annum upto 21^st August 2016 and 6% per annum from 22nd August 2016. Dividend not paid for an year will be paid in arrears, in subsequent year, subject to availability of Profits and other statutory requirements. The preference dividend are in arrears from 13^th November, 2014, due to losses incurred by the Company.

2. CORPORATE INFORMATION

Coromandel Engineering Company Limited (CEC) was incorporated as a Public Limited Company in the year 1947 and the Equity Shares of the Company are listed in BSE Ltd. CEC is in the business of Construction and Property Development.

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Mar 31, 2016

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. The dividend, if proposed by the Board of Directors, 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 remaining assets of the company, after distribution of all preferential amounts.

c. Terms/rights attached to preference shares :

The preference shares are cumulative in nature, carrying fixed dividend of 7% per annum. By virtue of agreement with Preference Shareholder, they have waived their right to dividend due up to 12th November 2014. Dividend not paid for an year will be paid in arrears, in subsequent year, subject to availability of Profits and other statutory requirements.

1 Note on Provident Fund: With respect to the Provident Fund administered by the Trust, the Company shall make good deficiency, if any, between interest to be credited to members as per interest rate notified by Government and the return on investments on the Trust funds for the year. Having regard to assets of the fund and return on investments, the Company does not expect any deficiency in the foreseeable future.

2 .Previous years figures have been regrouped wherever necessary to conform to current year’s grouping.

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Mar 31, 2015

1 a) 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. The dividend, if proposed by the Board of Directors, 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 remaining assets of the company, after distribution of all preferential amounts.

b) Terms/rights attached to preference shares :

The preference shares are cumulative in nature, carrying fixed dividend of 7% per annum. By virtue of agreement with Preference Shareholder, they have waived their right to dividend due upto 12th November 2014. Dividend not paid for an year will be paid in arrears, in subsequent year, subject to availability of Profits and other statutory requirements.

2 CORPORATE INFORMATION

Coromandel Engineering Company Limited (CEC) was incorporated as a Public Limited Company in the year 1947 and the shares of the Company are listed in Bombay Stock Exchange(BSE). CEC is in the business of Construction and Property Development.

3 Note on Provident Fund : With respect to the Provident Fund administered by the Trust, the Company shall make good deficiency, if any, between interest to be credited to members as per interest rate notified by Government and the return on investments on the Trust funds for the year. Having regard to assets of the fund and return on investments, the Company does not expect any deficiency in the for seeable future.

(Rs. in lakhs)

As at March As at March 31 2015 31 2014 4 Contingent Liability

3.1 Estimated amount of contracts remaining to be executed on capital account not provided for NIL NIL

3.2 a) Guarantees issued by the Company's bankers for which the Company has given counter guarantees. (Net of guarantees for which liability exists in the books of account) 3,649.79 4,742.25

3.2 b) Letter of credits issued by the Company's bankers for which the Company has given counter guarantees 382.19 436.12

3.3 Estimated liability on account of certain taxes and duties not provided for

i) Sales tax

Andhra Pradesh VAT for 2006-07 & 2007-08 (against which Rs 20.49 Lacs deposited 43.32 43.32 with the Commercial Tax Officer, Hyderabad)

Tamilnadu-Entry tax for 2012-13 2.99 2.99 (entire amount of Rs 2.99 Lacs deposited with the Commercial Tax Officer, Ranipet)

Uttarkhand VAT for 2007-08 - 25.00

Odisha VAT Assessment for 2011-12 & 34.93 - 2012-13 (Entry Tax : Rs. 6.80 Lakhs & VAT - Rs. 28.13 Lakhs) (Entire amount of Rs. 34.93 lakhs deposited with the Commercial Tax Officer, Berharmpur)

ii) Income Tax Appeals pending before CIT (Appeals) - 64.46

5. Previous years figures have been regrouped wherever necessary to conform to current year's grouping.

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Mar 31, 2014

1. CORPORATE INFORMATION

Coromandel Engineering Company Limited(CEC) was incorporated as a Public Limited Company in the year 1947 and the shares of the Company are listed in Madras and Bombay Stock Exchanges. CEC is in the business of Constructon and Property Development.

(Rs. in lakhs)

As at March 31 2014 As at March 31 2013 2 Contngent Liability

2.1 Estmated amount of Contracts remaining to be executed on Capital Account not provided for NIL 211.56

2.2 (a) Guarantees issued by the Company''s bankers for which the Company has given counter guarantees. (Net of guarantees for which Liability exists in the books of account) 4,742.25 4,058.32

2.2 (b ) Leter of Credits issued by the Company''s bankers for which the Company has given counter guarantees 436.12 523.14

2.3 Estmated liability on account of certain taxes and dutes not provided for

i) Sales Tax

Andhra Pradesh VAT for the year 2006-07 & 2007-08 (against which Rs. 20.49 lakhs deposited 43.32 43.32 with the Commercial Tax Officer, Hyderabad)

Tamil Nadu-Entry tax for the year 2012-13 & 2.99 2.99 (entre amount of Rs. 2.99 lakhs deposited with the Commercial Tax Ofcer, Ranipet)

ii) Income Tax

Appeals pending on various maters before CIT (Appeals) 64.46 108.50 AY 2005-06 Rs. 1.90 lakhs ; AY 2007-2008 Rs. 62.56 lakhs

iii) Utarkhand VAT for the year 2007-08 25.00 -

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Mar 31, 2012

A. 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. The dividend, if proposed by the Board Of Directors, 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 remaining assets of the company, after distribution of all preferential amounts.

b. Terms / Rights attached to preference shares :

During the year ended 31st March 2012, the company issued 25,00,000 preference shares of Rs. 100 each fully paid up. The preference shares are cumulative in nature and carry a coupon of 0.01% p a. The preference shares are redeemable at the option of the company with 4 weeks notice and within 18 months from the date of issue. Each holder of the preference share is entitled to one vote per share only on resolution placed before the company which directly affects the rights attached to the redeemable cumulative preference shares.

1.1 Note on Provident Fund : With respect to the Provident Fund administered by the Company, the Company shall make good deficiency, if any, in the interest rate declared by Trust over statutory limit. Having regard to the assets of the fund and return on investments, the Company does not expect any deficiency in the forseeable future.

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Mar 31, 2011

Rs. in Lacs

As at As at 31st March 31st March 2011 2010

1. Previous years figures have been regrouped/ reclassified to conform to the Current year.

2. Contingent Liability

2.1 Estimated amount of Contracts remaining to be 70.66 75.17 executed on Capital Account not provided for

2.2 Guarantees issued by the Companys bankers for which the company has given counter

guarantees. (Net of guarantees for Rs615.05 Lacs (PY-Rs.548.44Lacs)for which Liability exists 2,116.12 383.20 in the books of account.)

2.3 Estimated liability on account of certain taxes and duties not provided

i) Sales Tax

Andhra Pradesh VAT for the years 2006-07 43.32 43.32 &2007-08.(against which Rs.20.49 Lacs deposited with the Commercial tax Officer, Hyderabad)

ii) Income Tax

Appeal spending on various matters before CIT 106.17 1.90 (Appeals) AY 2005-06 Rs.1.90 Lacs and AY 2008- 2009 Rs.104.27 Lacs

iii) Excise Duty Demand under dispute decided in favour of 32.38 32.38 the Company pending before CESTAT based on Departmental appeal (against which Rs.9.54 Lacs deposited with Central Excise Authority included under Loans & Advances)

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Mar 31, 2010

1. Employee Benefits

a. Short Term

Short term employee benefits, including accumulated compensated absences, are recognized as an expense as per the Companys scheme, based on expected obligations on undiscounted basis.

b. Long term

i. Long term employee benefits comprise of leave encashment which is provided for based on the actuarial valuation using the projected unit credit method.

ii. Provident Fund

Contributions are made to the Companys Employees Provident Fund Trust in accordance with the fund rules. The interest rate is payable by the trust to the beneficiaries every year is being notified by the Government. The company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

iii. Superannuation

This is defined contribution plan. Fixed contributions to the Superannuation Fund administered by trustees and managed by Life Insurance Corporation of India are charged to the Profit and Loss Account. The Company has no further obligations for future superannuation benefits other than its annual contributions and recognizes such contributions as an expense in the year incurred.

iv. Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by Life Insurance Corporation of India (LIC). Liability for future gratuity benefits is accounted based on actuarial valuation, as at the Balance Sheet date, determined every year by LIC using projected unit credit method. Actuarial gains and losses, comprising of experience adjustments and the effects of changes in actuarial assumptions, are recognised immediately in the profit and loss account.

2 Taxation

Provision for current tax is made based on the liability computed in accordance with the relevant tax rates and tax laws. Provision for deferred tax is made for timing differences arising between the taxable incomes and accounting income calculated at the tax rates enacted or substantially enacted by the Balance Sheet date. Deferred tax assets are recognized only if there is a virtual certainty that they will be realised and are reviewed for appropriateness of their respective carrying values at each Balance Sheet date.

3 Provisions & Contingent Liabilities:

Provisions are recognized for known liabilities that can be measured where the Company has a present obligation as a result of past event. Contingent Liabilities are disclosed by way of note.

4 Note on Provident Fund :- With respect to the Provident Fund administered by the company, the company shall make good deficiency, if any, in the interest rate declared by Trust over statutory limit. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future

INTEGRITY

We value professional and personal integrity above all else. We achieve our goals by being honest and straightforward with all our stakeholders. We earn trust with every action, every minute of every day.

PASSION

We play to win. We have a healthy desire to stretch, to achieve personal goals and accelerate business growth. We strive constantly to improve and be energetic in everything that we do.

QUALITY

We take ownership of our work. We unfailingly meet high standards of quality in both what we do and the way we do it. We take pride in excellence.

RESPECT

We respect the dignity of every individual. We are open and transparent with each other. We inspire and enable people to achieve high standards and challenging goals. We provide everyone equal opportunities to progress and grow.

RESPONSIBILITY

We are responsible corporate citizens. We believe we can help make a difference to our environment and change lives for the better. We will do this in a manner that befits our size and also reflects our humility.

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Mar 31, 2000

Year ended Year ended 31st March 2000 31st March 1999 Rs. Rs.

1. Previous years figure have been regrouped to conform to the classification adopted this year.

2. Investments includes shares in company under liquidation -- 900

(c) Input credits of Excise Duty availed for raw materials & capital goods have been set off against cost of Raw Materials & capital goods respectively.

(d) Company has not provided for Excise Duty on closing stock of finished goods and Customs Duty on closing stock of bonded Raw Materials and accordingly said amount has not been included in the valuation of the said stock. This has got no impact on the financial results of the company.

3 (a) Other monies for which the Company is contingently liable: (i) Guarantees issued by the Companys Bankers for which the Company has given counter guarantees (*) 42,006,470 39,977,965

(*) includes Guarantees issued for liabilities existing in the books of accounts Rs. 27,271,647 (P.Y. 27,714,145)

(ii) Uncalled amount on investments in partly paid shares of Companies 900,000 900,000

(iii) Letters of Credit — 2,245,775

(iv) Corporate Guarantees issued by the Company to bankers for facilities availed from bankers by another company 20,000,000 20,000,000

(v) estimated Liability on Account of certain taxes and duties not provided for:

4. Investment Allowance:

a) For the Assessment years 1980 - 81 to 1984 - 85 Income Tax Department has filed reference application against the order passed by the Income Tax Appellate Tribunal allowing the Companys claim.

b) For Assessment Years 1989-90 and 1990-91, the Companys appeal before the Income Tax Appellate Tribunal is pending.

ii) Names of Small Scale Industrial Undertakings to whom the company owes a sum exceeding Rs.1.00 Lac which is more than 30 Days.

Gopal Metal Containers P. Ltd

Master Micron (India)

Satya Cashew Chemicals Pvt. Ltd

Standard Chemicals Co. Ltd

Alfab Industries

5. Foreign Currency Transactions:-

There being no activity in companys overseas division at Mauritius during the year, the balances outstanding at the end of the year continue to be shown at exchange rate prevailing at the beginning of the year.